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Archive: Legal Battles/Settlements

Gift Card Gamble

Take a peek inside your wallet, that desk in the spare bedroom or the catch-all drawer in your kitchen. Chances are that you've got some unused gift cards inside. I know I do. Now may be the time to rifle through them. As the roster of retailers filing for bankruptcy protection continues to grow, the Consumers Union is asking the Federal Trade Commission to force stores to accept those gift cards as long as their doors remain open. The advocacy group also wants retailers to set up a separate trust fund of gift card revenues, so that shoppers can be...

 

By Ylan Mui | September 11, 2008; 11:57 AM ET | Comments (1)

Is Bargain Shopping In Trouble?

There are few things Americans love more than a good bargain. The desire to get more for less has brought us so much: Black Friday, big box stores, a staggering trade deficit and the likes of Crazy Eddie. But it may soon get harder to find a good deal if the Supreme Court rules for manufacturers in a case called Leegin Creative Leather Products Inc. v. PSKS Inc., d/b/a Kay's Kloset, consumer advocates say. (I know. The mere mention of the Supremes has set off the Broccoli Alert, but bear with me, bargain hunters. This concerns you!) A quick summary...

 

By Annys Shin | February 28, 2007; 09:30 AM ET | Comments (96)

InPhonic Settlement

Ever since the D.C. Attorney General's office filed a lawsuit against District-based wireless phone and service retailer InPhonic Inc. last June, I have received a steady stream of e-mails from unhappy InPhonic customers. Well, looks like the company, while not admitting to wrongdoing, has settled with the city. It has agreed to pay D.C. $100,000 and make restitution to some 9,000 customers nationwide. Just to recap the case against InPhonic: The DC AG alleged the company failed to deliver on its rebates. To plagiarize my own June 2006 Post story for a second here: For example, the suit alleges that...

 

By Annys Shin | February 16, 2007; 06:45 AM ET | Comments (0)

About That Car...

If you've recently entered the used car market, you probably have it drilled into your head to get a vehicle history. For $20 to $25, services such as CARFAX can help you avoid getting stuck with a lemon. Well, consumers are only as good as the information they have and a class-action lawsuit against CARFAX alleges the Centerville, Va., company's reports are not as thorough as it has led people to believe. It turns out that CARFAX doesn't receive accident reports from every state, but the company's Web site is a little coy about disclosing that fact. On the one...

 

By Annys Shin | January 22, 2007; 08:30 AM ET | Comments (21)

Naturally Confusing

I don't think I've ever thought of soda as being "all natural" despite what advertisements might say. That assumption is based on the fact that I've never seen carbonated liquid squeezed out of a fruit or vegetable. Apparently, though, Center for Science in the Public Interest was worried some people might believe soda could be all natural--and thus not so bad for you. In May, it said it would sue beverage company Cadbury-Schweppes for calling the newly reformulated 7-Up all natural, even though it contained man-made high-fructose corn syrup. Last week, Cadbury-Schweppes cried uncle and said it would change the...

 

By Annys Shin | January 16, 2007; 09:00 AM ET | Comments (0)

The Biggest Loser Is...

There are days when I think working at the Federal Trade Commission must be a blast. Yesterday, the agency announced $25 million in settlements with several promoters of well-known weight-control products such as TrimSpa and CortiSlim. Deceptive advertising is not a laughing matter, but some of the ads for these products are pretty funny. Take an ad for One-A-Day WeightSmart multi-vitamin, which contains a green tea extract that supposedly does something for your metabolism. WeightSmart's maker, pharmaceutical giant Bayer, was not happy about being lumped in with the likes of Anna Nicole. And the company denied promoting WeightSmart as anything...

 

By Annys Shin | January 5, 2007; 07:33 AM ET | Comments (71)

Stealth Doesn't Pay

It's been a bad couple of days to be a spokesman for Sony. There were two fires to put out yesterday--both of which stemmed from attempts at being "slick," as the kids like to say, with consumers. Fire No. 1: Sony BMG--the music label that is a joint venture between Sony and Bertelsmann AG--said it would pay $1.5 million to settle lawsuits brought by the attorneys general of California and Texas over music CDs that installed anti-piracy software on consumers' computers without disclosing it. The software not only sent back information on what CDs consumers played, it also left computers...

 

By Annys Shin | December 20, 2006; 11:45 AM ET | Comments (0)

Hidden Charges? Nothing Some Earbuds Can't Fix

A few weeks ago I found out I was eligible to benefit from a recently settled class action lawsuit. The suit alleged the cellphone service provider used deceptive advertising and got away with collecting hidden charges. I received two vouchers. I can sign up for only one choice on each voucher. Let's take a look at the goodies being offered, shall we? Voucher No. 1: * A $15 credit in return for renewing my contract for a year. * A $30 credit in return for renewing my contract for two years. * Continuing $3 service credits every three months beginning...

 

By Annys Shin | November 14, 2006; 10:00 AM ET | Comments (24)

Seeing the See Clearly Method for What It Is

Scammers become more and more technologically advanced with each passing day, or so it seems. Starting today, in fact, the Federal Trade Commission is holding a series of public hearings on "Protecting Consumers in the Next Tech Age." It's billed as a glimpse into the not-too-distant future, with panels devoted to how changes in products, marketing, and data security are likely to affect consumers. No matter how sophisticated we become as consumers, however, some scams survive all manner of technological change and find new victims generation after generation. A case in point: eye exercises to help correct impaired vision. Eight-six...

 

By Annys Shin | November 6, 2006; 07:00 AM ET | Comments (0)

KFC's Trans Fats Taking Heat

The food fight continues. The perpetually hard-charging Center for Science in the Public Interest has launched another legal battle, this time against KFC. Fresh from its recent victory against Frito-Lay (see my item last week on the company's agreement to post more prominent olestra labels on the Light chip products), the nonprofit group today is filing suit against KFC for its continued use of partially hydrogenated oil, a.k.a. trans fat. In a class-action lawsuit filed in D.C. Superior Court, the group is asking a judge to bar KFC from using trans fat--or at the very least from requiring it to...

 

By | June 13, 2006; 10:00 AM ET | Comments (0)

No Longer Making Light of Olestra

There are a lot of people who don't like the Center for Science in the Public Interest. How do I know? Every time I write about this consumer-advocacy group, I get lots of e-mails and telephone calls complaining that the group is just a bunch of officious scaremongers, an obnoxious team of food police who are trying to curb our free choice to eat what we want when we want. One caller always leaves a message that I should identify the group as leftist liberal--and he does not mean that in a complimentary way. Say what you will about CSPI,...

 

By | June 8, 2006; 06:37 AM ET | Comments (0)

Fuel Savings or Fuel Fraud?

Strange New Products is a blog that looks at the "weirdest, funniest, stupidest, and ingenious new products entering the marketplace." Last December, it posted an item about BioPerformance, a pill that you pop into your gas tank to improve fuel mileage and reduce emissions. As the blog noted, BioPerformance's makers called it a "revolutionary fuel saving product" that can improve fuel mileage 35 percent--or more. But Texas Attorney General Greg Abbott has called the pill a fraud, saying it's made of naphthalene, basically the chemical found in mothballs. Not only is naphthalene toxic, but it could also decrease engine performance,...

 

By | May 30, 2006; 09:12 AM ET | Comments (45)

Bitter Words Over a Sweet Ingredient

High fructose corn syrup--that's quite a high falutin name for something that's basically just a sweetener in sodas and lots of other food. And now the question is, is it "natural?" 7Up says it is. It just launched a new advertising campaign, saying there's a whole new reason to drink the Uncola: It's 100 percent natural." The Center for Science in the Public Interest disagrees. The advocacy group, which has fought for tighter food labeling requirements, reduced fat and sodium in processed foods and unveiled the high caloric count of movie popcorn and Chinese food, says that as long as...

 

By | May 11, 2006; 12:43 PM ET | Comments (40)

Baby Video Firms Come Under Fire

A child-advocacy group whose mission is to limit marketing aimed at children yesterday asked the federal government to bar Baby Einstein and Brainy Baby, two major baby-video companies, from promoting their products as educational and beneficial to child development. The Campaign for a Commercial-Free Childhood filed a complaint with the Federal Trade Commission, saying the two major baby-video companies should not be able to say their products inspire "logical thinking," foster "the development of your toddler's speech and language skills," or give "your child a jumpstart on learning." Read more of my story in today's Post. What do you think...

 

By | May 2, 2006; 07:43 AM ET | Comments (31)

Riled Up Over Resort Fees

My husband, Gary, has a long list of pet peeves. (Don't we all?) Here are just a few of them: * Bad cell-phone reception. * The difficulties of making travel reservations online. The hotel/airline/car rental company's computers invariably crash just after entering all the necessary information but before the reservation is final. * The promotional phrase "free gift." What's a gift if it's not free? * Commercials before movies. * Meaningless computerized phone messages, like "Your call is very important to us." Here's his comment on that: "How do they know why I'm calling? It might not be important to...

 

By | April 24, 2006; 07:50 AM ET | Comments (14)

Netflix Settlement Update

This is just in from Michale Liedtke, AP's business writer who attended today's San Francisco court hearing on the proposed Netflix settlement: "A judge on Wednesday delayed approval of a proposed class-action settlement that would require Netflix Inc. to offer a free month of DVD rentals to resolve a lawsuit that prompted the popular online service to acknowledge it gives preferential treatment to its most profitable customers. "San Francisco Superior Court Judge Thomas Mellon Jr. indicated he needed more time to figure out how much he will reduce the fees of two San Francisco lawyers representing the interests of...

 

By | March 22, 2006; 09:18 PM ET | Comments (1)

A New Netflix Settlement

A proposed class-action settlement involving Netflix customers has been rewritten to address complaints that the agreement did little for consumers while rewarding the company and lawyers who filed the suit. The new version of the settlement, which is scheduled to be reviewed by a California Superior Court judge at a hearing today, still gives the plaintiff's' attorneys more than $2 million. However the chief complaint about the previous settlement -- that it would have resulted in Netflix customers paying higher monthy fees -- has been resolved. As a result, most objections to the settlement have been dropped, including those filed...

 

By | March 22, 2006; 11:09 AM ET | Comments (4)

States Halt Time's Automatic Subscription Renewals

Time after time, I've gotten complaints from readers who said they were billed for subscription renewals they didn't order. And many of the complaints were about Time Inc., which owns Time, Sports Illustrated, People, Fortune and a raft of other magazines. Yesterday, 23 of the nation's attorneys general cracked down on these automatic renewals. Time will pay $4.3 million to consumers and another $4.5 million to cover the costs of the investigation. More than 100,000 consumers -- about 3,400 in Maryland and 4,400 in Virginia--will be eligible for refunds on subscriptions that were automatically renewed between January 1998 and May...

 

By | March 22, 2006; 10:49 AM ET | Comments (0)

A Blow to the 'Wal-Mart Shopping Spree' Scam

The Federal Trade Commission has obtained a temporary restraining order against a group of companies that have been running what's become infamously known as the "Wal-Mart Shopping Spree" scam. Here's how the scam worked: Consumers got telephone sales pitches offering gift cards -- usually $200 to $500, mostly from Wal-Mart, but also from Kmart, JCPenney, Macy's and other retailers. To receive the cards, the consumers were asked to first pay a shipping and handling fee ranging from $3.49 to $4.95. The callers wanted payments made through consumers bank accounts and demanded the account information over the phone. If a consumer...

 

By | March 1, 2006; 12:11 PM ET | Comments (0)

Lead in Lunchboxes Update

The Center for Environmental Health is continuing to post victories in its battle to eliminate lead in children's products, especially lunchboxes. Last week, the California public-interest group announced it had reached an agreement with InGEAR, the nation's third-leading lunchbox and cooler manufacturer. InGEAR has agreed to set a strict standard for reducing lead in all of its vinyl lunchboxes and coolers to below 200 parts-per-million (ppm). It also agreed to stop using polyvinyl chloride (PVC or vinyl) plastic in the interior of lunchboxes since PVC often contains high lead levels. InGEAR, which sells its lunchboxes at Kmart, WalMart, Sears and...

 

By | February 24, 2006; 07:00 AM ET | Comments (0)

Apple Sued Over iPod Nano

Apple Computer has been sued in California by a consumer watchdog group that claims the company's popular iPod Nano's screen scratches so badly that it becomes unreadable. The group, the Foundation for the Taxpayer and Consumer Rights, also says Apple is refusing to give refunds, and is forcing consumers to pay a $25 fee to get a replacement that should be free under Apple's warranty. Apple spokesman Steve Dowling declined to respond to the San Francisco Chronicle, saying the company doesn't comment on pending litigation. Read the full story....

 

By Stacey Garfinkle | February 13, 2006; 12:50 PM ET | Comments (33)

Ameriquest Settlement

Federal and state law-enforcement officials today announced a $325 million settlement today with Ameriquest Mortgage Co., the nation's biggest home lender to people with bad credit. The settlement ends a two-year investigation by all 50 state attorneys general, banking regulators and local prosecutors into allegations that Ameriquest deceived consumers to sell mortgages, using high-presure sales tactics to meet employee sales quotas. In addition to paying $295 million in consumer redress and $30 million in legal fees, the company has agreed to change some of its business practices and accept outside monitors who will observe the company's operations to make...

 

By | January 23, 2006; 04:00 AM ET | Comments (46)

Netflix Settlement on Hold

A proposed class-action settlement involving Netflix customers may be rewritten in response to complaints that the agreement does little for consumers while rewarding the company and the lawyers who filed the suit. A hearing over the $4 million settlement that had been scheduled in California Superior Court on Tuesday was postponed for a month while both sides review more than 50 objections to the proposed settlement. Here's the full story and a link to my earlier item on one of the objections....

 

By Stacey Garfinkle | January 18, 2006; 08:10 AM ET | Comments (2)

AmeriDebt Founder Settles Deception Charges

Andris Pukke, who was once called the "poster child" for bad credit counseling, has settled two lawsuits that accused him and his firms, AmeriDebt and DebtWorks, with deceiving financially strapped consumers into paying high fees and then using that money for expensive homes, vacations and cars. (Read the full story) The settlement calls for Pukke's assets, including his multimillion dollar homes in California and Florida, to be sold and up to $35 million be placed in a special fund to be refunded to the 300,000 former AmeriDebt customers. The settlement of the two cases--one by the Federal Trade Commission, the...

 

By | January 10, 2006; 08:00 AM ET | Comments (1)

Netflix Settlement Falls Under Attack

The national public interest law firm Trial Lawyers for Public Justice has long been taking aim at what it considers unfair class-action settlements, filing objections to the settlements it believes offer lots of money to the plaintiff attorneys but very liittle--usually coupons with relatively small monetary value--to consumers. The group's latest target is a proposed class-action settlement involving Netflix customers. The law firm Trial Lawyers for Public Justice has posted this graphical representation of the Netflix settlement on its Web site. The national class-action lawsuit, filed in September 2004, alleged that Netflix misled consumers by failing to deliver DVDs as...

 

By | January 9, 2006; 10:00 AM ET | Comments (16)

Olestra Attack

The Center for Science in the Public Interest has taken the first step in a legal battle against Frito-Lay, accusing the company of deceptively marketing its "light" potato chips. The consumer advocacy group says the chips are made with Olestra, a controversial fat substitute that causes diarrhea, stomach cramps and other unappetizing symptoms. Since 1998, when Frito-Lay first introduced Olestra to its chip lines (which were first labeled WOW!, then renamed to light in 2004), CSPI has been loudly warning consumers about the potential side effects of Olestra. Initially, the Food and Drug Administration required food makers to post warning...

 

By | January 4, 2006; 02:45 PM ET | Comments (15)

 

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