‘Wild west’ prepaid calling cards industry unregulated and preying on poor, immigrant, military consumers – National Consumers League

/in /by

September 16, 2008

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

Washington, DC – At a hearing of the U.S. House Energy and Commerce on HR 3402, the “Calling Card Consumer Protection Act” today, Sally Greenberg, Executive Director of the National Consumers League, said the largely unregulated industry was a “Wild West” and spoke in support of greater consumer protections in the purchase and use of prepaid calling cards. Greenberg commended the bill’s lead sponsor, Representative Eliot Engel (D-NY), and other supporters for their leadership in offering HR 3402.

“Prepaid calling cards are already a $4 billion industry, projected to grow to $6.4 billion,” Greenberg said. “Unfortunately, too many of the prepaid calling card companies engage in fraud and deceptive practices with the most vulnerable consumers falling prey. Consumers need more transparency and full disclosure as outlined in Congressman Engel’s bill.”

Greenberg added that the terms found in the fine print on the back of prepaid calling cards are unreasonable and one-sided. “Anytime you have an industry like this, with low barriers to entry and a totally unregulated market, you can be sure there will be unscrupulous operators who will take the money and run,” said Greenberg.

For the full statement submitted by NCL’s Greenberg, which contains a timeline of the growth of the prepaid card industry, examples of the outrageous fine print found on the backs of real prepaid calling cards, and more detailed policy recommendations.

Excerpts follow:

“The rapid growth of the prepaid calling card industry combined with, until recently, a lax enforcement of consumer protection statues at the state and federal levels, has enabled consumer fraud to flourish. Like so many other scams, the most frequent victims of the fraud and deception are the most vulnerable consumers: immigrants and the working poor; military families, and those lower income Americans who often cannot afford or obtain regular phone service, relying on calling cards to stay in touch with friends and loved ones in the US and abroad. Sadly, along with immigrants, military families are so often targeted for many scams and rip-offs we see at the National Consumer League’s Fraud Center.

Hispanic consumers may be losing up to $1 million per day because of fraudulent phone cards. Examples of fraudulent practices used by the prepaid companies include “hang-up fees,” periodic maintenance fees, destination surcharges, and high billing increments. Companies that try to “play by the rules” are often punished by a loss of market share due to fraudulent carriers.

While some state attorneys general have taken the lead in prosecuting fraudulent prepaid card companies, and the Federal Trade Commission has done commendable investigations and brought important cases against individual prepaid phone card providers, we need basic federal protections to stem the ongoing tide of the many deceptive practices in this industry. Only 11 states, including California, Connecticut, Florida, and Illinois, currently have laws pertaining to calling card fraud, specifically.

While HR 3402 requires disclosure of the name of the prepaid calling card service provider, we recommend that this section of the bill be expanded to include requiring the address of card originator and a toll free number, and that operators answering the phone be able to speak the language in which the card was advertised. The requisite disclosures should be in the same language. We also support requiring that the disclosure text on the calling card itself, packaging, or other promotional material (including online) be in same language used to advertise the card.

###

About the National Consumers League

Founded in 1899, the National Consumers League is America’s pioneer consumer organization. Its mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. NCL is a private, nonprofit membership organization. For more information, visit www.nclnet.org.

Good News for Consumers: Potential Safety Hazards Getting Better Disclosure by Feds – National Consumers League

/in /by

by Sally Greenberg, NCL Executive Director

Some good news for consumers: we’ll soon be getting far better disclosures about potential safety hazards for food and drugs. In a blog about a month ago, I cheered the passage of major reforms in the Consumer Product Safety Act, which will help protect consumers, especially the most vulnerable ones — children — from dangerous or defective products. Consumer Product Safety Commission (CPSC) regulates more than 15,000 consumer products, ranging from all-terrain vehicles to electrical outlets to high chairs and bassinets.

Last week I sat in on an all-day briefing, sponsored by the CPSC, detailing highlights of the new law. One of the most important and exciting changes is that CPSC will be setting up a public database to give consumers access to information about products that other consumers, or CPSC, or manufacturers themselves have found dangerous, defective, or otherwise problematic.

Also last week the CPSC announced that it was recalling — without the manufacturer’s cooperation — a bassinet that has been implicated in the deaths of two babies, and that it was making the announcement as a result of new powers Congress had granted under the reform legislation. As a parent shopping for a bassinet, you’d certainly like to know about any hazards associated with this product. In the past, CPSC hasn’t been able to share complaint information, unless the product had been recalled, without checking with the manufacturer first. Under the new law, more general disclosures will be available at the public database of the agency’s Web site. At the meeting last week, CPSC officials noted that the opening of the database is some months away from being ready, but they say they may get it up and running ahead of schedule, which is great news for consumers.

It’s no coincidence that the Food and Drug Administration also announced this week that it will begin to list drugs whose safety is under investigation on its Web site every three months. Once again, Congress directed FDA to do it. However, while the federal safety agency will name the drug and the nature of the “adverse events,” it will not describe their seriousness or the number of complaints received, according to the Washington Post. That’s too bad, because with that information consumers can better assess the level of risk when their doctor prescribes a drug with potentially harmful side effects.

Of course, publishing such information can have a downside. FDA says that its adverse event hotline has received many reports that turned out to be false alarms. The upside, however, is that many times the full impact of side effects isn’t understood until the drug hits the market and many more people are taking it. The hope is that the public will have access to much more information on the safety and side effects of the drugs they are taking through this more open process—always a good thing for consumers.

LifeSmarts to kick off 15th competition year – National Consumers League

/in /by

September 4, 2008

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

Washington, DC—The National Consumers League announced the start of the 2008-2009 LifeSmarts season, with a new competition year beginning Sept. 15 at the program’s online home, www.lifesmarts.org, along with a variety of new resources for state coordinators, mentors, and youth. LifeSmarts is an educational competition that tests middle school and high school students nationwide on real-life consumer issues through online quizzes and live contests. While the competition formally begins Sept. 15, students and coaches may register online and begin taking practice quizzes and downloading resources today.

“We’re thrilled to be launching the 15th year of LifeSmarts,” said Program Director Lisa Hertzberg. “This program delivers real-world knowledge to students and then allows them to shine in competitions. In its first 15 years, LifeSmarts has grown in numbers of student and adult participants, state partnerships, corporate sponsorships, and, most importantly, quality of the program’s content,” said Hertzberg. “LifeSmarts competition questions have become more and more challenging, reflecting the increasingly complex marketplace that today’s consumers face. We’re proud to be preparing our teens and tweens to become the next generation of smart consumers and workers.”

Each year, thousands of students answer millions of questions on consumer-oriented issues ranging from personal finance and health and safety to the environment, technology, and consumer rights and responsibilities. Starting online each fall, the competition progresses to live state play-offs, and then builds to a high-spirited National Championship, which will be held in 2009 in St. Louis, MO. At last year’s national competition held in Minneapolis, MN, students on the state champion team from Arizona were crowned the 2008 national champs.

NCL partners with coordinators in 30 states, including Better Business Bureaus, credit unions leagues, state attorneys general and consumer protection agencies, FCCLA chapters, Jump$tart Coalitions and others, to staff and promote the program.

“The National Consumers League’s mission is to inspire confidence and safety in the marketplace,” said Sally Greenberg, NCL Executive Director. “The LifeSmarts program, our consumer education initiative for youth, gives students the tools to make smart decisions and feel confident about their place in today’s fast-paced marketplace.”

New this fall at www.lifesmarts.org are dozens of up-to-the-minute teaching resources for coaches, including innovative personal finance lessons made possible by an unrestricted educational grant from Visa. Other major LifeSmarts contributors include the Verizon Foundation, American Century Investments, Best Buy, American Express and Toys“R”Us. To see a full list of current LifeSmarts contributors, visit www.lifesmarts.org. To test your LifeSmarts abilities, take a sample quiz at https://start.lifesmarts.org/. From there, click on “Daily Quiz” to get started.

###

About the National Consumers League

Founded in 1899, the National Consumers League is America’s pioneer consumer organization. Its mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. NCL is a private, nonprofit membership organization. For more information, visit www.nclnet.org.

This Just In: FDA Upping Warnings on Arthritis Drugs – National Consumers League

/in /by

According to a *fresh story in the Associated Press, the United States *Food and Drug Administration has announced that the manufacturers of Humira, Cimzia, Enbrel, and Remicade must strengthen the warnings about the risk of developing opportunistic fungal infections. FDA’s statement said the agency “has reviewed 240 reports of histoplasmosis, an infection caused by the fungusHistoplasma capsulatum, in patients being treated with Enbrel, Humira, or Remicade. In at least 21 of the reports, histoplasmosis was initially not recognized by health care professionals, and antifungal treatment was delayed. Twelve of those patients died.”

Another significance of this announcement is that it involves the federal agency’s use of its new authority under the *Food and Drug Administration Amendments Act of 2007 to make safety-related changes to prescribing information or labeling. Learn more *here.

 

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

Protect Your Identity from Pretexting – National Consumers League

/in /by

This month, NCL’s featuring tips in its *2008 Consumer Calendar: Have We Got Tips for You! on protecting your phone records from “pretexting,” an *ID Theft technique used by criminals pretending to be you in order to gain access to your personal information.

But *NCL’s Fraud Center and the Federal Trade Commission aren’t the only ones out there trying to educate consumers about avoiding ID Theft. Many consumer, finance, and technology reporters have been doing their part to spread the word as well. Here’s a recent story in the Clovis News Journal out of New Mexico, where police are advising locals against scams meant to steal consumers’ identities.

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

Protect your phone records and your privacy – National Consumers League

/in /by

September 2, 2008

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

Washington, DC- Phone records have become another opportunity for identity thieves, warns the National Consumers League, but there are new security measures for protecting personal information and phone records. This month, NCL is offering consumers advice on how to protect themselves from pretexting in its “2008 Consumer Calendar Tips: Do We Have Tips for You!”

“Pretexting,” when an ID thief contacts a telephone company pretending to be a customer, is an illegal way people may attempt to obtain your personal information. The Federal Communications Commission has implemented new rules to make this attack more difficult, by requiring that all people calling for phone records provide their password to the company before any information is released. Over the Internet, access to records will also require a password, and in-person, it will require a photo ID.

The nation’s oldest consumer advocacy organization, NCL works to educate people about how to make wise decisions in today’s marketplace. Each month, NCL’s Web site, www.nclnet.org, will feature the calendar and tips for the month. Covering a range of subjects from medication safety, to avoiding scams, the tips are sponsored by major companies, government agencies, and organizations. The September tips about protecting telephone records were sponsored by Verizon.

The print version of the calendar was distributed to consumers free of charge through agencies and organizations around the country. There are no printed copies of the calendar remaining.

###

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.

Bracing for Gustav – National Consumers League

/in /by

It’s been three years since Hurricane Katrina devastated New Orleans, and as we commemorate the anniversary by remembering the victims and destruction it left behind, the region is once again preparing for a serious tropical storm, Gustav, which is currently headed towards Jamaica. You can follow Gustav’s path here.

The federal government offers resources for consumers from all parts of the country on how to prepare for natural disasters and other emergencies, including hurricanes, *earthquakes, *wildfires, and more at www.ready.gov.

 

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

Back to School, Back to Work? – National Consumers League

/in /by

In Washington, DC, where the National Consumers League is headquartered, today is the first day of school for hundreds of thousands of kids. The DC Metro area is certainly not unique; students across the country will be filing back into school buildings across the country this week and next, following Labor Day weekend. Earlier this summer, we warned young people about the dangers of taking on summer work that falls into our *Five Worst Jobs for Teens categories (landscaping, traveling sales crews, agriculture, and more). Just because summer’s coming to an end doesn’t mean that the hazards of dangerous work are no longer a threat.

According to the *U.S. Department of Labor, under the *Fair Labor Standards Act (FLSA), 14- and 15-year-olds may work outside school hours in various non-manufacturing, non-mining, non-hazardous jobs under certain conditions.

Permissible work hours for 14- and 15-year-olds are:

  • 3 hours on a school day;
  • 18 hours in a school week;
  • 8 hours on a non-school day;
  • 40 hours in a non-school week; and
  • between 7 a.m. and 7 p.m., except from June 1 through Labor Day, when nighttime work hours are extended to 9 p.m.

Child labor laws vary from state from state. Please check with your state department of labor as well. The Department of Labor provides a list of contact information, according to where you live. To learn more about what jobs are too dangerous for underage workers, check out our Five Worst Jobs list. And to learn how to protect yourself on the job, check out our Six Tips for Working Youth. Parents, learn what to watch out for if your teen is working or looking for a job this academic year — or any time.

 

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

Good News: Medicare Bill Passes in the Senate – National Consumers League

/in /by

By Catherine Bourque, NCL Health Intern

This summer, Catherine has interned in the health policy department at the National Consumers League. She’s from Washington, DC and, this fall, will begin her senior year at Cornell University, where she’s studying Government and Spanish.

About a month ago, both houses of Congress voted to override President Bush’s veto of HR 6331, the Medicare Physician Payment Bill, which stopped pay reductions to physicians treating Medicare patients. We at the National Consumers League support the passage of the bill. It will be crucial to protecting the healthcare of senior citizens across the country who would have been denied care had Congress not taken action to protect this important program and the providers who make the program possible.

Some background: on July 1st, a 10 percent reduction in the pay rate to Medicare physicians went into effect, leading many physicians to stop accepting Medicare patients for cost reasons and making it difficult for many senior citizens to find physicians who would. The Medicare bill will delay the 10 percent deduction for 18 months, financing the continued payments to physicians with a reduction in payment to the Medicare Advantage program, the Medicare health plan program.

After both the House of Representatives and the Senate voted by veto-proof margins to pass the bill, President Bush followed through on his threat to veto the bill, citing that the bill would hurt the Medicare Advantage program. The Medicare Advantage program provides flexibility for Medicare beneficiaries to enroll in private insurance programs.

The House overrode the veto by a vote of 383 to 41, with 24 more Republicans voting in favor of the bill. Similarly, in the Senate, the veto was overridden by a vote of 70 to 26 with 21 Republicans voting to override the veto. While not a permanent fix for the Medicare payment system, the passage of this bill shows Congress’s commitment to providing care for the elderly and making this care a reasonable venture for physicians.

How’d You Do? – National Consumers League

/in /by

Yesterday, we shared four sample LifeSmarts question to test your ‘smarts. How’d you do?

  • Foods that bear the radura logo have been: c. Treated by irradiation
  • You are a 16-year-old employee. Which of the following are you not allowed to do under the federal child labor laws: c. Be a delivery driver
  • Which of the following calls would be prohibited when you register for the National Do Not Call list? c. Telemarketing calls
  • What kind of personal information is not covered by any federal privacy law? c. What you watch on cable television
  • Which of the following is not an advantage of using compact fluorescent light bulbs instead of incandescent light bulbs? c. They cost less