Pillow seller’s puffed-up ad claims offer wake-up call to shoppers

CONSUMER FORUM

By Russ Van Arsdale, executive director Northeast CONTACT

Posted Jan. 09, 2017, at 6:42 a.m.

The first network news coverage we saw on the MyPillow flap told only half the story.

Yes, the headline was that the Better Business Bureau, or BBB, had pulled the company’s accreditation and lowered its rating from A-plus to F because of the firm’s advertising practices. The story cited the “buy-one-get-one-free” offer that runs continuously, meaning the “sale” price was actually the “regular” price.

The BBB said it acted because of a “pattern of complaints” over the BOGO offer, both on TV and online. MyPillow owner and CEO Mike Lindell said he was “terribly disappointed” and that his goal is still to give “as many people as possible the chance to have a great night’s sleep.”

What the initial network news story did not cover was MyPillow’s settlement last fall of a lawsuit brought by consumer advocacy groups in California. The groups took issue with health claims on its website that MyPillow could help sufferers of sleep apnea, fibromyalgia and insomnia.

While admitting no wrongdoing, the company paid just less than $1 million in civil penalties and promised another $100,000 for homeless shelters. It also dropped the health claims.

Earlier last year, the company settled a suit brought by the state of New York, which claimed that MyPillow had knowingly failed to pay sales taxes on purchases by New Yorkers. Again admitting no wrongdoing, the company entered into a $1.1 million settlement.

Lindell said he’s planning to change his advertising early this year but has not said how.

Consumer Reports bought three MyPillows last fall. Testers gave them mixed reviews (www.consumerreports.org/mattresses/should-my-pillow-become-your-pillow/).

Consumers should know that the BOGO offer applied to the firm’s “premium” series ($90 for two pillows). The pillows sold in retail stores have no gusset, fewer loft levels and retail for $49 to $69 each.

If companies make false health claims and are warned to stop, they “are going to pay the price if they don’t comply,” Bonnie Patton, executive director of Truth in Advertising Inc., said. The Connecticut-based nonprofit fights misleading ads and investigates complaints ( www.truthinadvertising.org).

TINA published a report on its investigation of MyPillow’s ads in February of 2016.

Consumers who sleep restfully may scoff at others who have paid millions over the years seeking a good night’s sleep. But they may be among the millions of consumers who spend billions of dollars on health products, many with dubious claims and sketchy performance.

It’s not too late for resolutions in the early days of this year.

Let’s all promise ourselves that we’ll look hard at ad claims, scientific research, real testimonials and the experience of friends or relatives. Let’s put our skepticism on high and our spending on low, which searching for the true bargains in the marketplace.

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 https://necontact.wordpress.com or email contacexdir@live.com.

Beware the $9.84 credit card scam

CONSUMER FORUM

By Russ Van Arsdale, Executive Director Northeast CONTACT

Posted Feb. 01, 2014, at 4:54 p.m.

The Better Business Bureau sent out a news release last week, reminding us all that we’re less vigilant than we ought to be.

The bureau said “scammers are banking on the fact that many consumers don’t check their credit card statements all that carefully.” The crooks are laughing all the way to the bank, as money from millions of fraudulent charges rolls in.

The scam has earned the shorthand name of the “$9.84 Scam,” based on the charges that are without exception under $10. Each charge is small enough not to raise many red flags on the part of card issuers or of many consumers who look over their monthly statements.

Those consumers may have noted small charges for a “service fee,” “maintenance fee” or other nonspecific terms. They may have felt that, while the charges were nothing they had authorized, it wasn’t worth the hassle of disputing. Multiply their apathy by a few thousand other consumers, and you’ll warm the heart of any scam artist.

Former Washington Post reporter Brian Krebs writes extensively about cyber security. Krebs did some digging and found that the person who set up one website charging $9.84 for a supposed product or service had set up 230 other sites. Further research on some of those sites turned up a trail of $9.84 fees. Some of those domains were set up over a year ago, so it’s unlikely that the data breach of Target’s computers was the trigger.

There’s lots of speculation over where the scam began and where it might end. Once word got out, scammers likely changed the amount of their phony charges a little. The lesson for consumers is simple: check your statement carefully for false charges; if you find any, call the number on the back of your card and dispute them.

Unauthorized charges may mean your card information has been compromised. Err on the side of caution and ask for a new card. Security experts advise that you never lend your card to anyone, and don’t leave cards, statements and receipts lying around in your home, office or car.

As always, be cautious when ordering over the phone or online. When giving your account number over the phone, be sure the person you’re speaking with actually represents the company with which you’re doing business. Never sign a blank charge slip, and draw lines through blank spaces above the total so numbers can’t be changed.

You can read about the scam investigation in detail at Brian Krebs’s blog,

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 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

 

 

Wednesday, July 17, 2013 is Military Consumer Protection Day

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast CONTACT

Posted July 16, 2013, at 6:51 p.m.

Wednesday marks Military Consumer Protection Day. It is so designated in light of some special situations that members of the military and their families face in today’s marketplace.

Our military members tend to be younger and financially less experienced than average citizens. They move more often and often face challenges in securing housing. Ten years of war have meant mission training has come before financial training, leaving many enlisted veterans poorly equipped to deal with the rigors of economic life back home.

In the past, payday lending operations located near military bases helped those needing a small loan to tide them over until payday. Today there are fewer of those businesses; the internet-based array of illegal, unlicensed predatory lenders may demand interest with an annual percentage rate of 300 percent or more.

At Maine’s Bureau of Consumer Credit Protection, principal examiner David Leach says, “We have a small handful of licensed payday lenders, who follow Maine law — no more than a $25 fee on a payday loan of $250.00 or more.”

Leach urges military people to check with his office for licensed lenders ( www.credit.maine.gov, 1-800-332-8529) and avoid all others.

A white paper by the federal Consumer Financial Protection Bureau last September called for expanding availability of small-dollar, low-interest military loans. These loans could include an automatic savings component in the repayment plan; accumulated savings over time could help build credit and be used for future short-term cash needs.

Deciding when to leave the military can have big financial implications. People at a financial planning conference late last year were told that career people who leave early could lose between $300,000 and $400,000 in pension and benefits. Planners were urged to prompt clients who insist on leaving active duty to consider joining the reserves.

There are several websites that can help with financial planning, among them www.military.com, www.tricare.com and www.va.com. The Maine state government site includes a “Financial Field Manual” for military families, produced by Kiplinger’s and the Better Business Bureau. Find the manual at www.investors.maine.gov (scroll down to “recent publications”) or call 1-877-624-8551 for a hard copy.

HOPE NOW is an alliance of HUD-approved counselors, investors and others in the mortgage market. Help tailored for military families can be found at www.hopenow.com/military-resources.php.

To be on guard against scams targeting service people, visit www.stopfraud.gov/service-members. Maine’s Bureau of Insurance has a webpage dedicated to life insurance (from Maine.gov search “military insurance”).

The Federal Trade Commission has more on Military Consumer Protection Day at www.consumer.ftc.gov/blog/military-consumer-protection-day-2013.

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 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

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PRESS RELEASE from MAINE ATTORNEY GENERAL JANET MILLS re: Military Consumer Protection Day

Seniors should be wary of medical alert device scam

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast CONTACT

Posted June 02, 2013, at 3:35 p.m.

At first we thought we were out in front of the story: People posing as representatives of a medical alert company were cold calling Maine seniors and offering them free medical alert devices. All the seniors had to do was fork over some personal financial information (and, in the process, open their bank accounts to the callers).

Then, last Wednesday, Maine Attorney General Janet Mills issued a news release calling the whole thing a scam. She cautioned seniors not to give any personal or financial data to these frauds calling their company Life Watch, or anyone else who called out of the blue. Not only that, she said the officers of sound-alike Life Alert are suing a couple of outfits it says are misrepresenting themselves.

“Legitimate companies do not operate like this,” Mills said in the release. “This scam is particularly insidious because it trades on the well-known brand of Life Alert, which is intended for very vulnerable senior citizens.”

There are several tip-offs that the call is not on the level. First, as Mills pointed out, honest companies don’t make random robot calls, putting a sales person on once the phone is answered and turning up the heat. A second clue concerned the pitch itself.

When the first call came to our home, a heavily-accented seller needed prompting before revealing that, while the alert device itself is “free,” my service plan would cost about a dollar a day. The second flag went up when, asked about the cancellation policy, she said, “Just give us a call.” That’s scammer code for, “We’ll just ignore you.”

I asked to speak with a supervisor, and another thickly accented person (who told me his name was “Mr. Lennie Allen”) said his firm was the “only EMT-certified” provider of “the preferred medical alert monitor” (EMS officials we spoke with weren’t sure what those terms meant). “Lennie” added that his firm had “100 percent customer satisfaction” (probably the first ever in our notebook) and that it was “endorsed by the American Diabetes Association.” A call to that organization confirmed that it “does not test advertised products, does not conduct independent scientific reviews and does not ensure the safety and efficacy of their claims.” Pants on fire, Lennie.

A second caller to our home asked for my wife by her legal name, which she never uses. “Where did you get my name?” she asked.

“Uh, well, we make random calls…”

“But I’m on the National Do-Not-Call list.” A hurried apology, and away the caller went.

The people who really run Life Alert are so steamed they’re suing the folks they say are responsible for thousands of seniors nationwide being ripped off and their company’s reputation suffering “tremendous” damage. They’ll have lots of ammunition; the Better Business Bureau says in February 2011 it requested that Life Watch “cease and desist all unauthorized use of the BBB name and logo in its promotional materials.” During our conversation, “Lennie” told me his firm had an A-plus rating from the Bureau (pants now in ashes).

Maine seniors who believe they have been a target of this scam should call the A.G.’s Consumer Protection Division at 1-800-436-2131 or email consumer.mediation@Maine.gov.

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 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

FTC Warns Consumers: Charity Scams Often Follow Disasters

Share Our Resources | Consumer Information.

In the wake of the devastating Tornado that hit suburban Oklahoma City on Monday, the Federal Trade Commission, the nation’s consumer protection agency, reminds consumers that scams often follow disasters. If you’re asked to make a charitable donation to help people in disaster-affected areas, before you give, be sure your donations are going to a reputable organization that will use the money as promised.

Unfortunately, legitimate charities face competition from scammers who either collect for a charity that doesn’t exist or aren’t honest about how their “charity” will use the money you give.  Like legitimate charities, they might appeal for donations in person, by phone or mail, by e-mail, on websites, or on social networking sites.  For more on the questions to ask and for a list of groups that can help you research a charity, go to Charity Scams.

If you’re asked to make a charitable donation to support victims of the recent tornado, remember:

• Donate to charities you know and trust. Be alert for charities that seem to have sprung up overnight in connection with current events, like a natural disaster.
• Ask if a caller is a paid fundraiser, who they work for, and what percentage of your donation goes to the charity and to the fundraiser. If you don’t get a clear answer — or if you don’t like the answer you get — consider donating to a different organization.
• Don’t give out personal or financial information — including your credit card or bank account number — unless you know the charity is reputable.
• Never send cash: you can’t be sure the organization will receive your donation, and you won’t have a record for tax purposes.
• Check out the charity with the Better Business Bureau’s (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, or GuideStar.
• Find out if the charity or fundraiser must be registered in your state by contacting the NationalAssociation of State Charity Officials.

From Maine Department of Professional and Financial Regulation:

[Information about charities can be obtained through the Department’s website (www.maine.gov/pfr), specifically at www.maine.gov/pfr/professionallicensing/professions/charitable. Links allow for the search of licensed charitable organizations, as well as disciplinary actions.  Questions and complaints can also be made by calling the Charitable Solicitations Program at 207-624-8525.]

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

 

Helping Victims of the Bombing in Boston — Make Sure Your Donations Count

April 17, 2013

by

Colleen Tressler

Consumer Education Specialist, FTC

After the bombing at the Boston Marathon, many people are looking for ways to help, like donating to a charity or fund.

Doing some research first will help ensure that your donation will go to a reputable organization that will use the money as promised — and as you intend. Urgent appeals for aid that you get in person, by phone or mail, by e-mail, on websites, or on social networking sites may not be on the up-and-up. Unfortunately, legitimate charities face competition from fraudsters who either solicit for bogus charities or aren’t entirely honest about how a so-called charity will use your contribution.

If you’re asked to make a charitable donation to support victims of the bombing in Boston, consider these tips:

• Donate to charities you know and trust. Be alert for charities that seem to have sprung up overnight in connection with current events, like the bombing.
• Ask if a caller is a paid fundraiser, who they work for, and what percentage of your donation goes to the charity and to the fundraiser. If you don’t get a clear answer — or if you don’t like the answer you get — consider donating to a different organization.
• Don’t give out personal or financial information — including your credit card or bank account number — unless you know the charity is reputable.
• Never send cash: you can’t be sure the organization will receive your donation, and you won’t have a record for tax purposes.
• Check out the charity with the Better Business Bureau’s (BBB) Wise Giving Alliance, Charity Watch, or GuideStar.
• Find out if the charity or fundraiser must be registered in your state by contacting the National Association of State Charity Officials.

For more on the questions to ask and for a list of groups that can help you research a charity, go to Charity Scams.

 

Ads disguised as news provoke outrage

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast Contact
Posted April 01, 2012, at 10:35 a.m.

On reading the full-page ad in Wednesday’s Bangor Daily News, I reacted with confusion, disbelief and a bit of outrage. I knew I would have to question the editors on this and expected they might respond defensively; I did not expect they would be contrite.

The ad in question offered sheets of uncut dollar bills “at face value,” contingent on buying three “protective banker’s portfolios” at a cost of $29 each plus shipping. The ad said “smart collectors are snatching up all the valuable uncut sheets of Gov’t issued money they can get their hands on,” although a disclaimer at the bottom admitted there’s no guarantee of increased future value.

Such a come-on probably would have been dismissed, if what was clearly labeled an advertisement had not looked, to the casual reader, like a news story. “Bangor area zip codes turn up cash for residents,” cried the headline under the large photo of uniformed guards wheeling around loads of the bill sheets. A Google search of the headline wording — minus the Bangor reference — yields hundreds of communities where similar ads have run in the United States and Canada.

Those ads have drawn fire from consumer groups and authorities alike. Last November, the Better Business Bureau reported more than 200 consumer complaints involving World Reserve Monetary Exchange, which placed the BDN ad. According to the Better Business Bureau many of those complaining said the ads were misleading. The bureau noted the ads suggest the offer is limited to a specific geographic area, which is not the case. A supposed time limit on the offer also created a false sense of urgency.

In January, a California lawsuit against Universal Syndications Inc., doing business as World Reserve Monetary Exchange, and Arthur Middleton Capital Holdings CEO Rodney Napier was settled. The firm was accused of falsely advertising “free” gold coins; it was ordered to pay $223,000 in civil penalties and court costs and to reimburse some buyers. The company also is banned from advertising in California the gift of a free item with the purchase of another item, unless it really is free.

We did some digging to find all this out. The Bangor Daily News did some initial vetting when the ad order came in. Steve Martin, BDN’s interim director of sales and marketing, told me the vetting process in this case wasn’t thorough enough.

Martin said the ad won’t be run again. In fact, he’s asking the ad agency that sent it not to send any similar ads to the paper.

“The sources [of such ads] are getting craftier and craftier” in their efforts to make ads look like news coverage, Martin said. He added the paper takes very seriously its duty not to mislead the public, and said every effort will be made to distinguish advertising from news copy in the future.

After spending most of my career as a working reporter, I know how these things can happen. We applaud the BDN for admitting a mistake and working to make sure it’s not repeated.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, or go to necontact.wordpress.com, or email contacexdir@live.com.

20/20 Investigates the Better Business Bureau | TV and Media Blog

20/20 Investigates the Better Business Bureau | TV and Media Blog.

“…20/20″ and ABC stations across the country investigate the Better Business Bureau, whose A+ grade is considered the gold standard for businesses. So why did the BBB in Los Angeles give a group of white supremacists an A+ while the Boston chapter of the BBB gave the five star Ritz Carlton Boston an F, with two complaints and millions of customers served?

As Brian Ross reports, the BBB is under fire, accused of using bad ratings and the promise of improved ratings to sell memberships. “20/20″ watches as business owners with C grades say they were told they could improve their rating by paying $425 for a membership in the BBB, and then watches as the business’s score goes up to an A+ in one business day. It’s a startling investigation that has some companies calling for the Better Business Bureau itself to be investigated. The exclusive report airs on “20/20,” FRIDAY, NOVEMBER 12 (10:00-11:00 p.m., ET) on the ABC Television Network. “20/20″ will air additional reports, to be announced.

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