Friday, November 27, 2015

Archive: October, 2010

POSTED: Friday, October 29, 2010, 10:59 AM

The Federal Trade Commission has shut down a Florida telemarketing "boiler room," contending that it was scamming desperate time-share owners out of millions of dollars with promises that it could help them unload their properties. As the FTC put it, the message amounted to: "Psst... Hey Buddy, Wanna Sell a Timeshare?"

After the collapse of the housing bubble and the resulting disaster in the real estate market, the problems of time-share property owners with unsellable contracts have been largely eclipsed.  But the FTC is still on the case, and Friday it got a federal judge in Florida to shut down a company called Timeshare Mega Media & Marketing Group, which it says was falsely offering an exit to unhappy owners.

The FTC says the South Florida ring "conned consumers by promising that they had buyers lined up and waiting. Only after making a hefty up-front payment did the consumers learn that there were no buyers, and that it was nearly impossible to get their money back from the defendants, many of whom have long criminal histories."

POSTED: Thursday, October 28, 2010, 2:28 PM

Complaints first arose nearly three years ago that mysterious $1.99-per-megabyte data charges were showing up on the bills of Verizon Wireless customers who said they didn't intentionally buy any data.  Earlier this month, Verizon said it planned to refund about $50 million to 15 million customers - some who complained, and others who likely never noticed the small charges that, as I wrote here, were reminscent of the old phone-bill trick known as cramming. 

This afternoon, the Federal Communications Commission announced that it had reached a settlement with Verizon.  The company has agreed not just to change its ways and to refund $52.8 million to customers, but also to pay the government $25 million to end the investigation - the largest such payment in FCC history, the agency says.  Verizon, for its part, insists that the money is a "voluntary payment" and has been mischaracterized in some news reports - including the initial version of this blog item - as a penalty or fine.

“Today’s settlement requires Verizon Wireless to make meaningful business reforms, prevent future overcharges, and provide consumers clear, easy-to-understand information about their choices," says Michele Ellison, chief of the FCC’s Enforcement Bureau.

POSTED: Wednesday, October 27, 2010, 11:30 AM

For years, all that's been clear about the risks of electromagnetic radiation from cell phones is that the risks aren't entirely clear - a fact that some of us will choose to worry about and others to ignore.  I use my mobile phone a lot, and don't dwell much on the warnings that phone-makers include with the devices, so you can probably infer where I stand on that continuum.

But from time to time, the question arises anew, as it has this week thanks to a Time magazine writer who noticed what he calls "the little-noticed bit of legalese" in the safety manual for Apple's iPhone 4:

When using iPhone near your body for voice calls or for wireless data transmission over a cellular network, keep iPhone at least 15 mm (5/8 inch) away from the body, and only use carrying cases, belt clips, or holders that do not have metal parts and that maintain at least 15 mm (5/8 inch) separation between iPhone and the body.

POSTED: Tuesday, October 26, 2010, 1:43 PM

"Greenwashing" is still a common problem, according to a new study by TerraChoice that finds questionable practices in 95 percent of supposedly "green" products.  But  TerraChoice, part of Underwriters Laboratories, also offers some surprisingly encouraging findings in its latest report on the practice, which it defines as "misleading consumers about the environmental practices of a company or the environmental benefits of a product or service."

Perhaps the biggest surprise: the frequency of finding genuinely greener products at big-box stores, the epitome of mainstream American shopping. TerraChoice says 22.8 percent of home and family products at the big-box retailers it surveyed had legitimate "green" certification, nearly twice the proportion found at specialty retailers such retailers (11.5 percent) and even at "green" boutiques (12.8 percent).   If there were ever any questions about consumer interest in sustainability, that alone offers a pretty clear answer.

TerraChoice, which examined claims made about thousands of products for sale at 34 stores in the United States and Canada, says its key findings include:

POSTED: Tuesday, October 26, 2010, 4:08 PM

There's good news for shareholders of General Motors - yup, that means all of us - in this afternoon's release of Consumer Reports' closely watched annual survey of auto reliability.  The nonprofit magazine says: "Eighty-three percent of Chevrolets, GM’s major brand, now have average or better scores in predicted reliability, up from 50 percent last year."

CR offered the results, first presented to auto writers at a Detroit luncheon, with a little glass-half-full spin. GM, it said, "has improved considerably, though Honda and Toyota still dominate" in the reliability ratings, which are derived from reports by owners of 1.3 million vehicles.

Chevrolet was GM's top nameplate, and ranked 17th overall - behind 10th-place Ford, the only U.S. automaker to crack the top 10. The other top 10, in order, are Scion, Porsche, Acura, Hinda, Infiniti, Toyota, Subaru, Volvo and Lexus.

POSTED: Monday, October 25, 2010, 11:55 AM

Bank of America says it has lost $364 million in revenue because it quit charging surprise $35 overdraft fees on point-of-sale transactions - the trigger for the now-infamous "$40 hoagie" or "$37 cup of coffee."  But its new approach also has an upside: a 27 percent drop in customers who leave the bank, apparently because many were fleeing in anger.

According to my Philadelphia Inquirer colleague Harold Brubaker, who wrote about the cost of the Federal Reserve overdraft regulations on Friday, Bank of America is hardly alone.  Wells Fargo came up $380 million short, and PNC Bank lost out on $44 million.

Brubaker wrote that the large banks are, as expected, trying to impose new fees to make up for some of the shortfall - click here to read his article.  Bank of America, for example, has introduced a new checking account that has no monthly fee for online banking and electronic statements but charges $8.95 a month for using teller services.

POSTED: Friday, October 22, 2010, 11:57 AM

Lots of folks will be suggesting priorities for the new Consumer Financial Protection Bureau, the independent agency to be housed at the Federal Reserve and charged, starting next July, with providing the consumer backstop that was so woefully lacking over the last decade as mortgage brokers and credit-card issuers ran wild, fueling excess debt and the housing bubble.

Consumers Union is one of the first out of the gate. The education and advocacy group offered this list last week while I was traveling, but it got scant attention to it's worth sharing here.  I'd be curious to know if readers think CU is wrong, or has left off anything that should be a priority.  Here's its list:

Ending Credit Card Rip-Offs: The CFPB needs to finish the job of protecting consumers from abuses by big banks and their credit card programs. The CFPB should reduce the amount banks can charge for penalty fees, limit the size of penalty interest rates, and require banks to enable consumers to more easily earn their way back to a better interest rate.

POSTED: Thursday, October 21, 2010, 12:51 PM

Remember the phrase "medical loss ratio"?  If you weren't paying close attention during the ugly, polarized debate over the health-insurance overhaul, you easily might have missed it. But it was one of the cornerstones of the new law's attempts to restrain the growth of health-care costs. And now its potential effectiveness is on the line in a battle underway in an unlikely spot: the Orlando area's swank Gaylord Palms Hotel & Convention Center.

An insurer's medical loss ratio is the amount of its revenue that it spends on the actual delivery of health care, versus profits, administrative costs, and other overhead. The law sets a floor: 85 percent for large-group plans such as those sponsored by employers or unions, and 80 percent for policies sold in the personal and small-group market.

Meeting those standards shouldn't be a problem for large nonprofit insurers, such as Philadelphia's Independence Blue Cross, which reports a systemwide medical loss ratio of nearly 90 percent. But for-profit insurers often report ratios well below the new thresholds, and some states have loose or nonexistent requirements. So, at least in theory, the new national minimum MLR should push insurers to operate more efficiently and restrain premium growth. If they miss the ratio, they have to rebate the difference back to policyholders.

About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

Reach Jeff at

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