Class Action Blog : Class Action Lawyer & Attorney : Meiselman, Denlea, Packman, Carton & Eberz : Consumer fraud, Personal Injury

As the Christmas holiday approaches many consumers are avoiding long lines at their U.S. post offices by mailing their holiday cards and gifts at their local United Parcel Service (“UPS”) store.  At your local UPS store, consumers can send their mail by U.S. mail as well as through UPS.  But according to a New York Times article, UPS clerks do not always tell customers that they may be paying a hidden surcharge when they send mail by U.S. mail.

The New York Times sent reporters posing as customers to several UPS stores.  These “customers” wanted to mail items by U.S. Postal Priority Mail.  In nearly every instance, they were quoted prices well above the U.S. postal rate and, most importantly, only one reporter was actually told that the he or she was paying a premium for using a UPS store.

For example, one UPS store said it would cost $21 to send an 8 lb. package by U.S. Priority Mail.  As such, the UPS clerk suggested using UPS Ground instead for $19.90.  In fact, the same package shipped from a U.S. post office costs $8.80, and would arrive at the same time as the more expensive UPS Ground shipment.  And the only notice that The New York Times’ reporters found at the UPS stores was a notation on the receipt – which a customer receives after the purchase – that reads, “U.S. Postal Rates Are Subject to Surcharge.”  There is, however, no notice of the amount of the surcharge or how it is computed.

“I think there’s a natural assumption on the part of the consumer that if you’re sending something through the U.S. Postal Service, even when it’s from another store, you’re not paying more, and if you are paying more, it’s just a pittance,” said Tod Marks, a senior editor at Consumer Reports.  Moreover, consumers should be given notice prior to paying that they are being charged a surcharge.

If you shipped mail from a UPS store by opting to use and pay for U.S. Postal service, and were charged a surcharge as a result, please contact us to discuss your legal options.

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Would it surprise you that purchasing “refundable” airline tickets from some major airlines and/or Internet travel sites are not actually fully refundable?  It shouldn’t, because they aren’t.  There are hundreds, if not thousands, of consumer complaints online regarding “refundable” airline tickets that are, in fact, not fully refundable.

For example, Continental Airlines allegedly sells “fully refundable” tickets at a premium price to consumers.  But if and when that consumer purchaser decides to cancel the airline ticket and get a refund of his or her “fully refundable” ticket, he or she is allegedly charged a $400 fee.  Other major airlines also sell “refundable” tickets that include a cancellation fee amounting to hundreds of dollars, sometimes equaling the amount of the ticket purchased.

Moreover, Internet travel sites, like Priceline.com and others, also allegedly sell “refundable” tickets that are not truly refundable.  One consumer complained that he purchased a “refundable” ticket from Priceline, attempted to cancel his ticket and was charged a “cancellation fee.”

Consumers purchasing airline tickets sold to them at a premium price as “fully refundable” or “refundable” should be able to cancel their tickets and receive the full price paid for that ticket.  Unfortunately, the practice of charging a “cancellation fee” for a ticket that is sold as “fully refundable” is a common practice in the airline industry and on Internet travel sites.  These tickets are sold with little or no disclosure informing purchasers that should they decide to cancel their “refundable” tickets, or change travel plans, they will be charged a substantial “cancellation fee.”

If you purchased “fully refundable” or “refundable” airline tickets and were charged a “cancellation fee,” please contact us to discuss your legal options.

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As part of an effort to ensure that environmental marketing is truthful and based on solid evidence, the Federal Trade Commission (“FTC”) has advised marketers since 1992 that in order to make claims that an item is “biodegradable” they must have scientific evidence that the product will completely decompose within a reasonably short period of time under customary methods of disposal.  And, as the FTC has asserted in three recently filed actions, products typically are disposed in landfills, incinerators or recycling facilities, where it is impossible for allegedly “biodegradable” products to biodegrade within a reasonably short time.

For example, the FTC recently entered into a settlement with a retailer of rayon towels – Dyna-E International – regarding claims that its Lightload brand dry towels are biodegradable.  The FTC charged that the rayon towels could not be biodegradable as they could not biodegrade in a reasonably short time under typical disposal methods.  Similarly, the FTC entered into settlements with Kmart Corp. and Tender Corp. regarding products sold with biodegradable claims.  All three settlements prohibit the defendants from making deceptive biodegradable product claims and require that they support all other environmental claims with competent and reliable evidence.

If you purchased a product that claims to be “biodegradable,” please contact us to discuss your legal options.

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The ever present desire for athletes to train to the extreme to obtain an edge on the competition exists at every level of athletics from high school to the professional athlete.  In the past this desire has led to the imprudent use of anabolic steroids by athletes in all levels of competition.

The dangers of using anabolic steroids have been well-documented and the subject of extensive media coverage.  The BALCO investigation is just one example. The serious and often fatal risks associated with using steroids to increase body strength and performance, clearly should prohibit the use of such substances.  There is, however, the ongoing desire to obtain that edge on the competition.   Thus, to avoid the stigma associated with steroids, certain products have been developed by some manufacturers that have been marketed as dietary supplements, but which actually contain synthetic steroids.

The Food and Drug Administration (“FDA”) issued a Public Health Advisory on July 28, 2009, warning consumers to stop using body building products marketed as dietary supplements, but are instead unapproved and misbranded drugs.  These products are sold online and in retail stores and are promoted as hormone products and/or alternatives to anabolic steroids.  The FDA warned that these products are potentially harmful and that it has not approved them or reviewed their safety before marketing.

The FDA also sent a warning letter to American Cellular Labs, the manufacturer of TREN-Xtreme and MASS Xtreme.  Other products identified by the FDA include ESTRO Xtreme, AH-89-Xtreme, HMG Xtreme, MMA-3 Xtreme, VNS-9 Xtreme, and TT‑40‑Xtreme.

The FDA has received adverse event reports for these products which include cases of serious liver injury, stroke, kidney failure, and pulmonary embolism.  Other conditions that can be associated with these products include shrinkage of the testes, male infertility, masculinization of women, breast enlargement in males, short stature in children, adverse affects on blood lipid levels and increased risk of heart attack and stroke.  As such, the FDA recommends that consumers immediately stop using these products and has also cautioned that athletes taking these products may test positive for performance-enhancing drugs.

If you have been injured as a result of using any of these products, please contact us to discuss your legal options.

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In the wake of the recent government sponsored “Cash for Clunkers” program, it has been reported that some car dealerships are improperly attempting to extract additional money from customers who have purchased new cars under this program.

Some examples include dealers claiming that: (i) the Cash for Clunkers paperwork was not approved and therefore the customer needs to pay the unpaid government program payment; (ii) the customers financing was not approved and the customer now needs to return and enter into a more expensive financing arrangement, (iii) the customer must buy post-sale extras or extended service contracts; and (iv) several other improper or coercive requirements being imposed on customers.

If you are a consumer who purchased a new car under the Cash for Clunkers program and are now being contacted by the car dealer seeking additional payments, please contact us to discuss your legal options.

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Gilead Sciences Inc. ("Gilead") received a subpoena from the Inspector General of the Health and Human Services Department regarding the development and marketing of its Ranexa heart drug.

The subpoena comes just months after Gilead acquired CV Therapeutics in order to obtain the drug Ranexa.  Investors who bought Gilead stock on the presumption that Ranexa would contribute to earnings in coming years may now be at risk, should the government determine there are problems with the drug.  Shareholders may be able to recover damages if the government determines Gilead was aware of, or should have been aware of, substantive problems with Ranexa when Gilead purchased CV Therapeutics and failed to disclose material information to investors.

If you purchased shares of Gilead, please contact us to discuss your legal options.

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In the most difficult job market in decades, a bewildering and largely unregulated array of businesses offering employment assistance have left job seekers vulnerable.  For fees that are typically thousands of dollars, these companies offer to help the unemployed land six-figure jobs and to cut the job search time in half.   However, many of these companies do little more than provide ordinary job search assistance: overhauling résumés and cover letters, giving advice on how to network and helping sort through public job listings.

For example, the New York Times recently reported the story of Edward Bockman, who managed the technology center of an Illinois college before losing his job during a restructuring.  Mr. Bockman paid a career management company $5,000 in late 2007 after responding to what he thought was a job posting for professionals looking to earn $100,000 a year.  Benchmark Professional Careers told him that a search for someone his age would normally take 13 months but that the company would cut that time in half.  Mr. Bockman said he believed that the company was a high-end recruiter, with access to a vast “hidden job market” that gave it connections to positions unavailable to regular job seekers.   Only after he began working with the company, did he realize it did not have any special pathways to job openings.  His demands for a refund were rejected.   Two years later, he still does not have a job, and the company’s $5,000 charge on his credit card helped push him and his wife to file for bankruptcy.

Numerous other consumers have had similar experiences.  For example, one consumer paid ITS Corporation $8,250 believing it would help him land a six-figure job in the Denver area, which he said the saleswoman promised.  But the company did little more than redo his résumé and advise him to cold-call employers.  Another consumer paid the Arthur Group nearly $3,000 for various services, which the consumer believed meant the company would market him for all the jobs to which it seemed to have access.  But the company, which purported to have connections to all kinds of employers, rarely placed anyone in jobs, according to three people who worked as salesmen for the company before quitting.

Over the years, several state attorneys general have filed lawsuits after consumers alleged that they had been misled.  In the mid-1980s, the New Jersey Attorney General’s office sued several career counseling companies founded by Robert J. Gerberg Sr., whose son, Robert J. Gerberg Jr., now runs ITS. (The elder Mr. Gerberg is a senior consultant to the company.)  A judge later found that the companies had violated state consumer fraud laws, “through the use of various misrepresentations and misleading statements to consumers.”  The companies were ordered to change their practices.

If you believe you or someone you know has been the victim of a job search scam, please contact us to discuss your legal options.

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The Food and Drug Administration (“FDA”) has issued a warning letter to Bodee, LLC, a company based in Century City, California, regarding the marketing and sale of its dietary supplement Zencore Plus (“Zencore”).  The FDA alleges that laboratory analysis of the product concluded that five lots of Zencore contain benzamidenafil, which is in the same class of pharmaceutical ingredients that include phosphodiesterase type 5 inhibitors.  Pharmaceutical ingredients that include type 5 inhibitors include sildenafil (Viagra), tadalafil (Cialis) and vardenafil (Levitra), which are all FDA approved drugs for the treatment of erectile dysfunction (“ED”).

The FDA states in its warning letter that Zencore -- marketed as a dietary supplement -- is misbranded because it is in fact a drug under the FDA Act.  For example, as the FDA letter points out, statements on Zencore’s labeling and on its website claim, among other things, that Zencore, “contains a combination of powerful natural herbs that supports long lasting, hard and firm erections . . .” and “stimulates the production of nitric oxide, leading to the production of cyclic GMP (cGMP).  It is the cGMP which ultimately affects smooth muscle relaxation, allowing the penile arteries to expand and fill with blood.”  In fact, as the FDA alleges, it is the undisclosed ED ingredients in Zencore that may aid men suffering from ED, not any herbal supplements contained in the product.  And because Zencore labeling does not declare that it contains benzamidenafil (an ED drug) and falsely asserts that it does not have the potential to cause side effects, the FDA alleges that Zencore’s labeling is “false and misleading” under the FDA Act.

Moreover, the FDA warning letter further alleges that because Zencore is misbranded in that it’s labeling lacks adequate warnings for users of the product, there is a potential for adverse events associated with its use.  For example, patients who take nitrates and consume Zencore may be at risk of life-threatening hypotension.

If you have purchased Zencore Plus, or have been injured as a result of using Zencore Plus, please contact us to discuss your legal options

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Have you recently purchased a new car from a dealership and was surprised to find that dealers are still attempting to force new car buyers to hand over their hard earned money for window etching?

Window etching is when the dealer “scratches” the vehicle glass with part of the car’s VIN number, for which the dealership will attempt to charge you anywhere from $150 to $500, or more.  If you ask about it (many people do not), the dealership will tell you it’s a major theft deterrent because a potential car thief will have to break all of the car’s windows to avoid detection.  In fact, car thieves will steal your car if they are inclined to do so whether or not there are some tiny numbers scratched on the windows.  Even assuming there is some theft deterrent, the markup being charged is unconscionable.  In fact, window etching is almost pure profit for the dealership.  It costs the dealer about $14 or less, and “do it yourself” etching kits are available on the Internet for $15 to $20.  Reportedly dealership marketing plans provide for $900,000 annual profits from etching.

The dealership finance manager who may attempt this scam in most cases will not even bother to show a car purchaser the written terms of the window etch deal, (which is essentially an insurance policy).  Admittedly, there is a small discount off of your car insurance if your car is etched -- approximately a 5% discount off of the comprehensive coverage.  For example, if your comprehensive premium is $230 per year, you would save $12 annually if you paid just $157 for the window etching.  After owning the car for 13 years (not likely), you would finally break even.  Many dealers, on the other hand, charge much, much more than $157 for window etching.

Window etching is an auto dealer scam consumers are likely to encounter when purchasing a car.  If you have been deceived by a car dealer’s window etching scam, please contact us to discuss your legal options.

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The first and second largest distributors of propane gas in the country, AmeriGas Propane, Inc. and Ferrellgas, Inc. (“Defendants”), respectively, began in January, 2009, to allegedly fill and re-fill consumers’ propane gas tanks with 15 cubic feet of gas, rather than the 20 cubic feet of gas which the tank can hold.  At the display cases where consumers re-fill or purchase propane tanks from the Defendants, it plainly states that the purchaser will receive a “full tank” of propane.  As a result, consumers were not allegedly getting what they were promised and what they paid for, and yet were being charged the same price for a “full” propane tank.

The Defendants’ propane display cases are situated in gas stations, hardware stores, convenience stores and at big retail outlets like Wal-Mart and Home Depot.  Ferrellgas propane is also sold under the brand name Blue Rhino.

If you or someone you know purchased propane from Blue Rhino, Ferrellgas and/or AmeriGas, please contact us to discuss your legal options.

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ConsumerReports.org recently wrote about the class action settlement reached with Costco regarding backdated memberships.  Lead counsel Meiselman, Denlea, Packman, Carton & Eberz, P.C. litigated the class action and were successful in certifying a class of almost 12 million former and current Costco members.  You can read about the settlement and the facts of the case by clicking here.

If you have purchased a membership in an organization that backdates its memberships, please contact us to discuss your legal options.

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With the recent economic downturn, many homeowners are facing the risk of mortgage foreclosures.  Desperate to save their homes, many people are falling prey to the predatory practices of mortgage rescue scams.  Typically, these scams solicit the homeowner with promises of debt relief that often seem too good to be true.  In fact, these are fraudulent offers, designed to prey upon those most in need of financial help.

The Federal Trade Commission (“FTC”) has alerted consumers to look out for five major warning signs of a mortgage rescue scam.  First, they will promise to stop a foreclosure or modify your loan.  Second, they will offer “guarantees,” that your home will be saved, with claims of a 97% success rate.  Third, they usually require fees to be paid in advance.  Fourth, they will advise you to stop paying your mortgage company.  Finally, they may have the look or sound of an official agency or governmental authority.

If you believe you or someone you know has been the victim of a mortgage rescue scam, please contact us to discuss your legal options.

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As the dangers of cigarette smoking have become well known, many smokers have resorted to various substitutes to their daily pack of smokes.  We all have friends or relatives who have tried to “kick the habit” by means of nicotine patches, nicotine chewing gums, herbal remedies, and prescription medicines.  Recently, electronic cigarettes – battery-operated devices that have the look, feel, and even taste of a normal cigarette – have been touted as an allegedly “safe” alternative to traditional cigarettes.  Hundreds of thousands of Americans looking for their nicotine fix have now taken up smoking these “e-cigarettes” based upon the belief that these devices pose no threat to their health.  Unfortunately, there are serious questions regarding the dangers of electronic cigarettes that remain unanswered.

The appeal of electronic cigarettes stems in large part from the fact that smokers inhale liquid nicotine, and exhale a mist of vapor, thus replicating the experience of smoking traditional cigarettes but without also ingesting the tar or tobacco that are present in traditional cigarettes.  According to a recent New York Times article, what many e-cigarette users don’t know is that along with liquid nicotine they are also inhaling propylene glycol, a liquid that is used in anti-freeze solutions and in brake and hydraulic fluids.  The material data safety sheet for propylene glycol states that chronic exposure of that substance may cause “reproductive and fetal effects,” “central nervous system depression,” damage to cell membranes, and possible seizures.  Moreover, there appears to be no evidence that inhalation of propylene glycol over a prolonged period of time is safe, and there are no independent scientific studies demonstrating that electronic cigarettes can help people to stop smoking. 

Electronic cigarettes are already banned in Australia and Hong Kong due to safety concerns.  And the Food and Drug Administration (“FDA”) has refused entry of shipments of electronic cigarettes coming into the U.S.  “These appear to be unapproved drug device products,” said Karen Riley, a spokeswoman for the FDA, “and as unapproved products they can’t enter the United States."

If you have purchased electronic cigarettes, or have been injured by using “e-cigarettes,” please contact us to discuss your legal options.

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In these tough economic times, with almost 1 out 10 Americans unemployed, many people are desperate for a job or an opportunity to earn a little extra money to pay their bills.  Not surprisingly, it is also when scam artists come out of the dark to prey on innocent consumers.  The latest work-at-home scheme proliferating on the internet is “Easy Google Profit.”  Typically, consumers surfing the internet will click on the link “Easy Google Profit” while reading -- what they later find out to be -- a fake newspaper article or advertisement.  The link directs consumers to a work-at-home scam, where they unwittingly sign up and their credit or debit cards are charged a fee.

The New York Times recently reported about once such example:  The reporter writes about a friend who came across an article online in the “Miami Gazette” about opportunities to work at home.  The article begins with general thoughts about the economic situation and how online jobs from home may be the next big thing.  Then it zeroes in on, and praises “Easy Google Profit,” which offers people work from home posting links on Web sites using text advertising applications.  It all looked legitimate; except, as the reporter points out, the “Miami Gazette” does not exist.  Moreover, the “Reader Response” posted under the fake article also seemed genuine, complete with misspellings and success stories.  In fact, the key to the scheme was that every link in the story sent readers to “Easy Google Profit.”  And in tiny, hard to read type below the newspaper logo, the following statement appeared: “This publication is an article advertisement for Easy Google Profit.”  The reporter’s friend didn’t notice the warning signs and signed up with her debit card.  She had unknowingly authorized this scam work-at-home company to charge $72 to her debit card every month until she called to cancel.

Unfortunately, many consumers across the country are being deceived by these sham work-at-home offers, particularly because they believe that Google -- a trusted and famous household name -- may be affiliated with these offers.  For example, in April, 2009, the Texas Attorney General filed a complaint against Infusion Media, Inc., a company that allegedly ran at least three sham work-at-home websites, two of which capitalized on the Google brand: GoogleMoneyTree.com, Google TreasureChest.com and InternetIncomeIntiative.com.  The State of Texas alleged that all three websites violated the Texas consumer fraud statute because the defendants engaged in false, deceptive and misleading acts and practices in the course of trade and commerce.  And we recently published a post on another famous work-at-home opportunity: Jeff Paul’s “Shortcuts To Internet Millions” program.  As we wrote then, a website dedicated to protecting consumers from sham business opportunities wrote that Jeff Paul’s program is a “scam” and warns consumers not to “believe everything you hear!!”  Another consumer website reported that in its opinion Jeff Paul’s program is not “a legitimate program” and cites to consumer complaints posted by people who signed up for the program.

The Better Business Bureau received 3,539 complains last year about work-at-home companies, and Allison Southwick, a spokeswoman for the bureau, says that her agency is “very concerned about seeing a rise in instances of fraud targeting job hunters this year in light of the increase in the unemployment rate.”  “Scammers,” she added, “read the headlines and anytime people are vulnerable, they’ll take advantage.”

Update:  Click here to read an ABC news story about work-at-home scams.

If you were deceived by a sham work-at-home scheme, please contact us to discuss your legal options.

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Detox Foot Pads and similar products are seen everywhere.  They are depicted in television and Internet advertisements.  They are in drug stores of all varieties.  They are also on the bottom of lots of feet.  Successful marketing, however, does not mean they actually do anything beneficial for you.  Detox Foot Pads claim they remove “toxins” from your body.  The ingredients in the pad placed on the bottom of the foot allegedly remove heavy metals, metabolic wastes and other health-threatening substances by drawing them through the pores of the skin on the sole of your foot where they are absorbed by the pad for disposal the next morning.  Their effectiveness is proven by how the white pad attached to the foot turns dark overnight.

The Official Foot Detox Home of The Official Detox Foot Pad claims its pads (as opposed to the cheap imitations found elsewhere) can treat “sleep disturbances, muscle tension, headaches, gastrointestinal disturbances, fatigue, nervousness, anxiety, changes in eating habits including overeating, loss of enthusiasm or energy and mood changes” for only $17.99 for a box of 14 pads.  The Detox Foot Pad contains tourmaline, “a mineral found in Brazil,” that emits “far infrared rays” that generate “negative ions.”  These negative ions stimulate acupressure points to promote wellness.  The website even contains an acupressure diagram of the foot showing where to apply the pad to treat various organs of the body.

The Detox Foot Pad also contains “a vinegar essence from Bamboo trees,” a healing substance known to Chinese villagers for “thousands of years.”  Combined with other substances, it forms a “powerful synergistic detoxification product.”  To certify the integrity of this product, the website even has an Anti-Fraud Policy and proclaims that they “Actively Pursue and Prosecute Fraud Offenders.”  The website also contains a disclaimer that advises that the Food and Drug Administration ("FDA") had not certified the effectiveness of the product and that you should consult with your physician.

The Detox Foot Pad and similar products are not supported by scientific evidence.  The vinegar in the pad will clean your skin during prolonged contact and turn the pad brown.  Beyond that there is very little to suggest the products work.  In fact, according to the Mayo Clinic, “no scientific studies have been published that demonstrate that these products actually remove toxins from the body.”  Moreover, tourmaline is mined primarily as a gemstone.  While some tourmaline has colors vivid enough to appear to glow (perhaps the source of the claim to emit far infrared rays), other stones are irradiated to improve their color.  There is no scientific evidence to indicate that tourmaline, a crystal silicate mineral, once ground up in a form that can be combined with the other substances in the Detox Foot Pad would emit anything, let alone far infrared rays.  Notably, the product’s website does not indicate how much tourmaline is in each pad.

If you have purchased Detox Foot Pads or any similar product, please contact us to discuss your legal options.

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Colon cleansing products are all the rage and the competition for the consumer dollar is fierce.  Numerous websites purport to be objective comparisons for colon cleansers, but are really just advertisements touting certain products.  For example, the Colon Review Board bills itself as the “Official source for colon cleanse news, reviews and information.”  They claim to be a New York based company that is a “watch dog group in the health products industry.”  Yet the website is registered to a Canadian firm, Domain Privacy Group, Inc. in Markham, Ontario.  The website reports on three colon cleanser products and goes on to praise the benefits of colon cleansing.  The website claims that our modern diet and lifestyle allegedly deposit toxins in the colon that impair our skin condition, our absorption of nutrients and may even lead to colon cancer.  Not surprisingly this website has links to the websites for the three products it rates most highly.

Another site, naturalhealingtoday.com, also offers a review of colon cleansers by its “editorial staff.”  The site claims that hardened fecal matter and other toxic materials in the colon impair digestion and nutrient absorption.  Ten separate products receive reviews and a customer feedback section is included.  The website is registered to Domains by Proxy, Inc., which at best helps conceal the real identity about this purportedly neutral pro-consumer site.

WebMD reports that colon cleansing has been examined inconclusively in regard to a few health concerns, none of which are the toxins, weight loss or other benefits alleged by the numerous current colon-cleansing advertisements.  WebMD also offers some additional observations.  The liver and the natural bacteria in the colon detoxify food wastes.  The mucus membranes colon cleansers claim should be removed are the body’s natural barrier keeping unwanted substances from being absorbed into the body.  The colon naturally sheds old cells on a regular basis, which prevents a build-up of harmful material.  And weight loss is unrelated to the colon since most calories are absorbed earlier in the digestive process.  WebMD also recommends you protect your colon health by eating 20 – 35 grams of fiber a day, drinking plenty of fluids, limiting alcohol and red meat and having colon cancer screenings after age 50 or at your doctor’s direction.

The claims made by the various colon cleansing products are almost identical to those made by Mega Systems International, Inc. regarding Eden’s Secret Nature’s Purifying Product during the late 1990s.  That product claimed to cleanse the body of toxic waste, colon waste and help the user lose weight, among other benefits.  In 1998, the Federal Trade Commission (“FTC”) required Mega Systems to cease advertising that the product would cause significant weight loss, prevent or cure illnesses and cleanse the body of toxins.

It may well be that the current interest in colon cleansing products may only be the re-emergence of an old consumer health fraud scam.

If you have been injured or deceived into purchasing colon cleansing products, please contact us to discuss your legal options.

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Everywhere we turn, it seems that we’re being assaulted with extra fees; $1.50 to use an ATM machine that’s not affiliated with your bank, $10 disconnect fee to change television service providers, $2.50 “fuel surcharge” on home delivery of the daily newspaper, $3.00 “surcharge” on in-room food service at a leading hotel, $50 for a second checked bag on a commercial airline, and the list goes on and on.   But have you ever stopped to consider whether these fees are actually permitted by the business that’s imposing them?   Have you ever stopped to ask “Did I agree to this when I accepted the service that’s being provided to me?”   Unfortunately, the “cost” of asking these questions and seeking to challenge the imposition of such fees is often not worth the aggravation and time that’s required to pursue it.   To many, the thought process goes something like this:  “20 minutes on hold with a customer service representative who, after listening to my plight, only passes me off to another rep, or pay the $2.00 fee?  Pay the $2.00 fee.”   And that’s where a class action comes in.

By aggregating the small claims of a great many people, the business practices of an otherwise large, corporate concern can effectively be challenged.  Class actions are successfully prosecuted when the barriers of entry to filing small, individual claims are high, and the injuries suffered by class members arise from a common course of treatment perpetrated by the business whose charges are being contested.   For instance, if the filing fee to commence an individual lawsuit would dwarf the damages that an individual consumer seeks to recover, then there’s an obvious disincentive to bringing an action on one’s individual behalf.   But if a class of persons who suffered the imposition of the same fee can be bundled, then the cumulative weight of such aggregated claims can be leveraged to obtain a recovery for consumers.   As a law firm that prosecutes consumer fraud class actions throughout the country, we’d welcome your input, feedback, comments and experiences if you encounter the imposition of fees or other business practices that offend your consumer’s sense of fair play.   We can be contacted at mdpcelaw.com or by telephone at 914-517-5000.

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In the wake of rising unemployment claims and mortgage foreclosures, Spanish-speaking consumers are being unfairly preyed upon by unscrupulous businesses who promise to stop foreclosure proceedings only to have consumers ultimately lose their homes despite paying significant sums of money to such “rescue operation” services.  Recently, in a lawsuit filed in Los Angeles, California the Federal Trade Commission ("FTC") charged a mortgage foreclosure “rescue operation” with falsely promising Spanish-speaking consumers who are behind on their mortgage payments that it would stop foreclosure.  Many people who paid the “rescue service” ultimately lost their homes, and others avoided foreclosure only through their own efforts.  At the FTC’s request, a federal court temporarily halted the defendants’ practices and froze their assets.

According to the FTC’s complaint, the defendants enticed consumers with false claims in Spanish-language radio and magazine ads, and during in-person consultations.  The defendants charged consumers an up-front fee equivalent to each consumer’s monthly mortgage payment, which was typically in the thousands of dollars.  In numerous instances, however, the defendants did not stop foreclosure proceedings from occurring or obtain mortgage loan modifications.

If you have been the victim of a mortgage foreclosure “rescue operation,” please contact us at mdpcelaw.com, or (914) 517-5000.

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In response to the mortgage crisis, the Obama administration introduced the Making Home Affordable program, which provides free mortgage counseling to consumers who are worried about losing their homes. In late March, the administration launched the program’s web site, makinghomeaffordable.gov.

It didn’t take long before alleged internet scammers attempted to prey on struggling homeowners seeking the government’s help. According to the Federal Trade Commission ("FTC"), consumers searching for the Making Home Affordable web site were diverted under false pretenses to other sites where they were asked to enter personal and financial information and to purchase mortgage counseling services from private companies for a fee.

On May 14, the FTC filed a complaint against the unknown defendants in federal court in Washington, D.C. The next day, U.S. District Judge Colleen Kollar-Kotelly issued a temporary restraining order that effectively outlaws the alleged scam.

Here’s how it worked, according to the FTC’s complaint:  the defendants purchased preferred advertisements on Internet search engine sites, including yahoo.com and msn.com.  When consumers entered a search for “making home affordable” or similar phrases, the defendants’ ads would appear at the top of the page, shaded in blue for emphasis.  The FTC alleges that the ads made it appear that the advertisements contained links to the official government program, and even used the phrase “MakingHomeAffordable.gov.”  But consumers who clicked on the links allegedly were redirected to various web sites that marketed home loan modification or foreclosure relief services for a fee.  The FTC alleged that the defendants falsely represented to the public that they were affiliated with the U.S. government and operated the government’s makinghomeaffordable.gov web site.

Judge Kollar-Kotelly found good cause to believe that the defendants were violating the FTC Act, which prohibits deceptive acts or practices in commerce.  She also found good cause to believe that consumers would suffer immediate and continuing harm unless the alleged scam was halted.  Her restraining order prohibits the defendants from pretending to represent the government, and from posting internet ads that contain any hyperlink with a “.gov” domain name, including makinghomeaffordable.gov.

One more thing: the court ordered Yahoo and the other search engine operators to identify whoever placed the ads. For now, the case caption reads: Federal Trade Commission v. One or More Unknown Parties Misrepresenting Their Affiliation With The Making Home Affordable Program.

If were deceptively redirected to various web sites that market home loan modification or foreclosure relief services and charged a fee, please contact us to discuss your legal options.

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On May 14, 2009, the Federal Trade Commission (“FTC”) filed suit in the Northern District of Illinois against two companies involved in making millions of allegedly deceptive “robocalls” to consumers in an effort to sell them vehicle service contracts under the guise of extensions of the original vehicle warranties. The FTC complaint against the robocaller names Florida-based Voice Touch, Inc. and two of its principals as well as Illinois-based Network Foundations, LLC and a principal of that company.   The complaint against the seller of the extended auto warranties names Florida-based Transcontinental Warranty, Inc., and its president and CEO.

The robocalls consist of a pre-recorded message that informs consumers that their original vehicle warranty is about to expire and they should “extend coverage before it’s too late.” The so-called “warranty specialists” mislead consumers into believing the seller of the extended warranty is affiliated with the dealer or manufacturer of the consumer’s vehicle. The “warranty specialists” then attempt to sell consumers a service contract which is falsely portrayed as an extension of the vehicle’s original warranty.

In addition to the robocalls, the FTC's complaint against Transcontinental Warranty alleges that it mails out deceptive postcards to consumers warning them about imminent expiration of their auto warranties. The FTC has charged the defendants with engaging in deceptive business practices in violation of the FTC Act and violation of the FTC’s Telemarketing Sales Rule by calling consumers whose numbers were on the National Do Not Call Registry.

If you were deceived into purchasing an extended warranty from Transcontinental Warranty, Inc., please contact us to discuss your legal options.

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It should come as no surprise that with all the stories in the news about stimulus funding, con artists have invented stimulus scams. The scam begins with an email, online ad or website that says you’re eligible to obtain an economic stimulus payment.  All you have to do is send back a completed form or submit one online.  The message might look like it was sent from a rebate company or the Internal Revenue Service (“IRS”).  The scam artists may ask you to send a processing fee to supposedly get a much larger check in return.  Others ask for your bank account number so they can deposit your check.  The scam artists then clean out your account or open new ones using your identifying information.  Some stimulus scams even encourage you to click on a link or open attached forms that in turn install harmful software, like spyware, on your computer resulting in your personal information ending up in the hands of an identity thief.

The Federal Trade Commission (“FTC”) cautions that the promise of stimulus money in return for a fee or financial information is always a scam, and advises consumers to ignore or delete messages offering you money from the stimulus program in exchange for personal information.

If you are a victim of a stimulus scam, contact us to discuss your legal options.

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The Federal Trade Commission (“FTC”) has reported a growing problem with scams involving purported rescue plans for home owners facing foreclosure.  The FTC brought 11 cases targeting mortgage foreclosure rescue and loan modification scams within the last year and is actively involved in ongoing investigations.  Additionally, the FTC has sent warning letters to 71 companies for marketing potentially deceptive mortgage loan modification and foreclosure assistance programs, and for falsely appearing to be affiliated with a non-profit or government entity or endorsed by government officials.  For example, the FTC recently filed a complaint against the Federal Loan Modification Law Center, LLP for allegedly misrepresenting that they were a part of, or affiliated with, the federal government and that consumers could obtain a loan modification in virtually all instances.

The FTC also recently settled charges against two individuals that they violated federal law and a previous court order by luring homeowners into high-cost, short term loans secured by an additional mortgage on their homes. The FTC sued them and 7 other defendants as part of an ongoing effort to crack down on businesses that prey upon homeowners facing foreclosure.  The FTC complaint alleges that the defendants violated the Home Ownership and Equity Protection Act by extending credit based on the value of consumers’ collateral without regard to their repayment ability, by requiring balloon payments after only 6 months, by providing negatively amortized loans that cause consumers to owe more at the end of the loan than at the beginning, and by failing to make required disclosures.  The defendants also allegedly violated the Truth in Lending Act (TILA) by grossly understating the loan’s annual percentage rate (APR) and finance charges.  Moreover, the complaint alleges that the defendants violated TILA by failing to make timely written disclosures and failing to accurately disclose the amount being financed, the finance charge, the APR, the payment schedule, the total payment amount and the fact that the creditor has or will acquire a security interest in the consumer’s home.

If you are a victim of a mortgage foreclosure rescue scam, please contact us to discuss your legal options.

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The Campaign for Safe Cosmetics (“CSC) has issued a warning to consumers to avoid certain Johnson & Johnson (“J&J”) baby bath products because they allegedly contain undeclared ingredients that could pose serious health risks. For example, CSC claims that dozens of popular bath products for babies and kids manufactured by J&J contain at least two hazardous contaminants: 1,4-dioxane and formaldehyde, both of which are not listed on the ingredients label of the product.

Formaldehyde and 1,4-dioxane are known carcinogens; formaldehyde can also trigger skin rashes in some children. Unlike many other countries, the U.S. government does not limit formaldehyde, 1,4-dioxane, or most other hazardous substances in personal care products.

Both of these chemicals cause cancer in animals, and formaldehyde is also known to cause skin rashes in people who are sensitive to the chemical. The CSC alleges that Johnson's Baby Shampoo, the iconic brand used by families for generations, contains both of these contaminants - neither of which is listed on J&J’s baby shampoo ingredient label. The CSC also alleges that while a single product might not be cause for concern, babies may be exposed to several products at bath time, several times a week, in addition to other chemical exposures in the home and environment. The CSC claims that these small exposures add up and may contribute to later-life disease.

Of the CSC claims and its report, J&J said, "The trace levels of certain compounds found by the Campaign for Safe Cosmetics can result from processes that make our products gentle for babies and safe from bacteria growth," and the Campaign should stop "alarming" parents. 

The CSC responded that parents have a right to know if the products they buy for their babies contain hazardous chemicals linked to cancer and skin rashes. The CSC points to other companies that it claims makes safe and gentle baby products allegedly without hazardous chemicals.

In response to the CSC report, on April 29, 2009, Senator Kirsten Gillibrand (D-NY) introduced the Safe Baby Products Act, which directs the Food and Drug Administration ("FDA") to investigate and regulate hazardous contaminants in personal care products marketed to or used by children.

If you have purchased J&J baby bath products, please contact us to discuss your legal options.

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The Food and Drug Administration (“FDA”) in conjunction with the Federal Trade Commission ("FTC") has issued a warning to consumers to avoid Internet sites and other promotions for products that claim to diagnose, prevent, mitigate, treat or cure the 2009 H1N1 influenza virus, more commonly known as the Swine Flu.  Many of these deceptive products are being sold over the Internet, and the websites selling these products are hoping to take advantage of the public’s concerns about the Swine Flu pandemic sweeping the country and the world.  As such, in their desire to protect themselves and their families, consumers may be easily tricked into purchasing fraudulent products which claim to cure Swine Flu.

These deceptive products come in all varieties and could include dietary supplements or other food products, or products purporting to be drugs, devices or vaccines.   According to the FDA and FTC, such fraudulent products will not prevent the transmission of the virus or offer effective treatments against infections caused by the H1N1 influenza virus.  “Consumers who purchase products to treat the novel 2009 H1N1 virus that are not approved, cleared or authorized by the FDA for the treatment or prevention of influenza risk their health and the health of their families,” said Michael Chappell, acting FDA Associate Commissioner for Regulatory Affairs.

Consumers can visit the FDA and Centers for Disease Control and Prevention Web sites for more information about the 2009 H1N1 influenza virus, and to determine which products the FDA has approved, cleared or authorized for use to diagnose, treat, prevent, mitigate or cure infections caused by H1N1 influenza virus.   Currently, there are only two antiviral drugs approved by the FDA for treatment and prophylaxis of the 2009 H1N1 influenza virus: Tamiflu (oseltamivir phosphate) and Relenza (zanamivir).

If you have a purchased any products which claim fraudulently to diagnose, treat, prevent, mitigate or cure infections caused by H1N1 influenza virus, please contact us to discuss your legal options.

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With the economy in decline, hundreds of thousands of consumers are turning to debt settlement companies for help in handling large credit card debts.  These companies offer consumers the promise of financial salvation promising to reduce a consumer’s debt, negotiate with creditors, and stop harassment from debt collectors in exchange for various fees.  Yet consumers often wind up paying large fees, often up to 15% of their total debt, and receive little to nothing in return.

As recently reported in the New York Times, these debt settlement companies advise consumers to stop paying the minimum amount on one’s credit card and instead accumulate the money in an account the settlement company promises to use to strike a bargain with creditors.  But, long before making any attempt to deal with creditors, the settlement company takes a monthly fee that can be over $100 a month.  Some consumers have found that the debt settlement company does nothing more than take its large fees. Even the credit card industry has warned that debt settlement companies are “very harmful” to both consumers and creditors.

State attorneys general are being flooded with complaints about debt settlement companies.  For example, the State of Texas has sued Credit Solutions of America claiming that it misrepresents its success rate, noting that the company’s own data “show that over 80 percent of the debts enrolled in the program do not settle.”  The few debts that are settled, the suit alleges, are for higher amounts than the promised 40 cents on the dollar.

If you have used a debt settlement company, please contact us to discuss your legal options.

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Late at night, or while surfing the web, you may have recently come across an infomercial or website with a person named “Jeff Paul” touting the possibility of earning thousands, or even hundreds of thousands of dollars, each week or month by opening up your own internet business. Both in his infomercial and on his website, Jeff Paul promises that if you join his program, you’ll “be in business tomorrow!” earning money by establishing your own internet business. In fact, Jeff Paul promises you that you don’t even have to know how to use a computer as “No computer skills needed!” All you have to do is pay Mr. Paul $39.95 per month -- plus shipping and handling -- and receive “10 New Internet Businesses Each Month!” As Jeff Paul promises, “Sign-up today and be in business tomorrow!”

In his infomercial and on his website, there are “success stories” by purportedly real followers of Jeff Paul’s program claiming to have earned thousands -- or hundreds of thousands -- of dollars each week or month. For example, there’s “Mike” who “Makes up to $7,000 a Week!” There’s also “Andrea” who “Makes up to $30,000 a Month!” Best of all, there’s “Tom” and “Antonio” who, respectively, make up to “$110,000 a Week!” and “$100,000 a Week!”

A review of online consumer websites dedicated to protecting consumers from scam or sham business opportunities reveals another side to Jeff Paul’s “Shortcuts To Internet Millions” program. According to the Internet Scam Review, Jeff Paul’s program is a “scam” and warns consumers not to “believe everything you hear!!” Another consumer website reports that in its opinion Jeff Paul’s program is not “a legitimate program” and cites to consumer complaints posted by people who signed up for the program. One consumer states that, “DO NOT FALL FOR THIS IT IS A SCAM! No money back gurantee [sic], no thousands a week, (not even a penny) But I still get charged every month.” Another post warns consumers, “Do not get suckered into any programs by Jeff Paul . . . They are all SCAMS and rip offs!!!! I hope that enough people complain and perhaps start a class action lawsuit . . .” There are many more complaints posted by consumers about Jeff Paul’s program which can be accessed here.

If you enrolled in Jeff Paul’s program, was charged monthly membership or other fees, and are dissatisfied with Mr. Paul’s program, please contact us to discuss your legal options.

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