Our Fragile Earth – National Consumers League

By Jacob Markey, LifeSmarts Summer 2010 intern

The standard of living for most Americans is far better than even when my parents grew up in the 60s. With advances in industry, medicine, and technology, Americans live longer and have access to goods and information like never before. We can hop on a plane and travel across the world in less than a day and converse with people face-to-face who are thousands of miles away using Voice over Internet Protocol (VoIP), a technology I enjoyed while studying abroad this past fall.

Globalization and industrialization have benefited Americans, but have come at a terrible cost to our planet. To power our cars, planes, and factories, we consume nearly 20 million barrels per day of oil. Combined with coal and natural gas, Americans rely on non-renewable sources for over 80% of our country’s energy needs. Using these energy sources pollutes the Earth. Together with the rapid industrialization of countries like China and India and the world’s continual population growth, a dangerous amount of tension is being placed on the Earth.

The consensus in the scientific community is that substantive change must happen. Many feel a failure to do so will alter the Earth in a plethora of irreversible ways, including an increase in temperature, the melting of the polar ice caps, and changes to ecosystems and agriculture around the world. The sad part is that even with drastic changes, much damage has already occurred.

The good news is that we can change our course! After scientists realized chlorofluorocarbons (CFCs) were the prime cause of the growing hole in the ozone layer, countries around the world signed the Montreal Protocol, eliminating their use. Even though the ozone layer will take decades to replenish, it has begun to recover, signaling a success in the fight against products that can harm our planet.

Dealing with human-created environmental problems is likely to be one of the biggest issues in the 21st century. Teens should therefore follow this issue closely. The world’s youth is responsible for cleaning up the mess left by previous generations. Whether its government policy trying to redress environmental damage or the development of new green technology, the health of our planet is sure to remain a hot topic.

Investment scams: from a quiet Amish community to the Big Apple – National Consumers League

The Amish, a peaceful, insular community that that eschews the use of modern technology, rarely make headline news. Unfortunately, today the Amish are getting considerable media attention for all the wrong reasons. The Washington Post reported that the Securities and Exchange Commission (SEC) is investigating a Madoff-like scheme in which a 77-year-old Amish man named Monroe Beachy filched more than $33 million dollars from more than 2,600 investors, the vast majority of which were fellow members of his Amish community. Beachy has been running his scheme over a 25-year period and was charged with fraud by the SEC yesterday.

Particularly heartbreaking is the fact that Beachy established such trust among Amish parents that many encouraged their children to invest with him as well—investors included a school cookbook fund and a school capital fund. Armed with just a 10th-grade education and some classes from H&R Block, Beachy lured investors by claiming they were earning money from safe U.S. government securities and would receive higher returns than they would get from banks.

Speaking of Ponzi schemes, Bernie Madoff himself made news this week when he accused banks of being “complicit” in his investment scam in a recent prison interview with the New York Times. Madoff stated that banks must have known about his Ponzi scheme, which lasted 16 years and cost investors billions of dollars, and that banks are to blame for failing to examine discrepancies between his filings and other information they had at their disposal.

Ponzi schemes

While each Ponzi scheme is different, they all involve a perpetrator who promises to invest client money while instead using the cash for something else, usually for personal gain. The scammer creates fictitious profit reports, and—when an investor asks for their earnings or principal—the fraudster uses other investors’ money to pay them. Ponzi schemes normally go on until someone discovers the truth or there’s no longer enough money left to pay investors and the scheme falls apart.

With consumers from residents of small Amish communities to New York power players falling victim to investment scams, now is a great time to go over some safety tips:

  • Be wary of big earnings claims. No one can guarantee how much you’ll make
  • Scammers advertise pyramid schemes as businesses that provide ‘easy money’ or ‘guaranteed income.’ Phrases like these should be red flags
  • Stocks and bonds fluctuate over time. Relentlessly even, positive returns over long periods of time is often a warning bell
  • Protect yourself by diversifying your brokers and not putting all your money in one person’s hands
  • Remember the old adage: if it sounds too good to be true, it probably is

For more information on Ponzi schemes click here.

Scammers prey on the elderly in 2010 – National Consumers League

A phone ringing at 3AM usually means one thing: bad news. That’s certainly the case with a Grandparent Scam, in which fraudsters play on the fear that a friend or relative is in danger by calling an elderly victim and posing as a grandchild or acquaintance.The scammer then frantically tells a story of distress (they’ve been arrested, in an auto accident, are in need of lawyer, etc.) that requires money to be wired immediately. The “grandchild” begs the victim not to tell anybody about the call to avoid getting in trouble with their “parents.”

Scammers, always on the look-out for an easy mark, have been mercilessly targeting the elderly, according to the NCL’s Fraud Center and its recently released Top Ten Scams Report. The report, which is compiled annually from consumer complaints submitted to NCL’s Fraud Center, looks at trends in Internet and telemarketing fraud in the last year.

Consumers over the age of 55 make up nearly a third of all reports (32.8 percent), while baby boomers and older consumers total 54 percent of all complaints to the NCL’s Fraud Center in 2010.

“Fraudulent telemarketers and Web-based scammers aren’t just pushy salespeople trying to make a living – they are hardened criminals out to take their victims’ life savings,” said NCL Executive Director Sally Greenberg. “Con artists know that older consumers may be particularly vulnerable to falling for a bogus pitch, using scare tactics, posing as legitimate outfits, or making the offer sound so sweet that it’s difficult for consumers to resist.”

Top ten scams of 2010

  1. Fake Checks: 29.67%
  2. Internet: General Merchandise: 27.24%
  3. Prizes/Sweepstakes/Free Gifts: 20.49%
  4. Phishing/Spoofing: 8.90%
  5. Advance Fee Loans, Credit Arrangers: 2.44%
  6. Timeshare Resales: 1.56%
  7. Nigerian Money Offers: 1.28%
  8. Internet: Auctions: 1.14%
  9. Friendship & Sweetheart Swindles: 0.99%
  10. Scholarship/Grants: 0.65%

Fake check scams—in which fraudsters lure their victims with phony mystery shopper jobs or sweepstakes “winnings,” asking their victims to cash realistic-looking checks and wire a portion of the proceeds back to the scammer before the check bounces—continued to be the most frequently-reported scam to NCL’s Fraud Center, making up 29 percent of all complaints.

“There is no legitimate reason for someone to give you money and then ask you to wire money back,” said John Breyault, NCL Vice President of Public Policy. “If a stranger wants to pay you for something, insist on a cashiers check for the exact amount, preferably from a local bank or a bank that has a branch in your area.”

Fraudsters on the line

Despite our increasingly digital society and the growing prevalence of Web-ready devices such as smartphones and tablet computers, scammers have not abandoned the telephone as a method of contact. Nearly a quarter – 23.67 percent – of victims reported being defrauded over the phone, up 7.62 percent from last year.

In 2010, NCL’s Fraud Center saw a spike in telemarketers focusing on bogus prize and sweepstake scams. Among scams where the con artist contacted the victim by phone, these scams increased by 19 percent and are this year’s most frequently reported telemarketing scam.

Wire transfers: Con artists’ preferred method of payment

Wire transfers are great for scammers. Unlike reversing a credit card charge or canceling a check, consumers have virtually no way of getting their money once a transfer has been made. Because it’s such an unsafe way for consumers to pay for transactions, wire transfer remains the payment of choice for scammers, with more than 2 in 5 (41.5 percent) of consumers who reported losses sending money via wire transfer.

For more information on the top scams of 2010, read NCL’s report.

NCL supports the Air Passenger Bill of Rights Act of 2011 – National Consumers League

February 15, 2011

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Washington, DC–The National Consumers League today announced its support for the Air Passenger Bill of Rights Act of 2011, legislation that will provide some very basic rights and increased comfort, including food, water, comfortable cabin temperature, and access to restrooms, while a plane is delayed on the ground. The bill would also require that airlines afford passengers the option to deplane after sitting on the ground for three hours. The U.S. Department of Transportation is also directed in the bill to create a hotline for passenger complaints, as well as approving airline contingency plans, and fining carriers and airports that don’t comply.

“These protections are long overdue,” said Sally Greenberg, NCL Executive Director. “We applaud Congressman Mike Thompson for his leadership in introducing this bill and Kate Hanni, director of Flyersrights.org, for her heroic advocacy for airline passenger rights. Kate turned a negative experience – being stranded on a plane for 9 hours on the tarmac with her family – into a constructive and pro-consumer movement for airline passenger rights.”

NCL urges the House Transportation and Infrastructure Committee to address these abuses on Wednesday, when the Committee begins mark-up of the Federal Aviation Administration reauthorization bill.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

A Valentine to the Capital Area Food Bank – National Consumers League

As part of a settlement with a cereal manufacturer, the NCL organized the delivery of close to 100,000 boxes of cereal to the Capital Area Food Bank.

By Sally Greenberg, NCL Executive Director

Monday afternoon, NCL staff paid a visit to the Capital Area Food Bank, the Washington DC area’s largest food distribution facility. With me on the visit were Courtney Brein, our Linda Golodner Food Safety and Nutrition Fellow, Daniel Dahlman, our new communications associate, and Karen Marcus, of Finkelstein Thompson, the law firm that represented NCL in the suit.

NCL’s connection to the CAFB stems from NCL’s case against a cereal manufacturer for false and deceptive advertising. The case settled in 2010, and as part of the settlement, NCL arranged to have 96,000 boxes of cereal delivered to the food bank for distribution throughout some of the poorest neighborhoods in the District. We didn’t know this at the time we negotiated this contribution, but the CAFB told us that cereal is in great demand because it is so expensive, and having cereal in this volume will delight food bank clients.

Lynn Brantley, the CAFB’s renown Executive Director and one of the bank’s founders, greeted us at the entrance. She described how the bank got its start in the 1970s as part of an interfaith campaign drive to address hunger in the District. The CAFB then distributed 1 million pounds of food a year; the facility has grown by leaps and bounds since then, serving 700 distribution facilities in the metropolitan area, including food pantries, soup kitchens, child care providers, faith-based organizations, group homes, senior centers, shelters and youth programs. Today the bank distributes 28 million pounds a year of food, including a great deal of fresh produce.

What I found most interesting were the pre-packed bags of food intended for school children and seniors. CAFB’s Molly McGlinchy, who led us on the tour, told us that a lot of kids whose families run low on money toward the end of the month may get breakfast and lunch at school, but they’ll miss an evening meal. They are sent home over the weekend or at night, therefore, with a bag that includes a box of spaghetti, cans of green beans and pears and peaches, and a big jar of red pasta sauce.

The seniors’ package contained similar nutritious foods. In addition to the donations the CAFB receives, the bank also buys food at reduced rates from retailers. We saw food of every description – cans of Vienna sausage, canned chili with and without meat, peanut butter, cake and brownie mixes (very popular!) even vitaminwater!
NCL is proud indeed that our efforts to prevent false and deceptive advertising in the cereal marketplace resulted in this bountiful contribution to the Capital Area Food Bank. The visit today to CAFB reinforced NCL’s historical connection to those in society who suffer from hunger and poverty. We were really so pleased to be able to direct nearly 100,000 boxes of cereal to those in greatest need of nutritious food.

<3 your tap water - National Consumers League

By Sally Greenberg, NCL Executive Director

The Environmental Protection Agency (EPA) recently took an important step towards ensuring that drinking water in communities across the United States is free from dangerous chemical residues. Lisa Jackson, Administrator at the EPA, told a United States Senate Committee that her agency is mandating a limit on perchlorate, a chemical found in rocket fuel and, unfortunately, also in the drinking water of between 5 and 17 million people. The effects of ingesting perchlorate include limiting the thyroid’s ability to absorb iodine, an important mineral for good health.

I am a big fan of drinking tap water and therefore applaud the EPA’s efforts. Tap water has many benefits, including the fact that it’s free! But consuming tap water is also much better for the environment. America’s consumption of bottled water, and the concomitant cost of production and disposal, costs billions of dollars every year. Tap water also has an important health benefit since it is often fluoridated, thus preventing tooth decay. Bottled water doesn’t have fluoride and many dentists say the increase in consumption of bottled water is reflected in patients with higher levels of tooth decay. Fluoridated water provides a critical public health benefit for children especially, and it can save them from a lifetime of dental disease.

One of the great health breakthroughs in the United States was the creation of safe drinking water right from the tap. But keeping that water safe is important; which is why the EPA’s action to curb perchlorate, which will also include a separate effort to set lower limits for 16 other chemicals in drinking water, is of critical importance.

Some popular Valentine’s Day gifts not so sweet when it comes to labor issues – National Consumers League

This February 14th, millions of lucky loved ones will be receiving chocolate and flowers, the ubiquitous staples of Valentine’s Day gift giving. But the beautiful flowers and delicious chocolates we all enjoy this time of year often come at the expense of exploited adult workers or child laborers in the cocoa and flower industries.

Flower farm abuses

Valentine’s Day accounts for 40 percent of annual fresh flower sales in the United States. To meet the holiday’s huge demand for flowers, flower retailers regularly purchases large amounts of flowers from farms in Ecuador and Cuba. According to Change.org, two-thirds of flower farm workers in these countries are women. The women are routinely forced to work 80-hour weeks with no overtime pay, are subjected to harassment and abuse from male supervisors, and often suffer from health problems such as eye infections and miscarriages brought on by prolonged contact with dangerous pesticides. Despite these well-documented abuses, 1-800-Flowers (the largest florist in the world), has so far refused to offer consumers Fair Trade flowers that require farms to adhere to certain worker’s rights standards. Concerned consumers can sign Change.org’s petition urging 1-800-Flowers to sell Fair Trade flowers by clicking here and those who want no part in the exploitation of women can buy their flowers from local farmers or from competitors, such as Whole Foods and Stop & Shop, that sell Fair Trade flowers.

Forced and child labor at cocoa plants

The cocoa industry has its own record of worker abuse and exploitation. Since 2001, cocoa produced from West Africa has fallen under great scrutiny because of allegations that children are involved in harvesting the crop under sometimes harsh conditions. The U.S. Department of Labor’s List of Goods Produced by Child Labor or Forced Labor includes cocoa from five countries, including the Ivory Coast and Ghana. According to the International Labor Rights Forum, the U.S. Department of State estimates that more than 109,000 children in Cote d’Ivoire’s cocoa industry work under “the worst forms of child labor,” and that some 10,000 are victims of human trafficking or enslavement. Just last month, two Ivory Coast workers died while loading cocoa onto a United States-bound ship because they were overworked and never received proper training. The disappointing labor rights record throughout the West African cocoa industry has prompted the Payson Center for International Development at Tulane University to urge chocolate companies to take responsibility for their supply chains by working to ensure labor rights compliance and implementing traceability systems for their cocoa supply chains. Hershey has so far has remained conspicuously absent from labor rights discussions and has made no effort to help ensure the safety of its cocoa suppliers despite posting record earnings in 2010. Click here to sign a petition to urge Hershey to support Fair Trade certified cocoa.

National Consumers League hails IRS policy turnaround on deductibility of breast pumps – National Consumers League

February 10, 2011

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Washington, DC–The National Consumers League today is hailing the reversal of policy by the Internal Revenue Service on breast pumps as a “great day for mothers, babies, and for advances for our nation’s health care.” Referring to this morning’s IRS Announcement 2011-14, advising the public that “expenses for breast pumps and other supplies that assist lactation may be deducted as medical expenses or reimbursed under a flexible spending arrangement or similar plan,” NCL Executive Director Sally Greenberg made the following statement:

“Today is a great day for mothers, babies, and for advances for our nation’s health care. We appreciate the care and attention the IRS devoted to the concerns expressed by the NCL, the American Academy of Pediatrics, members of Congress and many other groups who argued forcefully about the need to reimburse for breast pumps. We need to do all that we can to encourage mothers to breastfeed. This new Announcement gets all federal policy on the same page.”

Last fall, Greenberg wrote a letter to the IRS after the tax agency’s determination that breast pumps often used by working mothers wouldn’t be deductible as a medical expense under flexible spending rules. Greenberg’s letter pointed to overwhelming medical evidence that breastfeeding provides critical, long-term health benefits to babies and mothers alike.

According to today’s IRS announcement, the agency has concluded that breast pumps and supplies that assist lactation are classified as medical care under Section 213(d) of the Tax Code because, like obstetric care, they are used for the purpose of affecting a structure or function of the body of the lactating woman.  Therefore, if the remaining requirements of Section 213(a) are met (for example, the taxpayer’s total medical expenses exceed 7.5 percent of adjusted gross income), expenses paid for breast pumps and supplies that assist lactation are now to be considered deductible medical expenses.

Amounts reimbursed for these expenses under flexible spending arrangements, Archer medical savings accounts, health reimbursement arrangements, or health savings accounts are not considered to be income to the taxpayer, according to the IRS. The IRS plans to revise Publication 502, Medical and Dental Expenses, to include this information.

The decision was also hailed by a group of four lawmakers who, along with 41 others, had written to IRS Commissioner Doug Shulman last November asking him to reverse the IRS decision. Those members of Congress also issued statements today.

“Today’s decision is a huge victory for nursing mothers everywhere,” said Rep. Sander Levin (D-Mich.), Carolyn B. Maloney, (D-NY), and Sen. Jeff Merkley, (D-Ore.), and Tom Harkin, (D-Iowa). “Modern medicine has documented numerous health benefits linked to breastfeeding, including a reduced risk of illness in infants and a reduced risk of cancer in mothers. And because breastfeeding is so effective in preventing disease, it also happens to save billions in health care costs. We thank the IRS for their careful consideration and quick response.”

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

NCL to FDA: Don’t hide High Fructose Corn Syrup behind misleading ‘Corn Sugar’ name – National Consumers League

February 10, 2011

Contact: NCL Communications, (202) 835-3323, media@nclnet.org

Washington, DC — The nation’s oldest consumer group told the Food and Drug Administration (FDA) today that allowing a name change of High Fructose Corn Syrup (HFCS) to “Corn Sugar” would be misleading to consumers and possibly expose the agency to future dilemma, depending on how scientific research and public perception may continue to evolve.

“Regardless of where you stand on the debate over High Fructose Corn Syrup and its effects on our waistlines and our health, changing the name after decades of use is unfair to consumers,” said Sally Greenberg, Executive Director of the National Consumers League. “Consumers are familiar with HFCS, they know how to find it on Nutrition Facts labels, and they deserve consistency so they can continue to make purchasing decisions.”

The National Consumers League (NCL), a Washington, DC-based nonprofit watchdog group, filed formal comments with the FDA urging the agency to reject a petition by the Corn Refiners Association requesting that the name of High Fructose Corn Syrup, a sweetener commonly found in soft drinks and processed foods, be changed to “Corn Sugar.”

The request by the corn refining industry, which makes HFCS, comes before a backdrop of controversial and evolving debate over the ingredient’s nutritional value and possible health implications.

The FDA officially approved the name “High Fructose Corn Syrup” in 1983, and the sweetener has been referred to by that name ever since. HFCS consumption has come under fire in recent years as a possible factor in a variety of health problems ranging from obesity to diabetes, and as a result, some consumers have decided to avoid HFCS. Several manufacturers of brand name foods and beverages have stopped using the ingredient including Hunt’s ketchup, Snapple, Gatorade, and Starbucks’ baked goods.

“The FDA should not play spin doctor for the corn refining industry or shield food companies who use the ingredient from the impact of emerging scientific evidence or from consumer preferences. Just as it would be premature to conclude that HFCS is harmful to health, an official name change could frustrate further scientific study and confuse or irritate consumers,” said Greenberg. “Should it turn out that HFCS does contribute to obesity or other adverse health outcomes, a regulatory decision allowing manufacturers to hide this ingredient from consumers could come back to haunt FDA.”

To read NCL’s letter to the FDA, click here.

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

Continuing the drive to enact bill shock protections – National Consumers League

By John Breyault, Vice President of Public Policy, Telecommunications and Fraud

Yesterday, NCL joined with eight other consumer and public interest groups to file reply comments in the FCC’s bill shock proceeding.  As we have previously mentioned, the FCC is considering new rules that would require wireless carriers to provide alert notifications to consumers when they are close to running out of voice minutes, text messages or data allotments.  Such alerts would, we argue, help consumer avoid expensive overage charges and roaming fees.

Joining with NCL in our comments were the Center for Media Justice, Consumer Federation of America, Consumers Union, Free Press, Media Access Project, the National Hispanic Media Coalition, New America Foundation Open Technology Initiative, and Public Knowledge.

In our reply comments, we argue that the wireless industry’s current usage control mechanism is not adequately protecting consumers from these charges.  We further argue that all consumers would benefit from a common baseline of consumer protection and that such rules would enhance competition and innovation in the wireless market.  Finally, we argue that customers of smaller rural and regional carriers and prepaid companies should also benefit from the proposed rules.

The issue now goes to the FCC, which will review our comments as well as the comments of other stakeholders, including the wireless industry, state public utilities commissions and attorneys general, other consumer groups and individual consumers. NCL will continue to play an active role in this issue as we work with the FCC to implement common-sense protections that benefit consumers and address the bill shock issue.