We’re cancelling our membership in the out-of-touch-wireless-carrier club.

But are they?

Let’s move away from the iPhone to a more concrete example – a phone T-Mobile is already offering, the incredibly popular Samsung Galaxy S 3. Have a look at the website. A normal impression is that the phone costs just $69.99 plus $20/month. But that’s not the whole story.

You see, that $20/month doesn’t cover actually using the phone. In reality, it’s just an installment plan that ends up costing you the same amount of money as buying the phone outright.  You’ll still need to pay $50/month for phone service. So, consumers, that’s $69.99 up front plus $70/month (not $20)…quite a difference.

What’s more, the service plan claims it provides unlimited talk, text, and web. Ha! In reality, consumers only receive 500 MB of data before T-Mobile begins throttling (slowing) your service. Sure, there’s no overage charges; but throttled data is hardly “unlimited.”

In T-Mobile’s defense, the fine print can become clear with some in depth research and, perhaps, a call to customer service. As an added point in T-Mobile’s defense, their service is excellent in the Washington, DC area.

Still, this new ad campaign of “simplicity” and “meeting the customer’s needs” rubs me the wrong way. In my book, “simple” doesn’t include confusing and mislabeled installment plans masquerading as affordable pricing schemes.

Hey, John Legere (CEO of T-Mobile America), no matter what you say, you’re still a member of the “out-of-touch-wireless-carrier club.”

]]> http://www.thecorporateobserver.com/2013/04/04/t-mobiles-simplified-plans-simply-misleading/feed/ 0 http://www.thecorporateobserver.com/2013/04/04/t-mobiles-simplified-plans-simply-misleading/ http://feeds.lexblog.com/~r/AVoiceForMainStreet/~3/0x3RCp39ih4/ http://www.thecorporateobserver.com/2013/04/01/monday-roundup-8/#comments Mon, 01 Apr 2013 13:57:16 +0000 Steven Berk http://www.thecorporateobserver.com/?p=1562 Continue Reading]]> The Monday Roundup – a weekly collection of top consumer-related news just for you.

• Abusive forced placed insurance policies. State and federal regulators take a stand.
• Consumer Affairs – “Should airlines charge by weight?” Practical or not, it’s an interesting read.
• Massachusetts proposes criminal background checks for financial advisors.
• The 12 scams of Tax-mas.
• FTC wins one for the good guys. “Debt collectors agree to stop deceiving consumers.”

DOJ appears to be willing and anxious to prosecute financial fraud against enablers including: banks, third-party payment processors and other financial institutions who “provide the scammers with access to the national banking system and facilitate the movement of money from the victim of the fraud to the scam artist.” This initiative seems to be the brainchild of Michael Bresnick, who heads up the DOJ’s Financial Fraud Enforcement Task Force. Bresnick identified these entities as the “bottlenecks” in many fraudulent schemes. Without banks or payment processors, fraudsters would be without a means to get paid their ill-gotten gains.

But DOJ isn’t just claiming these financial institutions are “looking the other way.”  No, DOJ seems to be alleging that these financial entities actually encourage the fraud. Bresnick was not coy about this suggestion:

“Financial institutions through which these fraudulent proceeds flow, we have seen, are not always blind to the fraud. In fact, we have observed that some financial institutions actually have been complicit in these schemes, ignoring their BSA/AML obligations, and either know about – or are willfully blind to – the fraudulent proceeds flowing through their institutions.”

DOJ doesn’t stop at “willfully blind” allegations. Bresnick continues and says that “despite the presence of glaring red flags indicative of fraud,” (even describing the “red flags” as “ambulance sirens, screaming out for attention”) the banks continued to offer these “suspect” customers high levels of service so that these fraudsters could continue to bilk their victims out of money. Meanwhile, the bank continued to collect fees and profit from the fraudulent business that was occurring within its walls. Bresnick offers several specific examples of precisely how egregious the banks behaviors were.

DOJ’s tactic boils down to “starving” the con artist fraudsters out of business. If they no longer have reputable, trusted banking institutions to do their dirty work for them their ability to defraud people out of money goes way down.

Well it’s about time.  This new focus by Mr. Bresnick and his DOJ task force holds out the promise that banks will get in-line and stop aiding and abetting fraudsters.  My only additional suggestion: don’t forget the threat of criminal sanctions.  In the end that will be the strongest deterrent.

• Bluetooth hackers. Make sure you’re protected.
• Monster Energy Drinks take a step in the right direction. New labels will include caffeine content.
• Contact the CFPB to help with the Student Loan Affordability Initiative.
• CFPB tackles discrimination in auto loans.
• Auto sales are up – here’s to avoiding any discriminatory practices.
• New legislation targets overdraft fees.
• Microsoft reveals law enforcement requests for user data.
• Defective defibrillators? The FDA steps in.
• Facebook ramps up shopping. Beware of potential false reviews and expiring coupons.

Remember, if you’ve been the victim of a scam, bought a product based on false representations, or suffered discrimination in any form, contact us to discuss your options.

“The discovery of horse meat in products labeled as beef in the European Union has raised serious questions, not just about food labeling, but also about food safety and the working of the somewhat opaque, global horse meat industry.”

What grabs my attention about this quote isn’t the “ick” factor about eating horsemeat, but rather the “somewhat opaque” horse meat industry.  From a consumer’s perspective, an area you do NOT want to be full of mystery and fly-by-night standards is the food you eat.

People naturally have a visceral reaction when they hear about problems with food.  People might get upset if a coupon they have isn’t honored, or their car manufacturer won’t fix a recurring problem under warranty, but when it comes to food, the response is frequently a gut-wrenching, “Eww,” accompanied by a nose wrinkled in disgust.  The problem is that we have only begun to scratch the surface when it comes to food labeling problems.  My theory is: the problems have only just begun.

As our food chain becomes more and more industrialized we are going to see more and more “scandals” like pink slime and horsemeat.  The fact is we just don’t know where  food comes from anymore. We trust our food supply chain, and various government regulators, to keep food safebut that food supply chain is only getting more complex, more globalized and more industrialized.  A lot of the claims we see on products, such as “free-range,” or “organically grown,” or “hormone-free,” are unregulated and based on standards that may or may not have anything to do with consumer expectations. On the worst end of the scale we will see outright lies, a food label might say “sustainably grown (or raised),” when in fact it is grown just the same way something has always been.

Just a couple weeks ago we saw Oceana release a study that revealed fish types were mislabeled at levels ranging from 25% – 70% for common species.  So that Red Snapper you ordered for dinner last night might not have been red snapper at all.  In fact there is an 87% chance that it was NOT.

The tough part for consumers is that there is very little you can do to verify a food label’s claims.  You can do some cursory internet research, but most consumers just don’t have the resources to truly verify label claims – we can’t all DNA test the fish we just bought before we serve it up for dinner.

So where does this leave consumers and what can we do?  We absolutely cannot shut our eyes to this – what you eat directly affects your health.  You need to know what you are putting into your body.  What we can do is start asking questions and verifying label claims.  Talk to your legislative representatives and let them know you are concerned about this issue: you deserve the truth from labels on the food you buy.  If we start to ask questions and set standards now, we might be able to avoid a bigger scandal, and possibly even a health problem, later.

Have your rights as a consumer been violated? Do you know of a mislabeled food product? Call Berk Law today at 202-232-7550 to discuss your legal rights.

•  “U.S. Homes Now Have More Than Half a Billion Devices Hooked Up To The Internet” [Consumerist]
•  Housing Market Continues to Grow  – good news for consumers but beware of scams [Consumer Affairs]
• The Dangers of Buying Prescriptions Online [BBB]
• FTC 2012 Annual Report of Consumer Complaints (or, visit Mondaq for a summary)
• A disagreement over identity theft. [Huffington Post] Whatever you decide, protect yourself and be sure to contact us if you are an unfortunate victim of identity theft.
• Preliminary approval for class action settlement regarding Audi transmissions. [NY Times]
• Risks and benefits of transferring car loans to a credit cards [NY Times]
• Recall Alert: Ford Recalls Focus, C-Max and Escape [Consumer Affairs]

Williams used to be an executive at the Pacific Investment Management Company (“Pimco”), a huge money management firm, where he worked for over ten years.  In Williams’ position as a high-yield bond portfolio manager, he saw a whole slew of misdeeds, insider trading, manipulating rates and values of holdings to scam clients, you know, all the most popular securities violations, being performed by senior management at Pimco.  We’ve seen the banking and finance industry exposed in scandal after scandal as one who has done the math and concluded that violating securities laws is more profitable than following them – even if you get caught once and a while.

Williams was not comfortable with this.  He reported the wrongdoing to internal compliance officers, who told his supervisor.  Pimco allegedly undertook a review of all Williams’ concerns and found nothing. What a surprise.

But Pimco did find something for Williams, reduced pay and verbal abuse.  Williams, dedicated to his quest of righting the wrongs he had seen, then reported the conduct to the Treasury Department, who opened an investigation.  How did Pimco repay Williams for his dedication to ethical and legal business principles?  Pimco fired Williams, only three weeks after he informed Pimco that he had reported the wrongdoing to federal authorities.

Coincidence?  Not according to the lawsuit Willaims filed on March 5 in California state court – withdrawn only THREE days after it was filed.  Now, Williams is in settlement talks with Pimco. Three days is a very short amount of time, especially when you consider how most lawsuits last for years. Sounds to me like Pimco was embarrassed by what Williams had to say in his lawsuit.  They might not have been willing to give him the time of day before, but as soon as Williams files suit, putting his allegations in the public domain, Pimco reverses course and starts talking.  Which leads me to ask – what exactly is Pimco so worried about?

I am very happy for Mr. Williams.  Glad that he was able to achieve something many whistleblowers do not, getting his former employer to the table.  Most whistleblowers aren’t able to do that – many suffer career ending retaliation with no recourse.  In fact, whistleblower retaliation is on the rise: in 2011, 22 percent of American workers who reported misconduct were retaliated against while in 2009 that number was only 15%.

We need to work on changing how our culture views whistleblowers so that they will finally be recognized for their commitment to an ethical and moral workplace, instead of retaliated against and shunned.  We need whistleblowers; they help keep our companies and government honest – its time we acknowledge this and start embracing them.

Have you observed fraud or scams costing the government money? Call Berk Law at (202) 232-7550 today to discuss your legal rights.

• Know your rights with telemarketers.
• McDonald’s franchise takes advantage of foreign students.
• DOJ Department of Consumer Protection has recovered more than $5.89 Billion since 2009.
• Michelle Obama encourages accurate labeling and responsible marketing for major food producers.
• More in food labeling: Calorie amounts are wildly misleading.
• Wow; that’s a lot of debt! Government holds more non-revolving consumer debt than banks.
• Cell Phone Scams: Smishing, it’s even worse than its name.
• Consumer borrowing is up. Good news for the economy but watch out for scams!
• How to Avoid mortgage modification and foreclosure scams.
• Elizabeth Warren goes after the banks…and the regulators.

This week, March 3^rd – 9^th, is the fifteenth annual National Consumer Protection Week (NCPW).  Yes, it is an important time to spread awareness of common scams and problems that consumers encounter.  But more importantly, it is an opportunity for us to reflect on what exactly “consumer protection” means.

The White House issued a Presidential Proclamation for 2013’s NCPW last Friday.  President Obama offers us one view of what NCPW stands for:

Over 4 years ago, widespread abuses in America’s financial system nearly brought our economy to its knees.  Millions saw their life savings erode, businesses shuttered their doors, and families were devastated by job loss and foreclosure.  This crisis cast a harsh light on the breakdown in oversight that led to an epidemic of irresponsibility, and it highlighted the need for common-sense regulations to protect the vast majority of Americans from the reckless actions of a few.  During National Consumer Protection Week, we remember those lessons, and we recognize that our shared prosperity depends on empowering all Americans to make sound decisions for themselves and their families.

I think the key word here is “empowering.”  When talking about consumer protection it’s easy to get lost in the “protection” part.  Warning people of scams, making sure companies follow certain rules – these are important.  But it’s more important to make sure consumers know that they have the power to make changes (and, of course, to protect themselves).  A single consumer voice might get lost in the shuffle, but when thousands of consumers join voices to protest a particular practice, things change.

It seems many consumer protection organizations are beginning to realize this, and they are encouraging consumers to speak out, to complain.  “Complain” is an unfortunate word choice – it ends up sounding whiney.  “Speak up” or “tell your story,” might be a better way to describe it.  Any way you put it the underlying truth is that future consumers benefit whenever someone speaks up about their experiences.  Ever bought something on Amazon after reading the reviews posted at the bottom of the page?  Consumer complaints are like those reviews – letting other consumers know what to expect and notifying government regulators when there might be a problem.

Aside from general awareness-raising, there are a lot of NCPW activities scheduled across the country.  It is a “coordinated” campaign – which means you have a whole slew of organizations and government agencies that are each supporting the week in their own way.  The NCPW website has a list posted here of all the groups participating – participants range from the “Consumers Union,” to various state Attorney Generals’ offices, to the FBI (who has a webpage addressing white-collar frauds and e-scams).

Many of these organizations have both online tips and in-person events.  For example, Virginia’s Fairfax County is hosting an unclaimed property search and a workshop titled “What You Need To now Before You Hire A Contractor.”  More details about individual workshops in Fairfax County can be found here.

So take a look at the CFPB’s website “Highlighting Your Rights as a Consumer” and find out what you can do – to protect consumers and to EMPOWER consumers.

Here is your weekly Monday Roundup from sites we enjoy and frequent:

• National Consumer Protection Week
  “National Consumer Protection Week (NCPW) is a coordinated campaign that encourages consumers nationwide to take full advantage of their consumer rights and make better-informed decisions.”  This site is a “home-base” for NCPW – use it to find out whats going on across the country!
• FCC To Look Into Legality Of Unlocking Cellphones…
  Ever used an unlocked cell phone?  That may soon become a thing of the past…
• Senator Seeks More Data Rights for Online Consumers
  If you are a fan of privacy, especially online privacy, you will be interested in this bill.  Senator Rockefeller (D-WV) introduced the “Do-Not-Track Online Act of 2013” – is this the beginning of consumers taking back control of their own data?
• Even If It Breaks Up Viacom Bundle…
  Is the time of a-la-carte cable station choices coming?  At least this is a step in the right direction…
• Consumer spending rose slightly in January…
  The fiscal cliff tax increases appear to be coming out of consumer’s “savings” column instead of its “spending” column because spending is going up.