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It’ll Now Cost You $5 More To Activate Or Upgrade A Phone On AT&T’s Network

If you don’t have a contract with AT&T prepare to pay $5 more than you would have in the past to upgrade your phone, or activate a new one on the carrier’s network.

Previously, non-contract customers paid $20 to upgrade or activate a phone. That fee will now be $25, AT&T says, whether you’re purchasing a device with an installment agreement or bringing your own device.

However, customers with a device purchased on an installment agreement prior to Aug. 1, 2015 do not have to pay to upgrade.

Anyone is on a two-year agreement will pay $45 to activate or upgrade, but that option is only available on select devices, AT&T says. That fee has remained the same since it was raised from $40 in July 2015.

“The change is effective today,” AT&T told Ars Technica.

This is the third time AT&T has raised this fee, which it didn’t start charging until July 2015, when non-contract customers paid $15 to upgrade or activate. That fee went up to $20 in April 2016, which brings us to today.

AT&T isn’t the only game in town with upgrade fees, as Ars points out: Verizon Wireless recently raised its fee from $20 to $30; Sprint charges a $39 activation and upgrade fee; and T-Mobile doesn’t charge an activation fee but does have a $20 fee for a SIM card starter kit and a $20 “assisted service” upgrade fee that can be avoided if customers don’t upgrade their device in a retail store or through customer care, but instead handle it themselves.

by Mary Beth Quirk via Consumerist

The $300 From My Southwest Gift Card Vanished & Got Lost In Costco Switch To Visa

The gift of flight turned into a nightmare for a California woman when the Southwest Airlines gift card she purchased for her daughter was mysteriously canceled without notice, and then the funds vanished into thin air.

NBC San Diego reports that in 2015, the woman purchased a $300 Southwest gift card as a present only to find six months later the card was inactive.

When the daughter tried to redeem the card for an upcoming trip, the transaction wouldn’t go through. The woman then called Southwest and was informed that the card and points had been canceled and the money refunded to her American Express card.

While the woman wasn’t thrilled that the gift card was canceled without notification, the real issue was that she no longer had the American Express card.

It had been a Costco-branded credit card that switched to Citibank Visa in June 2016. When she contacted the credit card companies to find out where her money was, she was told it should have automatically transferred to her new card.

Except it hadn’t. Visa told her that too much time had lapsed and they couldn’t do anything about the missing funds.

“I couldn’t believe why nobody could find this money and my children told me Mom don’t give up,” the woman said.

Out of options, the woman contacted NBC San Diego’s 7 Responds team, which looks into consumer issues.

The team contacted Southwest, Citibank, and American Express. While none of the companies were able to actually explain why the gift card was canceled or what happened to the funds, Citibank said that because the woman was a valued customer they would credit her account for the full $300.

by Ashlee Kieler via Consumerist

Trump Administration Suspends Mortgage Insurance Discount For New Homeowners

The new Trump administration has already made one of its first moves, directing the Department of Housing and Urban Development to suspend a recently announced program that would have reduced mortgage insurance rates for a number of new homeowners.

This reduction, which was announced [PDF] by the Federal Housing Administration on Jan. 9, would have reduced annual mortgage insurance premiums on most new FHA-backed mortgages by .25 percentage points. Mortgages worth more than $625,500 would have seen a larger reduction of .45 percentage points on their insurance premiums.

Shortly after President Trump was sworn in, HUD announced via Twitter that this program had been suspended indefinitely.

The planned changes to insurance rates were not set to go into effect until Jan. 27, and would have only applied to loans originated or disbursed after that date, so existing homeowners would not have been affected.

In the mortgagee letter [PDF] announcing the suspension, HUD explains:
FHA is committed to ensuring its mortgage insurance programs remains viable and effective in the long term for all parties involved, especially our taxpayers. As such, more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts.

The intention of the rate reduction had been to hopefully spur home-buying among consumers who don’t have the full 20% down-payment that is generally needed to avoid mortgage insurance. The move had been criticized by conservative lawmakers who view the FHA insurance program as high-risk.

by Chris Morran via Consumerist

McDonald’s & Other Fast Food Giants Battling For Siberian Customers

When you picture Siberia, you probably imagine a vast, frozen landscape, tucked away in the coldest corner of the globe. You probably don’t picture the Golden Arches lighting up the frigid night, but now even Siberia has several McDonald’s locations — and it’s got plenty of competition for customers.

For example, there’s a challenge to McDonald’s fast food throne in the town of Tomsk — more than a thousand miles east of Moscow — where a billboard reads, “KFC. Opening soon,” reports The Wall Street Journal.

McDonald’s has been making a push into remote areas like Siberia, where it is facing rivals like KFC and Burger King who are doing the same thing. McDonald’s in particular has taken a slow and steady approach to expanding in Russia since its first location opened there in 1990, because logistics can make it tough. Again, this is literally Siberia we’re talking about, where winters can be extremely brutal and long, with temperatures often remaining well below freezing for months on end.

Despite those challenges, the company says it has more than a dozen restaurants open in Siberian towns and is planning more.

“It’s not difficult to open more restaurants in towns where we have a presence,” Khamzat Khazbulatov, chief executive of McDonald’s Russia, told the WSJ. “It’s even necessary, in order to optimize operating expenses and logistics costs.”

A Yum Brands spokeswoman told the Journal KFC is “strong and growing” in Siberia, with 71 restaurants in 17 cities, while Burger King’s parent company remained mum.

I also asked Consumerist’s regular Siberian correspondent, my brother, Sean — who has lived in Kyzyl, a mere 14 hours away by car from Tomsk, for the last 12 years — about the fast food landscape there, and he confirmed that folks “love” the stuff. Partly, just because it’s something to talk about.

“People always used to come back from Moscow talking about how they definitely stopped into a McDonald’s,” he told me. “It’s a sight to go see.”

Indeed, the WSJ notes that when the Tomsk location opened in September, there were several hundred customers waiting in line. About 6,000 customers were served in the first 24 hours.

One thing that people like a lot about McDonald’s — and other fast food — in Siberia is that the burgers are tastier, in my brother’s opinion. “Better meat in Siberia,” my brother says.

To that end, when McDonald’s first opened in Russia, it imported 80% of what it sold. Now, 85% is produced in Russia, Khazbulatov said, protecting the company from a Russian import ban on certain products from the West that was put in place in 2014.

Now, some local restaurateurs are also trying to imitate the cachet of global brands, my brother explained.

“We briefly had a ‘KFC,’” he says of a copycat effort. “It has turned into a place called ‘Chickens’ which has advertising that features a Milwaukee magazine cover about burgers from 2010. We also have a place called BurgerLike.”

If Kyzyl had a real McDonald’s, “people would totally go there,” he adds.

by Mary Beth Quirk via Consumerist

With One Week Left, Walgreens-Rite Aid Merger May Be In Trouble

The proposed merger of mega-drugstore chains Walgreens and Rite Aid seems like a good idea to the companies, but the Federal Trade Commission remains skeptical. With a week left before the purchase agreement expires, the companies need the antitrust watchdog to sign off, and it looks like they may not get it.

“People familiar with the matter” have told Bloomberg that the Commission’s lawyers aren’t satisfied with the companies’ plan, which would have the larger chain (Walgreens) sell 865 stores to a regional rival, Fred’s Inc., does not have the approval of FTC officials.

The goal of selling off stores is to preserve competition. Walgreens has 8,177 stores, and Rite Aid has 4,600. The FTC sources told Bloomberg that selling just over 10% of Walgreens stores simply isn’t enough to meet their approval, since it doesn’t do much to preserve competition in the drugstore and prescription drug industry.

The merger would bring the #2 and #3 drugstore chains together, overtaking CVS as the top brand. However, the merger would remove a national competitor, and close stores in areas that have both a Walgreens and a Rite Aid.

Bloomberg’s source does not know whether the FTC has a recommendation to counter the plan it is rejecting: it could propose selling more stores to Fred’s or to a different rival, for example. As new officials

by Laura Northrup via Consumerist

Expedia Wants To Tune Into Your Feelings About Booking Travel By Reading Your Face

If only companies could read shoppers’ minds, they’d know exactly what to provide and when to provide it. Alas, because no such telepathic technology exists (yet), Expedia is taking another tack, tracking facial movements to gain insight into customers’ emotions while they’re booking travel online.

Researchers in Expedia’s “usability” lab in London have been hooking subjects up to sensors that record tiny muscle movements in their faces while they’re booking travel, a procedure that Bloomberg’s Jeremy Kahn experienced first-hand.

“The lab allows us to see how people emotionally engage with the site,” said Gary Morrison, Expedia’s senior vice president of retail and brand.

Even if subjects aren’t aware they’re even having any feelings during the process, the electrodes can detect emotional responses, and eye tracking technology lets researchers see what subjects are looking at while they’re having those emotions. Researchers also might ask subjects what’s motivating their emotions.

This process is designed to help Expedia come up with new ways to reduce the stress and frustration many feel when booking travel or hotels online. The company’s UK division conducted a survey that found more than 75% of respondents considered buying a vacation online to be just as stressful as a bad day at the office, being stuck in traffic, or fighting with a loved one.

So what gave consumers the warm fuzzes? Participants responded most positively to photos of hotel rooms depicting attractive sights outside the room’s windows, instead of those that focused on the bed. Such an insight might help a hotel operator change the photos they use to list rooms and thus, get a boost in their Expedia bookings.

by Mary Beth Quirk via Consumerist

Man Pleads Guilty To Groping Teen On American Airlines Flight

Seven months after an Oregon man was accused of groping a 13-year-old girl traveling along on an American Airlines flight, the man has pleaded guilty. 

The Associated Press reports the 26-year-old man pleaded guilty to charges of making an indecent sexual proposal to a minor and assault with intent to commit abusive sexual contact of a minor.

The incident occurred in June during an American flight from Dallas Fort Worth to Portland.

According to a criminal complaint filed in a U.S. District Court, the man, who was sitting in the middle seat of a row next to the teen, allegedly started making small talk with the teen before leaning against her, nudging her, and touching her with his elbow. He then allegedly put his hands on her knee and upper thigh three times.

A flight attendant handing out snacks in the aisle saw his hand near the girl’s crotch, the complaint says, and noticed a tear on the girl’s face. She ordered the man to change seats, directing him to the back of the cabin, and moved the girl forward several rows.

The captain was then alerted and the man was arrested when the plane arrived in Portland.

The girl told investigators she remembered feeling “frightened and trapped” during the incident, and told authorities she didn’t use the bathroom for the rest of the flight because she didn’t want to run into the man.

The AP reports that the man agreed to a plea deal in which prosecutors will recommend a 14-month prison term, with credit for time served, and the man will resister as a sex offender for 15 years.

“I invaded her space, touching her in her thigh and her groin area,” the man said in court. “I had inappropriate conversations with her. My words were fairly considered to be indecent. What I did was wrong in all respects.”

The incident also spurred a lawsuit against American. In July, the girl’s family sued the airline and suspect, claiming the carrier failed to protect the teen during the flight.

by Ashlee Kieler via Consumerist

No One Will Believe The $20 Bills You Printed At Home Are Real Money

Your home printer might be truly awesome, but unless you’re trying to trick cashiers who have no concept of what real money looks like, you’re probably not going to fool anyone into thinking that the $20 bills produced in your home office are the real deal.

According to police, a Florida woman had not only been passing around fake money, but she’d been making it herself at home by printing out copies of $20 bills, reports The Gainseville Sun.

A Walmart employee spotted the five counterfeit $20 bills without too much trouble when the suspect handed them over on Jan. 14, the Lake City Police Department said. When the cashier questioned the woman about the funny money, she fled.

On Jan. 16, similar printed money showed up at a local Applebee’s, where a patron had left the bills to pay her tab. She also forgot her phone at the restaurant, allowing police to navigate her paper trail pretty darn easily.

Police contacted the phone’s owner and arranged to meet at a nearby hotel to return it. While there, an officer pulled the fake money out of a bag and asked her about it.

The woman “immediately became embarrassed and began to stammer as she spoke,” the police department said, and admitted using the money at Applebee’s.

Police later found “numerous counterfeit bills, along with blank paper and a printer” in a hotel room.

“It was determined that [the suspect] had not only been passing counterfeit bills, but that she had been producing them herself,” LCPD said.

Officers discovered marijuana and other drug paraphernalia, as well. The suspect was arrested on possession of counterfeit bills, possession of marijuana, and possession of drug equipment. The U.S. Secret Service is also looking into her case, said LCPD.

She’s also earned herself a spot in the “You Only Have Yourself To Blame” Hall Of Fame, where she has plenty of company:

• A fellow who left a literal trail of cash leading straight to him from the scene of a bank robbery.

• The bank robbery suspect who led police straight to his house when he swiped his ATM card before demanding cash.

The would-be robber who had to be rescued by firefighters after tried to crawl through a pizzeria’s ventilation duct to steal and got stuck.

The bank robbery suspect who was caught by police when he stopped for lunch at a casino.

The KFC worker who pulled a gun on his boss and returned for a paycheck the next day.

Suspected thieves who police said tried to sell a pawn shop owner his own stuff back, unaware that they’d purloined it from him in the first place.

A guy who police overhead planning a burglary after he unwittingly butt-dialed 9-1-1.

The burglary suspect who made things pretty easy by falling through the store’s ceiling… in front of cops.

A man who was freed after 15 years in prison for robbery who was accused of heading straight back there to rob it again.

The students who were arrested after allegedly stealing a $7,500 Ronald McDonald figure and then completing their drive-thru order.

A guy who was found sleeping in his car at a McDonald’s drive-thru who was charged with DUI after he tried to pay cops for his burgers.

The burglary suspect who broke into a restaurant and was caught after he tried to cook himself up some tasty crab cakes.

A man accused of burgling a fried chicken restaurant who found himself in handcuffs when he returned to the eatery the next day — and wearing the same clothes, no less.

The guy found snoozing at a Wendy’s drive-thru who woke up to a DUI and no fries.

The father-daughter duo accused of going on a burglary spree who were nabbed after she posted a doctored Microsoft employee badge on Facebook.

The criminal mastermind whose brilliantly plotted heist was undone after he returned to the scene to grab a remote control for the sound system he allegedly stole 30 minutes before.

A real-life Hamburglar accused of robbing a McDonald’s who was caught when he crashed into the local mayor.

Yet another snoozer, this time, a guy police found asleep in the McDonald’s drive-thru who was charged with driving while intoxicated after scoring a blood alcohol content of 0.14%.

The guy accused of breaking into Walmart and trying to saw through the ceiling of the store’s cash room while an employee was present.

The blabby teen who bragged online about pulling off a bank robbery. He apparently thought no one watches YouTube.

A would-be Walmart robber who was unfortunate to get hit by his own getaway vehicle.

The timid bank robber who scared himself silly by shooting his gun, and ended up fleeing without cash.

An accused robber of storage units who left behind a pizza box with his address on it.

The accused thief who made the rookie mistake of uploading pics from a stolen iPad to the cloud.

Speaking of uploading things, there was the time when a Disney cruise worker accused of stealing an iPhone unwittingly sent photos to the cloud of his adventures with the pilfered device.

The guy who reported the theft of an iPhone he’d just stolen from someone else to the police.

A very sleepy man who allegedly broke into a bar and then took a nice nap on the kitchen table.

by Mary Beth Quirk via Consumerist

“Ghost Restaurants” With No Tables Thrive On Delivery Apps

What is a “restaurant”? If an establishment that serves food has no tables and no storefront, is it a restaurant at all? Thanks to delivery apps, in expensive large cities, restaurants can launch with only a kitchen, a menu, and a delivery driver.

That’s great news for anyone who wants to launch a restaurant, but might mean that you can’t take your friends out to your favorite restaurant for lunch. A company in New York City, Green Summit, operates fourteen different restaurant brands that have no dining rooms.

That was as of press time when Fast Company hit “publish” on their article about the ghost restaurant industry; the company could very well have more restaurants by now.

Green Summit claimed to Crain’s New York that a failed new virtual restaurant costs around $25,000, while investors in a traditional big-city eatery can expect to lose hundreds of thousands of dollars if it fails.

For companies like Green Summit, launching a new “restaurant” could be as simple as reconfiguring ingredients it already stocks for its other brands. For example, it was easy for the company to get into the business of selling poke, a traditional Hawaiian fish salad, since its kitchens already had most the ingredients needed.

Another ghost restaurant business model licenses recipes from restaurants that don’t want to offer delivery. Instead of picking up entrées from those establishments, the company Good Uncle just makes its own version in its own commissary kitchens. True to the ghost restaurant model, the kitchen just supplies the company’s delivery business, which it’s test-marketing on students at Syracuse University.

by Laura Northrup via Consumerist

Report: Battery Size Likely Led To Samsung Galaxy Note 7 Issues

There will be answers: Samsung is set to reveal Monday the findings of an investigation into why the recalled Galaxy Note 7 smartphone has the tendency to catch fire or explode, with the cause centered on the device’s battery. 

The Wall Street Journal, citing people familiar with the matter, reports that there were two reasons for the phones’ issues: the irregular size of the battery and manufacturing problems.

The sources tell the WSJ that Samsung’s report — conducted by third-party firms and Samsung — concludes that batteries manufactured by affiliate Samsung SDI Co. were irregularly sized and didn’t fit into the phone properly. This, the investigation found, caused the batteries to overheat, leading to smoke, fire, or explosion.

When Samsung first became aware of the Galaxy 7 issues, it replaced its affiliate batteries with ones made by Amperex Technology Ltd.

Because of the quick turnaround needed, the sources say, these batteries included a manufacturing issue, but didn’t elaborate on what the problem was.

The WSJ reports that Samsung shared its findings with regulators this week, discussing ways in which the company plans to avoid any future battery problems.

To do so, the sources say Samsung has created an eight-step process that includes more testing, inspections, and quality assurances from manufacturers.

Samsung’s Galaxy Note 7 issues began in late August when the company delayed deliveries of the device after reports it could catch fire and explode. Days later the company admitted there was a problem and announced an exchange program, but not a recall.

That changed in mid-September when the Consumer Product Safety Commission announced an official recall. In October, customers reported that their replacement Galaxy Note 7s were also catching fire or exploding. The company then halted production of the phone temporarily, and later permanently.

More recently, wireless carriers have “bricked” the remaining Galaxy Note 7 phones through a Samsung-produced update.


by Ashlee Kieler via Consumerist

Costco Settles Federal Charges That It Turned Blind Eye To Bad Prescriptions

Costco has reached a deal with the U.S. Department of Justice to pay $11.75 million to resolve federal allegations that the warehouse club’s pharmacies violated the Controlled Substances Act by filling prescriptions they probably shouldn’t have.

The DOJ announced the deal late Thursday — one of several high-profile settlements and enforcement actions in recent days — saying that this agreement ends the government’s investigation into allegations that Costco pharmacies filled prescriptions that were incomplete, lacked the proper paperwork, or which fell outside the prescribing doctor’s scope of practice.

According to the DOJ, from Jan. 1 2012 to Dec. 31, 2015, some Costco pharmacies in Washington, California, and Michigan dispensed controlled substances inconsistent with their compliance obligations under the Controlled Substances Act.

Specifically, the DOJ claims that pharmacies filled prescriptions from practitioners who did not have a valid Drug Enforcement Agency (DEA) number; incorrectly recorded the practitioner’s DEA number; filled prescriptions outside the scope of a practitioner’s DEA registration; and filled prescriptions that did not contain all the required information.

Additionally, the pharmacies allegedly failed to maintain accurate dispensing records and failed to maintain records for their central fill locations in Sacramento, CA, and Everett, WA.

While prosecutors don’t specify if the investigation found customers were abusing prescription drugs from Costco, they note that lax pharmacy controls can have an impact on opioid abuse.

“These are not just administrative or paperwork violations – Costco’s failure to have proper controls in place in its pharmacies played a role in prescription drugs reaching the black market,” said U.S. Attorney Eileen Decker of the Central District of California in a statement. “Costco pharmacies in Southern California filled numerous prescriptions for drugs that should not have been sold to consumers because of its flawed system for validating DEA registration numbers.”

As part of the settlement, Costco acknowledges that some of its pharmacies were indeed in violation of the Controlled Substances Act. Consumerist has reached out to Costco for a statement regarding the settlement. We’ll update this post when we hear back.

In addition to paying a $11.75 million fine, Costco purchased a new pharmacy management system, and implemented a three-tier audit program that includes internal and external audits.

As part of the settlement, the DEA for the next three years can conduct unannounced and unrestricted inspections of all DEA registered Costco Pharmacy locations without Administrative Inspection Warrants.

by Ashlee Kieler via Consumerist

Amazon Adds Virtual Dash Buttons To Website, App For One-Click Ordering

If you’re the kind of person who already has enough clutter around without adding a bunch of plastic shopping dongles, Amazon thinks it has the solution for you: it’s adding virtual Dash Buttons to both its website and app so Prime shoppers can reorder common products with one click.

The buttons have been popping up on the site and app since last night, Re/code notes, so you may notice a fresh set tailored to your ordering history the next time you log in. For example, if you’ve ordered a lot of coffee, cat food, and toilet paper once a month for the last several months, well, expect buttons for items like those.

Like their physical counterparts, Dash Buttons are only for Prime members, and are available for tens of millions of products, Amazon says.

But unlike the plastic dongles, which cost $4.99 each, the digital version are free, and you can add or delete Buttons from your account at will. All Dash Buttons can be reached via the “Accounts & Lists” menu on the Amazon website, or by using the navigational menu on the Amazon mobile app.

If you accidentally click the “Buy” button, you’ll have a 30-minute window to cancel that inadvertent order.

by Mary Beth Quirk via Consumerist

Consumerist Friday Flickr Finds

Here are seven of the best photos that readers added to the Consumerist Flickr Pool in the last week, picked for usability in a Consumerist post or for just plain neatness.

Great Beyond
Patrick Johanneson
Xavier J. Peg
Karen Chappell

Want to see your pictures on our site? Our Flickr pool is the place where Consumerist readers upload photos for possible use in future Consumerist posts. Just be a registered Flickr user, go here, and click “Join Group?” up on the top right. Choose your best photos, then click “send to group” on the individual images you want to add to the pool.

by Laura Northrup via Consumerist

Uber Ordered To Pay $20 Million For Allegedly Exaggerating Drivers’ Potential Earnings

Popular ride-hailing service Uber has agreed to pay $20 million to close the book on federal charges that it used misleading and exaggerated earnings figures to attract new drivers to work with the company.

In a civil complaint [PDF], the Federal Trade Commission accused Uber of violating the law by using inflated income figures when marketing to potential drivers.

The FTC points to previous statements by Uber’s CEO that drivers for UberX — the standard level of car service for many Uber users — earned a median income of “more than $90,000/year/driver in New York and more than $74,000/year/driver in San Francisco.” This statement was later revised to say that these figures were “potential” earnings drivers could make in their respective cities.

However, the complaint contends that the real earnings figures, when calculated using a 40-hour work week, were significantly lower. According to the FTC, in 2014 — the year that the above statement was first made — a New York City Uber driver earned a median income closer to $60,000, while in San Francisco the actual median was around $53,000. Fewer than 10% of drivers in these two markets earned the potential income that the company had boasted about.

Beyond these statements from the CEO, the FTC also took issue with Craigslist ads posted by Uber in various markets around the country, advertising that Uber drivers could earn anywhere from $16 to $29 per hour, depending on the city.

Yet the FTC claims that actual earnings data from these cities shows that very few Uber drivers average the amounts touted in the ads. According to the following table, in some markets — like Boston, Philadelphia, and Minneapolis — fewer than 10% of drivers earned the advertised hourly average:


The FTC also saw problems with how Uber marketed its Vehicle Solutions Program, which allows people without cars of their own to finance a vehicle purchase while then using that car to drive for Uber.

After this program launched, Uber advertised it to potential drivers as a way to “own a car for as little as $20/day” or that drivers could lease a car with “payments as low as $17 per day.”

Problem is, according to the FTC, Uber had no actual information to base any of these statements on, and the reality of the lease terms has not been in line with what was advertised.

“Despite the claims that Drivers can make low weekly payments, the median weekly payment for Uber Drivers who entered into a lease from late 2013 through at least April 2015 has been over $200, while the median weekly payment for Uber Drivers who opted to purchase their vehicles through Uber’s Vehicle Solutions Program during the same time period has been over $160,” notes the complaint. “Further, information Uber had at the time it made the claims indicate that the claims are false. Uber’s communications with at least one auto company have acknowledged payment terms and conditions that are inconsistent with Uber’s promises to Drivers.”

The FTC also claims that many drivers who entered into the Vehicle Solutions Program thinking they would get a good deal actually ended up with interest rates that were likely higher than they would have received elsewhere.

“Uber’s marketing material to dealers has acknowledged that the lease-to-own option was a ‘one size fits all’ product with an ‘implied APR of 19.5%,’ significantly higher than even the industry average interest rates for consumers with deep subprime credit scores,” notes the FTC. “Additionally, the average rate of the other auto deals for Uber Drivers has been higher than the industry average for consumers with similar credit scores. Numerous Drivers who have purchased cars through Uber’s Vehicle Solutions Program have received interest rates on their retail installment contracts that are more than double the industry average rate for consumers with similar credit scores.”

Additionally, the FTC says that Uber misled drivers in this program into thinking they would not be bound my the typical mileage restrictions you see on many auto leases, by touting “unlimited miles.” In reality, according to the complaint, the leases obtained through the program came with annual mileage limits of between 37,500 and 40,000 miles.

These various allegedly misleading claims are in violation of the FTC Act, which prohibits deceptive business practices.

In addition to the $20 million judgment [PDF] against Uber, the company has agreed to refrain from misrepresenting the facts about drivers’ earnings, and the terms of its auto financing and leasing programs.

“Many consumers sign up to drive for Uber, but they shouldn’t be taken for a ride about their earnings potential or the cost of financing a car through Uber,” says Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “This settlement will put millions of dollars back in Uber drivers’ pockets.”

When reached for comment, Uber provided the following statement to Consumerist via email:
“We’re pleased to have reached an agreement with the FTC. We’ve made many improvements to the driver experience over the last year and will continue to focus on ensuring that Uber is the best option for anyone looking to earn money on their own schedule.”

Today’s settlement was not unanimously supported by all three sitting FTC commissioners.

Commissioner Maureen Ohlhausen dissented from the decision, voicing concerns about how the Commission came to the $20 million settlement figure, noting that it appears to unrelated to any actual harm that may have been done to consumers as a result of these alleged FTC Act violations.

Ohlhausen contends that the overstated earnings boasts likely only caused “consumer injury that is a small fraction of today’s settlement,” and that the $20 million settlement amount “far exceeds the best estimate of actual consumer harm.”

by Chris Morran via Consumerist

Western Union Will Pay $585 Million For Not Doing Enough To Stop Wire Fraud

Whether it’s the “distant relative stranded in a foreign country” scam or the “you’ve won the lottery but you have to pay us scam” or any other variation on this remotely operated ruse, wire transfer services like Western Union are often the conduit for getting that money from the victim to the scammer. After years of being accused of not doing enough to clamp down on fraud by its customers, Western Union has agreed to pay $585 million to federal authorities and admit that its policies — and some of its agents — aided and abetted wire fraud.

Today’s settlement is a “deferred prosecution” agreement, meaning the deal halts any prosecution of criminal charges against the company. It involves Western Union’s practices and policies from 2004 through 2012, during which time the company allegedly violated federal anti-fraud statutes and the Bank Secrecy Act, which — among other things — requires certain businesses to keep track of and report on suspected money laundering.

The agreement closes the book on investigations by various divisions at the Justice Department, the Federal Trade Commission, and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

According to court documents [PDF] filed by FinCEN, Western Union’s involvement in criminal transactions was sometimes more than just allowing for funds to be transferred from one party to another.

For example, in Oct. 2011 Western Union realized (with the help of law enforcement) that about half of the consumer fraud reports in Peru, where there are hundreds of WU locations, were connected to just four WU agents, all owned by the same person.

The company shut down these locations in April 2012, but eight months later allowed their owner to open a new Western Union location.

Along the border between the U.S. and Mexico, FinCEN says that Western Union agents failed to properly vet the subagents they contracted with to deliver funds to recipients, despite the company’s (and the public’s) awareness that wire transfers were a popular way to launder and move money for narcotics transactions.

The problems weren’t solely in Latin America. In the UK, one Western Union location had been repeatedly flagged as a high-fraud risk and potentially complicit in criminal activity. By 2012, the company had received some 2,000 consumer fraud reports related to this one location. WU staff even recommended severing ties with this agent, but the company chose to continue the relationship until 2012, notes FinCEN.

Those 2,000 fraud reports are nothing compared to the 31,000 suspicious activity reports filed by Western Union regarding transfers processed through four WU locations in China. One of these agents was responsible for 11,000 of those reports. According to FinCEN, this location was repeatedly facilitating transactions that were large enough to raise internal red flags, but just short of meeting the record-keeping requirements for large transfers.

“Despite continually identifying this activity, WUFSI implemented insufficient corrective action and never suspended this agent location’s relationship and this agent location continued to be one of WUFSI’s top accounts for sending money to China,” notes FinCEN, pointing out that it took five years and thousands of reports before WU finally terminated its relationship with this location in Sept. 2010.

The practice of transferring amounts of money that are just under the Bank Secrecy Act’s reporting threshold is known as “structuring.” That’s why banks and wire-transfer companies like Western Union are also required to report incidents of suspected structuring.

Instead, notes the DOJ in its announcement of today’s agreement:

“Western Union knew that certain of its U.S. Agents were allowing or aiding and abetting structuring by their customers. Rather than taking corrective action to eliminate structuring at and by its agents, Western Union, among other things, allowed agents to continue sending transactions through Western Union’s system and paid agents bonuses.”

Western Union could have avoided today’s messy settlement (and the substantial financial penalty) if it had just listened to its own security people more than a decade ago. In 2004, the company’s Corporate Security Department proposed global guidelines would have automatically suspended any agent involved in 15 fraud reports within a six-month period. Those guidelines were not adopted at the time.

In addition to the criminal and BSA-related allegations against Western Union, the Federal Trade Commission accused the company in a civil complaint [PDF] of violating federal law by failing to put effective anti-fraud policies in place, and for not properly dealing with Western Union locations and employees that the company had internally identified as being connected to questionable activity.

For its part, Western Union is downplaying its past problems, by pointing out that the settlement deals with practices and policies that happened more than four years ago, and that the company has increased spending on compliance by some 200% since then.

“We share the government’s goal of protecting consumers and the integrity of our global money transfer network, and we worked hard to resolve these matters with the government,” reads Western Union’s statement. “We are committed to enhancing our compliance programs to prevent illicit activity on our network and protect customers who transfer money to friends, family and businesses.”

by Chris Morran via Consumerist

Man Burglarizes FedEx Truck In Chicago, Ditches Getaway Car With Baby Inside

The string of robberies and burglaries of delivery vehicles in Chicago continues this week, with the latest theft happening to a FedEx truck. Police say that the suspect broke into the truck, took packages, and then abandoned his own vehicle with a 1-year-old child inside when the cops were after him.

The package heist went down on Wednesday morning, while a delivery driver for FedEx was parked at a Wendy’s restaurant to eat. According to police, someone in the parking lot called them after noticing a man looking through the packages in the truck, and the suspect took off in a car, which the bystander described to police.

A block away from the Wendy’s, police pulled over the vehicle, and the suspect got out and tried to run away… leaving the child in his backseat behind.

Police did not report the suspect’s relationship to the baby. They also took another person into custody related to this incident, but didn’t specify what that person was accused of.

This was the latest in a string of delivery vehicle thefts on Chicago’s South Side, which have included armed robberies, burglaries of unattended trucks, and even carjackings.

by Laura Northrup via Consumerist

Investigation Finds Tesla’s Autopilot Functioned Properly In Fatal Crash

As expected, federal safety regulators closed a months-long investigation into Tesla’s Autopilot feature after the fatal crash occurred when the semi-autonomous driving feature was activated, finding that the collision was not the result of a defect in the feature.

The National Highway Traffic Safety Administration revealed the findings [PDF] of its six-month long investigation, noting that Tesla’s Autopilot feature worked as it was intended and that the last action taken by the driver occurred two minutes before the collision.

According to NHTSA, the autopilot feature and emergency braking system were not to blame for the death of the 40-year-old Florida man.

The crash occurred on a divided highway, where the 2015 Model S collided with a tractor-trailer that was making a left turn across the Tesla driver’s lane.

In spite of its controversial name , Autopilot was designed to require the continual and full attention of the driver to monitor the traffic environment and be prepared to take action to avoid crashes.

NHTSA determined that it worked as it was intended, and that drivers are made aware of the need to remain vigilant when the function is active through Tesla’s owner manual and other systems.

Still, the agency notes that Tesla could do more to ensure drivers are engaged at all times.

“The systems have limitations and may not always detect threats or provide warnings or automatic braking early enough to avoid collisions,” NHTSA said in its report. “Although perhaps not as specific as it could be, Tesla has provided information about system limitations in the owner’s manuals, user interface and associated warnings/alerts, as well as a driver monitoring system that is intended to aid the driver in remaining engaged in the driving task at all times.”

Tesla addressed some of these concerns in a September update that it claims will better incorporate the use of radar and makes changes to the way in which drivers must keep their hands on the wheel.

In addition to not finding any defect with Autopilot, NHTSA investigators concluded that the driver should have been able to see the tractor-trailer for at least seven seconds prior to impact.

Because of this, NHTSA believes the man may have been “able to take some action before the crash, like braking, steering, or attempting to avoid the vehicle.”

However, NHTSA found that data from the vehicle showed the driver took no braking, steering or other actions to avoid the collision. The driver’s last recorded action, according to the report, was actually increasing his cruise control speed to 74 mph; that occurred less than two minutes before the fatal collision.

“A safety-related defect trend has not been identified at this time and further examination of this issue does not appear to be warranted,” NHTSA states, referring to the closing of the investigation.

by Ashlee Kieler via Consumerist

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