Crack down on Mislabeled Cheerios Welcome Action by FDA – National Consumers League

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by Sally Greenberg, NCL Executive Director

 

Today’s news that the U.S. Food and Drug Administration appears to be cracking down on food manufacturers’ product claims that cross the line into “medical” is welcome to consumer advocates like the National Consumers League. Last fall, we sent a *letter to the FDA Commissioner Andrew von Eschenbach, complaining that the makers of Cheerios seem to be going too far with their cholesterol-lowering claims about the product. Looking at a big yellow box of Cheerios at the time, we saw that the manufacturer, General Mills, was boldly enticing consumers to “Join the Challenge and Lower Your Cholesterol 4% in 6 weeks.”  The back panel repeated the claim, and directed consumers to “Sign Up Today at CheeriosChallenge.com”Our beef with all this was that General Mills’ claims of lowering eaters’ cholesterol levels promises consumers a health benefit, merely by consuming Cheerios® breakfast cereal without accompanying changes in diet or lifestyle, and this type of “magic bullet” health claims aren’t allowed by the laws that the FDA enforces. Cheerios isn’t medicine; it can’t make claims that taking it has a health-improving affect.

So now that FDA has issued a *warning letter to General Mills about our shared labeling concerns, we are hopeful that: a. General Mills will clean up its act quickly and stop making misleading claims about its food products and b. this is a sign that those in charge of our very important federal regulatory agencies are interested in cracking down on similarly misleading claims, which are widespread in today’s marketplace.

For more than 100 years, NCL has been concerned about the misleading, deceptive labeling and marketing practices by food and other producers. NCL volunteers staffing a booth at the 1904 St. Louis World’s Fair demonstrated to fairgoers that canned green beans touted by food processors as a labor-saving home product were adulterated with green dye. Since then, NCL has continued to work tirelessly to ensure that foods, drugs, and other consumer products are safe, healthful, and effective; that their contents are presented clearly and completely; and that advertisements promoting them are fair and honest. We’ve voiced concern over misleading labeling in more recent years, such as those containing sloppily-used terms like “natural” and “fresh,” and we’ll continue to work to ensure the products marketed to consumers are fairly and accurately represented by their manufacturers.

Critics, such as the *NBC Today Show’s Dr. Nancy Snyderman, are suggesting that the FDA has better things to do than go after a cereal company on claims like this. But these critics are getting it wrong. Misleading labeling has plagued consumers for many years and comes at great risk to consumers, not only related to their health but to their pocketbooks. Consumers who are misguidedly confident they are getting a daily dose of cholesterol medicine every morning in their cereal may not seek expert medical guidance from their health care practitioners. Cheerios is not an acceptable substitute for quality medical care.

Further, the high-profile nature of what the FDA conveyed in this letter to General Mills, whose Cheerios is the most popular breakfast cereal, gets the federal agency a lot of bang for its buck and sends a message to other food companies that they mustn’t exaggerate claims about a food having the ability to cure diseases when foods cannot do that.

 

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

The Need for a Mandatory Binding Arbitration Overhaul – National Consumers League

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by Sally Greenberg, NCL Executive Director

In the past several weeks, I’ve had two occasions to think about the effects of those ubiquitous binding mandatory arbitration clauses that are found in so many consumer contracts today. Two weeks ago, I spoke on a panel at an American Bar Association meeting on the Arbitration Fairness Act and advocating for an end to forcing consumers into mandatory arbitration. Then last week, I visited Congressional offices with homeowners whose houses had been built with such shoddy workmanship that they were unliveable – and yet they couldn’t seek remedies in court because of mandatory arbitration clauses in their contracts and the homebuilder himself owned or controlled the arbitration service. Adult children of nursing home residents described how their elderly parents were talked into signing arbitration clauses and subsequently developed deadly infections because of mistreatment and neglect, but the surviving children we barred from getting their cases heard in court because of a BMA clause, and the arbitrator sided against them. The companies offering arbitration actively seek the business of corporate clients, often promising them positive outcomes. In other words, the business of offering arbitration in consumer cases has become increasingly corrupted and biased.

What are these odious BMA clauses and how do they work? The clauses are buried in a contract you agree to as a condition of getting the service or good. The provisions contain some version of the following: “if there is a dispute between the parties the exclusive forum for determining remedies is arbitration carried out by the XX (one of three arbitration companies)” . That is, you can’t go to court, not even small claims court, you can’t bring a class, you can’t have a judge decide your case. They were described to me by corporate lawyer as a “risk management tool for corporate America.” That is pretty accurate, because these clauses prevent companies who engage in wrongdoing from being held accountable in a court of law. And they have worked beautifully to protect wrongdoers and emboldened them to add more and more of these clauses in their agreements with consumers.

If you think you aren’t affected by a BMA clause, think again. Anyone who’s signed up for a credit card, bought a computer, bought a cellphone, taken out a line of credit, rented a car, or engaged in any of the millions of transactions consumers deal with every day has agreed to one of these clauses, most often without knowing it.

That is why consumer groups and many others support the *Arbitration Fairness Act—HR 1020 in the House sponsored by Congressman Hank Johnson (D-GA) (the Senate bill doesn’t have a number yet) — which will bar pre-dispute mandatory binding arbitration in consumer and employment contracts. There’s nothing wrong with arbitration or mediation as an alternative to court if both parties agree to take this route AFTER the dispute has arisen and voluntarily. But forcing consumers and workers—60 percent of employment contracts apparently contain such clauses, and workers must agree to them if they want the job—into a private system of “justice” —which charges them a fee to get their case heard, deprives them of a judge, the right to submit and have the rules of evidence enforced, have a decision based on the law, have a written record, the right to appeal, and have a public record of the adjudication – is wrong and must end.

Moreover, consumers are deprived of counsel because few lawyers will take on cases if there’s an arbitration clause involved; the deck is stacked against the client and the lawyers find it hard to get paid. Faced with insurmountable odds, consumers or workers often are unable to fight for their rights, even if they have a strong case, because the arbitration system is so skewed against them.

A powerful coalition of consumers, workers, civil rights leaders, families of nursing home patients, and many other groups are seeking passage of the Arbitration Fairness Act in order to restore justice to a system that’s been hijacked by corporate interests. We know we’ll have a major challenge going up against the corporate entities that defend these clauses by making the dubious claim that they are “good for consumers” because, they argue, they provide “quicker, cheaper and more equitable resolution of cases.” If these BMA clauses are good for consumers, don’t force consumers into it, let them decide for themselves to opt for an alternative to court. If the system is fair, including the right to enter into class actions, the parties will choose arbitration.

Right now, powerful interests have commandeered the legal system, making it work as a shield that keeps them from being held accountable in the event that a homebuilder has engaged in wholesale consumer fraud in construction, or an employer has fired someone because they are African American, or a nursing home has neglected or abused an elderly resident so terribly that she dies of severe infection. The Arbitration Fairness Act will correct these abuses; NCL and other consumer groups intend to work tirelessly to unmask the corruption in the BMA system and see it addressed once and for all through the enactment of Arbitration Fairness Act.

 

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

Open Door at White House for Consumer Groups – National Consumers League

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By Sally Greenberg, NCL Executive Director

Last Friday, May 1, a number of national of consumer groups were invited to meet with White House staff to discuss our priorities for the coming legislative season. If you think about it, much of what has occupied the new Obama Administration is directly related to consumer concerns: the housing foreclosure crisis, rising credit card debt, and a host of unfair lending practices by many banks issuing the cards. With the recall of peanuts and peanut butter a few months ago, food safety has become another top priority. And the Act passed last year, reforming product safety law and regulation after children’s toys were found to have excessive levels of lead needs implementation.

Our groups have a lot of expertise and a variety of concerns. Last December *our groups issued a platform laying out many of these in a six point Consumer Platform covering food and product safety, health care reform, financial services, access to the courts, energy, and restoring the office of consumer affairs in the White House to give consumers a voice at the highest levels. We were pleased to have the chance to discuss these with senior White House staff.

I used my five minutes describing the National Consumers League’s Medication  Adherence Campaign, highlighted our *LifeSmarts financial literacy and consumer education competitions for teens, and talked about NCL’s Fraud Center, our work on child labor issues and close working relationship with unions, tying together the issues of workers and consumers.

The groups together expressed appreciation to President Obama for using his bully pulpit to bring banks to the White House and *asking them for “fair and transparent” rules and to reform some of the most odious practices – like using low, teaser interest rates to draw consumers in and then doubling those rates within weeks of issuing the card, allowing consumers to exceed their credit limits, then imposing excessive rates, or charging consumers who pay their bills by phone or Internet. Last week the House of Representatives delivered a powerful message to the industry – by a vote of 357 to 70, with 107 Republicans voting in favor, the House passed the Credit Cardholders Bill of Rights, which addresses some of the worst practices. The Senate is set to act this week.

White House staff promised that we will soon see a nominee to head the Consumer Product Safety Commission, which regulates product safety, including the safety of toys and other baby products and badly needs new leadership. Among the other issues we addressed were the need for broad based assistance to homeowners facing disclosure, payday loans and restoration of usury limits on loans, auto safety, consumer fraud, securities regulation, and protections for low income, military and immigrant communities that are often targets of fraud.

Together, our groups represent the interest of millions of consumers across America. It was satisfying to find an open door in this White House and to have the chance to outline our concerns about the host of issues facing consumers in the United States today.

 

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

Preparing for a Pandemic – Swine Flu 101 – National Consumers League

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By Mimi Johnson

A little more than a week after the first announcements of the *H1N1 flu (swine flu) hitting the United States, it seems the virus has now spread throughout much of the country. Though it now appears to be a milder flu than was initially expected, we still need to act with good judgment (and hygiene) to help keep this virus at bay!

Some things to consider:

  • If you or a member of your household is diagnosed with the H1N1 flu virus, notify employers and schools as soon as possible.
  • If you or a member of your household is feeling sick or exhibiting flu-like symptoms, do not go to school or work. You should also limit the contact you (and your sick household) has with others.

Some measures YOU can take to prevent yourself from getting the flu:

  • Cover your nose and mouth with a tissue (or your elbow) when you cough or sneeze, and throw the tissue away immediately after using it.
  • Wash your hands often with soap and water — especially after you cough or sneeze, touch communal handrails, door knobs, etc., or before you eat; alcohol-based hand cleaners or wipes will also do the trick.
  • Avoid touching your eyes, nose, or mouth. That’s how germs spread.

The flu is thought to spread mainly person-to-person, so preventing the spread of germs is your #1 defense!

Some things you shouldn’t do:

*Time Magazine has put together this helpful list of Top 5 Swine Flu don’ts.

You should continue to stay informed – check your local news and health departments to learn about the flu in your region.  Also, check the CDC’s H1N1 Web site for the most current and detailed official information.

On the off-chance that the flu situation causes closures of schools, work, and points of service like grocery stores, restaurants, etc., the Centers for Disease Control (CDC) recommends you develop a family emergency plan as a precaution. “This should include storing a supply of food, medicines, facemasks, alcohol-based hand rubs and other essential supplies.”

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

Credit Card Reform: It’s about Time – National Consumers League

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by Sally Greenberg, NCL Executive Director

Three cheers for President Obama’s speaking out publicly against some of the worst abuses in the credit card industry. Mr. Obama called to the White House the heads of banks issuing these cards and gave them a dressing down. No more “anytime, any reason rate hikes,” he said. Credit cards companies should offer a “plain vanilla, easy to understand, simplest terms possible” card for the average user, and not bury hidden charges and fees in the fine print of the contract.

Consumer groups have long urged Congress to reform the most odious practices of  the credit card industry, including calling for a ban on mandatory arbitration clauses in all their contracts and barring class actions for users who have complaints against their credit card issue. We’ve called for bans on universal default – a practice that sends your credit card interest rates up if you default on another unrelated payment, say your mortgage. In a recent Washington Post article, a reader who had perfect credit but miscalculated her payment date and was two days late on a bill saw her interest rate shoot up. She was told this hike was “automatic.”

We applaud the President for using his bully pulpit to call out the rampant abuses in this industry.  Earlier this year, the Federal Reserve issued regulations to curb many of these abuses, but those rules won’t go into effect into effect next year. NCL has joined with a host of other consumer groups in a letter to Congress supporting House and Senate bills to codify into law many of the Fed’s rules. Among the bills’ features are banning interest rate increases on existing balances unless payment is more than 30 days late and forbidding “double-cycle billing,” the practice of charging interest on debts paid off the previous month. The bills would require 45 days’ notice for a rate increase on your credit card account.

We hope the President will weigh in with Congress in support of these all-important issues. His voice will be needed to overcome the vocal opposition from the industry and their supporters in Congress.by Sally Greenberg, NCL Executive Director

Three cheers for President Obama’s speaking out publicly against some of the worst abuses in the credit card industry. Mr. Obama called to the White House the heads of banks issuing these cards and gave them a dressing down. No more “anytime, any reason rate hikes,” he said. Credit cards companies should offer a “plain vanilla, easy to understand, simplest terms possible” card for the average user, and not bury hidden charges and fees in the fine print of the contract.

Consumer groups have long urged Congress to reform the most odious practices of  the credit card industry, including calling for a ban on mandatory arbitration clauses in all their contracts and barring class actions for users who have complaints against their credit card issue. We’ve called for bans on universal default – a practice that sends your credit card interest rates up if you default on another unrelated payment, say your mortgage. In a recent Washington Post article, a reader who had perfect credit but miscalculated her payment date and was two days late on a bill saw her interest rate shoot up. She was told this hike was “automatic.”

We applaud the President for using his bully pulpit to call out the rampant abuses in this industry.  Earlier this year, the Federal Reserve issued regulations to curb many of these abuses, but those rules won’t go into effect into effect next year. NCL has joined with a host of other consumer groups in a letter to Congress supporting House and Senate bills to codify into law many of the Fed’s rules. Among the bills’ features are banning interest rate increases on existing balances unless payment is more than 30 days late and forbidding “double-cycle billing,” the practice of charging interest on debts paid off the previous month. The bills would require 45 days’ notice for a rate increase on your credit card account.

We hope the President will weigh in with Congress in support of these all-important issues. His voice will be needed to overcome the vocal opposition from the industry and their supporters in Congress.

LifeSmarts Nationals in The Lou – National Consumers League

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The Savvy Consumer blog will be taking a break for the next few days to staff the 2009 National LifeSmarts Championship. We know you’ll miss us terribly, so come visit us at our official nationals blog! We’ll be posting competition updates, team photos, and stories from the national competition — and the 30 state champion teams who will start arriving in St. Louis tomorrow.

See you back at the Savvy Consumer blog next week!

Happy Financial Literacy Month! – National Consumers League

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In this economy, every month should be financial literacy month, and in our LifeSmarts program, it sort of is!.  (Especially now that our program offers year-round curriculum through our Spring Training program. But we digress.)

LifeSmarts participants have a leg up when it comes to being smart about knowing what’s you’re getting into before signing on the dotted lines. They’ve learned about how to properly handle credit and debit cards, manage a budget, and make smart shopping decisions.

It might seem difficult to apply this knowledge without the proper organizational tools.You may think that you don’t have time to review your credit card spending and see what expenses are really making a dent in your savings. You may know that your bank charges fees for your account, but not have the energy to review every statement to make sure additional fees aren’t charged.

Wish there was a Web site where you could easily view your bank account activity; keep track of how you spend your money; and get advice on how to save money based on your current spending habits? Mint.com is a personal finance and budgeting Web site that offers exactly these services for free. This service is especially great for students who will be leaving home soon and will have new budgeting responsibilities.

Consumers: CD Freedoms Should Extend to DVDs – National Consumers League

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By Sally Greenberg, Executive Director, National Consumers League

With frightening financial headlines greeting us every morning and tucking us into bed at night, many of us consumers have started taking a long, hard look at the entertainment “extras” in our budget that are often so difficult to sacrifice.

Amidst the backdrop of this troubled economy, the National Consumers League recently commissioned a survey of Americans’ entertainment habits and interests, specifically those related to their use of DVDs. In this environment, when consumer satisfaction should be more important than ever to the businesses that rely on their patronage, we wanted to find out what consumers want when it comes to how they can use their DVDs.

For years, consumers have been able to freely copy and back up the content on their compact disc collections to their hard drives and other devices. This freedom didn’t come without struggle – remember the last decade of lawsuits and consumer fear involving the sharing and copying of music files? But, in the end, consumers’ interests won out, and the freedom and mobility that consumers enjoy today with their digital music files has changed the way we travel, relax, entertain, and express ourselves.

Given the growing affordability of hard drives with the capacity to store more music and movie files than ever before, we wanted to examine whether consumers’ expectations from the CD market are translating to the consumer DVD market. We can copy our CDs; how far off are DVDs?

Consumers are currently limited by digital rights management (DRM) restrictions on most DVDs. Without illiegal ripping software, we can’t currently save the contents of most DVDs to our computers, whether for backup purposes or simply to access our DVD libraries without carrying around the actual discs (the mean number of DVDs in consumers’ collections was 77.8 discs). Some “expanded” editions of DVDs come with the ability to save an additional copy to a computer, but these editions generally come with a higher price tag.

We commissioned the study to examine consumers’ opinions related to the entertainment content stored in their DVD collections, and *what we found was that consumers overwhelmingly want to do more with the DVDs they purchase. Consumers nearly unanimously think they should be able to back-up their DVDs onto computers or other devices in order to preserve their collections. Many of them, especially those with kids at home, have had to replace lost or damaged DVDs, and more than half of respondents were “bothered” that they don’t currently have the ability to back-up their DVDs.

And in an economy that is already struggling, the habits of many consumers in our survey may indicate a market slow-down ahead: more than half of respondents (55 percent) said that they are currently purchasing fewer DVDs than they did a year ago. And four in ten (41 percent) said they expect to purchase fewer DVDs one year from now.

If our entertainment budgets are shrinking, it’s more important than ever to get value from the DVDs we already own. The entertainment industry would be wise to pay attention to the attitudes and purchasing desires of the typical American consumer, who, according to our survey, is very interested in being able to back-up his or her collection. In our survey, 41 percent said the ability to save a copy of their DVDs would make their DVD collections more valuable, and 40 percent said it might cause them to buy more DVDs.

Consumers have grown accustomed to being able to do what they want, when they want, with the music products they’ve purchased, and now they’re expecting to have the same freedom with the DVDs they own. With more consumers turning to free Internet sources of entertainment, the DVD market may be in for tough times ahead. In an economy like ours, what better time than now to help consumers get more bang for their buck from products and services that may otherwise be the first to go when they are forced to tighten their belts.

Sally Greenberg is executive director of the National Consumers League, a nonprofit consumer and worker advocacy group headquartered in Washington, DC. She can be reached at sallyg@nclnet.org.

 

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

LifeSmarts = Real Life 101 – National Consumers League

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Since we’re counting the days until the 2009 National LifeSmarts Championship kicks off in St. Louis, we thought this would be a great time to focus on the types of topics covered by NCL’s LifeSmarts program — and the types of pro-consumer tools it arms its participants and alumni with.

Consumer Rights and Responsibilities: Country of Origin Labeling

A few weeks ago, the new COOL (Country of Origin Labeling) requirements went into effect. This means most fresh meat products and some types of chicken will require a label that tells you what country the product is from. Learn more about this important change at the official COOL Web site.

Personal Finance: New Student Loan Proposal

The new COOL requirements are not the only recent government measure that may impact your life as a consumer. A recent proposal by the Obama administration may impact one of the most important consumer decisions of all – your education. Find out about the New Student Loan Proposal and what it could mean for your future education financing plans.

We <3 You, Earth! - National Consumers League

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With Earth Week upon us and the official celebration of Earth Day just around the corner, many consumers are taking time to participate in observances and practices that remind us of the importance of treating our planet right.

Want a resource that summarizes the concepts and terms you need to know to understand climate change? Confused by the conflicting information you hear about our impact on climate, and climate’s impact on us? Recently, several scientific organizations, educational institutions, and government agencies have introduced a new Climate Change Literacy Brochure for the public that is easy to use and reflects the current consensus of these organizations on climate change issues.

This is a good resource that many of the 2009 LifeSmarts state champion teams across the country may be using this week to prepare for the 2009 National LifeSmarts Championship! The Environment is one of 5 major topic areas that the LifeSmarts program covers, and if we know our LifeSmarts participants, we know they are probably trying to squeeze as many last-minute hours of studying as possible before they face off in competition. We’re getting ready to head to St. Louis this week for our annual national event. Later this week, check back here and at our official LifeSmarts Web site to see how the competition unfolds!