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

President Bush announced that a new task force headed by Secretary of Veterans Affairs Jim Nicholson will be launched to help streamline the paperwork and other processes combat veterans must go through to receive benefits.

Nicholson is a Republican partisan who served as the RNC’s national chair from 1997 through 2000. Despite never being elected to office, he has held numerous leadership positions, including an ambassadorship to The Vatican. The 69 year old Iowan is a West Point alum who served in the Army for thirty years, including combat duty in Vietnam, where he won a Bronze Star among numerous other medals.

The task force’s mandate is to accomplish the following in 45 days:

* Identify and examine existing federal services that currently are provided to returning Global War on Terror service members;*
* Identify existing gaps in such services;
* Seek recommendations from appropriate federal agencies on ways to fill those gaps; and
* Ensure that appropriate federal agencies are communicating and cooperating effectively.

Public perception of the care combat veterans is receiving has fallen in recent weeks in the wake of a scandal at well known Army hospital Walter Reed Medical Center. Brigadier General Michael Tucker was transferred yesterday from Fort Knox to lead the embattled healthcare facility. Tucker, who served in Iraq, will oversee all operations of the military hospital, which is scheduled to be merged with Bethesda (MD) National Naval Medical Center in 2011 as part of the costutting base closure bill signed in 2005.

Posted under Customer Service, Finance

Consumerinfo.com, doing business as Experian Consumer Direct, will pay $300,000 to settle Federal Trade Commission charges that ads for its “free credit report” offer failed to disclose adequately that consumers who signed up would be automatically enrolled in a credit- monitoring program and charged $79.95. The FTC alleged that the failure to clearly disclose the enrollment and charges violated a previous settlement.

In August 2005, Consumerinfo.com, paid $950,000 to settle FTC charges that it deceptively marketed “free credit reports.” According to the FTC, Consumerinfo offered consumers a free copy of their credit report and added that they would provide “30 FREE days of Credit Check Monitoring.” The FTC alleged that Consumerinfo’s advertising and Web sites failed to explain adequately that after the free trial period for the credit-monitoring service expired, consumers automatically would be charged a $79.95 annual membership, unless they notified the defendant within 30 days to cancel the service. Consumerinfo billed the credit cards that it had told consumers were “required only to establish your account” and, in some cases, automatically renewed memberships by re-billing consumers without notice. In addition to the $950,000 payment, the settlement required Consumerinfo to pay redress to deceived consumers, barred deceptive and misleading claims about “free” offers, and required clear and conspicuous disclosure of terms and conditions of any “free”offer.

The FTC alleges that Consumerinfo.com ran ads after the settlement that violated the disclosure requirement. The settlement requires Consumerinfo to give up $300,000 in ill-gotten gains, and bars it from misrepresenting any affiliation with the annual credit report available to consumers under the Fair Credit Reporting Act.

The stipulated judgment and order named Consumerinfo.com, Inc., doing business as Experian Consumer Direct, Qspace, Inc., and Iplace, Inc.

The Commission vote to accept the supplemental stipulated judgment and order was 5-0. It was filed in United States District Court for the Central District of California in Los Angeles.

NOTE: Stipulated judgments and orders for permanent injunction and monetary relief are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Stipulated judgments have the force of law when signed by the judge.

Posted under Customer Service, Finance

Customer service issues that are handled by a computer automated response system (ARS) on the telephone generate significantly lower customer care ratings when compared with issues handled by a live representative, according to the J.D. Power and Associates 2007 Wireless Customer Care Performance StudySM —Volume 1.

Now in its fifth year, the semi-annual study provides a detailed report card on wireless provider customer care performance based on customer experiences with three point-of-contact methods: telephone calls with a service representative and/or automated response system (ARS); visits to a retail wireless store; and online Internet connection. Within each contact method, processing issues such as problem resolution efficiency and hold-time duration are also measured.

Overall, customers who speak with a service representative on the telephone provide an average index score of 127 points, which is significantly higher than the industry average of 98 points. However, customers contacting their carrier with a problem or inquiring through an ARS system rate their experiences significantly lower, averaging 92 index points. The index score drops even further (to 73 points) for contacts made over the Internet.

“One of the main factors contributing to this performance disparity is the quality of the response that is given,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. “A service representative—either over the phone or in person—has the ability to answer customer questions and clarify answers. This flexibility is very limited in both ARS and Internet contact methods.”

In addition, scores for the ARS contact method have decreased 5 percent to 92 index points in overall performance when compared to the most previous reporting period six months ago (97 points). The largest declines were reported for customers experiencing too many prompts before getting to the desired menu and the lack of relevant menu options available to address the customer’s inquiry.

“As more companies strive to save operating costs by encouraging customers to contact Internet- and computer-based customer service programs, they run the risk of increasing the rate of customers who will switch carriers, especially as the number of contacts needed to resolve issues rises,” said Parsons. “Since future churn levels are four times as high among those who rate their wireless carrier below average in customer care, the challenge for wireless providers is to offer an easy and efficient customer care transaction experience.”

For a fifth consecutive reporting period, T-Mobile ranks highest among the five largest wireless service providers by creating a positive experience among customers who contact the carrier for service or assistance. With an index score of 107 points, T-Mobile performs well across all factors that determine overall satisfaction, particularly in the ARS and retail contact channels, and in the overall hold-time duration on the phone. Verizon Wireless (101) and Alltel (99), respectively, follow T-Mobile in the rankings.

The study also finds several key wireless customer care patterns:

* More than one-half (55%) of wireless users have contacted the customer service department for assistance within the past year, marking a nearly 7 percent decline from the most recent reporting period (July 2006).
* The average number of contacts necessary to resolve an inquiry by phone is 1.87—up from 1.76 in the previous reporting period.
* Among customers who contact their provider, 73 percent do so by telephone and 24 percent do so through their provider’s retail store. E-mail/Internet accounts for only 3 percent of customer contacts.
* The average initial reported hold time on calls to the customer service department is 3.58 minutes. In comparison, it takes an average of 8 minutes before speaking in-person to a representative at one of the provider’s retail stores.
* More than four in 10 customers (42%) contact their provider with a billing-related service inquiry, with 55 percent of these contacts attributed to inaccurate charges. Additionally, 30 percent of all customer care inquiries are call-quality related.

The 2007 Wireless Customer Care Performance Study—Volume 1 is based on responses from more than 13,970 wireless customers who contacted customer care within the past year. The results are from the past two reporting waves, conducted in June and September 2006. The 2007 Volume 2 report will be issued in July 2007.

Posted under Customer Service

Florida Agriculture and Consumer Services Commissioner Charles H. Bronson has urged state residents to report any instances of price gouging in the wake of the tornadoes that tore through four Central Florida counties this week.

State law prohibits charging exorbitant or excessive prices for essential items, including shelter, gasoline, food, water, ice, generators or lumber following the declaration of an emergency, unless the increases in the amount charged are attributable to additional costs incurred by retailers.

Governor Charlie Crist has declared an emergency in Volusia, Sumter, Lake and Seminole counties, triggering the activation of the price-gouging statute. The price gouging law’s activation is limited to activities only in those counties.

Individuals or businesses found to have engaged in price gouging face fines of up to $1,000 per violation, or up to a maximum fine of $25,000 a day.

“We’re asking consumers to come forward and let us know if any retailers have exploited our citizens or are profiteering from the tornadoes,” Bronson said. “This activity is not only reprehensible, it’s illegal.”

Bronson is asking residents who have any evidence that price gouging has occurred or is occurring to report it at once to his department’s toll-free hotline - 1 800 HELP FLA (435-7352). In addition to the price gouging oversight, Bronson’s Division of Forestry is providing assistance in clearing roads and removing debris.

Posted under Customer Service, Safety

California Attorney General Bill Lockyer announced the nation’s largest rent-to-own business, Rent-A-Center, Inc. (RAC), will pay more than $7 million in restitution to thousands of California customers under a settlement, finalized this month by the San Francisco County Superior Court, that resolves a consumer protection lawsuit brought by Lockyer.

“Our economic system is not driven solely by the profit motive,” said Lockyer. “To function properly, businesses must deal fairly and honestly with consumers. Rent-A-Center flouted this fundamental principle, violated state law and harmed consumers. This settlement not only will provide restitution to thousands of victims, but also ensure the company reforms its business practices to conform with the law.”

The settlement resolves a lawsuit, filed simultaneously with the settlement, that alleged RAC failed to disclose the true cost of its rent-to-own program to California consumers. Additionally, RAC engaged in deceptive advertising in marketing and selling memberships in its “Preferred Customer Club (Club),” according to the complaint.

The settlement requires RAC to make full or partial refunds to thousands of California consumers who bought Club memberships, or who rented or purchased electronic merchandise, appliances, or computer systems from RAC on or after November 1, 2004. Lockyer’s office estimated the restitution will total more than $7 million. RAC also will pay $750,000 in civil penalties.

RAC rents and sells new and used household merchandise, including televisions, computers, furniture and appliances. Customers typically sign a self-renewing weekly or monthly lease for the rented merchandise. The lease agreements include an option to purchase, either by continuing to pay rent for a specified period of time, or by early payment of some specified portion of the remaining lease payments.

Lockyer’s complaint alleged RAC, in violation of state law, engaged in unfair competition and illegally misrepresented the cash price of certain merchandise.

The complaint also alleged RAC misrepresented the benefits and terms of its Club membership in numerous ways. The misrepresentations included: falsely claiming to provide an extended warranty, insurance, or service contract for rental merchandise; and telling consumers they would receive up to $500 in grocery discounts, without adequately disclosing that to obtain the maximum discounts consumers had to pay RAC more than $100 in additional fees.

Aside from the monetary payments, the settlement imposes reforms of RAC’s business practices. These “injunctive relief” provisions include:

Requiring RAC to comply with California’s Karnette Rental-Purchase Act in all rent-to-own transactions; prohibiting RAC from charging prices that exceed the maximum amount allowed by law; and requiring RAC to clearly disclose all terms of its Club membership, including any costs, benefits, services, features, discounts and cancellation rights.

In addition to the $7 million in restitution, RAC will deposit more than $7 million into a special consumer protection trust fund. The additional $7 million comes from a prior, private lawsuit brought against RAC, and represents restitution funds left undistributed to consumers in that case. The $7 million deposited into the special fund will be used solely to enforce consumer protection laws, and to protect California consumers in the areas of consumer lending and finance, debt collection, and the sale and lease of consumer goods or services.

RAC is based in Plano, Texas and operates 2,880 stores in all 50 states. In 2005, the company’s revenues totaled $2.34 billion.

Posted under Customer Service

Maryland Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division, working in conjunction with 17 other Attorneys General, has reached a settlement with Friedman’s, Inc., which trades under the name Friedman’s Jewelers. In the settlement, Friedman’s, Inc. has agreed to change its practices to provide clear and conspicuous point-of-sale disclosures when offering credit insurance to consumers.

The investigation of the nation’s third largest jewelry chain, alleged that the jewelry company engaged in unfair or deceptive trade practices by failing to adequately inform consumers regarding insurance fees. The States alleged that Friedman’s, Inc., when selling jewelry and financing the purchase, would charge premiums for credit life, credit disability and property insurance without adequately informing consumers that they were purchasing insurance.

In January 2005, Friedman’s, Inc. filed bankruptcy. At that time, Friedman’s had 560 jewelry stores in 21 states. After filing bankruptcy, Friedman’s has 427 jewelry stores in 20 states. Currently, Friedman’s, Inc. has five stores in Maryland.

Friedman’s, Inc. has denied any wrongdoing. However, under the terms of the settlement, Friedman’s has agreed to provide clear and conspicuous disclosures when offering credit insurance to consumers in the future. Additionally, Friedman’s has agreed to comply with Federal Truth in lending laws and with licensing laws before offering credit insurance. Friedman’s is paying $90,000 to Maryland under the agreement.

“It is important that consumers receive clear and adequate information when making a purchase and are not unfairly charged for products they do not want or need,” Curran said.

The Attorney General offers the following consumer tips:

* Before financing with an in-store financing option, check other financing options available to you and compare financing terms such as the interest rate;
* When purchasing any goods or services with a financing agreement, carefully review the financing documents and inquire about any add on fees or costs above those you initially agreed or expected to pay;
* Generally insurance that is sold as a part of a financing transaction is overpriced, so it is advisable to refuse to purchase it;
* When deciding whether to purchase credit insurance, review the terms of the credit insurance contract for all exclusions and compare the price of the credit insurance to the amount that would be paid off; and
* If electing to purchase credit insurance for any transactions, make sure the company is licensed to sell insurance in Maryland and is in good standing.

The other states participating in the settlement are Alabama, Arkansas, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee and Texas.

Posted under Customer Service

The Federal Trade Commission is charging the sellers of the “Centro Natural de Salud Obesity Treatment” with making false and unsubstantiated claims that their product causes rapid, substantial, and permanent weight loss. The “treatment” consists of three different pills, taken with breakfast, lunch, and dinner, and a bar of “special soap” to “reduce dress sizes.”

According to the FTC’s complaint, in Spanish-language infomercials and on the Internet the marketers made claims, such as:

“Lose 35 pounds in 2 months”

“Everything you lose, you will never gain back”

“No diets, no skipping dinner, no calorie counting, no side effects”

The defendants, Centro Natural Services, Inc., Xavier Rodriguez, and Rocio Diaz are located in Santa Ana, California. The complaint charges they falsely claimed the Centro Natural de Salud Obesity Treatment causes users: to lose substantial amounts of weight rapidly, without reducing calorie intake; safely to lose as much as a half pound per day for multiple weeks and months; and/or to lose weight permanently. The complaint also charges the defendants had no substantiation for their weight-loss claims.

The FTC is asking the court to order a halt to the defendants’ claims pending trial. It will seek a permanent halt to their operation, and redress for consumers.

Posted under Customer Service

The U.S. Food and Drug Administration (FDA) is alerting the public to counterfeit blood glucose test strips being sold in the United States for use with various models of LifeScan, Inc., One Touch Brand Blood Glucose Monitors used by people with diabetes to measure their blood glucose.

The counterfeit test strips potentially could give incorrect blood glucose values–either too high or too low–which might result in a patient taking either too much or too little insulin and lead to serious injury or death. No injuries have been reported to FDA to date.

The counterfeit test strips are:

* One Touch Basic®/Profile® (lot #272894A, 2619932 or 2606340) test strips; and,
* One Touch Ultra® (lot #2691191) test strips.

Consumers who have the counterfeit test strips should stop using them, replace them immediately and contact their physician. Consumers with questions may contact the company at 1-866-621-4855.

The counterfeit test strips were distributed to pharmacies and stores nationwide–but primarily in Ohio, New York, Florida, Maryland and Missouri–by Medical Plastic Devices, Inc., Quebec, Canada and Champion Sales, Inc., Brooklyn, N.Y.

The counterfeit test strips can be identified by the following characteristics:

Counterfeit One Touch Basic/Profile Test Strips

* Lot Numbers 272894A, 2619932 or 2606340
* Multiple Languages- English, Greek and Portuguese text on the outer carton
* Limited to 50-Count One Touch (Basic/Profile) Test Strip packages

Counterfeit One Touch Ultra Test Strips

* Lot Number 2691191
* Multiple Languages- English and French text on the outer carton
* Limited to 50-Count One Touch Ultra Test Strip packages

LifeScan alerted FDA of the counterfeit test strips. The agency is investigating the matter.

LifeScan is alerting the public via a press release and is notifying pharmacists, distributors, and wholesalers through a letter. In its letter, the company is advising customers to contact their original source of supply for restitution. For more information, visit: www.GenuineOneTouch.com.

FDA is alerting its Counterfeit Alert Network partners, a coalition of healthcare professional, consumer and trade associations, who have agreed to further disseminate this important information in a timely and effective manner.

Any adverse reactions experienced with the use of this product, and/or quality problems should also be reported to the FDA’s MedWatch Program by phone at 1-800-FDA-1088, by fax at 1-800-FDA-0178, by mail at MedWatch, HF-2, FDA, 5600 Fishers Lane, Rockville, MD, 20852-9787, or through the MedWatch Web site at www.fda.gov/medwatch.

Posted under Customer Service, Products

Consumer Help Web was contacted by a customer who was suffering from an ongoing problem with furniture giant Levitz.

Our customer tells us she purchased a dining room set from Levitz in 2004. She reports within a week or two of the expiration of her warranty the brace support on the bottom of one of the armchairs separated. This happened to another chair a month later. She states she contacted the company immediately after each incident, only to be told the warranty had expired and no assistance would be provided. Our customer tells us she believes there is a manufacturing defect in the chairs and is concerned for the safety of her family and guests.

Consumer Help Web contacted the company’s senior management multiple times and was stonewalled. To help our customer, we then arranged for free referrals to a local consumer attorney and the contact information for the government agency responsible for ensuring that Levitz addresses consumers when they have these types of complaints.

Posted under Complaints, Customer Service

A San Jose, Calif., executive of Samsung Semiconductor Inc. - the world’s largest manufacturer of a common computer component called dynamic random access memory or DRAM - has agreed to plead guilty and to serve jail time for participating in a global conspiracy to fix DRAM prices, the Department of Justice announced.

The charged executive, Thomas Quinn, participated in the price-fixing conspiracy in his capacity as vice president of marketing for memory products at Samsung Semiconductor Inc. Quinn was charged with one-count, alleging participation in an agreement to fix prices of DRAM and to coordinate bids in an auction held by a DRAM purchaser.

Under the plea agreement, which must be approved by the court, Quinn has agreed to serve eight months in prison and to pay a criminal fine of $250,000. In addition, Quinn has agreed to assist the Department in its ongoing investigation.

“Prison time for price-fixers remains the most potent deterrent to illegal cartel activity,” said Thomas O. Barnett, Assistant Attorney General in charge of the Department’s Antitrust Division. “Today’s action sends a clear message: those who engage in price-fixing schemes will be held accountable for their illegal conduct.”

Including today’s charge, four companies and 13 individuals have been charged and fines totaling more than $731 million have resulted from the Department’s DRAM investigation. The $731 million in criminal fines is the second highest total obtained by the Department of Justice in a criminal antitrust investigation into a specific industry.

DRAM is the most commonly used semiconductor memory product, providing high-speed storage and retrieval of electronic information for a wide variety of computer, telecommunication, and consumer electronic products. DRAM is used in personal computers, laptops, workstations, servers, printers, hard disk drives, personal digital assistants (PDAs), modems, mobile phones, telecommunication hubs and routers, digital cameras, video recorders and TVs, digital set top boxes, game consoles, and digital music players. There were approximately $7.7 billion in DRAM sales in the United States in 2004.

According to the one-count felony charge filed today in federal court in San Francisco, Quinn conspired with unnamed employees from other memory makers to fix the prices of DRAM sold to certain original equipment manufacturers from on or about April 1, 2001 to on or about June 15, 2002, and to coordinate bids on a Dec. 5, 2001 Sun Microsystems Inc., auction. The price-fixing scheme directly affected sales to U.S. computer makers Dell Inc., Hewlett-Packard Company, Compaq Computer Corporation, International Business Machines Corporation, Apple Computer Inc., Gateway Inc., and Sun Microsystems Inc., the Department said.

Quinn is charged with carrying out the price-fixing conspiracy by:

- Participating in meetings, conversations, and communications with competitors to discuss the prices of DRAM to be sold to certain customers; and

- Agreeing with competitors to coordinate bids submitted to Sun Microsystems Inc.

Quinn is the fourth Samsung executive to agree to a prison sentence in the DRAM investigation. Three foreign-based Samsung executives, Sun Woo Lee, Young Woo Lee, and Yeongho Kang, have already pleaded guilty and agreed to serve prison terms ranging from seven to eight months and to pay fines of $250,000 each. In addition, four Hynix Semiconductor Inc., executives, Dae Soo Kim, Chae Kyun Chung, Kun Chul Suh, and Choon Yub Choi, were charged with participating in the DRAM price-fixing conspiracy and agreed to plead guilty and serve jail terms ranging from five to eight months and to each pay a $250,000 fine. In December 2004, four Infineon executives, T. Rudd Corwin, Peter Schaefer, Gunter Hefner, and Heinrich Florian, pleaded guilty to the DRAM price-fixing conspiracy. The Infineon employees served jail terms ranging from four to six months and each paid a $250,000 fine.

Also, in December 2003 the Department charged Alfred Censullo, a Regional Sales Manager for Micron Technology Inc., with obstruction of justice. Censullo pleaded guilty and admitted to having withheld and altered documents responsive to a grand jury subpoena served on Micron. Censullo was sentenced to serve six months of home detention.

In total, four companies have been charged with price fixing in the DRAM investigation. Samsung pleaded guilty to the price-fixing conspiracy and was sentenced to pay a $300 million criminal fine in November 2005. Hynix, the world�s second-largest DRAM manufacturer, pleaded guilty and was sentenced to pay a $185 million criminal fine in May 2005. In January 2006, Japanese manufacturer Elpida Memory agreed to plead guilty and pay an $84 million fine. In October 2004, German manufacturer Infineon pleaded guilty and was sentenced to pay a $160 million criminal fine.

Posted under Customer Service, Products