New York H&R Block Lawsuit Settled Over Deceptive Sweepstake Ads

New York Attorney General Andrew Cuomo has settled a lawsuit against H&R Block regarding the company’s deceptive sweepstakes ads, Consumer Affairs reports.

As part of the agreement, Block must pay $245,000 in penalties and costs for failing to post rules and regulations of its promotions at its offices and using false and deceptive advertising material to promote two sweepstakes games. The company also must disclose that the purchase of H&R Block products is not necessary to enter any promotional contest.

“H&R Block has agreed to implement the necessary changes so that all future promotions are in full compliance with New York state law,” said Cuomo. “This settlement, while directed at H&R Block, serves as a warning to companies to make sure that all sweepstake rules and regulations are clearly spelled out with absolutely no ambiguity.”

New York state law requires companies conducting sweepstakes to give consumers an opportunity to enter and win without purchasing a product. H&R Block did not provide this opportunity for non-paying consumers.

Countrywide Financial Sued For Mortgage Fraud By California and Illinois

California and Illinois are suing mortgage lender Countrywide Financial Corp. and its two top officials for misleading borrowers into getting risky loans that resulted in foreclosure, AHN News reports. California Attorney General Jerry Brown filed suit Wednesday in the Superior Court of Los Angeles against Countrywide, chief executive officer Angelo Mozilo and chief financial officer David Sambol. The Illinois attorney general is also filing a similar suit against Countrywide and Mozilo.

The California suit accused the bank of violating the state’s unfair business practices and false advertising laws by obscuring risks in the loans, misleading consumers about payment terms, prepayment penalties and other obligations, and telling borrowers they would be able to refinance before the interest rate on their loans adjusted. The loans, which feature low initial payments that sharply increased a few years later, caused borrowers to default resulting in foreclosure.

The Illinois lawsuit accused Countrywide of rewarding employees and brokers who sold more of the questionable loans. The suit also accused Mozilo of “relaxing underwriting standards, structuring loans with risky features, and misleading consumers with hidden fees and fake marketing claims,” according to the New York Times.

Warnings issued for Midwest weather victims

The federal and Iowa state governments are warning victims of recent tornadoes and catastrophic flooding to be wary of fraudulent contractors.

The post-storm aftermath is often a time when victims begin to think about literally picking up the pieces. These areas attract contractors from outside the local area, typically, as there isn’t enough local help to fill the demand for construction work. Sometimes, these outside contractors have bad intent.

“People are desperate to get things fixed and get back in their house and get their life in order, so fraud artists do come to these kinds of situations because they know people are vulnerable,” Iowa state Attorney General Tom Miller told the AP.

Victims of these natural disasters – and there are quite a few across a broad landscape – are being advised to keep their personal identities close to the vest as they make important decisions about their homes’ futures.

Homeowners should be careful and do their homework on contractors they’re not familiar with, or are from outside their local area. People should do what they can to get as much work in writing as possible.

Tyson settles one lawsuit, still faces angered consumers

Tyson Foods has settled a lawsuit brought by a major competitor over a false advertising campaign, but still must deal with a similar suit brought by mislead consumers.

The Maryland Daily Record reports Perdue Farms has settled its lawsuit over Tyson’s claims its chickens were “raised without antibiotics” or “raised without antibiotics that impact antibiotic resistance in humans.”

In April we reported on a judge’s order for Tyson to stop using this claim in its marketing and advertising campaigns immediately, even as the lawsuit was pending.

And though Tyson has settled the dispute with Perdue and another poultry farmer, it must deal with an angry mob of consumers duped by this claim, too.

In a class action filing, attorneys representing consumers says, “Consumers reacted and relied on this campaign in buying chicken.”

Poultry or meat, in general, boasting these claims typically demand a higher price point.

Tyson still contests court rulings and has taken umbrage with the Food and Drug Administration’s standards for labeling such foods.

Great Expectations Lawsuit Filed by Arizona Attorney General

The Arizona Attorney General is suing Sun West Video, Inc., dba Great Expectations for Singles, a dating service, for violation of the Arizona Consumer Fraud Act and the Arizona Dating Referral Services Act. The lawsuit alleges that Great Expectations used coercive sales tactics, misrepresentations and other deceptive practices to sell expensive dating service memberships to Arizona consumers, typically costing thousands of dollars.

According to Consumer Affairs, the alleged illegal practices include:

• Misrepresenting to consumers the overall number of Great Expectations’ participating members, the number of participating members in certain age groups and the number of new members joining the service each month. Great Expectations also told consumers that two to three marriages occurred between members every month when it had no credible basis for such statements.

• Misrepresenting to consumers that it had conducted a criminal background check on all of its members.

• Using membership agreements that illegally extended initial memberships beyond one year and were designed to mislead consumers to believe they had no right to cancel or rescind the agreements.

• Unlawfully obtaining consumers’ credit information as soon as they arrived at the Great Expectations office to meet with a representative, before they received a sales presentation or agreed to purchase a membership.

Great Expectations has previously been sued by the Pennsylvania Attorney General in 2006 and in 2004 in Kansas by Kline’s Consumer Protection and Antitrust Division and Sedgwick County District Attorney Nola Foulston’s Economic Crime and Consumer Fraud Division.

Unfortunately, dating services committing fraud aren’t limited to a single company. In the past year, a group of New York women sued the matchmaking company It’s Just Lunch for defrauding consumers, and online dating services such as eHarmony have been sued for similar reasons. Sometimes the advice of reading the fine print before signing up for any service, including a dating service (online or off), can save a consumer thousands of dollars. Other times, the outright deception involved in online dating scams and matchmaking scams runs so deep that consumers are forced to learn the hard way — and usually only get their money back by filing a lawsuit.

New Jersey Gas Stations Defrauding Customers Busted by Attorney General

More than 300 New Jersey gas stations were cited for violations ranging from pricing discrepancies to inaccurate octane ratings and out-of-tolerance equipment, the state Attorney General’s Office announced Thursday.

In a coordinated effort at the end of May, county and state weights and measures inspectors checked 1,023 stations in 21 counties finding 350 violations, the Philadelphia Business Journal reports. Among the citations issued were: 62 violations for meters out of tolerance (more than six cubic inches), 46 violations for per-gallon prices being different on each side of the pump, 37 violations for fuel grade (octane rating label) not posted, 26 violations for inaccurate octane ratings, 19 violations for inaccurate total sale price calculation and 14 violations for multiple price changes in a 24-hour period.

“Consumers deserve to get what they pay for, especially when they are paying record-setting prices for gasoline,” Attorney General Anne Milgram said. “We cannot control the price of gasoline but we can, and we are, upholding our laws and regulations regarding the sale of motor fuels.”

Dealers violating per-gallon price requirements face a civil penalty of up to $1,500 for the first offense and up to $3,000 for any subsequent offense. Violating the Consumer Fraud Act carries an initial violation of up to $10,000 and up to $20,000 for subsequent violations.

406 Mortgage Fraud Indictments

406 people have been indicted in 144 mortgage fraud cases since March on charges of mortgage fraud nationwide, including about 60 who were arrested on Wednesday, the Department of Justice and Federal Bureau of Investigation (FBI) announced Thursday. The FBI estimates that approximately $1 billion in losses were inflicted by the mortgage fraud schemes employed in these cases.

Additionally Thursday, the U.S. Attorney’s Office for the Eastern District of New York announced an indictment against two senior managers of failed Bear Stearns hedge funds, charging Ralph Cioffi and Mathew Tannin with conspiracy, securities fraud and wire fraud. Cioffi was also charged with insider trading. The indictment alleges that the managers marketed the two funds as a low risk strategy, backed by a pool of debt securities such as mortgages. The indictment alleges that by March 2007, the managers believed the funds were in grave condition and at risk of collapse, but made misrepresentations to stave off investor withdrawal. The funds subsequently collapsed in the summer of 2007 resulting in approximately $1.4 billion in losses to investors.

“Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation’s housing market and to the peace of mind of millions of American homeowners,” said Deputy Attorney General Mark R. Filip. “Operation Malicious Mortgage and our other mortgage-related enforcement actions demonstrate the Justice Department’s commitment and determination to combat these criminal schemes, hold their perpetrators accountable and help restore stability and confidence in our housing and credit markets.”

Mortgage frauds employ a variety of tactics including misrepresentations, deceit and other criminal abuses to fund, purchase or insure mortgage loans. Operation Malicious Mortgage addresses primarily three types of mortgage fraud schemes: lending fraud, foreclosure rescue scams and mortgage-related bankruptcy schemes. Lending fraud frequently involves multiple loan transactions in which industry professionals construct mortgage transactions based on gross fraudulent misrepresentations about the borrower’s financial status, such as overstating the borrower’s income or assets, using false or fictitious employment records or inflating property values. Foreclosure rescue scams involve criminals who target legitimate homeowners in dire financial circumstances and fraudulently collect fees for foreclosure prevention services or obtain ownership interests in residential properties. Both of these fraudulent mortgage schemes may be furthered by filing bankruptcy petitions that automatically stay foreclosure.

Avoid Car Warranty Scams

Once again officials are warning against car warranty scams, often ploys to steal a consumer’s identity and/or bank account or credit card information, but almost always an opportunity for a con artist to make a chunk of change.

How it works: in the ‘Expired Car Warranty’ scam, consumers are contacted by telephone, email and U.S. Mail and “reminded” that their car warranty is about to expire, whether it is or not. Scam artists lure consumers into providing personal and financial information under the pretense that they will extend their car warranties.

As a Colorado District Attorney’s office warned Monday, car warranty scams often begin with a recorded message telling you that this is your last warning that your automobile warranty is about to expire. It doesn’t matter whether your car is still under warranty, has been expired for 10 years or is actually about to expire.

The identity thieves ask for your credit card or checking account number saying that the numbers will insure that your existing warranty will remain in effect or will be reinstated. Whether by phone or mail they will tell you this is “urgent” or your “last chance” to keep your car under warranty or to reinstate your coverage.

Don’t be fooled! Typically, car warranties are offered by car dealerships. New or used cars generally come with a standard warranty. You can purchase an extended warranty from them when you purchase your car or any time afterwards. Be wary of anyone contacting you by phone, mail or email offering to sell you a car warranty.

New York City iPhone Scam Robs Craigslisters at Gunpoint

New York City authorities have busted a gang using Craiglist, an online marketplace, to lure folks in with an offer of 10 iPhones for $2000. Those who respond to the ad are given the address of a remote meeting location, where they will then be robbed at gunpoint, Consumer Affairs is reporting.

“It was all a ruse to get the buyers with money in the criminals’ comfort zone so they could rob them,” Lt. Garfield Brown of the Brooklyn Central Robbery Unit, told the Post.

The police have made arrests in the case, but don’t believe the scam is likely to die out anytime soon, since it’s an easy way to rob victims. They say copycats are likely to try it in other cities, using either craigslist or other advertising sources. Consumers, they say, should be aware of it.

FTC believes penalties will curb spyware

The Federal Trade Commission told a Senate Committee recently that enacting stiff civil penalties against sources of spyware would curb the illicit, online activity.

These penalties would come into effect when other attempts to stop known spyware distributors have failed. These include seeking “consumer redress or making the operators give up their ill-gotten gains” from their malicious software, according to

There is currently a draft Senate bill tied up in Committee that could give FTC regulators the ability to pursue fines against spyware distributors.

The legislation would require software distributors – who typically try to download their software via the internet – to disclose their software could be malicious, and even basically that they’re attempting to download the software.

Many companies now attempt to download their spyware programs unknown to computer users.

Once installed on systems, the software can track personal data, retrieve it and severely alter a computer’s performance.