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.

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.

June 16, 2009

Nation’s Pioneering Consumer Organization Urges Swift Confirmation to Speed Implementation of Consumer Protection Agenda

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

Washington, D.C.—The National Consumers League (NCL) applauds the hearing by the U.S. Senate Committee on Commerce, Science and Transportation of Inez Moore Tenenbaum, former Superintendent of Schools for South Carolina, as Chairwoman of the Consumer Product Safety Commission (CPSC). Having previously supported President Obama’s nomination, NCL calls for a swift confirmation of Tenenbaum.

The following statement can be attributed to Sally Greenberg, Executive Director of the National Consumers League:

“Elected for two consecutive terms as Superintendent of South Carolina Public Schools and founder of the south Carolina Center for Family Policy — a non-profit organization advocating for reform in the state’s juvenile justice system — Tenenbaum’s experience attests to her commitment to child safety and health.”

“If confirmed, Tenenbaum’s extensive background in public policy will help her in implementing the Consumer Product Safety Improvement Act of 2008. We again welcome Tenenbaum to Washington and look forward to working with her and the Commission to restore its original mandate – protection consumer from hazardous products.”

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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.

June 3, 2009

Citing excessive fees, predatory lending, outsourcing jobs to India and other anti-worker practices by TARP recipient

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

Washington, D.C. — The National Consumers League, in coalition with Consumer Action, National Association of Consumer Advocates and the Consumer Federation of California, have written a letter to the Treasury’s TARP Inspector General, Mr. Neil Barofsky, and to the TARP’s Congressional Oversight Panel, Chaired by Harvard Law Professor Elizabeth Warren, calling for an investigation of KeyBank’s current business practices and implementation of a remedial process for harm done to consumers, workers and their communities.

In the letter, the groups told officials that KeyBank has a history of engaging in predatory student lending and exposing its customers to excessive fees, and that loans to the bank will serve to undermine the Emergency Economic Stabilization Act of 2008.

Since receiving TARP funds, KeyBank’s behavior towards customers persists as a recent complaint makes amply clear. One customer has written: “Opening an account with KeyBank has been a costly mistake. I have paid overcharge fees and drafts due to the bank’s mistakes! They charge fees for everything, and have no empathy for the customer. They should be ashamed of themselves considering the economy today.”

KeyBank stands out among banks, many of whom also charge excessive fees.

“The National Consumers League and our colleagues find the practices of KeyBank toward students, consumers and workers to be totally out of sync with what the government intended when it provided bailout funds.” said Sally Greenberg, Executive Director of the National Consumers League. “We are distressed to learn that KeyBank is receiving taxpayer funded monies and believe that this is wrong.”

In addition to being involved in shady student loans and excessive customer fees, Key Bank has also engaged in anti-worker behavior, such as providing financing for a company engaged in extensive workers rights abuses, and outsourcing many of its information technology jobs to India. This acts against the interests of the very communities these funds are supposed to be helping.

“We implore the Federal authorities to review their decisions to provide funds to KeyBank, and ensure that the bank’s practices are consistent with the public interest,” said Ira Rheingold, Executive Director of the National Association of Consumer Advocates.

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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.

May 29, 2009

One teen American worker dies from a workplace injury every ten days; advocacy group warns parents and teens to be smart this summer and protect themselves from workplace hazards

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

WASHINGTON, DC – With summer just around the corner, and many teens competing with out-of-work adults for summer employment, the National Consumers League has issued its annual report for 2009 on the Five Worst Teen Jobs, with work in agriculture again topping this year’s list for the third year running. Based on statistics from the National Institute for Occupational Safety and Health (NIOSH), a teen American worker dies from a workplace injury every ten days, and an estimated 158,000 youth sustain work-related injuries and illnesses each year.

The National Consumers League (NCL), which coordinates the Child Labor Coalition, has issued this year’s Five Worst Teen Jobs report to remind teens and parents that while it’s never too late to focus on safety when considering a summer job, it’s often difficult to see the hidden dangers in many jobs that are legal for teens to perform.

“Seeing the dangers in summer work isn’t always easy. Jobs like construction are obviously dangerous, but others like retail work can pose hidden dangers when teens are asked to work alone at night and may be vulnerable to robberies and assaults,” said Reid Maki, NCL’s Director for Social Responsibility and Coordinator of the Child Labor Coalition. “And at times, young workers performing seemingly safe jobs are asked to do very unsafe things, such as using trash compactors, something the law specifically prohibits them from doing because it is too dangerous. Choosing a summer job can be very difficult, even for those parents and teens who are mindful of safety concerns.”

In 2007—the last year for which there are complete records—an estimated 2.6 million adolescents aged 16 to 17 years worked in the United States, and that figure does not include the 400,000 children of migrant and seasonal farmworkers who work at ages younger than 16 because of loopholes in our child labor laws.

“Each year, the National Consumers League issues our Five Worst Teen Jobs report to remind teens and their parents to choose summer jobs wisely,” said Sally Greenberg, NCL Executive Director and co-chair of the NCL-coordinated Child Labor Coalition. “Summer jobs can contribute a lot to a child’s development and maturity, and teach new skills and responsibilities, but the safety of each job must be a consideration. If you think employers, even good-intentioned ones, and federal child labor laws can protect our young workers from dangerous tasks, think again.”

NCL’s Five Worst Teen Jobs of 2009 (read full report)

1. Agriculture: Harvesting Crops

1. Construction and Height Work

1. Driver/Operator: Forklifts, Tractors, and ATV’s

1. Traveling Youth Sales Crews

1. Outside Helper: Landscaping, Groundskeeping and Lawn Service

The Five Worst Jobs of 2009 report focuses on jobs that are legal for teens to perform despite placing young workers in potentially dangerous environments, according to NCL. Despite urging by advocates for Congress and the Department of Labor to prohibit the jobs known as the “most dangerous forms of child labor,” most of the activities on the list remain legally permitted work for teens, including work at heights, poultry catching and processing, driving tractors and all-terrain vehicles (ATVs), operating chain saws (prohibited for only use on wood) and working on traveling youth crews that sell magazines or other products.

In this year’s report, NCL has also highlighted illegal work in meat packing plants as a “Bonus Worst Job” in addition to the legal worst five jobs. Although workers must be 18 years old to legally work in these plants, recent federal immigration raids have found children as young as age 15 working in meat packing. Reports that 50 teens may have been working in the Agriprocessors plant in Postville, Iowa and the more than 9,000 child labor violations alleged against the plant by the State of Iowa have raised great alarm among child labor and child welfare advocates.

“Meat processing work, which involves repetitive use of very sharp knives, is extremely dangerous—for youth and adults. In a visit to Postville, Iowa last summer, we met a young worker who cut himself processing meat when he was only 16 years old,” said Maki. “The truth is that even laws that are meant to protect our young workers are not being obeyed, and teens are at great risk.”

NCL compiles the Five Worst Teen Jobs each year using government statistics and reports, including monitoring reports from state labor officials and news accounts of injuries and deaths. Statistics and examples of injuries for each job on the list are detailed in a report available 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.