Variable-rate electricity plans pose high risk of sticker shock

CONSUMER FORUM

Posted Sept. 28, 2014, at 9:18 a.m.

Thousands of Mainers signed up last spring with suppliers of electricity, who offered what seemed to be great deals. Now, many of those consumers are having second thoughts as the second phase of the arrangement kicks in.

One deal was a six-month contract to buy power at a fixed rate, roughly one-half cent below the standard offer price. Eric Bryant, senior counsel for the Maine Public Advocate, says such a contract offered real savings for many consumers.

But in a news release last March, Bryant warned consumers to watch their calendars. Once the six-month contract was up, Bryant cautioned that a variable rate — likely fluctuating month to month — would kick in.

The variable rates are driven by wholesale market prices. Last winter, MPA says some variable rates went as high as 25-cents a kilowatt hour, or nearly four times the standard offer price.

“Their rates went very, very high,” Bryant says of some consumers who suddenly found themselves with a variable rate contract.

Bryant said last spring MPA generally discourages variable pricing agreements because of sticker shock. Last week, MPA called on consumers to ditch their variable rate deals and get back on the standard offer price, which can’t be raised until March 1 of each year.

“North American Power is supposed to let customers know their contract is expiring, but we know some customers haven’t gotten notice, and we’re concerned that those who have received notice may not understand the potential costs of switching to a variable rate,” said Public Advocate Tim Schneider in last week’s statement. “Missing that single piece of mail could cost a customer hundreds of dollars this winter.”

MPA advises customers of North American Power to call the company at 888-313-9086 or email at customercare@NAPower.com to find out when the contract expires. If the variable rate agreement is still in effect, ask the company to switch immediately to the standard offer; MPA says there’s no need to wait for a meter reading and that the company must process a request within two business days of receiving it.

Emera and Central Maine Power charge a $5 “off-cycle drop fee” if you switch before your next meter reading; there’s no fee if the switch happens “on-cycle.”

If your fixed-rate plan has not yet expired, you can ask North American to switch you to the standard offer on the date the plan does expire. You may also make the change by calling your utility (Emera Maine or Central Maine Power) directly.

North American Power says in a statement its policy is to send notices to all fixed-rate plan customers, telling them when their plan expires. The notices say, if the customer does nothing, a month-to-month variable rate will begin; it also sets a date by which customers should contact North American to choose another fixed rate plan.

North American Power representative Tiffany Eddy told me, “Our goal is to keep our customers happy and to keep communications going.” She could not explain why a number of customers had contacted the advocate saying they had not been notified.

Eddy also disputed figures cited in the advocate’s release, saying “our rates have never been as high as 25 cents (per kwh).”

The public advocate mentioned only North American in its release, but consumers should be aware that other suppliers make similar offers. Know what a plan entails before signing up, so that you don’t face unpleasant surprises later.

 

Click meter to access six things to consider when choosing a supplier

The Office of the Public Advocate’s website is updated monthly. It lists the prices offered by major electricity suppliers and suggestions for choosing a supplier. Visit the site at http://www.state.me.us/meopa/utilities/electric/supply.html or call 207-287-2445 to speak with someone from the Advocate’s office.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

Hearth & Home Technologies Recalls Gas Fireplaces, Stoves, Inserts and Log Sets Due to Risk of Gas Leak and Fire Hazard | CPSC.gov

Hearth & Home Technologies Recalls Gas Fireplaces, Stoves, Inserts and Log Sets Due to Risk of Gas Leak and Fire Hazard | CPSC.gov.

Click image for list of dealers in Bangor area

This recall involves Hearth & Home Technologies®, Heat-N-Glo®, Heatilator®, Outdoor Lifestyles® and Quadra Fire® natural or propane gas indoor and outdoor fireplaces, stoves, inserts and log sets.

Remedy

Consumers should immediately stop using the gas fireplaces, stoves, inserts and log sets, turn off the gas to the units and contact the fireplace store where the unit was purchased to arrange for a free inspection and, if necessary, valve replacement.  The firm’s dealers are contacting known purchasers.

Sold at

Fireplace stores from May 2014 through July 2014 for between $1,200 and $8,000.

Manufacturer

Fireplace Manufacturer: Hearth & Home Technologies, of Lakeville, Minn. 

 

Change in electric rates could prove shocking! Maine’s Public Advocate warns consumers

PRESS RELEASE: Maine Office of Public Advocate Warns North American Power Customers to Get Off Variable Rates (9/23/14)

The Maine Office of the Public Advocate is warning customers of North American Power that their fixed rate contracts for electricity have expired, or will soon expire, and they should act now to avoid paying hundreds of dollars in excess electricity costs this winter.

Earlier this year, North American Power sent a direct mail solicitation to residential electricity customers across the state, offering a 6-month fixed rate for electricity at a favorable price. Thousands of Central Maine Power and Emera Maine customers signed up for these offers, which have now ended or are about to end.

When the fixed rate term expires, customers are automatically rolled over to a variable rate, where the price changes each month based on wholesale market prices. Last winter, some variable rates went as high as 25 cents per kWh, or nearly four times the standard offer price, costing some customers hundreds of dollars in excess costs. The Office expects to see similar variable rate pricing, or worse, this winter.

“North American Power is supposed to let customers know their contract is expiring, but we know some customers haven’t gotten notice, and we’re concerned that those who have received notice may not understand the potential costs of switching to a variable rate.” said Public Advocate Tim Schneider. “Missing that single piece of mail could cost a customer hundreds of dollars this winter.”

 

Feds sue for-profit college network of predatory lending, phony career services

CONSUMER FORUM

By Russ Van Arsdale, executive director Northeast CONTACT

Posted Sept. 21, 2014, at 10:40 a.m.

It’s likely that only a small percentage of Maine’s college-age students have even heard of Everest University, Heald College and WyoTech. The three schools are operated for profit by Corinthian Colleges Inc (CCI). None is in Maine; the two closest campuses are in the Boston area.

Still, a lawsuit filed last week by the Consumer Financial Protection Bureau against CCI should be of interest to students who have taken out private student loans to pay for their education. The suit charges Corinthian with predatory lending, persuading students to take out the higher-cost private loans by advertising phony job prospects and career services.

In announcing the lawsuit, the director of CFPB did not mince words. “We believe Corinthian lured in consumers with lies about their job prospects upon graduation, sold high-cost loans to pay for that false hope, and then harassed students for overdue debts while they were still in school,” Richard Cordray said in remarks prepared for a reporter telephone briefing.

Cordray cited “egregious” examples of alleged misdeeds by CCI employees. One school apparently paid legitimate employers to hire graduates just long enough to count them as “employed” (CCI apparently defined a “career” as a job lasting only one day).

Although it touted ongoing career services, students often got generic Craigslist job postings. Often they could not contact any CCI personnel in the various career services offices.

Once they signed up, students faced high-cost tuition. In 2013, CFPB says tuition and fees for an associate degree ran between $33,000 and $43,000; for a bachelor’s degree, the range was $60,000-$75,000.

Tuition was higher than the federal loan limit, so many students were forced to take out private student loans. Corinthian offered its own “Genesis loans” costing more than twice as much as federal student loans.

The CFPB investigation found that three of every five students were likely to fall behind on Genesis loan payments within the first three years. Investigators said CCI did not share that reality with students; rather, it said the students “had no idea they were being set up to fail.”

Corinthian set an unusual policy of requiring students to start paying back those Genesis loans as soon as their classes began. If they fell behind on the payments, they faced what the CFPB director called “harassing and bullying debt-collection methods.” If they dropped out of school, they had all the debt and no degree.

A statement on Corinthian Colleges’ website strongly disputes allegations in the suit. It says the CFPB “wrongly disparages the career services assistance that we offer our graduates and mischaracterizes both the purpose and practices of the ‘Genesis’ lending program.” The company says it discloses details about its loan program before students enroll, calling that process “clear and extensive.”

It also says that a number of the problems CFPB identified were brought to the agency’s attention by the company, and that Corinthian is working on improvements. CFPB is looking for full redress of all Genesis loans made since July 21, 2011, including those that have been paid off.

The future of the 100-plus campuses across the country is uncertain. The company entered into an agreement with the U.S. Department of Education in July to sell or close a number of its campuses.

Meanwhile, a bill pending in the U.S. Senate would allow 25 million Americans to renegotiate their student loans at today’s lower interest rates. It would also cap undergrad loans below 4 percent; federal Stafford loans top out at 9 percent, while some private loans can exceed 14 percent.

You can read the “Downeaster Common Sense Guide to Student Loans” at http://www.maine.gov/pfr/consumercredit/publications.htm.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visithttp://necontact.wordpress.com or email contacexdir@live.com.

‘Zap Rachel’ and other ways the feds are fighting robocall ripoffs

CONSUMER FORUM

Posted Sept. 14, 2014, at 11:09 a.m.

It’s worth celebrating consumers’ wins over ripoff artists. Last week’s ruling that shut down an illegal robocall operation telling consumers they were entitled to free money was one such victory.

It was sweeter still for the Federal Trade Commission, whose banner the scammers had been flying when they claimed to have helped more than 13,000 people get refunds. The victims had received phone calls saying they were entitled to those refunds. The calls seemed credible to many victims when the FTC’s consumer assistance phone number appeared on their Caller ID screens.

The robotic calls drew attention in late 2012. They directed people they called to a website labeled “FTCrefund.com,” and gave them a six-figure number called a “Seizure ID.” Entering that number would entitle them to a refund from something called American Consumer Group Inc.

Except it didn’t work; it was all aimed at getting victims’ personal and financial information. Once they surrendered their names, bank account numbers and bank routing numbers, their funds began to be drained away.

This kind of “spoofing” of phone numbers is not new; scammers have long used computer trickery to fool victims. However, when the FTC first learned what the operators of The Cuban Exchange Inc. were doing, they headed for the courthouse. (The Cuban Exchange has also done business as CrediSure America and MyiPad.us.)

The FTC doesn’t use robocalls or cold calls of any kind, and it doesn’t ask people to provide financial or other personal information.

“To anyone breaking the law by making illegal robocalls, transmitting phony Caller ID information, or impersonating a federal agency, we have two words for you: Stop now. The real Federal Trade Commission will come after you,” said David Vladeck, who was director of the FTC’s Bureau of Consumer Protection at the time the agency first had the phony website shut down.

Last week, a federal judge in New York permanently barred The Cuban Exchange and its principal, Suhaylee Riviera, from misrepresenting any goods or services for sale. The ruling also bans defendants from claiming any affiliation with the FTC or saying they can get refunds for consumers from the agency.

The FTC has information on its website about cases against companies making deceptive claims. You can check the site (www.ftc.gov/enforcement/cases-proceedings/refunds) to see if you might be eligible for a refund in one of those cases.

The FTC highlighted the Cuban Exchange case, the 100th example of legal action it’s taken over nine years against violators of national do-not-call rules. Those rules have been in effect since 2003. Yet, every week consumers get calls from the relentless robot “Rachel from Cardholder Services.” The FTC even sponsored a contest with cash awards for computer enthusiasts who came up with possible ways to “Zap Rachel.”

In the end, the FTC may find that paying hackers is more effective than taking the scammers to court. Meanwhile, consumers are advised to be sure what entities they’re dealing with, especially when they receive unsolicited offers. An ad might say it will help you get money you’re owed by a state or federal agency; it’s certainly too good to be true, since such an agency will almost certainly help you for free.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit http://necontact.wordpress.com or email contacexdir@live.com.

Consumers should prepare for more data breaches

CONSUMER FORUM

Posted Sept. 07, 2014, at 1:09 p.m.

They are dirty, rotten scoundrels. Unfortunately, we’re getting much too used to them.

They are the writers of the sinister computer codes that prowl the Internet, looking for vulnerable systems to infect and mine for our personal and financial data. They have found mother lodes of info on several servers that try to handle big retail’s payment systems.

The breaches come so frequently and in such staggering numbers we barely pay attention any more. The crooks keep coming, and the security people are swamped. Consider one estimate that some large banks face as many as 35,000 threats of possible computer mischief every day.

Security officers quickly toss aside the work of hacker wannabes, so the number of real threats they face may number 100 or so a day. That’s still a pile of work, and missing a genuine threat can cause major problems for the company and its customers.

The results stunned us when we first heard the reports: 110 million or so consumers affected by last year’s Target breach. By the time news broke last week about what could become an even larger breach of Home Depot customers’ data, our eyes were beyond glazed over.

The good news, really, is that the banks that issue credit cards assume the financial liability if those cards are misused. That’s written into state and federal law, with varying standards and deadlines for avoiding fraudulent charges on your credit versus debit cards.

The bad news is that the underlying security nightmare will continue as long as most American commerce is tied into magnetic stripe technology. Much has been written about the much better chip-and-pin technology, backed by use of a personal identifying number. What has worked well in much of Europe for several years is still on the horizon for many U.S. retailers.

That technology will come, but it will be costly. Banks have tried to shift financial liability for data breaches to retailers, pointing at poor security systems. As you’d expect, retailers have reacted strongly; however, they are moving faster toward adopting more modern card security technology.

Will Lund, superintendent of Maine’s Bureau of Consumer Credit Protection, told me last week the changeover will happen piecemeal, and that will mean problems during the transition.

“Questions of liability may arise if a store has the technology but the consumer’s card does not, and vice versa,” Lund said.

Lund’s bottom-line advice to consumers is to remember they are not liable if they take reasonable steps to notify their banks of unauthorized charges. They can get free credit reports at each of the three major reporting companies each year — rotating requests yields a new report every four months — by visiting annual.creditreport.com. Lund said consumers should not feel scared or bullied into buying identity theft insurance, credit monitoring or other costly products, because “the most important rights and protections are already granted by state and federal law.”

People in Lund’s office and at the Bureau of Financial Institutions can answer individual questions about data breaches and consumers’ rights. Both are part of Maine’s Department of Professional and Financial Regulation.

Visit our blog — necontact.wordpress.com — and search “breach” to read PFR’s information and guidance to consumers regarding financial breaches. You can find information online at the PRF website — maine.gov/pfr — or by calling 207-624-8500.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit necontact.wordpress.com or email contacexdir@live.com.

 

Google to Refund Consumers at Least $19 Million to Settle FTC Complaint It Unlawfully Billed Parents for Children’s Unauthorized In-App Charges

FTC Order Requires Google to Change its Mobile App Billing Practices to Ensure Consumers’ Consent is Obtained Before Charges Levied

Google Inc. has agreed to settle a Federal Trade Commission complaint alleging that it unfairly billed consumers for millions of dollars in unauthorized charges incurred by children using mobile apps downloaded from the Google Play app store for use on Android mobile devices. Under the terms of the settlement, Google will provide full refunds – with a minimum payment of $19 million – to consumers who were charged for kids’ purchases without authorization of the account holder. Google has also agreed to modify its billing practices to ensure that it obtains express, informed consent from consumers before charging them for items sold in mobile apps.

The Commission’s complaint against Google alleges that since 2011, Google violated the FTC Act’s prohibition on “unfair” commercial practices by billing consumers for charges by children made within kids’ apps downloaded from the Google Play store. Many consumers reported hundreds of dollars of such unauthorized charges, according to the complaint.

“For millions of American families, smartphones and tablets have become a part of their daily lives,” said FTC Chairwoman Edith Ramirez. “As more Americans embrace mobile technology, it’s vital to remind companies that time-tested consumer protections still apply, including that consumers should not be charged for purchases they did not authorize.”

This marks the Commission’s third case concerning unauthorized in-app charges by children. In January, the Commission announced a settlement with Apple Inc., requiring Apple to provide full refunds to consumers who were billed for unauthorized charges by children – paying a minimum amount of $32.5 million – and obtain express, informed consent for in-app charges. And in July, the Commission filed a complaint in federal court against Amazon.com, Inc., similarly seeking full refunds for consumers and an order requiring informed consent for in-app charges.

In-app charges are a component of many apps available from Google Play and can range from 99 cents to $200. In many apps used by children, users are invited to accumulate virtual items that help them advance in the game, though as the FTC’s complaint notes, the lines between virtual money purchases and real money purchases can be blurred. The FTC’s complaint alleges that Google billed consumers for many such charges by children without obtaining account holders’ authorization, leaving consumers holding the bill.

When Google first introduced in-app charges to the Google Play store in 2011, the complaint alleges, Google billed for such charges without any password requirement or other method to obtain account holder authorization. Children could incur in-app charges simply by clicking on popup boxes within the app as they used it.

According to the complaint, in mid- to late 2012, Google began presenting a pop-up box that asked for the account holder’s password before billing in-app charges. The new pop-up, however, did not contain any information about the charge. Google also did not inform consumers that entering the password opened up a 30-minute window in which a password was no longer required, allowing children to rack up unlimited charges during that time.

During this time, many thousands of consumers complained to Google about children making unauthorized in-app charges, according to the complaint. Some parents noted that their children had spent hundreds of dollars in in-app charges without their consent. Others noted that children buying virtual in-game items with real money were unaware they were causing their parents to be billed.

Google employees referred to the issue as “friendly fraud” and “family fraud” in describing kids’ unauthorized in-app charges as a leading source of refund requests, according to the complaint. The complaint further alleges that Google’s practice has been to refer consumers seeking refunds first to the app developer. Continue reading

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