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What's On Your Mind? Government Grant Scam, Dermitage Anti-Aging, Verizon Wireless

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Our daily look at consumer reviews

By Mark Huffman of ConsumerAffairs
February 13, 2012

PhotoThe Government Grant Scam has been around a long time, and apparently, has a new wrinkle or two. Alicha Burlson, of Lincoln City, Ore., reports receiving a call from a woman telling her she had been awarded a grant of $8,400 to further her education. It just so happens that Alicha had, indeed, applied for an education grant a month earlier.

“She told me the information on my address and made sure it was correct,” Alicha told ConsumerAffairs.com. “Then she said I needed to call a number and talk to another person. When I called the number, the gentleman said that he received the information and wanted my bank's routing number and checking account. I feel silly but I did give it to him, then he said to receive the money I needed to donate 155 dollars to a charity. I told him I would not donate because I have no money and he said you must have cash to get grant. I repeated that I would not donate.”

Alicha should immediately contact her bank's fraud department since the man has her bank information. Any money she had in the account is probably gone. It's disturbing that the scammers had her address, suggesting they are taking more care in selecting their victims and not choosing them at random. The charitable donation demand is a new wrinkle. Chances are, the “charity” is one operated by the scammer.

Being followed

Mary Beth, of Rosamon, Calif., felt she had plenty of Dermitage Anti-Aging System product and cancelled her prescription when she moved at the end of December. But Dermitage followed her to her new address.

“I received the product at my new address in February, unopened, and I was going to send it back and request a return mailing slip,” Mary Beth said. “They automatically had charged me and refused to take back the product because they had 'notified me by e-mail' and therefore I could not return the product I did not request and they continue to charge me for the following month.”

Mary Beth should contact her credit card company and report it as an unauthorized charge. Unless the company can provide a proof of purchase, it will have to return the money.

Bad timing

Amanda, of Manteca, Calif., says she switched cell phone carriers from Verizon Wireless to Virgin Mobile last week. Everything was smooth, she said, expect the final bill.

“I called today to find out the balance due, and they told me I had to pay my entire bill; including all taxes and fees,” Amanda said. “I have used the service for approximately days out of the month and 10 minutes of use this billing period. My bill was $44.02 so that comes out to $4.40 per minute!”

Most cell phone companies do not prorate their bills, even though Amanda thinks that was the fair thing to do. If she didn't want to pay the overlap, she should have timed her move to Virgin Mobile near the end of the billing cycle.


Consumers Urged to Seek LCD Settlement Funds

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You might be entitled to compensation

By Mark Huffman of ConsumerAffairs
February 28, 2012

PhotoIn October 2010, several states filed a lawsuit against ten companies, accusing them of engaging in price-fixing of LCD panels from 1999 to 2006. The alleged price-fixing. the complaint said, resulted in higher prices for a number of products.

Now that there's a half-billion dollar settlement, attorneys general in eight states are urging consumers to file a claim. Consumers who purchased products with LCD panels - computer monitors, laptops, and PCs - from 1999 to 2006 are encouraged to visit a special website to get more information.

The settlements announced in December 2011 resolve claims against seven companies, filed by eight attorneys general and a national class action. As part of the settlements, the companies that engaged in price fixing will provide a fund for consumers and businesses in 25 states.

The settling companies have also resolved claims brought by California Attorney General Kamala Harris for civil penalties under California's Unfair Competition Law, as well as restitution for government agencies that purchased the flat screen LCD panels.

California is joined in the settlements by the attorneys general of Arkansas, Florida, Michigan, Missouri, New York, West Virginia and Wisconsin, as well as a class action brought on behalf of private claimants in the United States District Court for the Northern District of California.

Settling defendants include: Chimei Innolux Corp., Chi Mei Optoelectronics USA, Inc., Chi Mei Optoelectronics Japan Co., Ltd, HannStar Display Corporation, Hitachi, Ltd., Hitachi Displays, Ltd., Hitachi Electronic Devices, USA, Inc., Samsung Electronics, Co., Ltd., Samsung Electronics America, Inc., Samsung Semiconductor, Inc., Sharp Corporation, and Sharp Electronics Corporation.

The alleged price-fixing came to light in 2006, mostly through an international effort. Investigators in the U.S. were joined by counterparts in the European Union, Korea and Japan to expose anti-competitive activity. The investigators said that activity made computer monitors, laptops and flat screen TVs more expensive than they would have otherwise been.  

Lawsuit Challenges Skechers 'Shape-Up' Shoes

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Class action charges deceptive advertising, says shoes have no health benefits

By James R. Hood of ConsumerAffairs
March 5, 2012

PhotoA 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.

Consumers' Complaints Getting Attention in High Places

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State attorneys general actively seeking consumer input

By Mark Huffman of ConsumerAffairs
March 6, 2012
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Eric Schneiderman

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.

Consumer Group Calls Drug Coupons Illegal

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Suit accuses eight drug makers of steering consumers to higher-priced drugs

By Mark Huffman of ConsumerAffairs
March 8, 2012

PhotoThree health plans in Community Catalyst's Prescription Access Litigation coalition have filed class action lawsuits in four federal courts against major drug manufacturers.

They claim the companies are illegally subsidizing co-payments for expensive brand-name prescription drugs such as Lipitor and Nexium through the promotion of co-pay coupons.

The lawsuit alleges that the payments by eight drug makers -- Abbott, Amgen, AstraZeneca, Bristol-Meyers-Squibb, GlaxoSmithKline, Merck, Novartis, and Pfizer -- are illegal under a federal statute that prohibits commercial bribery because the undisclosed payments to patients and pharmacies are made through a ‘shadow claims system' designed to keep information about the presence or amount of these payments from health plans.

Not really savings, suit claims

Community Catalyst, a national consumer advocacy organization, warns that while prescription drug coupons appear to save consumers money by reducing or eliminating co-payments, in reality they dramatically increase the cost of health care by driving up health insurance premiums and potentially causing consumers to hit benefit caps or lose coverage altogether.

"Pharmaceutical corporations are duping consumers with misleading coupons that are more about increasing corporate profits than actually reducing the cost of drugs for consumers" said Wells Wilkinson, director of the Prescription Access Litigation project at Community Catalyst. "If not stopped, the use of these deceptive coupons will increase costs for consumers' health plans by billions of dollars, contributing to higher premiums and the increasing loss of coverage and benefits for Americans."

Steering consumers to higher priced drugs

The suit contends that the drug companies are combining direct-to-consumer marketing and supermarket coupon clipping to steer consumers toward higher-priced name brand drugs. By subsidizing all or the majority of a consumer's co-payment, drug companies are alleged to promote the sale of these expensive products over less expensive, equally effective generics.

Community Catatyst says federal government health plans like Medicare consider these coupons kickbacks and have banned them. It says they are also banned in Massachusetts under an anti-kickback law.

The lawsuits were filed in New York, Chicago, Philadelphia and Newark by the AFSCME District Council 37 Health & Security Plan Trust, Sergeants Benevolent Association, the New England Carpenters, and the Plumbers and Pipefitters Local 572 Health and Welfare Fund.  

Hell Hath No Fury Like a Consumer Scorned

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When consumers feel wronged, they often take it personally

By Mark Huffman of ConsumerAffairs
March 28, 2012
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Kristin Christian

Where do consumer advocates come from? They tend to be ordinary consumers who one day run into what they perceive as gross injustice at the hands of a business. Then, look out!

Last fall it was Kristin Christian, a Los Angeles businesswoman, who got so fed up with her bank's fees that she set in motion what became “National Bank Transfer Day,” when hundreds of thousands of consumers left their big national banks and opened accounts at smaller banks and credit unions.

Invalid charge

One sees budding consumer advocates daily in the pages of ConsumerAffairs. In a recent post, Vernon, of Houston, Tex., tells of receiving an invoice, marked as a “late notice,” from Progressive Business Publications. It was for an HR book and priced at $299.

“Of course nobody at my company ordered this book, plus it was never received,” Vernon wrote.

After some searching, Vernon said he tracked down a phone number for the company and called, speaking with a customer service rep.

“She tried to say someone ordered this book, and we owed this money,” Vernon said. “I decided to call my brother, who just happens to work for the Texas Attorney General's office. Guess what? This company has so many complaints and there is an ongoing investigation!”

Vernon said he called back and, when he pressed the issue, was assured he would receive no more bills.

Now, it's personal

“But that's not good enough,” Vernon writes. “I have a new goal in life now. They messed with the wrong guy.”

Vernon wants to spread the word that, when businesses receive invoices for something no one seems to know anything about, they should not be paid without further investigation.

Business employees should also be careful about taking telephone calls from unknown vendors who say they are taking a survey. The answers can be misconstrued and misrepresented to constitute a sale.

As for Progressive Business Publications, ConsumerAffairs has received a number of complaints that closely match Vernon's. The Better Business Bureau reports it has closed 1,797 complaints against the company in last 3 years, with 943 closed in last 12 months.

Judge Tosses Proposed McAfee Settlement

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Suit alleged McAfee tricked customers into buying "PerfectSpeed"

By Truman Lewis of ConsumerAffairs
April 10, 2012

PhotoA federal judge refused to approve a proposed settlement to a class action lawsuit that claimed McAfee and an advertiser conspired to trick consumers into buying services from an unrelated third party, and then gave out their banking information to complete those purchases.

U.S. District Judge Lucy Koh said the settlement agreement "does not pass muster," and said she found it impossible to differentiate between class members who actually downloaded the advertiser's software and those who did not, Courthouse News Service reported.

The 2010 suit, filed in the U.S. District Court for the Northern District of California, says that consumers who purchase security products directly from McAfee's website are presented with a misleading pop-up display [that] leads them to unwittingly enroll in subscription-based services offered by a third party, Arpu Inc.

According to the suit, McAfee transmits customer credit/debit card and billing information to Arpu Inc. and receives an undisclosed fee for each consumer.

Customers say they clicked the "Try It Now" pop-up and unwittingly bought the Arpu product called PerfectSpeed because they thought clicking was a necessary step toward downloading McAfee's anti-virus software. Arpu charged $4.95 a month for PerfectSpeed after a 30-day free trial, using the credit card information already on file.

Class members who did not download the software reached a $1.2 million settlement with McAfee and Arpu in July 2011. A separate class of customers who downloaded Arpu's software never reached a final agreement.

The judge took issue with that and rejected the non-downloaders' claims that it was fair for the others to receive nothing from the settlement.

"Those who did not download the Arpu software claim that they were charged for something that they never received. In contrast, the downloaders are in a different position," the judge wrote.

Suit Charges Apple Double-Bills for Online Purchases

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Company refuses to issue refunds, suit further charges

By Truman Lewis of ConsumerAffairs
May 2, 2012

PhotoA federal class action lawsuit claims that Apple double-bills customers who buy products at its e-stores and routinely refuses to issue refunds to consumers who discover the double-billing.

In the suit, Robert Herskowitz claims he bought a single song from the iTunes store for $1.29, for which Apple charged him twice. 

When he brought the error to Apple's attention, he says, the company responded: "Your request for 'Whatya Want from Me' was carefully considered; however, according to the iTunes Store Terms of Sale, all purchases made on the iTunes store are ineligible for refund. This policy matches Apple's refund policies and provides protection for copyrighted materials," according to Courthouse News Service

Herskowitz says the agreement "says no such thing" and charges the policy has "resulted in substantial numbers of Apple customers throughout the country having been double billed by Apple."

The complaint adds: "Under the agreement, as with any consumer transaction, Apple may bill customers only once for each product or service that is purchased. With troubling regularity, however, Apple has 'double billed' customers for purchases made through the Apple Stores. In those cases, when a customer purchases a song, movie or book, Apple bills that customer twice for the same download. Apple, however, has effectuated a policy and practice of refusing to refund the extra charge to customers whom it has overbilled."

Herskowitz claims that in addition to the iTunes store, Apple follows the same illegal policy at its App store, iBookstore and the Mac App store. He seeks damages of more than $5 million for a national class.


Judge Rules in Favor of E-book Consumers in Civil Price-fixing Case

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Federal judge rejects Apple and publishers’ attempt to dismiss case

By Truman Lewis of ConsumerAffairs
May 15, 2012

PhotoA U.S. District Court judge today denied petitions by several of the nation’s largest book publishers and Apple seeking to dismiss a nationwide class-action lawsuit that accuses the companies of conspiring to illegally fix the prices of e-books. 

The 56-page ruling, issued by Judge Denise Cote of the United States District Court for the Southern District of New York, is the first substantive ruling in the litigation. It denies the companies’ motion to dismiss the case, allowing the case to move forward.

The lawsuit was filed on Aug. 9, 2011, and seeks to represent purchasers of e-books who the complaint says were forced to pay tens of millions of dollars more for their favorite titles because of a price-fixing scheme organized by the e-book publishers and Apple.

“We thought that Judge Cote’s ruling was spot on, especially when she noted that we’ve gone above and beyond in illustrating the legitimacy of our case,” said Steve Berman, lead counsel representing consumers in the nationwide class action and managing partner of Hagens Berman, a consumer-rights law firm. “We are eager to push forward with the case.”

In April, the U.S. Justice Department filed a lawsuit in U.S. District Court in New York making very similar allegations to the civil case and citing much of the same evidence. It describes Apple and the publishers actively conspiring to wrestle control of the e-book market from Amazon while artificially driving up prices for consumers.

“We look forward to uncovering additional evidence in the discovery phase of this litigation,” said Berman. “We litigated this case because we strongly believe that consumers were harmed by Apple and the publishers’ tactics and we will not settle without an effective plan to repay consumers for their losses.” 

According to the class-action suit, the publishers believed that Amazon’s wildly popular Kindle e-reader device and the company’s discounted pricing for e-books would increase the adoption of e-books and permanently set consumer expectations for lower prices, even for other e-reader devices.

“Fortunately for the publishers, Apple was also terrified of Amazon’s pricing and the popularity of its Kindle device,” said Berman. “Rather than compete on merit, price and convenience, we intend to prove that the cabal simply tried to game the system.”

The case seeks to compensate e-book purchasers for losses incurred as a result of the alleged price-fixing scheme.

Is It True? No. Is It Legal? Yes.

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Not much fruit in Fruit Roll-Ups but labeling is legal, judge rules

By James R. Hood of ConsumerAffairs
May 17, 2012

PhotoThough packaging for Fruit Roll-Ups and Fruit by the Foot snacks misleads consumers into believing they are made with real fruit, federal regulations allow for such labeling, even if it's not true, a federal judge has ruled in connection with a class-action lawsuit filed against General Mills.

"A reasonable consumer might make certain assumptions about the type and quantity of fruit in the Fruit Snacks based on the statement 'made with real fruit,' along with other statements prominently featured on the products' packaging," U.S. District Judge Samuel Conti wrote, Courthouse News Service reported.

"Additionally, the word 'strawberry' appears in large letters on the front, back, top, and bottom panels. Taken together, these statements might lead a reasonable consumer to believe that product is made with real strawberries, not pears from concentrate. The names 'Fruit Roll-Ups' and 'Fruit by the Foot,' along with the fanciful depiction of the products, which resemble fruit leather, may lead to further confusion about the Fruit Snacks' ingredients. After seeing these prominent aspects of the packaging, a reasonable consumer might be surprised to learn that a substantial portion of each serving of the Fruit Snacks consists of partially hydrogenated oil and sugars."

Popular with consumers

Anyone who thinks consumers will soon rise up and demand more truthful packaging may be disappointed.  A ConsumerAffairs computerized sentiment analysis of about 28,000 postings on social media over the last year finds Fruit Roll-Ups riding high with a net positive sentiment of about 80%.

 

Judge Conti was ruling in a class action brought on behalf of a San Francisco-area mother by the Center for Science in the Public Interest in October 2011. It claims that General Mills incorrectly describes the ingredients in its fruit-flavored snacks and deceives people into thinking they are healthful.

“General Mills is basically dressing up a very cheap candy as if it were fruit and charging a premium for it,” said CSPI litigation director Steve Gardner. “General Mills is giving consumers the false impression that these products are somehow more wholesome, and charging more. It’s an elaborate hoax on parents who are trying to do right by their kids.”

Citing an example, the suit charges that Strawberry Fruit Roll-Ups are made from pears from concentrate, corn syrup, dried corn syrup, sugar, partially hydrogenated cottonseed oil, citric acid, acetylated monoglycerides, fruit pectin, dextrose, malic acid, Vitamin C (ascorbic acid), unspecified “natural flavor,” and Red 40, Yellow 5, Yellow 6, and Blue 1.

Even with the pear ingredient, the product provides little of the beneficial fiber or nutrients associated with real strawberries, the suit alleges. While labels tout the naturalness of the added flavorings, CSPI says that many of the ingredients are artificial by anyone’s definition, including the partially hydrogenated cottonseed oil and the acetylated monoglycerides.

Whatever's in the stuff, most of the 28,000 consumers whose comments we analyzed think it's pretty tasty.

 

 

Deceptive but legal

Conti agreed that the words "made with real fruit" was deceptive, but agreed with General Mills that its claims based on the labels "naturally flavored" and "fruit flavored" are preempted by the Nutrition Labeling and Education Act, since the regulation allows a product to be labeled as "fruit-flavored," even if it does not contain fruit.

"Thus, the regulation allows a producer to label a product as 'natural strawberry flavored,' even if that product contains no strawberries. While the regulation's logic is troubling, the court is bound to apply it," Conti wrote. "So long as that product 'contains natural flavor' which is 'derived from' the 'characterizing food ingredient,' it will not run afoul of the regulation."

Groupon Settles for $8.5 Million For Not Listing Its Deal Restrictions

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Class action suits charged the company deceived users by creating "sense of urgency"

By Daryl Nelson of ConsumerAffairs
May 23, 2012

PhotoAre you a Groupon user? If so, you may have some money coming your way, as a class-action lawsuit was filed against the company for not disclosing the certificate's deal restrictions.

Groupon will be paying a sum of $8.5 million to consumers who were not able to cash in on Groupon deals, due to deal expiration dates not being listed on the certificate.

The lawsuit is made up of 17 different cases that have been merged into one, and brought to the California courts. Groupon decided to settle, but was excused from having to admit any wrongdoing.

Initially, the company said it didn't understand what all of the fuss was about, as it said its policy allows for customers to redeem unused certificates for the same amount they've purchased it for, regardless of the date.

Sense of urgency

Obviously the plaintiffs saw it another way, and said that Groupon not clearly listing its guidelines was deceptive and allowed customers to believe certificates were more time-sensitive than they really were.

The plaintiffs also said not plainly alerting the consumer to Groupon's restrictions "effectively creates a sense of urgency. Consumers therefore feel pressured and are rushed into buying the gift certificates and unwittingly become subject to the onerous sales conditions imposed," said the suit.

Each of the 17 named defendants will receive an amount of $500 each, while the rest of the settlement will be split between anyone who purchased a Groupon certificate between Nov. 1, 2008 and Dec. 1, 2001. Consumers have until July 6 to file their reimbursement claims. You can download a claim form at https://grouponvouchersettlement.com/SettlementVoucherClaimForm.aspx

In addition to the financial settlement, the Chicago-based company will also provide vouchers that can be used towards the customer's initial Groupon purchase. If the voucher isn't accepted by business owners, consumers can file a second claim for a personal check to be mailed.

Microsoft Changes License Agreement to Bar Class Actions

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Company's customers give up their right to sue and agree to binding arbitration in all disputes

By James R. Hood of ConsumerAffairs
June 4, 2012

PhotoMicrosoft, never shy about trumpeting its latest innovations whether real or just vaporware, has quietly changed its U.S. end user license agreement to forbid its customers from suing or joining in class action suits against the company.

The 14th Amendment guarantees everyone the right of due process, but when it's consumers against mighty corporations, that doesn't  mean very much.

In this and similar cases, companies have been modifying their end use license agreements -- commonly called the EULA -- to state that the consumer agrees to be bound by the conditions of the agreement.  And -- voila! -- one of those conditions is now that the consumer will not exercise the right to sue.

In other words, you still have the right. You just can't use it. What could be fairer? After all, no one is holding a gun to your head and forcing you to use Microsoft Word, right?

Not much notice

The notice, such as it was, of the change was slipped into a Microsoft blog just before the Memorial Day weekend, a favorite time for issuing notices that one hopes won't be noticed.

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Consumers rate Xbox

In the blog posting, Tim Fielden, assistant general counsel at Microsoft, describes the changes, which mandate arbitration for all customer claims and forbid class-action lawsuits as a precondition to using Microsoft's products. The mandatory arbitration clause of the EULA is binding and is not an option.

"You understand and acknowledge that by agreeing to binding arbitration, you are giving up the right to litigate (or participate in as a party or class member) all disputes in court before a judge or jury," the EULA states in clause 18.1.4.

The denial of consumers' rights already applies to XBOX products and is being extended to other Microsoft products, presumably as quickly as Fielden & Co. can crank out the new boilerplate.

"We will implement similar changes in user agreements for other products and services in the coming months as we roll out major licensing, hardware or software releases and updates," Fielden wrote.

Microsoft, of course, is not alone and, as usual, is not even out in front. Companies have been falling over themselves to unilaterally rewrite their contracts even since an infamous 2011 U.S. Supreme Court ruling in the AT&T v. Concepcion case handed corporations the right to simply remove, demolish, diminish and destroy consumers' rights simply by inserting a few sentences in their contracts.

A contract is generally defined as an agreement between the two parties. But that cuts no ice in this case. The consumer simply has no input into the decision once deciding to buy the product or service -- commonly known as the "take it over leave it" option.

Not only is there no opportunity for negotiation or modification by the consumer, most EULAs are written to allow the corporation to unilaterally modify them, as Microsoft is doing, a rather unusual provision for what is supposedly an agreement between consenting parties.

Class Action Charges Jos. A. Bank's Sales Are Bogus

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Retailer's merchandise is "perpetually on sale," lawsuit alleges

By James R. Hood of ConsumerAffairs
June 5, 2012

PhotoIt's pretty hard to escape the ads and commercials for Jos. A. Bank Clothiers, the Brooks Brothers wannabe that's constantly running sales and claiming that this is the very last day to get, let's say, two suits for the price of one.

A couple of New Jersey consumers don't think this is fitting and have filed a class action complaint in federal court charging that the clothing chain's merchandise is "perpetually on sale and the sale price is actually the price at which the merchandise is regularly offered."

Jos. A. Bank Clothiers said in a regulatory filing that it intends to "defend this lawsuit vigorously."

The lawsuit charges that Bank's advertising "cultivates the perception that consumers are being offered a discount from the Company's regular prices when, in fact, they are not."

The plaintiffs say they bought suits and shirts thinking they were getting a special deal only to find that the same merchandise was offered at the same price after the supposed sale had ended.

"Plaintiffs and the Class would not have purchased Jos. A. Bank merchandise, or would have paid significantly less for the merchandise, if Jos. A. Bank had not represented that the merchandise had a 'regular price' that was well above the 'sale' price," the suit charges. "As a result, Jos. A. Bank has handsomely profited from its misrepresentations to the detriment of Plaintiffs and the Class ..."


Three LCD Makers To Pay $543 Million Restitution

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Total of 10 companies now agree to more than $1 billion settlement

By Mark Huffman of ConsumerAffairs
July 12, 2012

PhotoThe last three manufacturers to be charged with fixing prices of LCD screens have settled charges with several states and the U.S. government.

As a result of the settlement, Toshiba Corp.; LG Display Co., Ltd.; and AU Optronics Corporation have agreed to pay $543.5 million in restitution to consumers who bought LCD monitors, notebook computers, and LCD televisions between January 1, 1999, and December 31, 2006.

The action follows previous settlements with seven other manufacturers who agreed to pay $500 million, making the total restitution in the case over $1 billion. The earlier settlement has already been approved in federal court, where it was filed.

“These settlements should make it clear that price fixing will not be tolerated in Missouri,” said Missouri Attorney General Chris Koster. “My office will continue to investigate and prosecute any anticompetitive actions – whether they originate in Missouri or across an ocean in Taiwan – that harm our state’s consumers.”

Consumers and businesses who believe they may be owed restitution can find information at a special Website.

The case stems from a 2010 lawsuit in which consumer advocates claimed companies selling LCD screens conspired to make the prices artificially high. That in turn, they claimed, made computers and TV sets more expensive than necessary.

Koster said his office, along with seven other state attorneys general and the federal government, uncovered evidence of a high-level conspiracy involving secret meetings in which the companies’ executives agreed to raise prices for their LCD screens.  

Nature Valley Not So Natural, Suit Charges

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Suit charges snack bars have factory-made high-maltose corn syrup, maltodextrin

By James R. Hood of ConsumerAffairs
July 26, 2012

PhotoGeneral Mills touts its Nature Valley granola bars and "thins" as "natural" snacks but a class-action lawsuit says the snacks contain industrially-produced artificial ingredients such as high-fructose corn syrup, high-maltose corn syrup, and maltodextrin.

"Our Chewy Trail mix bars are made with delicious combinations of 100% natural ingredients like whole almonds, cranberries, peanuts, and pomegranate," is how the company describes Nature Valley Chewy Trail Mix bars on labels.

The front of the package describes the product as "100% NATURAL," and a side panel notes that Nature Valley "is proud to be the official natural granola bar for" the U.S. Olympic Ski Team and the PGA golf tour. Yet the product contains high-maltose corn syrup and maltodextrin.

But according to the complaint, high-maltose corn syrup and maltodextrin are both produced by applying acids, enzymes, or acids and enzymes in sequence to corn starch, depolymerizing the starch to glucose and maltose. The acids or enzymes are then neutralized, removed, or deactivated, and the resulting product is then refined, purified, and concentrated.

Highly processed

"High maltose corn syrup and maltodextrin are highly processed, do not exist in nature, and not even under the most elastic possible definition could they be considered 'natural,'" said Michael F. Jacobson, executive director of the Center for Science in the Public Interest, whose litigation department is acting as co-counsel in the suit.

The lawsuit was filed in United States District Court in the Northern District of California, on behalf of Amy McKendrick, a resource teacher from Kern County, Calif., and another California woman, both of whom sought out natural products on medical advice.

"My daughter's special diet requires that I select natural products and avoid artificial dyes, sweeteners, or additives—and I'm willing to pay a little bit more for products that are truly 'all natural,'" said McKendrick. "Who would assume that a '100% Natural' product from a company called Nature Valley would have these factory-refined ingredients?"

CSPI said it privately raised concerns with General Mills over Nature Valley "Natural" claims in July 2010. General Mills responded by indicating they would work to eliminate high-fructose corn syrup from the product line, CSPI said in a press release.  It added that while few, if any, Nature Valley products still contain high-fructose corn syrup, many still do contain high-maltose corn syrup and maltodextrin.

"Few companies would like to brag that their ingredients are 'fresh from the factory,' but that's exactly where high-maltose corn syrup and maltodextrin come from," said CSPI assistant director of litigation Seema Rattan. "General Mills is misleading consumers when it suggests otherwise."

The suit says Nature Valley's labeling and advertising is in violation of several California consumer protection laws, including the California Legal Remedies Act, the Unfair Competition Law, and the False Advertising Law. Besides CSPI's litigation unit, the San Francisco law firms of Baker Law, P.C., and Sherman Business Law are representing the consumers. Besides seeking certification to proceed as a class action, the plaintiffs seek to stop General Mills from making deceptive natural claims on Nature Valley products.


Civil Penalty Proposed Against Federal Express

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The carrier is accused of breaking rules on transporting hazardous materials

By James Limbach of ConsumerAffairs
August 10, 2012

PhotoThe Federal Aviation Administration (FAA) is proposing a $681,200 civil penalty against Federal Express Corp. (FedEx), of Memphis, Tenn., for allegedly violating U.S. Department of Transportation (DOT) Hazardous Materials Regulations. 

The FAA alleges that between Aug. 2 and Aug. 12, 2010, FedEx employees in numerous locations around the country improperly accepted several dozen shipments containing hazardous materials for transportation by air. Agency inspectors discovered the alleged violations during an inspection and records check of FedEx facilities in the Los Angeles area. 

Further infractions

The FAA also alleges that in 19 instances on Aug. 12, 2010, the airline failed to provide pilots of flights to and from Los Angeles with the required "accurate and legible written information" about shipments of hazardous materials it accepted for transportation by air. Additionally, the the government contends FedEx failed to document hazardous materials training and testing for three individuals who were among those accepting the shipments for the company. The training includes security awareness, and initial and recurrent training on the handling of hazardous materials. This training is necessary to ensure compliance with the hazardous materials regulations. 

"To ensure the safe transport of hazardous materials aboard aircraft, operators must follow appropriate rules and procedures, and provide proper training," said Acting FAA Administrator Michael P. Huerta. 

Federal Express has 30 days from the receipt of the FAA's enforcement letter to respond to the agency. 

Another Lawsuit -- the 14th -- Filed Against Bumbo

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Filing follows the latest recall of child seats

By James Limbach of ConsumerAffairs
August 29, 2012

PhotoTwo personal injury and product safety law firms have filed their 14th lawsuit against Bumbo International Trust. 

The CPSC earlier this month announced the second recall of approximately 4 million Bumbo molded foam rubber seats sold at Toys R Us, Target, WalMart and other major retailers. The nation-wide recall follows hundreds of reported incidents in which babies have been injured after falling out of the chair manufactured by Bumbo International, based in South Africa. 

Rose Walker LLP and Pulaski & Middleman, LLC previously represented the families of 10 injured children. Those lawsuits were voluntarily dismissed less than a week before the first one was scheduled to start trial in a Houston courtroom almost two years ago. 

But, they kept pressing and in June 2011, filed suit in federal court in Austin, Texas. That lawsuit is set to start trial in November. And, since filing that suit, the firms say they have been contacted by more parents who wanted to sue Bumbo because of injuries suffered by their children. 

Frightening incident 

There's no shortage of horror stories. Brittany of Washington, UT, says her son was sitting in his Bumbo on the kitchen table. Her husband, she writes in a ConsumerAffairs post, "was cooking dinner. My husband had his back turned to him, and heard a noise. He turned around and my son had fallen out of his chair. He had a huge bump on the back of his head. We rushed him to the hospital and upon receiving a CAT scan, we got news that he had a skull fracture. We were required to overnight at the hospital so they could run test results and monitor his progress." 

"We have sued Bumbo 14 times now, and another 8 families have already contacted us and asked us to sue Bumbo because of their children's injuries," says Rose Walker attorney Ross Cunningham. "We will keep suing Bumbo and these retailers as long as parents keep hiring us because of the injuries to their children."

Voter Fraud or Voter Supression: What Are New State Laws Really Trying To Do?

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Critics of new voter ID laws say they are aimed squarely at minorities and the poor

By Daryl Nelson of ConsumerAffairs
September 20, 2012

PhotoLast month a Texas judge rejected a proposed law that would force residents to get a government-issued ID in order to vote in the November election.

Many political officials in the Lone Star State said the law was needed to prevent various types of voter fraud, like someone using another person’s ID to cast a vote.

Critics say that forcing people to get government-issued IDs would disproportionately affect the state’s lower-income and minority voters, while at the same time intimidating them and suppressing their opportunity to vote.

These critics also say that many people in lower-income communities do not possess government-issued IDs for several reasons, including not having a driver's license because they can't afford a car. Others don't have a passport because they can't afford to travel.  

Photo“Chalk up another victory for fraud,” Texas Gov. Rick Perry  wrote on his website after the judge's ruling. “Federal judges subverted the will of the people of Texas and undermined our effort to ensure fair and accurate elections. The Obama administration’s claim that it’s a burden to present a photo ID to vote simply defies common sense. I will continue to work with [Texas] Attorney General [Greg] Abbott to fight for the same right that other states already have to protect their elections.”

U.S. Attorney General Eric Holder commended the judge’s decision in a recent statement.

“Under the proposed law, many of those without required voter identification would be forced to travel great distances to get one -- and some would have to pay for the documents they might need to do so,” he said.

19 states 

Currently, there are 19 states that have passed ID laws for voting, according to the Brennan Center for Justice at New York University School of Law.

And all of these states maintain the new voting laws will protect the integrity of this upcoming election as well as future ones, although there are few documented cases of people using phony IDs or trying to pass themselves off as someone else in order to vote.

Opponents, including the American Civil Liberties Union (ACLU) say the new restrictions are no more than modern versions of the poll taxes and literacy tests that for decades were used to disenfranchise voters in the South.

"Poll taxes and literacy tests have given way to more modern voter suppression tactics packaged as voter ID laws, restrictions to voter registration and cuts to early voting. With these new laws in effect, up to 5 million voters could be turned away at the polls in November," the ACLU charged recently. 

Hollywood celebrities have joined the campaign against the restrictions, as in this video narrated by Whoopi Goldberg.

The ACLU notes that voter turnout in the 2008 election was the most racially diverse in American history, closing the longstanding gap between white and minority voter participation. It charges that the more restrictive voting laws are a response to the growing influence of voters who are not white males.

"States are making it harder and harder for people to vote, virtually guaranteeing that many people won’t really have the right at all," the ACLU said.

Pennsylvania maneuvers

PhotoIn Pennsylvania, Judge Robert Simpson upheld a March 2012 decision to implement a new voting ID law in that state, after individual plaintiffs filed an injunction and attended a lengthy hearing explaining how such laws would impact them and others in their communities.

Attorneys for the plaintiffs said the law could keep at least 100,000 of the state’s residents from voting in this coming election.

“The vice is not in requiring photo identification, said lead plaintiff lawyer David Gersch. “The vice is in requiring photo identification that not everyone has or has the ability to obtain." 

Of course Pennsylvania is a major swing state, and in recent years the state has swung left. In fact, it wasn’t since 1988 when George H. W. Bush won the presidential election over Michael Dukakis that Pennsylvanians pushed the Republican ticket through the victory tape. And many on the left feel the passing of the ID law is an obvious attempt to better even the Republican score.

Additionally, Democrats say the comments made by Rep. Mike Turzai, the Republican majority leader of the Pennsylvania House of Representatives, are proof that the state is trying to manipulate the upcoming presidential election by abruptly changing voting laws.

“Voter ID, which is going to allow Governor [Mitt] Romney to win the state of Pennsylvania? Done,” Turzai was overheard saying recently. 

Pennsylvania Democrats pounced on Turzai’s comment, portraying it as an admission of partisan motivations in enacting the new law, renewing their charge that it is an effort to suppress Democratic votes.

Florida changes

In Florida state officials have also modified that state's voting laws, by shortening the allotted amount of time for early voting.

Last week the Justice Department’s Civil Rights Division upheld the modifications, but specified that residents have to get 96 hours for early voting over an eight-day period. However, the option to vote early on the Sunday right before the election has been removed. African Americans have traditionally turned out in large numbers on Sunday.

Republican Ken Detzner, Florida’s secretary of state and chief elections officer, sees the change as a benefit to Floridians and not a form of voter suppression.

“The approval of these changes is a tremendous victory for Florida voters,” he said. “In the areas of the state already able to implement the changes, we have seen how the changes offer more flexibility to vote, more accountability and faster reporting times on Election Day.”

 

Bank of America to Pay $2.4 Billion to Settle Class Action

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Investors sued over Merrill Lynch merger, claiming they had been misled

By James R. Hood of ConsumerAffairs
September 28, 2012

PhotoAnother setback for Bank of America -- it has agreed to pay $2.4 billion to its investors to settle a class-action lawsuit resulting from the 2009 merger with Merrill Lynch & Co.

The lawsuit charged that Bank of America made misleading statements to investors as it pursued the Merrill Lynch acquisition during the financial meltdown that caused it to suffer huge losses.

In agreeing to settle the suit, Bank of America denied wrongdoing and said it agreed to the settlement to eliminate the uncertainties and expense of litigation.  

"As we work to put these long-standing issues behind us, our primary focus is on the future and serving our customers and clients," Bank of America CEO Brian Moynihan said in a statement.

The settlement is awaiting final approval by Judge Kevin Castel in the U.S. District Court for the Southern District of New York.

Analysts gasp

Bank of America  Sept. 28, 2012, 2:36 p.m.
Consumers rate Bank of America

The suit has been pending for some time and the settlement was not unexpected. But its size surprised financial analysts and is expected to drive down Bank of America's already sagging stock price even further.

“This settlement is far larger than we expected given the weak merits of such suits and historical precedence,” David Trone, a JMP Securities LLC analyst, wrote in a note to clients, Bloomberg Businessweek reported. “Bank of America is attempting to rebuild its capital base, and these hits will essentially erase the past six months of progress.”

Consumers grumble

While the settlement doesn't directly involve consumers, it's nevertheless likely to further hammer BA's already sagging image with its customers.

ConsumerAffairs analyzed about 1.2 million postings to social media and found that consumer perceptions, which had started to climb back into positive territory, slumped back towards zero in recent days, a trend likely to be hastened by the massive settlement.

 

Long stretch of bad road

Life has not been kind to Bank of America the last few years. Its record of missteps, errors and miscalculations is a lengthy one. Notable disasters include:

  • $25 Billion mortgage settlement Federal and state officials reach a landmark $25 billion  agreement with BA and four other mortgage servicers over foreclosure abuses and fraud, and unacceptable nationwide mortgage servicing practices  
  • $1 Billion fine for mortgage fraud  In February, the bank agreed to pay $1 billion for "fraudulently and recklessly" underwriting loans to unqualified borrowers, thereby defrauding the Federal Housing Administration (FHA).  
  • Great idea - let's charge more fees  Having failed to impose a fee on debit cards, BA thinks may it can change free checking to "free" checking. 
  • Homeowners charge "Pay Plan" was deceptive  A federal class action filed in June 2011 claimed BA told customers its "PayPlan" of automatic weekly or fortnightly mortgage payments would save them money on interest, then "systematically and persistently" took the payments late and charged them even more interest. 
  • BA Settles Overdraft Suit  Lawsuit alleged BA charged excessive overdraft fees. The bank agreed to pay $410 million to put the action to rest.

     

New York Sues J.P. Morgan Over Financial Meltdown

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Claims Bear Stearns unit mislead investors about mortgage-backed securities

By Mark Huffman of ConsumerAffairs
October 2, 2012

PhotoThere has yet to be a single federal prosecution in connection with the financial meltdown triggered by the collapse of the market for mortgage-backed securities. But at least one state has been on the case.

New York Attorney General Eric Schneiderman has filed suit against J.P. Morgan Securities LLC -- formerly known as Bear Stearns & Co. Inc. -- JP Morgan Chase Bank, N.A., and EMC Mortgage LLC for making fraudulent misrepresentations and omissions to promote the sale of residential mortgage-backed securities (RMBS) to investors.

Specifically, the suit alleges that Bear Stearns assured investors that it had carefully vetted the residential mortgages contained in the securities and would continue to monitor their performance. The suit charges the company didn't do either.

Insecure securities

During the housing bubble, banks bundled residential mortgages into securities and sold them to investors, including other banks and hedge funds. When many homeowners who purchased homes with subprime mortgages began to default, it virtually destroyed the value of mortgage-backed securities because it was hard to tell which securities held the defaulting loans.

When Bear Stearns collapsed in early 2008, it incurred losses that have totaled approximately $22.5 billion to date.

Schneiderman's suit was brought under the Martin Act, which gives the New York Attorney General extraordinary power to prosecute financial crimes, and was executed as part of a joint state-federal task force set up to investigate those responsible for misconduct contributing to the financial crisis. To date, no one has been held responsible.

Accountability

“This lawsuit will bring accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy,” Schneiderman said.“Our lawsuit demonstrates that there is one set of rules for all -- no matter how big or powerful the institution may be -- and that those rules will be enforced vigorously. We believe that this is a workable template for future actions against issuers of residential mortgage-backed securities that defrauded investors and cost millions of Americans their homes.”

Schneiderman says several federal agencies worked on the case, specifically the Federal Housing Finance Agency Inspector General, who provided investigators and lawyers. The U.S. Securities and Exchange Commission collaborated and assisted with the case, while the Department of Justice provided resources from U.S. Attorney’s offices around the country to assist with interviews and depositions.

“Fannie Mae and Freddie Mac purchased residential mortgage-backed securities from the defendants and were allegedly misled about the quality of the loans supporting those securities. Actions like this contributed to the financial crisis and those who engaged in such activities should be held accountable,” said FHFA Inspector General Steve Linick.

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