States give consumers more protection

Iowa moves ahead on consumer rights bill
Iowa would join every other state in allowing consumers to individually sue companies for fraud under the state consumer protection law. But the bill is criticized for too many exemptions: insurance companies, banks, lawyers, cable TV providers, doctors, veterinarians and architects.The governor still must sign the measure.
Des Moines Register

Now, how do you pay for college?
The Illinois state treasurer is trying to recoup money parents had invested in a state-sponsored college savings program. One investment option lost $85 million last year.
CBS 2 Chicago

New Jersey plan would require greater notice on debt
A bill in the New Jersey General Assembly would require debt collection agencies in the state to provide debtors with additional information about their accounts, a copy of the Fair Debt Collection Practices Act and would increase fines per violation to at least $10,000.
InsideARM

Consumer news across the country

Phone scheme hits Idaho
Police are warning about a new round of phone calls that promise big winnings from a sweepstakes prize. The caller introduces himself as an employee of the Federal Bureau of Consumer Protection Affairs, a made-up agency. (KPVI-TV)

Insurance company sued over health plans
A national insurance company is being sued for selling fixed-payment health plans that, according to plaintiffs, violated minimum standards in the State of Washington and had not been authorized by the state. (Seattle Times)

CR Health.org has a report that can help you tell whether your health plan provides good coverage.

Connecticut company recalls sprouts
Consumers were warned that sprout products produced by Amalgamated Produce Inc. (API) of Bridgeport, Conn., are being recalled.  A sample collected from a supermarket in New York tested positive for Listeria monocytogenes, an organism which can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems.  The sprouts have been carried by major grocery stores in Connecticut. (Connecticut Department of Consumer Protection)

Consumer Reporter has more on food safety.

Consumer gouging cases settled

Tennessee settles gas station pricing complaints
The attorney general’s investigation began last fall after consumers complained that some gas stations unfairly raised gas prices after hurricanes shuttered Gulf Coast oil refineries and left several Southern states without enough gas.
Knoxville News Sentinel

South Dakota warns of fake lottery
A new e-mail come-on gives the appearance of having been sent by the South Dakota State Lottery. Consumers are told that they are the lucky recipient of a $500,000 cash drawing from the "South Dakota Web Lottery." But the e-mail doesn't come from the lottery and there is no web lottery.
Marshall County Journal

Illinois protection on gas utility service
Gov. Patrick Quinn has signed a law that regulates alternative natural gas suppliers' marketing to protect consumers from misleading advertising and excessive termination fees.
Crain's Chicago Business

Texans battle over homeowners' insurance
Saying Texas homeowners pay the highest insurance premiums in the nation, State Senate Democrats blocked action on a major insurance bill. They are seeking changes, including one that would require insurers to get prior approval from the state insurance commissioner before increasing rates. Currently, companies can raise rates simply by notifying the insurance department.
Dallas Morning News

You can get advice on how to buy homeowner's insurance from the CR Money Blog.

Consumers cope with disaster recovery

Tennessee tornado victims warned about repair ploys
Consumers who need repair work done quickly following a natural disaster are often targets of faulty construction work or price gouging, according to Tennessee consumer protection officials and the attorney general’s office. They urged victims of last week’s storms, which killed a mother and her baby and injured dozens, to check licenses and backgrounds of contractors before they commit to a project.
(Murfreesboro Post)

Alabama hit with flood damage
More than 100 roads were closed in Geneva County in Alabama as of the weekend. Hundreds of homes have been damaged by flood waters. And state officials warned businesses and homeowners to watch out for potential gougers.
(Dothan Eagle)

How to prepare for emergencies
You can get ready before a disaster strike: visit Consumer Report’s emergency guide
for advice advice about securing your home and protecting your family.

Lessons from one family's encounter with a forclosure rescue scam

While the government announced yesterday that it is cracking down on mortgage and foreclosure fraud, Consumer Reports tackled to the problem in the March issue and gave some advice on how to protect yourself and your home.

In the video on the right, meet Kari and Roger Mizer, first-time homeowners who faced foreclosure on their home in 2007 after the monthly payment on their adjustable-rate mortgage hit $1,850.

The Mizers found hope when they received a letter from a mortgage-restructuring firm that claimed to have a 95.5 percent success rate in stopping foreclosures, but it turned out to be a scam. (Read more of the Mizer's story here.)

To keep from getting into a similar situation yourself, Consumer Reports advises you to avoid some common traps:

• Watch out for unsolicited offers
• Be wary of demands for up front fees
• Stay away from any service that advises you to stop contact with your lender
• Stay away from any service that asks you to transfer title of your home

Here's what you should do to deal with the threat of foreclosure:

Anyone anticipating problems making mortgage payments should seek legitimate free or low-cost help as soon as possible. Contact a housing counseling agency certified by the Department of Housing and Urban Development (www.hud.gov/foreclosure or 800-569- 4287). Their agents can assess options and advise you in negotiating with the lender. Advice is also available at the Homeowner's Hope Hotline, at 888-995-4673 (see box below). Another good source of help is the Institute for Foreclosure Legal Assistance, www.foreclosurelegalassistance.org, which funds and trains groups nationwide that give subsidized legal representation to families facing foreclosure.

Government cracking down on mortgage fraud

The government today announced a crackdown on mortgage modification come-ons that have flourished in the ongoing housing crisis. Typically, companies with official-sounding names prey on homeowners in danger of default who are seeking to refinance.

"These predatory scams callously rob Americans of their savings and potentially their homes," Treasury Secretary Timothy Geithner said Monday, according to the Associated Press.  "We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar."

Attorney General Eric Holder said the FBI is investigating about 2,100 cases of mortgage fraud. The Federal Trade Commission has sent warning letters to 71 companies it says were running suspicious advertisements and has filed five new civil cases to halt illegal loan modification scams.

Consumer Reports reported on these financial traps in the March issue. Read about five common come-ons and see our video report on the "Faces of foreclosure."

Maybe it's OK to make fun of the economy today

The first day of April spawns a lot of completely untrue headlines--some just fool us and others are even kind of funny.

The best executed ruse in my inbox this morning was from The Economist, which is a terrific magazine but is not really known as a laugh factory.

"The Economist to Launch London Theme Park," the subject line of mock news release read.

"The Economist Group is delighted to announce the development of a public-entertainment facility that combines the magic of a theme park with the excitement of macroeconomics," the announcement read, announcing that the company has secured a piece of property near the banking center of London.

"High unemployment in the area will only increase the facility's attractions, as former City workers seek to recapture some of the excitement they enjoyed in their professional life. Heavy investment in security and a landscaped moat and electric fence will neutralise any potential threat from the growing anarchist presence."

And, what rides will The Economist build to entertain the pinstriped masses?

• The currency high-roller: Float like a butterfly with the euro and drop like a stone with the pound!
• Chamber of horrors: Tremble at the wailing of distressed debt!
• Fiscal fantasyland: Watch the economy shrivel before your very eyes as you struggle to stop growth falling!
• Bankrupt Britain: Pit your wits against the government as you try to sink sterling and bring the country to its knees!
• The severe contest: Try your strength against a bear market!

While "Econoland" is fiction, the premise is not all that far-fetched. Disney and investment firm T. Rowe Price announced plans in March to open "The Great Piggy Bank Adventure" exhibit at Disney's Epcot Theme Park to "bring basic saving and investing concepts to life in a fun and captivating way."

FTC offers financial help with new Web site

The Federal Trade Commission has launched Money Matters, a new Web site to help people struggling through the recession.

"Practicing positive, tried and true money management techniques – and learning how to recognize and avoid some 'ripped from the headlines' consumer scams and rip-offs – can help you weather tough economic times," the site tells visitors.

According to the announcement:

Money Matters offers short, practical tips, videos, and links to reliable resources for more information on topics like credit repair, debt collection, job-hunting and jobs scams, vehicle repossession, managing mortgage payments, and foreclosure rescue scams.

If you're looking for more tips on saving money and living in a tough economy, visit CR's Money Blog. 

Miss a call from a 649 or 809 number? Be careful.

There's a new twist on an old scam, wireless advocates a warning.

Phone companies are noticing a pattern of calls that ring once or twice but automatically disconnect after that, according to the non-profit group mywireless.org.

Here's what happens:

When the number appears on the customer's cell phone as a missed call, it appears to be a typical domestic three-digit phone number starting with the "649" area code. If the customer decides to return the missed call, the call is returned to an Adult Entertainment chat line in the Turks and Caicos, outside the reach of U.S. regulators. While wireless companies are working to block suspicious numbers on their networks, some individuals may be victims of this and similar schemes involving international area codes and end up being billed for expensive international call and chat line charges.

What to do about it?

MyWireless.org urges wireless consumers to always check an area code first before returning a call to an unknown caller. Be skeptical about area codes you don't recognize, especially: "649" (Turks and Caicos); "809" (Dominican Republic); "284" (British Virgin Islands); "876" (Jamaica); "758" (St. Lucia); or "664" (Montserrat). There are dozens of area codes (mostly in the Caribbean islands) which connect callers to an international telephone number. In addition, if you do not make international calls, ask your wireless carrier to block outgoing international calls on your account.

The Federal Trade Commission has more details in a Fact Sheet for International Telephone Number Scams (PDF).