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Consumer News & Alerts

January 17, 2006

BEWARE THE SCAM FLU
This is the time of year that Sudafed and Kleenex live for: everyone has the flu and is busy giving it to everyone else. But just as bad, maybe worse, is the Scam Flu. It's lurking out there all year round, constantly mutating into new forms and highly contagious.

Scams have been around since the first humans tried to chisel each other out of the last bit of rabbit meat. Other than adapting the latest technology and local customs, they haven't really changed all that much. A scam basically appeals to either our greed or our good nature -- generally offering something for next-to-nothing or presenting what appears to be an opportunity to help others.

There are literally countless examples. Here a few recent ones:

• Princess Di When Princess Di was alive, many consumers felt they knew her. So they weren't surprised when scammers claimed Princess Diana had left them $3 million and all they had to do to collect it was provide their bank account information.

• "Found" Money A young woman approached an elderly consumer in an upscale parking garage, claiming to have found $8 million. Before you know it, the elderly woman had lost her $700,000 life savings trying to get her share of the loot.

• Lottery Scams Turn to Text Messaging Scam artists are what sociologists call "early adopters" -- they're among the first to use new technology. In Asia, lottery scams are now emptying pockets with instant messaging. Expect them to do so here soon.

• Sego Mine Disaster Scammers are fast to exploit consumers' sympathies when there's a disaster. Best solution: ignore email solicitations. Real charities don't use email to ask for money.

How to avoid scams? The trite rule of thumb is that if something sounds too good to be true, it almost certainly is.

As your grandmother told you, strangers aren't to be trusted. It's best to avoid buying anything from telemarketers, email promotions, people who approach you in public places, anyone claiming a direct connection to God and -- without exception -- anything advertised in an infomercial.

Oh, and remember to check our Scam Alerts -- updated daily with the latest from the scam world.

WHAT'S WRONG WITH THIS PICTURE?
Let's say you're a small, struggling company. You know, like Sony, Fuji or Canon. And let's say you know that hundreds of thousands of your products contain a defective chip that can fail without warning, obliterating priceless Kodak moments. What do you do -- immediately issue a recall and replace the defective products? Or do you basically hunker down and keep quiet, hoping the problem goes away? Think you know the answer? Click here to see if you're right.

JINGLE DELLS
Yes, Yuletide is past but there's still that certain seething feeling in the air among those who crossed paths with Dell over the holidays. Missing rebates, restocking fees under the tree, melting warranties and, as a final surprise, jolly old interest fees on "interest-free" purchases.

Lumps of Coal Other holiday grinches include problems with Burlington Coat Factory, broken iPods and iTunes gift card delays. Then there's the blizzard of complaints about problems with Partylite snow globes.

ITUNES INCLUDES ISPY FEATURE
It's pretty hard to argue with the success of iTunes, but it's not hard at all to argue with its nosy nature. The perky little program keeps its beady eyes on you all the time, not only keeping track of what you're listening to but beaming the info back to Big Apple. Of course, the Apple corps denies it does anything with the information.

Symantec's Little Rootkit Norton Systemworks is something consumers pay good money for, hoping to buy protection from viruses, worms, adware, spyware and what-have-you. That's nice, except that it turns out Systemworks inserts some fairly iffy software on its customers' hard drives.

Personally, we have tried just about every anti-virus software out there and found AVG Anti-Virus 7.1 offers excellent protection without the in-your-face behavior of its better-known competitors.

EAT YOUR VEGGIES
In a world filled with fad diets, it's easy to get confused about what constitutes healthful eating. A new study by researchers at Washington University finds that a simple, vegetable-heavy, low-calorie diet can not only help you lose weight but can also slow or reverse the heart's aging process.

Meditate on This Last week, our Dr. Henry Fishman reported that researchers found a lower death rate among elderly practitioners of transcendental meditation. Now, another study finds that meditation can reduce cholesterol buildup, lessening the chance of heart attack and stroke. The recipe for a long and healthy life appears to be a pretty simple one: eat a low-calorie diet rich in vegetables, exercise moderately, meditate regularly, don't smoke, drink red wine sparingly. No expensive pills, potions or supplements required.

Forget the Cough Syrup Chances are your medicine cabinet is full of old and new cough syrup bottles. Unfortunately, the latest word is that over-the-counter cough remedies do next to nothing to treat the underlying cause of that nagging cough.

GAS PRICES RISE, GM STOCK SINKS
Fairly or not, General Motors is identified in many consumers' minds with gas guzzlers. To say that this is bad for business as gas prices begin rising again is a vast understatement. Cars and SUVs are piling up on dealers' lots, leading GM to cut prices, in hopes of moving the merchandise without costly incentives. Ooops, that was true for a day or two. Now GM has also announced it will add incentives to get the aging inventory rolling off the lot.

Inner Air Pollution Forget gas mileage for a minute. A consumer group says the flame-retardant chemicals used in modern cars are "toxic at any speed."

STRONG-ARMED
This may turn into an unpleasant year for homeowners who took out adjustable rate mortgages a few years ago. With interest rates rising, many homeowners who locked in at 3 percent could see their rates double this year. Those hardest hit are likely to be the consumers who chose ARMs because they offered the only monthly payment they could afford.

Fewer Late Payments On the other hand, consumers may be getting a handle on their credit card debt. Delinquencies were down slightly in the last quarter but could head up again as energy costs rise and the full effects of Hurricane Katrina ripple through the economy.

THE NEW CIVIL WAR
The biggest scam artist in town these days is the federal government. Ever since Congress openly put itself up for sale to the highest bidder, the feds have been consistently undercutting tough consumer laws on the state level. Even as the latest bribery scandal energizes the D.C. Bar, financial interests are hoping to short-circuit state regulation of predatory lending. Bad for business, you know.

AMERIDEBT SETTLES UP
AmeriDebt founder Andris Pukke will have a big tax deduction next year. He's agreed to pay $35 million to settle charges that AmeriDebt and DebtWorks defrauded consumers who were seeking credit counseling services. Most of the money will go to a restitution fund. "These defendants used their credit counseling business to deceive nearly 300,000 consumers about the services they provide, the fees they charged, and their status as a non-profit company," said Lydia B. Parnes, director of the FTC’s Bureau of Consumer Protection

IRS Scams Taxpayers An auditor charges that the Internal Revenue Service withheld refunds from taxpayers wrongly labeled as cheats. The citizens falsely accused by their government had to wait years for their refunds. Many did not even know they were under suspicion since the IRS did not give them an opportunity to defend themselves. How is it that the officials responsible are not facing prison? Good question.

SCAMS & OUTRAGES

• Florida Sues Home Care Provider Targeting Elderly Intrust Home Care took seniors' money but provided no services, state charges.

• Michigan Financial Advisors Plead Guilty to Chiseling Seniors Restitution of more than $900,000 ordered.

• Student Leadership Network Allegedly Defrauded Schools Supposed charity collected $4 million for youth leadership training materials and programs that were never delivered.

• Boston Man Charged With Ebay Identity Theft Scheme Dozens of customers' identities stolen.

RECALLS & SAFETY WARNINGS

• Pilates Balls Clips can come loose.
• Bombardier Snowmobiles There could be a missing weld on the steering column.
• Porsche 911 S and 911 4S Recalled A bad weld can cause the tailpipe to fall off.
• Kawasaki Utility Vehicles Steering problems.
• Mosquito Magnet Cleaning Tool The valve can leak or break apart.
• Neptune Aquarium Power Strips Risk of an electrical shock.
• Stihl Chain Saws Possible fuel leak.
• Guardian Home Generator Fuel Hose Possible fuel leak.
• Target Holiday Lights Undersized wires pose a shock and fire hazard.
• Hurley Windbreaker Jackets The drawstring poses a strangulation hazard to small children.

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