Complaint resolution service publishes case studies, recall information and consumer news.

In cooperation with the FDA, Fun Express, Inc. is expanding its face paint recall from early May to include white and yellow face paint colors.  The face paints can cause rashes, skin irritation, and itchiness.  The paints, made by Shanghai Color Art Stationary Company Limited, have the words, “Water-Based Face Paint Net Weight 1 Oz (28.3gm) Non-Toxic Made in China” on the tube.  The tube is packaged on cardboard backing that is labeled, “Face Paint” on the front, and, “Distributed by Oriental Trading Co., Omaha, NENE 68127″ in the upper right hand corner. 

The item number can be found on the back of the package-

85/2338 (White face paint)
85/2339 (Yellow face paint)

The products were distributed primarily to retail stores nationwide between April 2008 and April 2009.  If you have the face paint in question, you should immediately discard it.

Consumers can contact Fun Express, Inc. by calling (888) 999-0442 between the hours of 9:00 am and 5:00 pm CST, Monday through Friday.

Posted under Customer Service, Health, Products, Recalls, Safety

Bayer, the folks who make aspirin and medical supplies, has a growing business in the diabetes care field.  With more than 20 million Americans currently suffering from diabetes and a projected 1 in 3 children aged 8 projected to contract the disease, there is big money in reaching diabetics and locking down their preferences.

The giant health care company has agreed to pay a fine of nearly $100 million to settle U.S. Justice Department allegations that they paid distributors to convert diabetic patients from their glucometer (a device that measures blood sugar), test strips (the expensive part of the proposition, ranging up to $1 each for the uninsured) and other supplies.

The federal agency says that supplier Liberty Medical received $2.5 million as payment for each Medicare patient converted.  The funds were designated “advertising”.

“If medical device manufacturers want to serve Medicare beneficiaries they must follow the law,” said Gregory G. Katsas, Assistant Attorney General for the Civil Division. “Paying healthcare suppliers to place a particular brand of device with Medicare beneficiaries violates the law and will not be tolerated.”

Bayer reportedly paid $375,000 to ten other suppliers. The $97.5 million fine settles claims against Bayer through 2007. The company was also required to enter into an agreement with the government regarding future conduct.

Posted under Customer Service

Market research company JD Power has released its report on residential consumer satisfaction with telephone companies, and the results may surprise you.

Power broke its results into 4 geographical areas.  Cablevision (East), Bright House (South), WideOpenWest, aka, WOW! (North Central) and Cox (West) were all top dogs.  Many were cited for customer service, billing and similar best of breed practices.

What might surpise folks:  traditional phone companies aren’t there.  As phone service becomes a commodity bundled with cable, Internet and other services, make sure to study reports like Powers’ to ensure you are not using your parent’s phone company, when your grandchildren’s phone company may have better service.

Posted under Customer Service

Consumer Help Web has long given high marks in reviews of various Intuit products, including two of their flagships: Quicken and TurboTax. Members of our staff have even participated in beta testing with the company, and the company agreed those years not to review the products.

Intuit’s once legendary customer service had fallen on hard times in recent years. Consumers complained about product activation (although in reality, Intuit had found a huge percentage of tax preparation was done with “borrowed” copies of TurboTax). Customer service and tech support also became difficult, with the company often charging customers for basic issues. But the consumer community was whispering that Intuit was changing its ways.

Those whispers proved true last week when the company announced it would provide more than $10 million in refunds to consumers after a late glitch in its TurboTax program caused taxpayers to miss the deadline. While we would be the first to criticize a company that didn’t acknowledge its responsibilities with such an important piece of software, we were delighted to see the company proactively reach out to the Internal Revenue Service and save trouble for its customers. The government agency agreed to extend the tax deadline for those customers by another two days.

“We deeply regret the frustration and anxiety this caused our customers,” said Steve Bennett, president and chief executive officer of Intuit. “This is not the experience customers have come to expect from Intuit. It’s not acceptable to us, and we will do right by our customers who were impacted by this delay.”

Those are usually words written by Marketing in a last ditch effort to save face. In this case, the company did do right and deserves praise.

Posted under Customer Service

The Federal District Court in Oregon has frozen the assets of Beaverton-based Merchant Processing, Inc. (MPI), its owner, and affiliated companies. The court ordered a temporary halt to claims the Federal Trade Commission alleges are deceptive, and appointed a receiver to temporarily take control of the business. The FTC alleges that the defendants used deceptive tactics to sell credit and debit card processing services to thousands of small businesses across the county. The Washington State Attorney General’s Office also has sued the defendants.

In its complaint, the FTC alleges the operation falsely promised that it would save the small businesses money and that it would buy out the merchants’ existing equipment leases, often worth thousands of dollars. The FTC also charged the defendants with failing to disclose fees and concealing pages of fine print from the merchants until after they had already signed contracts. The FTC charged MPI, its owner, Aaron Lee Rian, and affiliated companies Vequity Financial Group and Direct Merchant Processing with violating the FTC Act.

According to the FTC’s complaint, the defendants’ sales representatives call and visit small businesses around the United States and promise they can save them hundreds to thousands of dollars a year in processing fees by offering lower rates than the merchants’ current credit card processing service. They also tell the merchants that the credit card swipe equipment they currently are using is outdated or incompatible with their systems, or that the merchants will need to replace their systems in order to get the special low rate.

Many merchants already are under a contract to lease their card swipe equipment, but the defendants claim they will buy out the merchants’ current leases if they sign a new, usually more expensive, lease. With the claimed lower processing rates, the sales agents promise overall savings despite the higher lease payments. The FTC alleges the defendants’ agents then have the merchants sign third-party equipment leases and processing agreements while concealing pages of fine print. According to the FTC, the sales representatives often don’t leave copies of the agreements with the merchants.

The merchants soon find their fees are not lower, and they end up paying additional fees that they weren’t told about. MPI does not buy out their previous equipment leases, so merchants often end up paying on two leases or spending thousands of dollars to get out of the old lease. Then, to cancel the new, more expensive processing service, the merchants must pay a substantial, previously undisclosed cancellation fee.

The FTC also is seeking preliminary and permanent injunctions halting the deceptive claims and unfair practices, and refunds for the small businesses.

Posted under Customer Service

The consumer group representing people aged 50 or older and their spouses came out swinging this week against the government’s proposed Medicare Advantage rates.

“AARP believes inflated payments to Medicare Advantage plans are unfair and fiscally irresponsible. Congress should ensure that traditional Medicare and Medicare Advantage compete on a level playing field,” said AARP Director of Government Affairs David Sloane.

Last month, the independent Medicare Payment Advisory Commission (MedPAC) found that reimbursements to Medicare Advantage plans are 12 percent more than reimbursements to Medicare’s traditional fee-for-service program. All taxpayers and all Medicare members—not just the 18 percent of Medicare members enrolled in private MA plans – are funding these inflated payments.

“Right now Medicare payments clearly favor the MA program over traditional Medicare, which is unfair to the majority of beneficiaries who participate in the traditional program. The federal government should be financially neutral with regard to Medicare reimbursement,” continued Sloane.

Medicare Advantage plans were supposed to provide the same benefits as fee-for-service more efficiently—not at greater cost to the program. In the past, they were able to provide extra benefits to beneficiaries through the greater efficiencies achieved by managed care (e.g., care coordination, negotiated prices, provider networks). Today, because of the excess payments to the plans, they have no incentive to achieve these efficiencies.

According to the nonpartisan Congressional Budget Office (CBO), the federal government could save $65 billion over five years and $160 billion over 10 years, if Medicare Advantage plans were paid at the same rates as traditional Medicare providers.

Posted under Customer Service

Darden Restaurants Inc., which owns restaurant chains Olive Garden, Red Lobster, Smokey Bones, and Bahama Breeze, has agreed to settle Federal Trade Commission charges that it engaged in deceptive practices in advertising and selling its gift cards. As part of the settlement, Darden will restore fees that were deducted from consumers’ gift cards and disclose fees or expiration dates in future gift card sales. This is the agency’s second law enforcement action involving allegedly deceptive gift card sales.

“The FTC works to make sure consumers have the facts they need to make smart decisions, no matter what they’re buying,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “When it comes to gift cards, issuers can’t gloss over key information. They must clearly and prominently disclose fees and restrictions that affect the use of their gift cards.”

According to the FTC’s complaint, Darden advertised its gift cards on television and radio, and in its restaurants and Web sites. Darden represented that consumers could redeem the cards to buy goods or services at its restaurants equal to the card’s monetary value. But Darden did not disclose adequately the “dormancy fees” that would be deducted after a certain period of time. For cards sold before February 2004, after 15 months of non-use, a $1.50 dormancy fee was deducted from the card’s balance for each month of inactivity; for cards sold after February 2004, the monthly fee was deducted after 24 months of non-use.

In many instances, the Commission alleges, consumers did not learn of the fee until they attempted to use their gift cards and learned that they had little or no remaining value.

The Commission’s complaint alleges that Darden and co-respondents GMRI Inc. and
Darden GC Corp. inadequately disclosed the fee by noting it in fine print on the back of the card,obscured by miscellaneous other information; marketing a transparent Red Lobster Gift Card with a red lobster on the front that further obscures the disclosure; marketing cards in restaurants without notifying consumers of the fee; and marketing cards on Web sites without disclosing the fee. As of October 2006, Darden stopped charging a dormancy fee on all Darden gift cards.

The proposed settlement requires Darden to disclose any automatic fee or expiration date clearly and prominently in future advertising, at point of sale, and on the card, and prohibits the company from collecting any fee on cards activated before the order is approved by the Commission. The settlement also requires Darden to restore to each card any dormancy fees that were assessed and publicize the restoration program on its Web sites for two years. Darden has already completed the process of restoring all fees on cards. Consumers may simply present their card at any Darden restaurant to receive the card’s value with the dormancy fees restored.

Posted under Customer Service

A pesticide producer and a telemarketer and distributor in Suffolk County, New York will pay a total of $145,000 for violating the federal pesticide law. Both companies allegedly sold off-spec, misbranded products, with the second also making false claims, according to the U.S. Environmental Protection Agency (EPA). The Agency cited the Topaz Turf Corporation in Holtsville and its distributor, Southern Chemical Supply, Inc. in Bohemia. In its complaint, EPA alleged that both companies had been involved in distributing off-spec and misbranded pesticides to the public since at least October 2003. Topaz has agreed to pay $65,000 and Southern has agreed to pay $80,000 in financial penalties under the agreements with EPA being announced today.

“Companies which sell misformulated, unregistered or misbranded pesticides to unsuspecting customers and telemarketers that make misstatements about products will pay a stiff price for their disservice to the public and the environment, both in fines and the trust of their clients,” said EPA Regional Administrator Alan J. Steinberg. “EPA and its partners in the states are keeping a close eye on would be violators.”

Any pesticide product, such as a weed killer, contains a certain percentage of active chemical ingredients approved by EPA for a specific end-use. By law, these registered formulations must match the information on the product label and must have the correct EPA product registration numbers. The percentage of active ingredient in the weed killer sold by Topaz and/or Southern didn’t match the claims made on the labels. In addition, the Agency cited Topaz for selling an unregistered product designed to kill insects on plants and for failing to maintain and furnish records on this product. EPA also found that Southern made misstatements in its telemarketing messages to customers when selling the pesticides.

In February 2006, after discovering the violations during inspections conducted jointly with the New York State Department of Environmental Conservation, EPA ordered both companies to stop selling their products. Both companies stopped selling the pesticides identified in EPA’s Orders.

Topaz wrote EPA in April 2006 indicating that it had conducted an investigation of the problems in manufacturing and documentation that were uncovered by EPA and the state and that it corrected the problem by implementing a new quality control program during the production process. As part of the settlement, Topaz will submit to EPA a copy of its new program aimed at ensuring the problems in the manufacturing process do not reoccur. Southern Chemical is no longer in business.

Posted under Customer Service, Products

When shopping for a photo printer, 25 percent of consumers indicate price is the most important reason for purchasing a specific brand, followed by printer quality, according to the J.D. Power and Associates 2006 Photo Printer Customer Satisfaction Study.

The inaugural study measures customer satisfaction with photo printers based on five factors that drive overall satisfaction: performance, appearance, connectivity, ease of use and cost. When examining photo printer performance relative to the drivers of overall satisfaction, Kodak and Lexmark perform particularly well among printer brands.

“Price and quality play a critical role in the purchase decision and also have a considerable impact on overall satisfaction once the ownership experience begins,” said Steve Kirkeby, executive director of telecommunications and technology at J.D. Power and Associates. “Generally, consumers have a much more positive attitude toward their photo printer if they believe they received a good deal, which creates a valuable marketing opportunity for retailers’ and manufacturers’ sales channels. By clearly communicating the value and cost-savings in bundling high-quality printers with cameras and their accessories, manufacturers can improve their chances of attracting customers while providing a more satisfying purchase experience.”

The study finds that 25 percent of customers purchase their photo printers through the Internet. Among those shoppers, 27 percent purchase from a retail Web site, 24 percent purchase directly through the brand manufacturer’s site and 9 percent purchase through an online auction site such as eBay. Customers who purchase through the Internet have higher satisfaction levels with their printer (averaging index scores of 801 points on a 1,000-point scale) compared to owners who purchased in a retail store (averaging 779 points).

“Although it is not always the case, customers generally feel that they are able to find less expensive printers online than in a retail store, particularly at online auction sites,” said Kirkeby. “This is further evidence of the critical role price plays in buying a photo printer.”

The study also finds that there is a distinct relationship between overall satisfaction and brand loyalty. Among satisfied printer owners—those who provide an overall satisfaction score of 900 or more index points—52 percent will repurchase the same printer brand. Conversely, only 4 percent of indifferent or disappointed owners—those who provide a satisfaction score of 700 points or less—are likely to repurchase the same brand.

“Our research also shows that if customer satisfaction improves by 25 index points, repurchase intent among owners will, on average, improve by 10 percentage points, which can certainly prove beneficial to manufacturers,” said Kirkeby.

Additionally, while nearly 70 percent of satisfied owners report they would recommend their printer brand to friends and family, only 5 percent of indifferent and disappointed owners indicate they would do the same.

The 2006 Photo Printer Customer Satisfaction Study is based on responses from 2,391 customers who purchased or received a photo printer between July 2005 and July 2006.

Posted under Customer Service, Products

Comfort Suites, which operates 443 hotels containing 53,393 rooms, told reporters that it would ban smoking throughout its properties this spring. There was no word on whether other hotel chains owned by Choice Hotels, including Quality Inn (122,000 rooms) and EconoLodge (55,000 rooms) would follow suit.

Comfort joins major hotel chains in banning smoking throughout its properties.

Posted under Customer Service