Friday, December 28, 2007
CPSC Lowers Boom On HSN For Failing To Report Safety Issues
The US Consumer Product Safety Commission says that HSN will pay an $875,000 fine for failing to report safety issues regarding its sale of The Welbilt Electronic Pressure Cooker (pictured left)
HSN, which was known as Home Shopping Network during the 2001 to 2004 time period in which the government agency said the offenses occurred, denied any wrongdoing or liability. The law requires manufacturers and distributors to immediately report safety issues.
The company's actions were termed a penalty, rather than a fine, but the results are simple semantics. The CPSC claims that the company received more than two dozen reports of consumers who were burned when the cooker's lid allegedly opened prematurely. The agency worked with Welbilt and HSN in 2005 to recall nearly 4,000 units in 2005. Those cookers were made in Korea.
"This simply shows that even a small recall can have major repercussions," said Consumer Help Web's George Bounacos. "We have been trained to think in terms of millions or hundreds of thousands, but in this case, the reported injury rate was more than 1 out of every 170."
Bounacos' comments came during his announcement of a new recall information portal for consumers. "Too many agencies announce recalls and investigations for the average consumer to learn about them all. Even when stores do comply, the second-hand market for used goods thrives, from eBay to consignment shops.
RecallRecap.com will help consumers quickly check for free whether the product they're interested in was recalled, and if so, for what reason."
Labels: CPSC, HSN, recall
Thursday, December 27, 2007
Senior Scam Halted In Time For Christmas
California's Attorney General and Insurance Commissioner wrapped up a long-running lawsuit in time for the Christmas holidays.
In announcing a $7.2 million settlement with multiple organizations, the California AG's office did what few do in such settlements. $5 million of the settlement will go to restitution with $1 million fines for two different companies.
The scam worked like this:
California officials said that the companies tricked senior citizens into buying annuities—long-term financial vehicles with high penalties for early withdrawal. The annuities offered the possibility of future payments, but only after a lengthy surrender penalty period. Because of their long window to mature, California officials said the investments were not typically suitable for senior citizens.
One of the companies, Family First Insurance, reportedly sent sales representatives, who were not authorized to practice law, to senior citizens’ homes to provide legal advice on estate planning. Those representatives naturally did not disclose that their ultimate goal was to sell annuities. After preparing the living trust documents the agents returned to the seniors’ homes—under the guise of acting as their financial or estate advisors—and induced the seniors to move their liquid assets into annuities.
Family First will be forced to cease operating according to California officials, who offered some solid advice for consumers in the wake of the problems.
* Consumers should be wary if someone claims to a trust expert, senior estate planner or paralegal, or to work with an attorney who is an expert in estate planning. These agents are not attorneys and not experts in living trusts. If seniors need assistance with preparing a trust or other estate plan, they should seek out their own attorney whose expertise is in estate planning.
* Be wary of free seminars or sales presentation on living trust services.
* Use caution if the representative asks for access to your personal financial information while setting up or updating an existing living trust. Agents use this ploy to ultimately pitch annuity investments.
* Some may also criticize existing investments, saying that these investments carry more risk than the annuity.
* And finally, a big warning bell should go off if someone does not discuss the drawbacks of a particular investment option.
Labels: California, consumer, financial, insurance, investment, scam
Friday, December 21, 2007
Saturn Now Requires CARFAX
Saturn has announced that checking a CARFAX Vehicle History Report is required before a Saturn dealer can "certify" a used vehicle.
Certified pre-owned programs (CPO) are becoming an industry norm as manufacturers with late model inventory seek to remove the stigma of a used vehicle and bolster prices. Saturn, like pricier European models, is known for reliability and durability, but that doesn't necessarily mean that a specific vehicle is safe or roadworthy.
Using a CARFAX report along with a mechanic's inspection remains the company's mantra, and the advice is sound. Meanwhile, part of the work will already be done for Saturn buyers now that dealers are required to check the CARFAX report before selling the vehicle as "certified".
The majority of certified used vehicles sold in the United States must now be checked through CARFAX.
Labels: carfax, saturn
Thursday, December 20, 2007
If This Is The Season, You're Already Shipping Too Late
Consumers write us every year, frustrated to the point of anger or tears, because a merchant missed a delivery date. It happened to us twice this year, most recently with
1800Flowers.com.
Our reviewer Lynn Kvigne called out this florist for glitches, but did admit that the merchant tried hard to recover. They did the same with us again this year, missing an order we placed yesterday for "same day delivery". The merchant does provide a telephone number, and they did agree to have the florist re-route the delivery to the recipient's home, but consumers make this purchase because they need something there on the same day.
We see this happen every year with the delivery services like FedEx and UPS also. Remember two things:
1. It's December 20 and you don't have any of their official shipping days left before Christmas Eve.
2. The overnight and special delivery fees are
not guaranteed during this time of year.
Think of the guarantee as akin to an airline's weather or mechanical delay. Just as the airline is not responsible for a delay then, UPS, FedEx and the others will not be responsible for a delay now. That's not to say you shouldn't make use of them. Get there now. But also understand that your package may still not get there, and it's not their fault.
We actually meant to post this earlier this week, but delays happen. You see how it is?
Labels: 1-800-Flowers, delivery, FedEx, UPS
Wednesday, December 19, 2007
Sprint Nextel Moves To Fix Customer Service Issues
Sprint Nextel (NYSE: S) tapped former AT&T Wireless executive Daniel Hesse for the second time to help manage the company. Hesse spent most of his career with AT&T before joining Sprint and spinning off the company's Embarq subsidiary over a year ago.
Hesse is joining Sprint Nextel as CEO after the company's bets on Wimax technology and a reputation for customer service problems have halved the company's stock price from the low $20 range to well under $10 now.
Nextel, before merging with Sprint, went through a similar dry spell before its then new push-to-talk technology and merger buttressed the company's fortunes. Sprint Nextel received more complaints in 2007 than any other wireless carrier, said Consumer Help Web President Joan Bounacos, who praised the company for being "responsive" when contacted by the company's complaint letter writing service.
Labels: customer satisfaction, Hesse, SprintNextel, wireless
Monday, December 17, 2007
Like Twitter? Like T-Mobile? They May Not Be Good Together
We have always thought T-Mobile an outstanding wireless company. They are consistently
responsive to us when we send complaint letters, and they get far fewer than any other wireless carrier.
We're not so sure about Twitter. One of us is a big fan, one keeps trying to be and the rest of the folks want to know about their content areas. Still, learning about T-Mobile's stance today regarding Twitter was a dash of cold water in the face reminiscent of that brief horrible period when Intuit turned its back on special service and almost killed Quicken.
Irreverent but usually darn accurate Silicon Valley site
Valleywag wrote yesterday about T-Mobile refusing to allow text messages to Twitter's service. A blogger apparently tried a net neutrality argument, but that was quashed by the executive response team. Instead, it appears that the tech contingent (the gang who first made the Sidekick go viral and sell big) will do the company's reputation more harm than any philosophical argument.
Why is this seemingly tech-oriented battle important for consumers?
The answer lies in what we told a client today. There will be millions of new cell phones with web capabilities unwrapped around Christmas trees next week. T-Mobile's representative wrote in response to Twitter:
"... some Services are not available on third-party networks or while roaming. We may impose credit, usage, or other limits to Service, cancel or suspend Service, or block certain types of calls, messages, or sessions (such as international, 900, or 976 calls) at our discretion."
Knowing what your carrier provides is one of the keys to making that new wireless purchase a winner. Read the fine print before you wrap the present.
Labels: T-Mobile, Twitter, Valleywag, wireless
Wednesday, December 12, 2007
When Do Not Call Means Forever
Remember that nifty "Do Not Call" list you registered for some time ago with tens of millions of your best friends? We're betting you didn't know that there was a time limit involved.
It's true. The original program was only designed as a short-run measure. Now the House of Representatives wants to make it permanent and has overwhelmingly voted to make the status permanent and continue funding operations from telemarketing firms. These are both good measures that are long overdue.
But don't forget that certain calls are exempt. They include calls from businesses with which you have established or continued a relationship, charities, and our favorite, political calls. The CCD, a non-profit group in Washington, is continuing its efforts to compile a do not call list that would be voluntary for politicians. As the 2008 presidential elections come up next year, we can't think of any smarter move you can make since registration is free. Visit StopPoliticalCalls.org to
add your name to the political do not call list.
Labels: do not call, FTC, stop political calls
Tuesday, December 11, 2007
Kudos To Amex On Their New Resolution Policy
This move will be unpopular with merchants of every stripe (although we've never had a
chargeback at Consumer Help Web so we don't mind...), but American Express' new "billing inquiry" resolution process improves an already good process.
Amex used to flag the funds in question, ask the merchant or member to supply documentation and then make a decision. Now the burden of proof is strictly on the merchant (as it should be in any billing dispute) and the process can be initiated online in addition to phone.
Capping the entire process is a fairly long satisfaction survey to gauge the customer's reaction to the process. The financial services company says it will make a donation to the American Cancer Society for each completed submission and has donated over $400,000 so far. We understand enough about marketing to know that there is a cap and that the value of an individual survey may not be much.
That said, whenever a company tries something new and asks if you like the new process or procedure, you're being a smart consumer to vote. In the world of customer sampling, even a handful of votes can garner lots of upper management attention. Make sure they hear your voice.
Labels: American Express, customer satisfaction, survey
Monday, December 10, 2007
Our Take On The Mortgage Crisis
Last week,
House Democrats defied the Bush administration's veto threat and rammed through H.R. 6, energy legislation that would change fuel economy requirements for cars and light vehicles over a 13 year period.
Among the arguments raised by the White House and Senate Republicans was that the bill legislated a free market economy.
We thought that was an interesting excuse then because the U.S. does not have a free market economy, despite any political rhetoric to the contrary. Yet the subprime mortgage issue apparently required federal government intervention in those very same markets, which leaves us with a single question.
Why?Overextended consumers in danger of losing their homes is a terrible plight. Equally terrible are the tens of thousands of innocent consumers now on unemployment in time for the holidays because they worked for large financial institutions who gave credit to greedy consumers.
Yes, greedy consumers. "But I didn't know (or think) the rate would change that much," is the most common rallying cry. We're sure that is true because our discussions with consumers show that most don't spend long enough during their mortgage closing process to actually read, much less understand, the documents on what is typically the largest purchase of their life.
We listened to these same consumers crow about their low, low rates while stodgy conservative consumers clung to 30 year fixed mortgages and vowed to reduce their overall interest expense by voluntary rather than mandatory pre-payment as in the accelerated 15 year mortgages. We likewise saw many consumers opt for interest-only notes. Many of those consumers now have no equity left in their homes, which financial planners tell us often funds a major portion of a person's retirement nest egg.
Any financial institution who did not fully disclose the maximum interest rates and payment schedules should face civil, and as necessary, criminal penalties at an individual level. But consumers who just guessed wrong and traded 36 lower payments until a rate reset don't deserve and shouldn't receive federal intervention. No matter what assurances government officials make, the market is too symbiotic for these measures not to impact the overall consumer mortgage market.
Bad financial planning by greedy consumers shouldn't be protected at the expense of fiscally prudent consumers who did their homework and chose not to speculate with their home. For consumers who were told the odds and gambled (much like a lottery or slot machine) with their home, we have sympathy, but a bailout is the wrong message to send to our financial trading partners throughout the world, to our independent businesses and to our younger consumers who have now learned that engaging in the latest financial fad may not have repercussions.
Reinforcing that lesson may be the biggest problem this debacle caused.
Labels: mortgage, sub-prime
Saturday, December 08, 2007
Know Before You Buy - CompUSA To Close After Christmas
After acquiring privately-owned computer retailer
CompUSA, the new owners have announced plans to close the company's stores.
This is important news for consumers who purchase holiday gifts at those stores. Returns, refunds and exchanges may not be possible after the holiday depending on how fast the company moves to sell store locations and close the retail business. If the chain is even still selling gift cards, we would hope that full disclosure of the chain's pending demise is printed on the card.
Gordon Brothers, a well known equity firm that also owns Things Remembered and Toys R Us among other well known brands, made front page news throughout the country today with its announcement to close the large computer store's retail operations. We think it is incredibly irresponsible, however, that neither the new owner's site nor the main
CompUSA site included any of this important consumer information 24 hours after the deal was announced.
One wonders how this lack of information was created in an age of push-button technology, instant messaging and the ability to publish data on the web within minutes. In the absence of a simple message reassuring consumers that their purchases will be protected for a certain amount of time, we can only advise the well known axiom,
caveat emptor, buyer beware.
Labels: CompUSA, Gordon Brothers
Friday, December 07, 2007
Forget Mortgages Now. One Agency Tells You (Free) 51 Ways To Save
As the government interference in the free market mortgage economy sorts itself out over the coming hours and days, we'll share our thoughts on this big piece of consumer news. There are still several battles looming and today's Wall Street reaction before a true temperature can be taken of the unilateral government actions being taken.
Meanwhile, the FCIC, one of our favorite federal or local agencies, does an excellent job with a new publication on saving on loans and credit cards. As always, the agency and its content partners do a great job describing an issue and its solutions (or prevention) in plain ole' English.
(from their release)For many, nothing says the holidays more than shopping: hitting the sales, taking in the sights, searching for the perfect gift for everyone on your list.
But it's very easy to shop yourself into more debt than you can handle. This year, resolve to keep your expenses in check and your credit intact -- it's a gift you'll appreciate the whole year through.
Check out
51 Ways to Save Hundreds on Loans and Credit Cards from the Federal Deposit Insurance Corporation (FDIC) and the Federal Citizen Information Center to get advice you can use now and to start the new year off right.
BUDGET: Set a budget whenever you shop. Decide how much you can spend, and don't go over that limit. Paying with plastic? Look at how much you already owe on your cards. One of the quickest ways to run up debt is to only pay the minimum amount owed on your credit cards. Late fees add up, too, and so does going over your credit limit.
51 Ways to Save has other helpful tips for paying less in credit card fees and interest.
BEWARE QUICK CASH LOANS: Proceed with caution if you're looking for quick cash for a shopping trip. Car title or "payday loans" can get you money fast, but they come at a steep price --
the interest rate on a payday loan can be as high as 391 percent! Instead, start a savings account where you can put just a little bit from each paycheck throughout the year. You'll have saved plenty for gifts in time for the next holiday season. If you're considering other loan options for extra cash (like a home equity loan), make sure to check out
51 Ways to Save to learn how to shop for the best deal, compare Annual Percentage Rates (APR) and read the fine print to save even more.
You can get
51 Ways To Save three ways (four, if you count sending us a $25 money order...we're just joking, don't do that)
* Send your name and address to 51 Ways to Save, Pueblo, Colorado 81009.
* Visit
www.pueblo.gsa.gov/rc/n7051waystosave.htm to order online or to read or print these and hundreds of other Federal publications for free.
* Call toll-free 1 (888) 8 PUEBLO weekdays 8 a.m. to 8 p.m.
Labels: credit, FCIC, financial
Thursday, December 06, 2007
House Votes Green, But White House Threatens Veto
Don't count on decreasing your dependence on traditional energy sources based on legislation approved in the House of Representatives today.
The Democrat controlled
House passed H.R. 6 less than an hour ago. This legislation jumps fuel economy requirements from 27.5 miles per gallon to 35 miles per gallon and increases the tax burden on traditional energy companies. Rolling back the previous tax credits is earmarked to investigate alternative energy sources such as wind and solar. The fuel economy requirements, called CAFE requirements, would be phased in over a 12 year period.
Except Senate Republicans and a defiant White House are promising the bill will never become law. Original author Rep. Nick Rahal (D-WV) and 198 co-sponsors ensured the bill, introduced at the beginning of 2007, would easily pass the House.
The bill had not yet been passed when the White House released a statement saying that H.R. 6 "...would raise taxes and increase energy prices for Americans. That is a misguided approach and if it made it to the President's desk, he would veto it."
Despite the promised veto and the threat that Senate Republican leaders might even manage enough votes to keep the bill from going to the White House, the House moved quickly after threatening the legislation all week.
"This showdown over energy happened along party lines," said Consumer Help Web COO George Bounacos. "Things are now politicized to the point that the Bush administration refers to their concept as 'energy security' and the House bill approving the Senate's earlier amendments refers to 'energy alternatives.' While they argue over words and taxes, nothing changes and consumers still face huge price increases at the gas pump since that remains our primary fuel source for personal transportation."
Strong lobbying groups for the automobile manufacturing and energy industries kept the bill stalled almost to the holiday break. With the House's work now down, CNN is quoting Senate Democrats who say they will introduce the legislation as early as 48 hours, even calling back candidates involved in the 2008 Presidential election process.
Oil prices jumped $3 higher today, once again crossing the $90 mark.
Labels: Bush, Congress, energy, gas prices
Wednesday, December 05, 2007
FTC Closes Envelope On Work-At-Home Firms
The Federal Trade Commission has announced the conclusion of cases against firms targeting "work at home" employers. We wrote about the initial
FTC charges earlier this year.
Since then, the federal agency has amended its complaint and judgments have been entered against multiple defendants at an individual and corporate level. The new FTC statement does not accuse any of the entities of wrongdoing, but instead says that monies were received when that they were not entitled to.
We believe that more important than any particular fine or criminal case the agency could have pursued through the Justice Department is the warning sent to the lucrative industry of luring unsuspecting consumers into an arrangement where the consumer not only doesn't make any money, but often is the only party paying any money. With repeated crackdowns, those engaged in improper business activities designed to cheat consumers have clear notice from the federal government that consequences will occur when caught.
Meanwhile, if a work from home or envelope stuffing deal sounds too good to be true, call your state's local employment commission and your local or state consumer protection office to check out the company before doing anything. Deals that sound too good often aren't good.
Labels: FTC, work at home
Tuesday, December 04, 2007
Levin Committee Opens Hearings On Credit Card Interest Hikes
Powerful Senator Carl Levin (D-MI) opened Senate hearings today that put credit lending giants on notice that sudden rate hikes would soon come under greater scrutiny.
Levin chairs the Subcommittee on Investigations under the Homeland Committee and criticized the industry from the credit bureaus to the credit lenders for a lack of transparency in the process. Citing multiple examples in which the interest rate on a consumer's credit card could suddenly and retroactively increase, Levin announced that the Subcommittee would review the process.
Using the occasion to describe legislation he has been co-sponsoring with Senator McCaskill (D-MO) almost all year, Senator Levin said, "When a credit card issuer promises to provide a cardholder with a specific interest rate if they meet their credit card obligations, and the cardholder holds up their end of the bargain, the credit card issuer should have to do the same."
Amen.
The Michigan senator referred to the mysterious FICO credit scores many lenders use to determine interest rates and said that he would advocate that the underlying data used to generate those scores be kept so that a consumer could challenge an increase. Consumers currently are advised of an increase, but Levin said that many are unaware of the increase's trigger, including spending within an individual account's limit, but at a higher percentage of that limit.
Senator Levin chastised lenders and called the practice "offensive".
We think this is the first step in more transparency to credit reporting laws, a long overdue overhaul of how lenders operate now. We certainly don't expect lenders to issue credit to bad credit risks and we respect a lender's light to charge a premium interest rate to protects itself when granting credit to consumers with poor credit.
But full disclosure in plain English with no retroactive increases makes sense to us too. And if someone is issued a credit limit by a lender, their interest rate on another account shoudn't rise if the consumer spends that money. Credit is a privilege, not a right, but consumers ultimately pay for that privilege through interest, card fees and higher prices when merchants have to keep prices higher rather than absorb the fees credit card companies charge
them for each transaction.
Cheers to Carl Levin. Read up on
S. 1395, (pdf file) and call your own Senator about signing on to the bill. This is a good one.
Labels: credit, Levin, McCaskill
