Consumerist

INVESTIGATIONS

Goldman Riskier Than Citigroup

By Ben Popken 5.6.10

Bond markets slammed Goldman Sach this week, making the firm pay more for cashizzle then even the bailed-out Citigroup. Goldman’s yield rose to 2.79 percentage points over Citigroups’ 2.29. At the end of March, before the legal and regulatory headaches began, Citigrouop’s spread was wider than Goldman’s by .45 percentage points. Higher yields on debt usually indicate a higher risk of default or other negative credit events. Concerns continue to mount over how long and how deep the firm will be tainted by the SEC’s civil lawsuit and the investigation by federal prosecutors, and what other skeletons the scrutiny might shake out.

Blankfein’s Bonds Are Riskier Bet Than Pandit’s: Credit Markets [Bloomberg]

mortgages

Did Paulson Violate The Fair Credit Reporting Act?

By cwalters 4.27.10

When the SEC announced its fraud complaint against Goldman Sachs, people noted that the penalties involved would involve money, not jail time. But an attorney writing for seekingalpha.com argued over the weekend that John Paulson, the hedge fund manager who worked with GS to create “synthetic derivatives,” accessed FICO scores to create his financial product and therefore violated the Fair Credit Reporting Act (FCRA)–which could mean a penalty as high as $1 billion, and even jail time if the FTC or Justice Department decides to go after him. [More]

credit cards

Prison Inmate Charged With Running Major Department Store Credit Card Scam

By cwalters 4.5.10

Seven Ohio men between the ages of 27 and 50 were arrested last week and charged with conspiracy to commit wire fraud, after an investigation found evidence that they were gaining access to strangers’ store-issued credit cards to buy and resale merchandise. The group’s leader, who was also charged, is a 33-year-old inmate at Fort Dix, NJ. Investigators think he initially met one of the Ohio men in prison. [More]

packaging

Investigation Reveals Widespread Fraud In Seafood Packaging

By cwalters 3.30.10

It’s a common, legal practice to protect seafood with a layer of ice before packaging it up for retail sale. It’s also apparently a common practice to add that ice into the total weight of the seafood, and in some cases to add more ice than necessary just to bump up the total weight, which isn’t legal and which defrauds the consumer. The National Conference on Weights and Measures recently investigated seafood packaging in 17 states and pulled more than 21,000 packages of seafood from store shelves, noting that in one particularly bad case ice made up 40% of the total listed weight. [More]

ftc

FTC Catches 30% Of Funeral Homes Violating Consumer Laws

By Laura Northrup 3.25.10

Thanks to the Federal Trade Commission, consumers have certain rights when it comes to funerals. Consumers have the right to purchase only the products or services they need, to use the services of a funeral home while declining embalming, to see written price lists before they begin to make decisions, and the right to purchase a casket or urn elsewhere. An undercover FTC investigation, however, discovered that in 30% of the funeral homes they visited, at least one part of the Funeral Rule of 1984 was violated. [More]

shopping

Walmart Wants To Know Who Made The Racist Announcement Over Their PA System

By cwalters 3.17.10

This past Sunday, a male voice came over the public-address system at a Walmart in New Jersey and said, “Attention Walmart customers: All black people leave the store now.” Understandably, customers and employees were pretty offended. One of the shoppers made sure that store management and local media outlets were made aware of what happened, and Walmart apologized–over the PA system, fittingly–on Sunday evening. Store officials say they’re now reviewing security footage to find out who made the announcement. [More]

celebrity cruises

CDC And Celebrity Cruises Can't Figure Out Why Passengers Keep Getting Sick

By cwalters 3.16.10

Remember the diarrhea nightmare vessel that sickened 450 passengers a few weeks back? Once it got back home, Celebrity Cruises delayed the next trip by a day so that it could perform a “full cleaning.” It didn’t help much, though: CNN says that about 10% of passengers on the next sailing got sick, and about 19% of passengers on the current sailing are now sick. [More]

toxic assets

Reporters Buy Up Toxic Assets

By Ben Popken 3.15.10

To dig right into the meat of the story they’ve been tracking for over a year, NPR Planet Money reporters David Kestenbaum, Chana Joffe-Walt plunked $1000 down and bought up a securitized pack of Countrywide mortgages. At one point it was worth $75,000. Will the homeowners pay their mortgages and the reporters make their money back or will too many houses get sold at a loss and the asset implode? Follow along and find out. [More]

ftc

FTC Shuts Down Multi-Million Dollar Cramming Business Inc21

By cwalters 3.2.10

Inc21 supposedly sells web hosting and other Internet-related services, but the FTC says that in reality it contracted with offshore telemarketers who helped it cram charges onto unsuspecting customers’ phone bills, earning $19 million over the past five years. Customers who complained about the charges said they were either never contacted in the first place, were promised a free trial, were told that the telemarketer was just verifying business information, or explicitly refused Inc21’s offer and were charged anyway. [More]

rich dad poor dad

Is Rich Dad Robert Kiyosaki Getting Rich Off Suckers?

By Ben Popken 2.24.10

If you’re looking to get rich, a CBC Marketplace hidden camera investigation reveals that Robert Kiyosaki’s “Rich Dad” seminars should probably be avoided. They attended a $500 3-day workshop and found it was little more than some very poor real-estate investing advice – tricks like “lease options,” “pre-foreclosure” and “buy 10 condos, get 1 free” – sprinkled on top of heavy upsells into the $12,000-$45,000 “advanced” training courses. In a new twist, the instructor tells everyone to go raise their credit card limit by $100,000 so they will have the money they need to start investing in real-estate, and even gives them the scripts to do it. [More]

customer service

30 Worst NJ Toll Collectors

By Ben Popken 2.23.10

Never give a New Jersey toll collector pennies. Never. Ever. Not unless you want to risk them being thrown in your face. That’s the lesson I learned from reading the 30 pages of customer complaints The Smoking Gun gathered by doing a Freedom of Information Act request on the State of New Jersey. And in between the suggestions to stay flashing suggestions, threats of strip search and violence, that state is very altered indeed. [More]

florida

Cash4Gold Stops Suing Whistleblowers; FL AG Launches Investigation

By Ben Popken 2.16.10

The lawsuit stemming from our post from last year, “10 Confessions Of A Cash4Gold Employee,” is all over. At the beginning of February, Cash4Gold stopped suing the two ex-employees Michele Liberis and Vielka Nephew. And just this Sunday, the Florida Attorney General announced they’ve opened a civil investigation into Cash4Gold. It seems you can still speak truth to power after all. [More]

california

State Investigators Find All Sorts Of Dirty Tricks At Mercury Insurance

By cwalters 2.8.10

This summer Californians will be able to vote on Proposition 17, which if passed will allow insurers to bypass some legal restrictions on how much they can charge for auto insurance. Mercury Insurance Group is a big proponent of the proposition, but maybe that’s because it’s been possibly sidestepping the law in recent years anyway. Hey, making it legal will just prevent another state report like the one Carla Marinucci at the San Francisco Chronicle obtained, which contains findings that Mercury “has engaged in practices that may be illegal, including deceptive pricing and discrimination against consumers such as active members of the military and drivers of emergency vehicles.” [More]

readers

Beware Secret Surcharges On USPS Mail At UPS Stores

By Ben Popken 12.21.09

UPS lets you send USPS Priority Mail at their walk-in locations, but a New York Times investigation found Manhattan locations charging up to 140% more for the favor. [More]

SCAMS

Homeless Charity Revealed As A Fraud

By cwalters 11.24.09

If you live anywhere in the NYC area, you’ve probably seen a “United Homeless Organization” table on the sidewalk, staffed by a volunteer who looks homeless himself. (If you don’t live here, imagine a year-round, homeless Salvation Army Santa.) If you thought the set-ups looked a little sketchy, you were right: the UHO is a “sham,” according to NY Attorney General Andrew Cuomo. [More]

rainforest

Gibson CEO Takes Leave Of Absence From Rainforest Group While Feds Investigate Imported Wood

By cwalters 11.19.09

When agents raided Gibson Guitar’s manufacturing facility earlier this week, some articles pointed out that the company’s CEO Henry Juszkiewicz was on the board of the Rainforest Alliance, a group that certifies businesses to sell their goods under an environmentally sustainable label. Now the group has postponed its annual certification of Gibson Guitars, and Juszkiewicz is temporarily stepping down from the board.

fast-food

Wow, Wendy's Really Does Take It Seriously

By cwalters 11.17.09

We’re always making fun of companies who overuse the phrase “taking it seriously,” but it looks like Wendy’s isn’t playing around. An anonymous tipster found a chicken bone in his Wendy’s sandwich, and got taken very seriously when he reported it.

recalls

Toyota Says It's Not Hiding Anything In Runaway Cars Investigation

By cwalters 11.5.09

One of Toyota’s execs said today that the company isn’t covering up information about its suddenly accelerating cars, but the Department of Transportation doesn’t seem to agree.

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INVESTIGATIONS