Testimonial advertising crossing the line into deception, says NCL – National Consumers League

July 22, 2009

Stricter rules on consumer and expert endorsements, blogola, and fake news needed, says consumer group

Contact: 202-835-3323, media@nclnet.org

WASHINGTON, DC –- Appearing today before a Senate subcommittee, the National Consumers League (NCL) called for stricter rules regarding the use of consumer and expert testimonials in advertising. The consumer group also urged lawmakers and regulators to strongly consider establishing guidelines regarding disclosure by bloggers and others of compensation received in return for product and service reviews online. The League also described as “extremely troubling,” the proliferation of advertising masquerading as real news.

“Now more than ever, consumers need to be assured that products and services advertised to them deliver on what they promise,” said NCL Executive Director Sally Greenberg. “We believe that the overuse of consumer testimonials and expert endorsements has crossed the line from aggressive marketing to outright deception.”

The hearing before the Senate Commerce Committee’s consumer protection subcommittee was prompted by revisions being undertaken at the Federal Trade Commission (FTC) of the agency’s guidelines regarding the use of consumer testimonials and expert endorsements in advertisements. Changes under consideration include requiring advertisers to prominently disclose average results when atypical results are shown, such as in diet pill commercials. Other changes would require that bloggers and other online reviewers disclose when they receive payment or gifts from advertisers in return for a review. NCL also urged regulators and lawmakers to investigate whether the undisclosed use of video news releases by news organizations should fall under the FTC’s testimonial advertising guidelines.

“We find the rampant lack of disclosure by broadcasters that they are being paid to air VNRs extremely troubling,” said Greenberg. “Citizens of a democratic society should have confidence that the media is not passing off advertisements as hard news.”

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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.

Sotomayor’s Consumer Decisions – National Consumers League

By Sally Greenberg, NCL Executive Director

While the Senate hearings for Supreme Court Justice nominee were going on last week, the National Consumers League took a look at President Obama’s first Supreme Court nominee — Judge Sonia Sotomayor’s — and her record on consumer issues. NCL reviewed a series of cases that had been identified by the nonprofit group, Alliance for Justice, as related to consumer matters.

What we found gave us comfort. Judge Sotomayor’s handful of consumer-related decisions demonstrate a sympathy for the average consumer against those who would scam them or hide provisions in the fine print. Sotomayor upheld the Federal Trade Commission’s efforts to levy a hefty fine on one company and restitution for its victims.  She also seems reluctant to throw plaintiffs out of court on a technicality, protecting protects their right to seek redress.

Read our analysis, Judge_Sotomayor’s_Record_on_Consumer_Issues, of decisions on cases that we thought would be of interest to consumers and other readers of this blog.

Happy Blueberry Month! – National Consumers League

By Mimi Johnson, NCL Health Policy Associate

Blueberries are my all-time favorite food.  Whether frozen, fresh, or preserved, they are truly nature’s treat, and July has been designated as the month for celebrating these wonderfully nutritious berries.  In honor of the blueberry, I recently traveled to a local farm and picked a few buckets’ worth.

While you don’t have to spend your Saturday laboring away for berries, your local farmers’ markets and grocery stores will likely have the fresh stuff in stock – the peak season runs mid-May through August.  If you can’t get your hands on fresh ones, frozen berries pack the same punch.

*Blueberries are rich in antioxidants – the richest of any fruit – and help block bacteria from sticking around in the body.  Blueberries are an excellent source of vitamins C, E, and K, as well as manganese and fiber.  In addition to promoting brain health, blueberries are also believed to help reduce the risk factors for cardiovascular disease and metabolic syndrome.

Including blueberries in a diet rich in *vegetables and fruit can help lower your risk for chronic conditions and help maintain a healthy weight.  The summer months make it easy to fill your plate with colorful, nutrient-rich foods.  To see if your meals need some help, visit the CDC’s interactive site where you can learn how to better reap the benefits of fruit and veggies.

If you’re interested in picking up some fresh berries or other healthy produce, head to your local farmers’ market.  Many markets offer cooking demonstrations and farmers are always ready to share their tried and true recipes.

 

*Links are no longer active as the original sources have removed the content, sometimes due to federal website changes or restructurings.

Recession-Fueled Fraud Increases the Need for a Federal Role in Fraud-Fighting – National Consumers League

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

Consumer misery – in the form of rampant unemployment, high foreclosure rates, and dwindling retirement savings – is blood in the water for scammers. These con artists know that consumers in desperate financial straits are more vulnerable to the kinds of frauds these criminals routinely peddle. Unfortunately, the worst economy in a generation has caused the traditional “boots on the ground” of consumer protection – state and local consumer agencies – to see their already-slim budgets slashed to the bone or eliminated altogether. Given these disturbing trends, consumers will increasingly depend on federal authorities to protect them from the growing threat of fraud.

This was the message that NCL Executive Director Sally Greenberg delivered to a subcommittee of the Senate Commerce Committee on Tuesday in *testimony on the impact of the economic meltdown on consumer fraud. Greenberg was asked to testify by the committee thanks in part to the work that NCL’s Fraud Center does every day to educate consumers about consumer fraud and alert authorities when victims come to NCL looking for help.

“Absent increased action at the federal level to bring scam artists to justice and educate consumers about the threat of fraud, consumers will be caught between the proverbial rock and a hard place,” noted Greenberg in her testimony.

To address these issues, Greenberg offered several recommendations, including beefing up staffing levels and enforcement budgets at the Federal Trade Commission (FTC), making the FTC’s Consumer Sentinel database open and searchable by the public, and creating a consumer education grant program to help state, local, and non-profit organizations launch innovative anti-fraud projects.

In support of Greenberg’s testimony, NCL released its *semi-annual rankings of the top ten frauds reported to the Fraud Center.  Fake check scams again topped the scam category rankings, increasing by more than 4% of the total complaints submitted. Complaints involving prizes, sweepstakes, or free gifts also increased, particularly among fraud perpetrated by telemarketers. In response to the continued growth of fake check-related complaints, NCL in 2009 has begun to look deeper into the scams behind the fake checks. Our six-month review indicated scams involving fake mystery-shopping jobs, phony sweepstakes winnings, and overpayment for goods made up more than 65% of the total fake check scam complaints received. NCL believes that consumers’ vulnerability all three scam types is closely linked to difficult financial circumstances, which are likely exacerbated by the worsening economic climate.

Click here to see video of the Senate hearings on fraud linked to the recession, including NCL’s remarks.

 

*Links are no longer active as the original sources have removed the content, sometimes due to federal website changes or restructurings.

NCL commends Minnesota attorney general for prosecution of arbitration firm – National Consumers League

July 16, 2009

Contact: 202-835-3323, media@nclnet.org

WASHINGTON, DC –- The National Consumers League (NCL) commends Minnesota Attorney General Lori Swanson for her efforts to prosecute the National Arbitration Forum (NAF), the nation’s largest arbitration company, for consumer fraud, deceptive trade practices, and false advertising.

Consumer groups have argued for years that the while the NAF claims to be a neutral arbitrator of debt collection complaints against consumers and on other consumer complaints, behind the scenes the company aggressively markets itself to credit card companies, mortgage lenders, debt buyers, and cell phone companies and even helps them put mandatory arbitration clauses in consumer contracts.

Businesses know that they will be treated more favorable under arbitration, and so have been eager to participate in it.

But the suit brought by the Attorney General brings up even more serious allegations of bias and favoritism toward businesses. Swanson claims the NAF helps companies fill out claims against consumers, while providing consumers no such assistance. The lawsuit also reveals the intricate corporate ties between NAF and debt collection companies who do business with NAF’s clients. The NAF hides these connections, as they illustrate a clear conflict of interest.

Mandatory arbitration provides legal cover for businesses at the expense of consumers’ right to take action in court when they are harmed. The National Consumers League supports a full ban on mandatory arbitration and applauds the Minnesota Attorney General for her action on the matter.

Wal-Mart Steps out on Health Care Reform, Prompting Attack by Retail Federation – National Consumers League

By Sally Greenberg, NCL Executive Director

 

As the Congress begins to consider several different approaches to universal health insurance, Wal-Mart, the giant retailer, has come out in favor of an employer mandate to cover health insurance. That alone is a breakthrough for health care reform since Wal-Mart has been *heavily criticized for its record of poor worker pay and benefits, including lack of affordable health care. In response to criticism from unions, Wal-Mart now provides health care to 52 percent of its workers, up from 46 percent three years ago.

What is shocking is that the National Retail Federation, a federation of retailers across the United States, is condemning Wal-Mart’s actions and is encouraging its members to take a stand against Wal-Mart. “They [members of the federation] really don’t want Wal-Mart to define the health care debate,” said a spokesman for the retail federation.

According to a Kaiser Family Foundation survey, the retail industry covers only 45 percent of its workers. Some retailers have expanded their health care coverage — Toys R Us and Home Depot included — in an effort to reduce employee turnover. And others have stood out for a long time as exemplary in the coverage they provide; Costco Wholesale Corporation has for years had generous health benefits for its employees, and more than 90 percent have coverage. Costco officials say that providing these benefits has boosted employees’ productivity.

So what do the bills say about an employer health care mandate? The *House bill would require most employers over a certain size to provide workers with basic benefits or contribute up to 8 percent of their payroll toward helping the government pay for their coverage. A Senate bill would place a larger obligation on employers of low wage workers. Wal-Mart told the Wall Street Journal that “…we believe we have taken a pro-business position. The present system is not sustainable.”

Wal-Mart support for an employer mandate was expressed in a letter sent to the White House that was co-signed by Andy Stern, president of the Service Employees International Union (which holds a seat on the NCL board) and John Podesta, CEO of the Center for American Progress.

It’s a shame that in 2009 we have a major force in American business taking such a reactionary position on the coverage of basic health benefits. America is the only industrialized country that doesn’t provide health coverage for its people. The National Retail Federation should take a page from one of its own, Costco, which has shown that providing good benefits and health insurance to workers actually increases productivity and improves its bottom line.

 

*Links are no longer active as the original sources have removed the content, sometimes due to federal website changes or restructurings.

NCL warns Senate of recession-fueled fraud – National Consumers League

July 14, 2009

New Fraud Center Statistics Underscore Call for Increased Federal Fraud Fighting

Contact: 202-835-3323, media@nclnet.org

WASHINGTON, DC – Appearing today before a Senate subcommittee, the National Consumers League (NCL) said that frauds linked to the bad economy are on the rise and called upon federal fraud cops to “vigorously enforce existing anti-fraud statutes and regulations” and redouble their efforts to educate consumers about the growing threat of recession-fueled fraud.

NCL warned that consumers’ thinly-stretched pocketbooks have “increased their vulnerability to fraudsters offering promises of extra income. The consumer group warned that nearly one in three consumers could be at risk for fraudulent work-at-home schemes and that fake check complaints involving phony sweepstakes and bogus “mystery shopper” jobs continue to increase.

Top Scams, January – June 2009 (read full report)

1. Fake Check Scams
2. Internet: Gen Merchandise
3. Prizes/Sweepstakes/Free Gifts
4. Phishing/Spoofing
5. Nigerian Money Offers (not prizes)
6. Business Opportunities/Franchises/Distributorship
7. Advance Fee Loans, Credit Arrangers
8. Friendship & Sweetheart Swindles
9. Internet: Auctions
10. Lotteries/Lottery Ticket Buying Clubs

“Consumers face a double bind. The economic crisis has made them increasingly vulnerable to fraud while local agencies that investigate scams and enforce the laws are shutting their doors, leaving consumers with fewer avenues to protect their interests,” said Greenberg. “Absent increased action at the federal level to investigate and prosecute scam artists, consumers will be caught between the proverbial rock and a hard place.”

In support of Greenberg’s testimony, NCL’s Fraud Center released its semi-annual ranking of the top telemarketing and Internet scams plaguing consumers so far in 2009, with fake check scams continuing to top the list. For the first six months of 2009, fake check scams made up more than 44 percent of the total complaints NCL received, with more than half of these complaints (55 percent) involving a fraudulent mystery shopper job or phony sweepstakes winnings. Average losses per victim were more than $3,000.

Phony business opportunity scams — which include fake franchises and distributorships – were not among the most commonly reported scams to the Fraud Center in 2008. However, in the first six months of 2009, they have risen into the top ten most-reported scams. Earlier this year, an NCL-commissioned survey found that 31 percent of respondents were more likely to consider starting a home-based business due to the current economic climate. NCL believes that this is a reflection of a weak economy, loss of jobs, and consumers’ eagerness to find viable employment.

“The worsening economy has clearly had an impact on consumers’ vulnerability to fraud.” said John Breyault, NCL Vice President for Public Policy, Telecommunications and Fraud. “Consumers should be wary that scammers are eager to prey on those in greatest financial need.”

NCL’s Fraud Center is unique among consumer organizations. It was created in 1992 to combat the economic menace of telemarketing fraud. In 1996, it expanded its fraud-fighting efforts to include scams in cyberspace. The Fraud Center’s www.fraud.org and www.fakechecks.org. Web sites are a consumer resource with information on the most common telemarketing and Internet scams. Consumers can report suspected fraud there using NCL’s online complaint form. These reports are then transmitted to the appropriate agencies among NCL’s law enforcement and consumer protection partners in the U.S. and Canada. These reports alert authorities to emerging scams and help put them in touch with victims, while providing the necessary ammunition to investigate and shut down fraudulent operations.

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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.

Tips to Enjoy a Safe and Healthy Summer – National Consumers League

Though summer may be in full swing and we might be in relaxation mode, it is all the more important we stay consumer savvy.

Sunny days may bring a smile to our faces and give us our daily dose of vitamin D, but we have to be prepared and protected so that we don’t get too much of a good thing.  It’s important to wear a hat (with a brim and ideally one that offers the face and ears protection), limit exposure between 10am and 4pm, wear sunglasses with at least 99% UV protection, and *use sunscreen.  When using sunscreen, there are a few things to remember:

  • use broad spectrum sunscreen, which protects against both UVA and UVB rays
  • use SPF 15 at a minimum
  • apply at least 30 minutes before going outside so that it can be absorbed
  • apply even on cloudy days
  • reapply at least every 2 hours – more if you are in water or staying active and sweating

With longer, warmer days, it makes it all the easier to get out and get active. Whether biking, swimming or walking, it’s important to *do so safely.  Wear a helmet, and appropriate padding, when you take the wheels.  When swimming, stay alert and practice some safe tips like swimming with a partner, knowing your limits, staying in safe swimming areas (and avoiding currents, deep water, etc.), being careful about diving, and keeping protected from the sun.  If you plan to exercise, try to avoid drinking a lot of alcohol or caffeine beforehand, as it can cause dehydration.  Stretch your muscles out before any activity to prevent injury.  And one of the most important things to remember when getting out and active this summer is to stay hydrated!

With all the excitement of summer, it’s also important to take some time to relax a bit, whether it means you take a vacation or a staycation.  It’s important that you take some time to unplug, unwind and give your body a much needed break – it can actually help lower our blood pressure.

So whether going for a relaxing stroll or splashing around in a pool, stay safe and consumer savvy this summer!

 

*Links are no longer active as the original sources have removed the content, sometimes due to federal website changes or restructurings.

Declare Your Health Care Independence! – National Consumers League

By Mimi Johnson, NCL Health Policy Associate

Health care reform is the talk of this town these days, but it doesn’t mean you can’t make it the talk of your town. In fact, Senators and Congressmen alike have recently returned to their home states to celebrate our nation’s birthday. With their return to your neighborhood comes and opportunity for YOU to speak out for health reform.

In fact, July 2nd was designated as “Health Care Independence Day”, and this month, you’re encouraged to wave your flags and act patriotically before your politicians to help illustrate that you – *and 85% of Americans – are ready for a change.

I’m heading back to Wisconsin and I hope to visit my Congressman’s office, donning red, white, and blue to ensure access to quality health care for me and you.

Please share your health care stories – whether your inspiration for reform or your activities of support. We are always eager to hear from you – and we encourage you to reach out to your Senators, Congressmen, and local media.

Happy Birthday, America! Let’s hope next year we can celebrate as an insured nation!

 

*Links are no longer active as the original sources have removed the content, sometimes due to federal website changes or restructurings.

Common Pain Relievers Under Scrutiny – National Consumers League

By Rebecca Burkholder, NCL Vice President for Health Policy

Americans love our pain relievers, but health advocates are increasingly concerned that they can be dangerous to our health if not taken safely. Last week a *FDA Advisory Committee recommended to lower the maximum does of acetaminophen, a key ingredient in many over-the-counter (OTC) pain relievers (like Tylenol and many generic versions, like the ones sold at CVS, Target, and other pharmacies), and to ban prescription drugs that combine acetaminophen with other drugs. I attended the FDA hearing to give NCL’s view on consumer acetaminophen and hear what the experts are saying about the danger of too much acetaminophen.

High doses of acetaminophen are the leading causes of *liver injury in the United States. More that 400 people die and 56,000 visit the emergency room every year in the United States due to acetaminophen overdoses. Consumers don’t know that acetaminophen is an active ingredient in many OTC products, or that it is dangerous to take too much acetaminophen. In fact, almost half of all adults are not sure of the main active ingredient in the OTC pain medication they take most often, and two-thirds of consumers who use OTC acetaminophen are not concerned about overdoses, according to the preliminary results of a new NCL survey of consumer use and attitude towards pain relievers.

To prevent some of these accidental overdoses, the FDA Advisory Committee is recommending that the federal health agency reduce the maximum single adult dose of OTC acetaminophen from 1,000 mg (two 500 mg strength tablets) to 650 mg (two 325 mg strength tablets). The Committee also discussed *the dangers of combination prescription pain relievers that contain acetaminophen, as well as other drugs – over long periods of time, many consumers take more to relieve their pain and they mistakenly take with other medications also containing acetaminophen. The Committee voted to ban these combination prescription drugs containing acetaminophen (such as Percocet and Vicoden – two of the most popular pain relievers). The FDA is not required to follow the recommendations of the Advisory Committee, but it often does.

NCL shared with the Committee the preliminary results of our recent survey on acetaminophen and emphasized the need to remind consumers that just because a drug is available at their local drug store or supermarket, does not mean it is risk-free. We also announced that we will be launching a public education campaign to help consumers understand how to use acetaminophen – with a special focus on teens and Hispanics. Next time you reach for a pill to relieve your pain – *remember to take it safely.

*Links are no longer active as the original sources have removed the content, sometimes due to federal website changes or restructurings.