Apparently the super-market shrink-ray has a "reverse" option too. I've been collecting and re-purposing old scoops from laundry detergent boxes for years now, and have almost exclusively been a Cheer Color Guard (or it's current incarnation) customer during that time. Rather than use the scoop from a new box, I usually just continue using the previous scoop. Therefore I can't tell you how old this one is, but it's at least three or four years old.

So the scoop on the left is an older one, used in the cheer boxes many years ago. The one on the right is a new one from a box I purchased this month. Notice anything immediately? If you're like me, you don't sit down and painstakingly measure out your detergent, you eyeball the partially filled scoop and pour. For years I've used about 3/4 scoop to wash my clothes, no problems. If I applied that logic to the same scoop from a new box of Cheer, I'd have been using significantly more in my laundry.

However, to give Cheer a fair chance, I decided to measure them out as per the directions on the scoop. Each has 3 levels. Medium, Large and Heavy Soil for the old scoop and a 1 and 2 for the new scoop. The new scoop however has three lines on it and the directions state they are for Medium Loads, Large Loads or Heavy Soiled Medium Loads and Large Heavy Soiled Loads. So to try and judge fairly, I filled the large scoop to the maximum amount (3rd line from the top) with water.

Looking at the two side by side, it actually appears that the larger scoop requires less detergent for a large heavy soiled load. Perhaps Cheer tweaked their formula over the years and I'm judging them harshly. So I decided to see, because it seems to take a completely full old scoop to equal what a 3/4 full new scoop does. So I poured the larger scoop into the smaller, attempting to transfer all of the liquid to the old one. I couldn't do it.

If you'll notice, not only is the smaller scoop completely full (including the handle) but there's still water left in the large scoop. Two and one-half tablespoons worth.

So my conclusions are either Cheer is either trying to gently encourage us to use more washing powder than necessary, or they've reformulated their detergent over the years to actually be less effective.

-Mark

If you catch the Grocery Shrink Ray in action, approach warily with a camera, and send the results to the tipline.

The California Public Utilities Commission and state officials believed that crisis-era pacts with San Diego-based Sempra Energy and others were costing consumers an extra $1.45 billion to $3.08 billion — an amount they had hoped to return to electricity customers, possibly by reducing or eliminating future charges.

A Washington utility had hoped to get relief from a nine-year power contract with Morgan Stanley Capital Group. Under that contract, the Snohomish County Public Utility District is paying $105 a megawatt-hour, well above the historic norm for the Pacific Northwest of $24 a megawatt-hour, but also well under the $3,300 a megawatt-hour hit at the peak of the energy crisis that spread beyond California's borders, according to the court's synopsis.

Justice Scalia scolded the states for whining about "buyer's remorse." Roger Berliner, a lawyer for Nevada utility Sierra Pacific Resources, applauded the Justice for his unrivaled ability to blind himself to reason:

"It was the failure of regulators to protect consumers from market manipulation" that caused the utilities to overpay for power. I don't think the court appreciated the extent to which the dysfunction in the market made it impossible for there to be just and reasonable contracts."

Supreme Court deals blow to states on electricity [Los Angeles Times]



(Photo: Getty)

The New York-based research group Conference Board said Tuesday that its Consumer Confidence Index dropped to 50.4 from a revised 58.1 in May. The reading was the lowest since February 1992, when it was 47.3.

Economists had expected the index to decline to 56, according to Briefing.com.

Because I accidentally and stupidly made this political by mentioning that dreaded "B" word, here's what your two presumptive presidential candidates (well, actually it was just their campaigns) had to say about the numbers. We'll leave it up to you to guess whose campaign said what (or you could just read the CNN article):

Potential President X: "We know that the public has been concerned and regardless of whether the geeks in the world think there's a recession or not, the public feels like that."

Potential President Y: "The disappointing consumer confidence numbers are yet more evidence that we need a change in our economic policy."

Consumer confidence tumbles to 16-year low [CNNMoney]

Avid tech consumers were also likely to be low in modesty and may be perceived as conceited or arrogant by others.

Low levels of modesty also correlate with what Welch calls "badge-buying", or a tendency to buy luxury brands. "So there's an element of pride in being able to have the latest and greatest, not just in the realm of technology, but in all other areas."

The researcher behind the study said it could have implications for technology companies looking to attract new consumers. Coming soon: a gadget with the tagline, "You're better than everyone else. Now prove it."

"Gadget buyers more assertive, even arrogant" [Reuters via ZDNet]
(Photo: Getty)

The starting point for comparison is 1996, when Congress deregulated the telecom industry, ostensibly to spur competition. Startups and cable companies quickly trammelled the telecoms' ability to dictate prices, but nobody emerged to take on cable.

Kevin J. Martin, chairman of the F.C.C., said in an interview that since 1996, when Congress increased competition in telecommunications, prices have dropped for many other services.

“We’ve seen the opposite occur in the cable industry,” he said. “The dramatic increases in pricing we’ve seen are one of the most troubling issues from a consumer point of view.”

In 2007, average monthly revenue for each Cablevision subscriber was $75, up from $65 in 2005, according to SNL Kagan, a research company. At Time Warner it was $64, up from $54.50.

The industry isn't changing its prices or practices because consumers aren't changing their habits.

“I work eight hours a day facing a computer. When I come home, the last thing I want to do is mess with another computer,” said Eric Yu, 24, a college student in San Francisco who pays around $80 a month for cable.

Mr. Yu said he watches only a handful of channels, including some in high definition like National Geographic. But to get them, he has to pay for a premium package. “I just pay the bill and try to forget about it,” he said. “It lessens the pain.”

Well, some are...

Evelyn Tan, 22, a friend of Mr. Yu, takes a different approach. She pays Comcast $33 a month for Internet access and does not get cable television — but she does watch TV programming.

In fact, she watches ABC shows like “Desperate Housewives” and “Gray’s Anatomy,” which are free on the Web. When she wants to watch shows or movies that are not readily available online, she says she easily pirates them. “I would not pay for cable TV at all,” she said.

A la carte programming isn't coming anytime soon, but the monopolistic anti-consumer juggernaut Verizon might provide some relief as it elbows its way into the television business. While Verizon is no better than its cable competitors, its arrival opens a brief window for competition by allowing consumers play one giant against the other to eek out slight savings on cable programming.

Of course, those slight savings might only bring your rates closer to what you were paying two or three years ago. Neither the Times nor the FCC think cable is worth the cost. What do you think?

Cable Prices Keep Rising; Customers Keep Paying [NYT]
(Photo: Getty)

Alpha Consumer, who was at the hearing, recounts:

[Susan Wones of Denver said one] of her Chase credit cards jumped from a 14.9 to 25 percent interest rate after she got close to, but didn't exceed, her $6,000 credit limit. She said the interest rate on a second Chase card similarly shot up after she went $15 over her credit limit in the middle of a billing cycle, even though the beginning and ending balances were under the limit.

The NFL does not allow one team, in the midst of the fourth quarter, to unilaterally move their end zone 20 yards in their favor just because they don't like the point spread. The rules are laid out before the kickoff, and the umpires enforce the same rules for both home and visiting teams for the whole contest. It's time for legislation at the federal level that tells the credit card industry, "Game Over" to unilateral, one-sided, rule changes.

As a registered Republican, it has typically been my philosophy that business and commerce flourish and perform better with minimal government interference. However, when an industry sector proves time and again that it is unable to police itself and behave and engage in fair and ethical trade practices, legislative intervention is required.

"credit card abuses faced by our middle class families add insult to injury ...charging interest on penalty fees is wrong...contracts are totally incomprehensible...if this problem is going to be resolved it is going to be resolved here in Congress...The fed is looking at disclosures, it's (looking is) endless."

The Credit Cardholders' Bill of Rights is a wonder-packed piece of legislation that would:

• Ban arbitrary rate increases
• Force creditors to provide 45 days notice of any rate increase
• Ban double-cycle billing
• Empower cardholders to set limits on their cards and ban over-the-limit fees once that ceiling is reached
• Ban excessive fees
• Ban lending to subprime borrowers
• Require creditors to mail bills at least 25 days before the due date, instead of 14 days as currently required
• Require creditors to apply payments first towards high interest items

The Credit Cardholders' Bill of Rights: Providing New Protections for Consumers [House Financial Services Committee]
Live blog from credit card hearing [U.S. PIRG]
Credit Card vs. Consumer [Alpha Consumer]
HR 5244 - The Credit Cardholder's Bill Of Rights [THOMAS]
Write Your Senator
Write Your Representative
PREVIOUSLY: How To Write To Congress
Credit Card Victims Muzzled, Ordered To Release Financial Histories Before Sharing Their Experiences
(Photo: the illustrious untitled13)

Let's first check out the professor's relevant credentials:

Professor Levitin's research focuses on financial institutions and their role in the consumer and business credit economy, including credit card regulatory and competition issues, mortgage lending, identity theft, DIP financing, and bankruptcy claims trading.

I called Citi and disputed the charge. The charge is a billing error under 15 CFR part 226.113(a)(1). Unfortunately my dispute did not compute in the Citi system. Because I was contesting an unliquidated amount of the charges, however, my case didn't fit into one of their eight dispute check boxes. (Note that Reg Z does not require that I know the amount of the error. See 15 C.F.R. Part 226.113(b)(3).) Finally, after speaking to a supervisor, I just decided to dispute the entire amount because that was the only way I could go forward with a dispute given the unbending parameters of Citi's computer system. I also contacted PACER to make sure that they had processed all my fee exemptions.

Fast forward to earlier this week. I still hadn't heard anything from Citi or PACER about the dispute's resolution. But, to my great surprise this month's Citi statement arrived. It says that I owe the full PACER balance and there's a finance charge tacked on for the disputed amount.

When I called Citi to inquire, I was told that I hadn't disputed the charge the previous month. This was in spite of fact that there were numerous notes about the nature of the dispute in my file. In other words, Citi had taken down all sorts of details about my dispute, but never actually processed that I was disputing the charge. Citi entered the dispute a month late, and only after I called to check up on it.

Well, Citi has now (supposedly) removed the finance charge and recorded the charge as contested. But Citi tells me that I need to submit documentation about the dispute or the charge will be reinstated. That means I have to send some 50 pages of court orders to Citi at my own time and expense for a merchant's mistake. The duty to investigate a billing error is Citi's. Nothing in Reg Z requires that the cardholder submit written documentation to the card issuer at my own expense. So why am I footing the bill? (Maybe there's language to that extent buried in my cardholder agreement...)

1. His credit report may take a ding from the late payment, something he has no control over and Citibank's CSRs are too incompetent to fix.
2. The surprise rate on the finance charge was 101.211%
3. After futzing with a compound interest calculator for half an hour, the professor couldn't figure out how Citibank was calculating the finance charge.
4. The late payment could trigger universal default provisions with his other creditors, causing a world of financial pain from Citi's mistake.
5. He can't close the account without losing his rewards or further dinging his credit score.

We take away one very simple lesson that every policymaker should appreciate: a renowned expert on credit cards is being harmed by his creditor and is practically powerless to fight back. Does this seem fair or reasonable to anyone?

My Very Own Risk-Based Repricing Experience [Credit Slips]

Card & Payments writes, "The report, dated this month and drafted by a lab hired by U.S.-based mobile phone maker Mobicom Corp., clearly shows the Citi logo on the front of the tiny handset." They say Citigroup tested a similar technology last year in partnership with AT&T, and that the report indicates the phone is for the U.S. market.
 
We can't think of a single way this could be used to steal money from a Citibank account. Oh wait, yes we can.
 
"Citigroup Developing A Citi-Branded NFC Mobile Phone" [CardForum] (registration required)
(Photo elements: Getty and Mobicom)

Other interesting findings from the study:

• Complaints rose by 40% from 2003 to 2006
• "Telemarketers generated the most, 178,079 out of 454,373 complaints.
• Billing rates for both wireline and wireless telephone providers were second, accounting for 117,875 complaints.

"Report Faults FCC on Complaint Tracking" [Associated Press]
(Photo: Getty)

One analyst is quoted as saying that just as consumers are getting fed up with false promises of "quality" service, companies are tightening return policies and policing fraud more stringently: "You'd have to go back a long way to see the kind of acrimony that you're seeing now."

The Internet is doing a lot to empower consumers who were formerly isolated, notes the article. They mention Dan Ortiz, who couldn't get anything resolved with Comcast last fall:

Then the 26-year-old bike messenger logged on to The Consumerist, a blog with more than 2 million unique visitors a month that's part of Gawker Media's digital empire of snark. [<— That's why we made the snarky comment above about the masks. -Consumerist] There he found a consumer vigilante's gold mine: a list of e-mail addresses for more than 75 Comcast executives and employees, along with instructions for launching what the blog calls its "executive e-mail carpet bomb."

Ortiz got lucky. After firing off a note copying all those names the day before Thanksgiving, he quickly had an inbox full of out-of-office replies, complete with contact information containing direct numbers. He called a Chicago manager at home, who put his lead technician on the case. Ortiz says a swarm of eight trucks showed up on his block. "Once you get ahold of [executives], they bend over backward for you," he says. He adds that Comcast sent him a tin of gourmet popcorn for Christmas and more than $700 in credits. Even better, he now has the mobile numbers for the lead technician in his area. "I'm not calling customer service ever again," he says.

...research suggests that much of the time it's not the companies offering rebates that are creating the problem. It's the customers. Their tendency to procrastinate and inability to follow multistep directions—albeit often explained in tiny print—result in as many as half of all rebates going unfulfilled. "It's their own inability to have self-control and say, 'I'm going to get this done,' " says Tim Silk, assistant professor of marketing at the University of British Columbia.

Because people tend to believe they will redeem the rebates and then they don't, they often pay more for items than they expect. "You see something that has a rebate associated with it, and you are overly optimistic that you will do all of what's required," says John Gourville, professor of marketing at Harvard Business School.

...promotion managers informed us that redemption rates tend to be "very low" when the reward is below $10, that rebates of $10 to $20 on a $100 software product range between 10% and 30%, and that redemption rates on consumer electronics average approximately 40%.

Why Shoppers Love to Hate Rebates [U.S. News & World Report]
Why we buy but fail to redeem? (PDF) [Tim Salk]
Managing Mail-In Rebate Promotions (PDF) [Tim Salk]
PREVIOUSLY: Rebate-Processor Parago Caught In A Lie
HOWTO: Rebate Whore
Redeem Rebates With Hard Work And Luck
(Photo: Mecha Wendy)

... what's the interest rate on the credit cards you're carrying? How about the default rate? Do you know what constitutes an event of default? What will trigger a penalty fee or surcharge? How much are those fees? If you're like most Americans, you probably cannot answer many or all of these questions.

The absence of this vital information has indebted millions of Americans and nourished the subprime meltdown. The professor concludes that under our current system, it is "virtually impossible to determine the potential costs of carrying a balance."

Credit cards' complex, non-transparent pricing structure also invites abusive fees and billing practices like late fees that do not correlate with either the balance or time a payment is late, universal cross-default and two-cycle billing. If you are among the nearly two-thirds of Americans who do not consistently pay off your card bills in full and on time, then you've probably been hit with some combination of these fees.

The complexity of credit card pricing helps explain the soaring growth of American credit card debt, now approaching $1 trillion. Credit card debt has strong correlations with consumer bankruptcy filings, and contributes to inflation and decreased savings rates and purchasing power for new goods and services. Dollar for dollar, as Ronald Mann of Columbia Law School has shown, people with credit card debt are more likely to file for bankruptcy than people with any other types of debt. Society as a whole ends up holding the bag for the widespread costs of skyrocketing credit card debt.

The Byzantine complexity of credit card pricing structures makes it impossible for people to possibly use credit cards intelligently and responsibly. No amount of increased Truth-in-Lending disclosure or consumer financial literacy education will change this. I qualify as a savvy and dedicated reader of financial contracts, but frequently I cannot calculate with certainty the costs of carrying a credit card balance, and my calls to card issuers' 800-number servicing lines have done nothing to clarify matters. The lack of straightforward, easily comparable and understandable pricing is a major factor in the growth of credit card debt.

Complex pricing of credit cards should be simplified [Chicago Tribune]
(Photo: Maulleigh)

The report describes what it calls a "plethora of inadequacies," including:

• inadequate inspections of manufacturers, noting that foodmakers, for example, are inspected about once every 10 years.
• A "badly broken" food-import system and food supply "that grows riskier each year."
• A depleted FDA staff, which is about the same size as it was 15 years ago despite huge growth in agency responsibilities.
• A workforce with a "dearth" of scientists who understand emerging technologies.
• An "obsolete" information-technology system, with handwritten inspectors' reports and "piles and piles" of paper documents that are in warehouses with no backup, including clinical trial data.

"These people were horrified by what they found," [said William Hubbard, a former FDA associate commissioner]. While the subcommittee was supposed to look ahead to where the FDA needs to be, Hubbard says it came away concluding that "it cannot even do its job now."

Mr. Stone and his daughter Montana began their testing nine months ago after Montana heard news reports about lead in children's jewelry. She asked her father about the safety of the jewelry she had received as favors at birthday parties.

Mr. Stone, 68, used a lead testing process that he usually uses on deer carcasses to test for bullets in New York. (It is illegal in some circumstances to shoot deer with guns rather than bow and arrow.)

Mr. Stone found that more than half of his daughter's jewelry tested positive. Soon, the Stones bought 75 more pieces of jewelry in stores near their home in Albany. Of those, 56 pieces contained more than 0.06 percent lead, the federal limit, and some were half lead, Mr. Stone said, adding that he plans to continue testing children's jewelry even after the recall.

Mr. Stone works in an agency of New York state government unrelated to the attorney general, but he took his test results to Mr. Cuomo's office last February. Mr. Cuomo then started an investigation of children's jewelry sold in the state, including additional testing.

"As an individual, it's like a voice screaming in the wilderness. It's hard to be heard," said Sally Greenberg, executive director of the National Consumers League, a nonprofit organization in Washington. "Bureaucracies are not really set up to listen to the public."

LTE is what you expect from a next generation of communications protocols: it can fit more information into less bandwidth than its predecessors. It is meant to reduce the complexity of wireless communication by converting both voice and data communications into packets using Internet Protocol. Loosely speaking, it competes with the WiMax standard being promoted by Sprint and Clearwire, a startup founded by Craig O. McCaw, the cellphone entrepreneur.

They key fact isn't anything technical here. LTE is the format that has been endorsed by the GSM Association, which coordinates the wireless standard used in most countries. And it has been endorsed by AT&T. What it means is that in a few years, you will be able to buy phones and switch them between the two largest wireless networks in the United States—Verizon and AT&T—as well as carriers in most of the world.

It could just be us, but Verizon seems a little less evil lately. The decision to open their network coupled with the move to GSM will undeniably benefit consumers - unless, of course, Verizon lets their usual profit motive mangle their seemingly good intentions.

Verizon's Real Move to Openness [NYT]
PREVIOUSLY: Verizon To Open Its Network To Any Compatible Device
(Photo: Maulleigh)

• Debix: For just $99 per year, whenever someone tries to open a line of credit, Debix will call and play your own pre-recorded approval message. Credit will be denied unless you enter the super-secret PIN.
• LifeLock: Maybe not the best of the bunch, LifeLock offers to place and preserve fraud alerts on credit files. CEO Todd Davis promoted his company's services by bandying his social security number about the internet, challenging anyone to defeat his company's software; a scammer successfully pried $500 from a check-cashing firm using his identity.
• TrustedID: For $12.95 per month, TrustedID places alerts and freezes on credit files. The credit reporting agencies recently began allowing consumers to request credit freezes for free - but they only last 90 days.

If the three privately-owned, for-profit credit reporting agencies want to keep the exclusive high honor of determining each American's credit worthiness, they should offer these defenses to every consumer, free of charge.

In ID Theft, Some Victims See Opportunity [NYT]
(Photo: jyesko)

Judy Cardin, section chief for weights and measures with the state, said that in the case of bulk coffee, the weight of the packaging materials was included when the price of the product was determined. The state had tested one-pound bags of Cameron brand coffee beans, which were found to be 3/100ths of a pound over the actual bagged content.

While that doesn't seem like much, it translated to an overcharge of 21 cents per pound, Cardin said.

"This is something that's difficult for the consumer to know it's even going on," she said. "How would someone know they were being overcharged? This is why weights and measures checks products to make sure consumers are getting what they paid for."

Cardin said Wal-Mart was fined $25,000 in January 2006 for overcharging for bulk coffee.

Wal-Mart hit with $89,705 state fine [Manitowoc Herald Times Reporter]
(AP Photo/April L. Brown)

"Delinquencies on these mortgages are likely to rise further in coming quarters as a sizable number of recent-vintage subprime loans experience their first interest rate resets," Bernanke testified.

"Weakness in the housing market will keep construction in a down trend," he said.

He also had some advice for those of you in mortgage meltdown land: "Get in touch with your lender because experience shows the earlier you do so you'll be able to resolve the matter."

Retailers should worry, too: "Indicators of overall consumer sentiment suggested that household spending would grow more slowly, a reading consistent with the expected effects of higher energy prices, tighter credit and continuing weakness in housing," Bernanke said.

He's a cheerful guy, isn't he? We like that about him. Maybe he didn't hear that everything is going to be ok because broke people shop at Walmart.

Fed Chair Warns Congress of Economic Slowdown [NPR]

The NYT has a cute quote from one such strapped homeowner:

"It used to be that if I wanted it, I'd just go and buy it and finance it," Mr. Whittey, 33, said. "I'm feeling the crunch, and my spending is down significantly."

"We used to go out to eat three or four nights a week," Mr. Whittey said. "Now, we don't go out at all."

Homeowners Feel the Pinch of Lost Equity [NYT]
(Photo:Marilyn Newton for The New York Times)

The Federal Communication Commission says people who use cellphone jammers could be fined up to $11,000 for a first offense. Its enforcement bureau has prosecuted a handful of American companies for distributing the gadgets — and it also pursues their users.

Investigators from the F.C.C. and Verizon Wireless visited an upscale restaurant in Maryland over the last year, the restaurant owner said. The owner, who declined to be named, said he bought a powerful jammer for $1,000 because he was tired of his employees focusing on their phones rather than customers.

"I told them: put away your phones, put away your phones, put away your phones," he said. They ignored him.

The owner said the F.C.C. investigator hung around for a week, using special equipment designed to detect jammers. But the owner had turned his off.

The Verizon investigator was similarly unsuccessful. "He went to everyone in town and gave them his number and said if they were having trouble, they should call him right away," the owner said. He said he has since stopped using the jammer.

Of course, it would be harder to detect the use of smaller battery-operated jammers like those used by disgruntled commuters.

An F.C.C. spokesman, Clyde Ensslin, declined to comment on the issue or the case in Maryland.

Devices Enforce Silence of Cellphones, Illegally [NYT]

The 375 pounds of seized illegal cheese included panela, queso fresco and queso oxaca varieties, the [California Department of Food and Agriculture] says. It was a significant find, the department says.

"Illegally produced is cheese is serious threat to public health," says CDFA Secretary A.G. Kawamura.

Arrests drain bathtub cheese sellers [Central Valley Business Times via BarfBlog]
(Photo: jthorvath)

Today's hearing will feature two panels. Four separate law firms will testify, along with the American Arbitration Association and Public Citizen. Join us as we struggle to interpret the Committee's legalese - which may prove just as futile as binding arbitration.
(Photo: xsparrowx)

2:00: Video Link
2:05: Today's commentary is brought to you by both Carey and Meghann in the hope that two pairs of ears will be able to decipher the Committee's legalese.
2:41: FINALLY! The hearing has been called to order.

2:43: The resolution on this feed is terrible. Someone, a Congresswoman - maybe Rep Sanchez (D-CA), is reviewing the history of arbitration.

2:44: Rep Cannon (R-UT) believes that arbitration provides protection for consumers because it's fairer (what?) cheaper, and faster. That's not right. Individual consumers don't have deep pockets, which is why class action waivers are unconscionable.

2:45: Arbitration is so complex and ingrained that this Committee can't possibly handle the topic today. Ok, Congressman, set up a webcam at the Hawk and Dove and we'll meet you there.

2:47: Nobody has proposed banning arbitration - just mandatory arbitration. Consumers would still have the option to forego a trial, but that's a choice they would be empowered to make, a choice they don't currently have.

2:49: Rep. Johnson (D-GA), sponsor of the measure is here, pointing out that people wouldn't voluntarily sign away other constitutional rights.

2:51: Arbitration carries its own anti-consumer charges. The fees to expedite a hearing can cost $500.

2:53: See Cannon, nobody wants to ban arbitration, they merely want to restore consumers' right to a trial.

2:57: One of the panelists is former Georgia Governor Roy Barnes, who is receiving quite the introduction from Rep Johnson - Governor Barnes helped save Georgia from the subprime meltdown and scared the Confederate flag from the Statehouse.

2:59: That was practically a eulogy.

3:01: Onto Laura McCleary of Public Citizen.

3:02: Arbitration allows "rulings that are silly, wacky, or contrary to law..." "They are flawed by design."

3:04: An eight month analysis of 34,000 cases of credit arbitration, data they could access only because California requires disclosure, showed that the 28 arbitrators who handled most cases ruled against consumers 94% of the time.

3:04: Arbitration involving businesses went against the consumer 99% of the time.

3:05: Credit card companies, specifically MBNA, are using mandatory arbitration to circumvent the Fair and Accurate Credit Transaction Act.

3:07: Onto Richard Naimark of the American Arbitration Association (AAA), who wants to find a balanced response to Congress' concerns.

3:08: AAA developed a basic code of conduct that makes arbitration slightly fairer than, say, a Gitmo tribunal. Consumers can have access to counsel, arbitrators must disclose financial interest.

3:10: He's arguing that only 2% of cases go to court, so consumers don't "get their day in court" anyway. The cases don't go to trial because they're settled, not arbitrated, usually because the parties think a jury will rule against them.

3:11: Gov Barnes is branding mandatory binding arbitration as a "contract for a crime." Payday lenders use binding arbitration to circumvent the courts.

3:12: He's challenging Cannon - nobody thinks it's fair to go to arbitration to prove that they are the victim of a crime.

3:13: Arbitration provides a small remedy but does not condemn the criminal action as illegal.

3:14: There are more payday lenders than McDonald's. Frightening.

3:15: Barnes doesn't want people to use arbitration to hide from criminal acts - one of the defenses raised is that if Congress didn't want arbitration used that way, Congress would act.

3:18: Onto nursing homes.

3:19: News to us: Shaving cream softens feces.

3:20: Nursing homes = Abu Ghraib.

3:21: We're struggling to see how this relates to binding arbitration.

3:21: Here we go - families are presented with 50-60 page disclaimers before their loved ones can be admitted.

3:22: Most people don't realize they are waiving their litigation rights to gain admission.

3:23: Because they were offered "the opportunity to sign," courts accept the agreements as valid.

3:23: The costs for arbitrating nursing home issues are significantly higher, as are the rewards.

3:23: Final thought: Mandatory binding arbitration kills grandparents.

3:24: Arbitration dissuades people from pursuing very valid claims. If a credit card company withholds a couple bucks, you won't sue, but if you can't form a class for a class action, the company walks away with oodles.

3:25: Appellate courts have been bench-slapping down such agreements as unconscionable.

3:26: Gov. Barnes: "I got mayhem and murder in the streets." Apparently, no one cares about stopping illegal payday lending in the criminal courts, and arbitration is keeping it out of the civil ones.

3:27: Illegal practices flourish when individual consumers can't pursue their claims as a class.

3:29: Conservatives should be all over this bill. They're all about returning power to the local level, empowering local decision makers. That's what juries are all about.

3:32: Cannon will have another chance to make his point. So far, none of the panelist agree with him. Apparently, soldiers need payday lenders.

3:34: Cannon is picking a fight with McCleary, wondering how much weight to give to her damning study. 'We can't trust any consumer who says "my widget broke"'

3:35: If you arbitrate, you are wrong. "Credit cases are going to against the person who didn't pay their bill."

3:37: McCleary can't convince Cannon because arbitration data isn't readily available - nobody discloses, so Cannon is technically right in saying that her data is narrow, the category is narrow, and the study as a whole is narrow. "The implications are not narrow."

3:38: Maybe if AAA wanted to part with their data, they could produce a story as wide as Cannon.

3:40: Point proven: according to the AAA, 60% of arbitrations are settled before they can reach arbitration - so not every arbitration results in a hearing before an arbitrator. Might as well kick things back to the courts.

3:40: Johnson wants to know how AAA gets their business. (Hint: consumers have no choice!)

3:41: "Unions and businesses primarily" refer to AAA.

3:41: Most arbitrators are lawyers, but not judges. AAA claims that there's no bias in selecting arbitrators, that they look for "senior, respected members of the community."

3:43: There is no court reporter in arbitrations, which means there's no practical way to file an appeal.

3:44: There is a limited right to discovery, as controlled by the arbitrator - the arbitrators who rule against consumers 90% of the time.

3:45: The word right here is fairly creatively used.

3:45: The first panel is excused. Onto the second panel.

3:49: Deborah Williams is 64 and bankrupt thanks to binding mandatory arbitration agreement.

3:49: Her dreams of owning a Coffee Beanery franchise turned to nightmares. The binding agreement required her to purchase all sorts of unnecessary equipment, and a Pepsi contract.

3:51: The average Coffee Beanery lasts three years, and costs $375,000.

3:51: Maryland's AG found that the Coffee Beanery committed fraud - but she was forced to arbitrate.

3:52: The arbitrator had significant financial ties to the Coffee Beanery, and had ruled in their favor repeatedly. The Coffee Beanery's own lawyer doubled as an arbitrator.

3:53: The Coffee Beanery dragged discovery out for over 7 months, because the company knew she couldn't pay the costs, and forced her and her layer to fly to Michigan - 500 miles away - four times for 11 days of hearings.

3:53: The cost of arbitration was over $100,000 - and the arbitrator found that the Maryland AG was wrong, there was no fraud, and that she had to pay penalties to the Coffee Beanery, including their attorney's fees.

3:54: She has lost over $1.5 million to the franchise.

3:55: She is borrowing money from her family just to file for bankruptcy - and even then, she'll need to pay the Coffee Beanery franchise fees over the next 15 years until her contract expires.

3:57: Onto Cathy Ventrell-Monsees of the National Employment Lawyers Association (NELA)

3:57: "Companies from Circuit City to Hooters To Halliburton" use arbitration to limit employee suits.

3:58: Employees are required to sign these agreements despite any laws that prohibit mandatory binding arbitration agreements as a condition of employment.

3:59: Wow, Cathy almost looks like she's going to cry.

3:59: Arbitration is a "modern version of separate and unequal justice for employees."

3:59: "Arbitrators do not need to follow the law. THEY DO NOT EVEN NEED TO KNOW THE LAW."

4:00: Companies continually use the same arbitrators that rule in their favor. As a result, the arbitrators have a direct financial interest in ruling in the companies' favor.

4:00: Pfizer has a 97% success rate.

4:01: Halliburton has an 82% success rate. They need to bum Pfizer's arbitrators. We wonder how Verizon's dinosaur-eating lawyers would fare.

4:02: Onto Peter Rutledge of the The Catholic University of America.

4:04: Arbitration lowers costs for companies, which is passed on in the higher wages, better share prices and lower prices. Thank god.

4:05: "Imagine what the increase in costs would be if arbitration was eliminated altogether." No, no, don't make us imagine the costs! Oh, wait, nobody is saying arbitration should be eliminated! Just that the constitutional right to a trial should be restored.

4:05: "Where are these people going to end up if arbitration is not available?" Court, good professor. They will end up in court, where they belong.

4:06: Rickshaw justice for the many is the alternative? That sounds awesome. That guy was nuts.

4:07: Onto Theodore G. Eppenstein of Eppenstein and Eppenstein - did he really go out to find another Eppenstein? Suspicious.

4:08: He wants to talk about arbitration in securities disputes - something we know absolutely nothing about.

4:09: This guy loves his resume. Enough already.

4:09: "Securities arbitration does not work for the investor."

4:10: The poor guy has been arguing about this for 20 years.

4:11: "The public pool [of investors] isn't pure." Arbitrators are pandering to keep their jobs.

4:12: This guy tells you he's going to say things a lot.
"Let me tell you something."
Ok.
"I'm going to give you examples."
Well, um. Ok.

4:13: He has data. 58% of the time, the customer goes home with nothing except a bill for arbitration.

4:13: Pfizer laughs at the industry's 58% success rate.

4:14: There is a place for arbitration, but it needs to be run independently. Great idea.

4:16: Geekybiker is absolutely right. If you haven't already, tell Congress to support the Arbitration Fairness Act!

4:18: The Chairwoman is sorry for Coffee Beanery woman's experience: Do you feel like you were ripped off? Um, duh.

4:19: Deborah is amazed to hear the professor and the AAA talk about the flaws in arbitration and wants to know: "What are you going to do for me? I lost everything. What are you going to do for me?"

4:21: Chair to the professor: if your data shows that businesses don't prevail, why would they chose to arbitrate?

4:22: According to the prof, a ten-year-old study has useful anecdotes. One corporation spent $1 m winning a case, and legal fees are the root of all evil. Lawyers are such great villains.

4:24: Chairwoman politely says, "You're on crack."

4:24: Consumers' win rate is falling, as is there rate of recovery. Maybe that has something to do with it? Maybe? Bueller?

4:26: The professor is rightly pointing out that some businesses have a higher win rate at trial - but, when they end up in court, the trial is overseen by a judge bound by the law, and both parties have a right to appeal.

4:27: This should be settled with KY wrestling. No one's data is good enough for the other.

4:28: Eppenstein angry. Testimony misrepresented. Rarr, Eppenstein.

4:29: The very threat of arbitration depresses settlement offers.

4:30: Onto Cannon's last stand.

4:30: Cannon wants to know if stockbrokers cheat their investors, won't the investors take their money elsewhere?
Eppenstein: 'If they have any money left!'

4:31: NELA has no issue with a waiver for unions because unions handle arbitration responsibly.

4:32: Not that it's relevant, but we have discovered that Chris Cannon has 8 (eight) kids. EIGHT!
He's never spoken to them at length.
Along with the rest of the planet.
He's like a metronome of bullshit.

4:34: He's now attacking Coffee Beanery woman. It's her fault she got screwed. According to him, "we live in a world of information." If Deborah had only done her homework, she could have kept the $1.5 million now lost forever.

4:35: Buzzers sound in the distance. Floor votes. The end is near.

4:39: Johnson is defending Coffee Beanery woman, implicitly calling Cannon a nut.

4:40: According to Ventrell-Monsees, her story is typical.

4:41: Epperstein says the public never hears about the egregious violations, the systemic raping of justice caused by mandatory binding arbitration.

4:42: Overheard on the video feed from a mystery person: "Unbelievable. I think I'm the only like regular joe blow kinda guy here and I am outraged." @Godai heard a slightly different version.

4:42: We didn't think it possible, but mandatory binding arbitration is even more frighteningly horrific than we knew. God help us all. The hearing is adjourned.

The Sun-Sentinel analyzed state inspection reports from 2004 to 2006. The analysis found 580 of more than 2,500 stations in South Florida had at least one pump dispensing more gas than customers paid to purchase, while 477 provided less fuel than they should.

"If you go to the grocery store and buy a gallon of milk, you expect a gallon of milk," said Jason Toews, co-founder of Gasbuddy.com, a consumer advocacy site that tracks gas prices. "The same goes for gasoline."

It's unclear if Florida's pump failure rate is higher or lower than in other states. In 2003, a national survey by the National Conference on Weights and Measures, found a 6 percent failure rate on gas dispensers tested in 2002. South Florida's failure rate in recent years mirrors the nation.

34 percent of area gas stations fail pump tests in last three years [South Florida Sun-Sentinel]
(AP Photo/Matt Rourke)

Aurora's Platteville farm contains 1,075 milking cows on 500 acres. While Aurora doesn't have a specific percentage for how much of its cows' diet comes from grass instead of feedlot grain, its goal is to have pasture comprise at least 30 percent during the typical May through September pasture season, said Clark Driftmier, Aurora's vice president of marketing. Aurora milks its cows two or three times a day.

By comparison, Jim Greenberg's central Wisconsin dairy is considered large for a family- run farm with 500 cows on 1,000 acres of pasture. His cows receive 70 percent of their diet from grass during grazing season, which typically lasts from the first of May to the first of November. He milks his cows twice a day, saying three times a day would move them off the pasture too much.

Aurora produces the same amount of milk as 300 average Midwestern dairy farms, said Greenberg, who employs five family members and eight others.

Since Aurora started, "I've heard more people voice skepticism about organic milk and how well the standards are enforced," he said. "They say if it's going on at such a large scale, people lose confidence whether it's really organic."

For Aurora's Retzloff, that criticism over scale goes to the heart of the controversy, and he says the company doesn't get any credit for the benefits its size can bring. He points to Aurora's efforts to recycle the farm's plant and water waste, use wind power at all of its farms and offices, and offer bilingual classes, health benefits and subsidized housing for farm workers.

Huge dairy doesn't fit organic image [Rocky Mountain News]
(AP Photo/Steven Senne)

AT&T doesn't have the cojones to appear before the committee, so the heavy task of defending the industry will fall solely to Verizon CEO Lowell McAdam. Facing off against the industry, Minnesota Attorney General Lori Swanson - who sued Sprint for illegally extending contracts - and representatives from Consumers Union, the Public Service Commission of West Virginia, and a researcher from George Mason University.

Set your phones to vibrate and keeping hitting refresh to watch as the Senate asks Verizon: "Can you hear me now?"
(Photo: KB35)

09:50: The video feed is alive and well.
10:05: C-SPAN was going to cover this hearing, but apparently the Attorney General confirmation hearing is more important.
10:09: "Meeting to order!" "Let me say two things: I will have to leave soon." Looks like Amy Klobuchar is going to chair this meeting. Good, we like her style.

10:10: @Papa Midnight: Locked phones might make an appearance, but the Senate cares more about other practices. Even our favorite bill of the 110th Congress calls only for a FCC study on unlocking.
10:11: Over 230 million Americans in a country of 300 million have cellphones. 18% of us, present company included, use their cellphone as their sole number.
10:12: We think Rockefeller (D-WV) is talking, one of the co-sponsors of our favorite bill, The Cell Phone Empowerment Act.
10:13: He's from West Virginia, where they don't have good coverage, which is why a requirement for accurate maps made it into the bill.
10:13: Rockefeller: our limited regulatory system is inappropriate when only four companies control the landscape.
10:13: And he's attacking the industry's deceptive billing, where the industry charges 'regulatory fees' to cover ordinary operating costs.
10:14: "If the industry was so competitive, one would have expected these deceptive charges to have evaporated."
10:14: "Sounds more like collusion than competition to me." Yes, yes it does.
10:15: Rockefeller is attacking the industry's assertions that the lack of complaints to the FCC indicates satisfaction with service. Most consumers know that a complaint to the FCC won't go very far.
10:17: Ok, we can't read nameplates today. This looks like Byron Dorgan (D-ND), but sounds like someone else. He has a story about how a cellphone once rang loudly in the oval office. Haha, irrelevant!
10:18: Ok Papa Midnight, he just mentioned that locking is only done in the U.S., and is something the Senate needs to take a look at as well.
10:19: The Senator is accurately tying Verizon's latest rejection of NARAL's text messages to net neutrality, and wants to hold a hearing just on that. Excellent.
10:21: Klobuchar is here, welcoming Minnesota's AG. Apparently, the cellphone industry pockets $100 billion per year.
10:22: She's painting the cellular landscape with remarkable accuracy: consumers enter into restrictive contracts without proper information, and can't cancel without even when the service is subpar.
10:23: She's casting her legislation as the modern-day solution that holds short of imposing new regulation, aiming only to give consumers the ability to find the best service at the best price.
10:24: Even with AT&T and Verizon's pro-rated ETFs, only 55% of the market is covered, so the Cellphone Users Bill of Rights - the other name for the Cell Phone Empowerment Act - is still necessary.
10:25: "If the cellphone companies are advertising who has the least amount of dropped calls, consumers have the right to know just where those dropped calls are."
10:27: "Competitive markets work best when consumers have access to the best information."
10:28: Yay! Senator Stevens is here.
10:28: NO! The Senator dropped his statement into the record without reading a word.
10:29: Jim DeMint (R-SC) is attacking the government. His office, like all Congressional offices, gets thousands of complaints each day, which shows that the federal government can't handle complex things (like a war in Iraq?)
10:30: DeMint thinks nothing beats a competitive market, which apparently, is provided by four cellphone companies that all follow the same practices. Still, "there is no compelling reason for the government to get involved."
10:30: 150 companies are competing for our business? Oh really, Senator? Name 15 of them.
10:31: "Consumers really are empowered." Um, no, they are not.
10:32: "Government regulation can't keep up with this dynamic industry." He's citing trial periods and prorated ETFs. Great, that's called staying ahead of the game so windbags like you can say, 'see, industry already did it!'
10:33: According to DeMint, companies are embracing unlocked phones. Hear that, iPhone owners? By the way, how's that 1.1.1. firmware update written at AT&T's behest working out for you?
10:35: Oh good, DeMint is done so we can stop banging our head against the desk and go get some ice.
10:36: McCaskill has had and hated: Sprint, Nextell, AT&T, and Verizon.
10:37: Uh oh, she didn't buy a text messaging plan for her three teenagers and didn't realize that they could receive text messages without her consent. This, from a member of the Senate Commerce Committee.
10:38: Ha, she's going on a good government bent and plans to introduce a bill banning people from taking cash to stand on line for Committee hearings. Lobbyists pay people big bucks to stand in line for a hearing so they're guaranteed a spot in the room. The lines are one of the best ways to figure out which hearings deal with big bucks. This hearing had a long line.
10:40: Damn! Line standers get $60 an hour! If you could stand in line from 9-5 each day, that works out to $120,000 per year. But we digress...
10:44: Senator Cantwell is talking. We doubt her consumer credentials. She used to be a VP of Real Networks, notorious makers of the insidious crapware Real Player, perhaps the most consumer unfriendly piece of multi-platform junk floating around the internet. At least she thinks that ETFs are harsh and unnecessary.
10:46: Cantwell is arguing that the Washington State AG receives more complaints about cellphones than anything else, especially with regards to coverage, disclosure, and billing errors.
10:47: 'I'm not convinced that the industry is self regulating.'
10:49: Another Republican, John Thune (R-SD) is here. Let's see if he agrees with DeMint's pro-industry anti-consumer views.
10:50: Tough to tell. He's looking forward to the panelist's testimony.
10:51: He agrees - $60 is a lot to stand on line.
10:52: We have no idea who is talking. Balding with glasses? Can you identify this Senator?
10:53: Glasses is taking us back to the first regulatory measures, which targeted the industry for its interstate nature.
10:53: He's wondering if there is enough competition, arguing that four or five competitors is necessary. Even in rural areas, he says, there are 3.6 providers, which he thinks is enough. We want nothing less than DeMint's 150 competitors IN EVERY SINGLE MARKET.
10:54: Pro-industry Senators are hellbent on proving that customers are satisfied because they aren't complaining to the federal government. Our site's existence apparently isn't enough to sway them, so we will add to our list of recommendations: call you Senator!
10:56: He's now railing against federal price controls, an idea nobody up until now has mentioned or endorsed. But yeah, Communism bad, competition good.
10:57: Ah, that was John Sununu (R-NH).
10:58: Senator Vitter (R-LA) is going Stevens on us and skipping his opening statement so we can get to the panelists.
10:59: Lori Swanson, the MN AG is talking about a Minnesota resident who was lied to by her cellphone carrier. She was told she could cancel anytime, but charged a $175 ETF when she tried to cancel. So sad and not at all uncommon.
11:00: 4 companies control 80% of the market.
11:01: Finally, the point we have wanted to hear: ETFs bear little to no resemblance to the costs incurred by carriers when they lose a customer.
11:01: "In a fair transaction, there is a meeting of the minds." Nobody thinks that cellphone contracts are fair.
11:02: The BBB receives the most complaints about the cellphone industry, which beats out 3,600 other companies.
11:03: @Red_Eye, there's no verbatim transcript, but the Commerce Committee website will have a link to the archived audio.
11:05: Verizon's CEO is just going to talk, submitting his remarks for the record.
11:06: He's praising the Clintons for establishing a "light touch" regulatory system, where companies earn customers' business every day.
11:07: Verizon is always focused on what they could do better, which is why they talk to their customers every day. Oh, Verizon, it's been so long since we've had a heart-to-heart. Are you really talking to all your other customers? You don't love us anymore.
11:08: The ultimate authority is in the customer's hand. Ha, right. We can apparently go to one of seven companies? What happened to 150?
11:09: He implores the Committee: "Let us compete!"
11:11: Patrick Pearlman of the West Virginia Public Service Commission makes a compelling argument that wireless carriers should be regulated as if they were landlines now that many consumers are using them as their sole number.
11:12: To back up his point, he mentions that wireless companies, like their landed brethren, are trying to get cash out of the Universal Service Fund.
11:14: Consumers Union bringing the sarcasm: "We're sure the timing of AT&T's announcement yesterday had nothing to do with this hearing."
11:16: CU is attacking the premise of the ETF. The iPhone doesn't receive any carrier subsidy, so what fee is the carrier recovering when charging an ETF? Prorating an unreasonable fee is still unreasonable.
11:17: Ah, good - he's attacking carriers for crippling their phones (ahem VERIZON!) Specifically, he's mentioning that Blackberries have mapping software that carriers block so consumers will be forced to use the carrier's software.
11:18: 'If they're so competitive that they don't need oversight, they can't say 'here's a fee for canceling, here's a fee for adding service, they can't throw all these things in the way of competition.'
11:23: Mike Higgins, who represents a rural carrier, thinks rural carriers are great.
11:24: He thinks the FCC should handle all regulations, realizing that big carriers aren't the same as small ones. If you guys are so great, then you shouldn't worry about ETFs, junk fees or locked phones, right?
11:26: He supports unlocked phones because no handset maker will build his company a phone. "Apple won't build an iPhone for Central Texas Tech."
11:27: We're onto Jerry Ellig of the Mercatus Center at George Mason University. The way this guy sits brings one word to mind: swashbuckler.
11:28: He's not failing us! But he also doesn't think that new regulations per se will improve his horrible experiences as a cellphone customer.
11:29: "We have to do more homework. (What would you expect an academic to say?)"
11:30: He's going to try to answer three questions:

• Is there a systemic problem that regulation can solve?
• Are there effective alternatives?
• What are the unintended consequences?

Alpha Consumer explains:

You can't reduce your chances of a random audit. But for audits in general, there's a lot of stuff you can do.

For a normal tax return, file an accurate return, and most of the time you won't get audited. Get a reputable return preparer. If someone says, "Don't worry, you won't get audited if your expenses are below this amount," that is probably not someone you want to work with. Keep records. If you have any cash transactions, keep records. If you make a mistake, and you discover it, you can file an amended return before any audit starts. If you make a mistake, it is just that most of the time. But if you go into a return thinking, "Maybe the IRS won't catch me," and you don't report 10 or 20 percent [of your income], that's not the way to do it if you want to avoid an audit or more than an audit later.

In general, small-business owners and self-employed people have a much larger likelihood of getting audited, because W-2 wage earners have taxes withheld from their returns.

Other "stuff" that may pop you out of a computer and trigger an audit includes a situation where you have $50,000 in income and have reported losses of $100,000, wiping out all the income reported. Or, a taxpayer showing $60,000 in income with a $45,000