Articles Posted in Consumer Fraud/Consumer Protection

Published on:

As consumers become increasingly aware of the potentially harmful side effects of certain chemicals used to extend the shelf life of prepared foods, the demand for packaged foods that are free of preservatives has gone up and continues to go up. Many consumers are prepared to pay a higher price for foods bearing labels such as “organic” and “all natural,” while others simply refuse to buy any foods they cannot be certain are free from artificial preservatives.

The more scrupulous buyers check the ingredients of everything they buy before taking it to the checkout counter, and over the years, people have come up with a few different rules regarding what to look for in the ingredients label. For example, some say you shouldn’t buy anything containing any ingredients you can’t pronounce, while others claim you simply shouldn’t buy anything with more than five ingredients.

Still others just rely on the product’s label. If the company claims their product is free of artificial preservatives, most customers will take that claim at face value and grab the product without bothering to check the ingredients label. Others rely on labels with terms like “all natural,” even though products don’t need to meet any legal qualifications in order to put that label on their products (as opposed to the term “organic,” which does require the product to be certified organic by the U.S. Department of Agriculture). Continue reading

Published on:

While most companies let people return a product a month or two after purchase if something goes wrong, some companies go above and beyond by offering a lifetime guarantee. The idea is to ensure customers that nothing will go wrong with the product during its lifetime, and if something does go wrong, the company will either replace the item or reimburse them the cost of the item. A lifetime guarantee is a sign that the company believes in the quality of its products and will go to great lengths to make sure their customers remain satisfied.

But some people choose to interpret “lifetime warranty” to mean the product is guaranteed to last for the rest of their lifetime, rather than the standard lifetime of the product. According to Shawn O. Gorman, the Executive Chairman of L.L. Bean, some customers were taking advantage of the company’s lifetime warranty to mean anything they bought from the company would not be subject to wear and tear, and if it were, the company should reimburse them for the item or replace it.

According to an open letter to the public released by the company on February 9th, some people were taking advantage of the lifetime guarantee by trying to get replacements or reimbursements for products several years after they had been purchased. Some had even sought replacements or reimbursements for used L.L. Bean items they had bought at garage sales. As a result, the company recently decided to get rid of its century-old lifetime guarantee and to replace it with a one-year warranty – which can only be used if the customer still has their receipt. The company said it will still work with customers who want to return or get reimbursed for a product more than a year after the date of purchase, but only if the product is defective. Continue reading

Published on:

Hogs can be defined as either of these two:

  1. a domesticated pig, especially one over 120 pounds (54 kg) and reared for; or
  2. a large, heavy motorcycle, in particular, a Harley 

Recently, both have come under the scrutiny for different legal reasons. You wouldn’t think so, but they did.

Hogs Corporation Being Squeezed for Trade Reasons 

Part of the Harley Davidson Investor Relations has included Corporate Governance. It makes good corporate sense, transparency and accountability is what they want for their investors. All of this is tied to profit and branding. Good business sense has also made them consider a recent move of some of its production out of the U.S.A. as part of a strategy to overturn the likelihood of decreased economic profitability. This is since the recent tariffs that the U.S.A. has imposed on steel and aluminum. They have been rather substantial and the production decision came right after it was caught between the new steel and aluminum duties imposed by President Trump. There was no doubt that the domestic prices on Harley Davidson were bound to shoot up. Trading partners within the European Union, have retaliated with tariffs placed on American products. It has been squeezed to move production where the overall costs will be less. The cost of a bike basically added up by more than two thousand

dollars in a public filing. The stock went down by 2%. It is not known for how long the tariff based war will last and executives are looking for ways to reduce impact. A likely question is that with more and more tariffs being raised against the U.S.A., will other companies and their in-house counsel soon be considering cross-border moves as well? All sorts of considerations come into play. More specifically, it involves the re-assessing support several functions including

U.S. distribution, procurement and technology, compliance and international legal affairs. That is why scrutiny by the legal department must have been made prior to any move. All sorts of jurisdictional issues will come into play. Continue reading

Published on:

The sports industry is one of inflated prices. From tickets to merchandise, rabid fans are often willing to pay outrageous prices for the illusion of a connection to their favorite player and this includes the selling of equipment that was allegedly worn by star players during games. The question of whether it can be proven that a specific piece of equipment was worn during a game or not was up for debate in a recent lawsuit against Eli Manning, the Giants, two equipment managers for the NFL team, and Steiner Sports, a company that sells helmets and jerseys worn by players during games.

The lawsuit was filed by Eric Inselberg, Michael Jakab, and Sean Godown, who purchased two helmets that were supposed to have been worn by Manning during games, but the three men allege that is not actually the case. Inselberg, who filed the lawsuit in 2014, claimed photographic experts used a technique known as “photo matching” to determine if the helmets he, Jakab and Godown had bought had actually been used in NFL football games. According to the lawsuit, these experts allegedly failed to find any evidence that either helmet had, in fact, been worn during any game.

Manning and the Giants argued that photo matching isn’t reliable because helmets are routinely reconditioned after, and even during seasons. They claim photo matching fails to take this into consideration and the evidence that a particular helmet was worn during games is to be found on the inside of the helmet, rather than the outside. Continue reading

Published on:

Extra virgin olive oil (EVOO) is the highest grade of olive oil and people are often willing to pay a higher price for bottles claiming to be filled with EVOO. By definition, EVOO has been made by cold-pressing olives, without using any sulfates or other chemicals in the extraction process. It’s also supposed to have a superior taste compared to all the other forms of olive oil, although the average consumer is unlikely to be able to tell the difference. Unfortunately, there are plenty of olive oil manufacturers who rely on that ignorance.

Although we all do it, there are a few problems with buying a bottle just because it’s labeled “extra virgin olive oil.” The first is that bottles bearing that label are all too easy to obtain here in the U.S., despite the fact that real EVOO is the best of the best, and yet a glance at American grocery store shelves would have you believe that virtually every olive oil sold here is EVOO.

The truth is that EVOO is one of the largest (and oldest) scams in the world. Tests conducted by the University of California-Davis to the National Consumers League have found that more than half the olive oil labeled EVOO in the U.S. is actually adulterated with other oils, such as sunflower seed and peanut oils. Not only do these oils lack taste, they also lack the renowned health benefits of EVOO and can even cause allergic reactions in some consumers. Continue reading

Published on:

The makers of products for newborns and young children, Johnson & Johnson, were subject to suit for their talcum powder.  It was alleged that lung cancer came about due to use of that powder.  As a result, a New Jersey banker and his wife were awarded $37 million in compensation for damages sustained.  More specifically, $30 million for him and $7 million for his wife.  Johnson and Johnson assumed 70% of the liability for the illness. The supplier of the talc mineral is what was linked to the cross contamination with asbestos being mined.  For that reason, they were hit with the other 30% of the liability.  In addition, there are thousands of other cases tying its talc products to ovarian cancer.

The way the mesothelioma acted was by having inhalation of the baby powder dust by regular use since his 1972. The jury was a seven-woman jury, which had found that asbestos was concealed in their products, making the product deadly.  This is despite the evidence that Johnson & Johnson has long tested its products for contamination and the other party argued that asbestos exposure could have come from somewhere else other than the talc.  “The evidence was clear that his asbestos exposure came from a different source such as the asbestos found in his childhood home or schools,” a spokeswoman had said and they will most likely consider an appeal.  Punitive damages are also yet to come, as the second phase of the trial is to begin next week.  On Tuesday, the jurors will make the decision as to whether or not to award punitive damages. Johnson & Johnson said it was disappointed by the jury’s most recent decision. Johnson & Johnson still affirms that its products are not carcinogenic and never have or do not contain traces of asbestos fibers. Continue reading

Published on:

Would you buy makeup that had been opened and used by someone else?

According to a recent class action consumer lawsuit, that’s allegedly what Ulta Beauty, a multi-million-dollar cosmetics company, has been doing. When people return cosmetics to the company for a refund, for any reason, store employees were allegedly instructed by managers to repackage and re-seal the returned items, then put them back on the shelves to be resold.

The allegations started with a Twitter user who claims to be a former employee of Ulta. According to a series of tweets she posted, the alleged practice of repackaging and re-sealing used products extended to all the company’s products, from makeup to fragrance to haircare tools. After she posted these accusations, other Twitter users, also claiming to have worked for Ulta, jumped to back up her claims, while others rejected them.

While the social media storm was no doubt a PR nightmare for Ulta, the Bolingbrook-based company now has a bigger problem on its hands: a consumer class action lawsuit seeking to represent anyone who has ever purchased products from Ulta. The lawsuit was filed in federal court in Chicago by Kimberley Laura Smith-Brown, who lives in Los Angeles and says she has bought dozens of Ulta products over the past six months, including eyeliner and lip balm.

While the complaint acknowledges that using cosmetics that have been opened and used by someone else is unsanitary, the lawsuit is more concerned with Ulta’s unjust enrichment as a result of this business practice. Aside from allegedly gaining the additional funds from selling the same products twice, the lawsuit also wants to sue Ulta for allegedly deceiving customers about the quality of the cosmetics they were buying. If Ulta’s products really were second hand, then they shouldn’t be charging full price for them, according to the lawsuit. Continue reading

Published on:

Despite plenty of evidence to the contrary, certain business advocates continue to insist that arbitration bans hurt individual consumers and employees more than they help them. They are not bothered by the facts, such as:

  1. Arbitration does not allow multiple plaintiffs to combine their claims into a class action or collective action. This effectively blocks consumer lawsuits from ever seeing the light of day because an individual’s claims are often smaller than the cost of filing a lawsuit or pursuing the dispute in arbitration.
  2. There is no explanation for why an arbitrator ruled the way they did and no opportunity to appeal the decision.
  3. The arbitration process is kept private, which means the results, and even a customer filing for relief for a complaint, are never made public. The transparent nature of the courts is an inherent ingredient to justice and accountability. By keeping all the proceedings private, other consumers with identical or similar complaints will not even know that they have a valid complaint.
  4. Arbitration is not always neutral. While some arbitrators have a good reputation for neutrality, others are less trustworthy, and many arbitration clauses give the company the power to choose the arbitrator. Because arbitration is a business, many arbitrators tend to be tempted to rule in favor of the side that brings them a lot of business.

Despite all these facts, and extensive research conducted by the Consumer Financial Protection Bureau (CFPB) showing how arbitration clauses harmed consumers, the U.S. House of Representatives and Senate both voted to overturn a CFPB rule that would prohibit banks from putting arbitration clauses in their consumer contracts. Continue reading

Published on:

An engineer for vehicles was sentenced to 40 months imprisonment and will pay a $200,000 fine for emissions-cheating deception after cooperating with U.S. prosecutors in their criminal investigation of a conspiracy to defraud government officials and customers.

A pleading of being charged with one count of conspiring to defraud the U.S., committing wire fraud and violating the Clean Air Act for his role in helping vehicles evade emissions requirements with diesel-powered vehicles. As a result, the foreign national agreed to be removed from the U.S. following the prison term, according to prosecutors. The engineer initially moved to and settled in the U.S. to help launch diesel-powered vehicles and handle certification, testing, and warranty issues, prosecutors said.

Furthermore, the sentence imposed by the judge exceeded prosecutors’ recommendation. The initial request was that the accused receive three years imprisonment and a $20,000 fine. It was a stiffer sentence than expected, as the engineer only helped to create software that controlled exhaust emissions. The tough sentence sends a message that employees can and should be held accountable for misdeeds they commit for their corporate employers. Many individuals have not been held responsible for corporate misconduct and this is one of those rare cases; a stunning fraud on the American consumer, being a very serious and troubling crime against our economic system. Such incidences give rise to a reduced trust in corporate America and undermine the economy. As a result, the ruling sends a strong message even though he was not “mastermind” and never benefited financially from its development of devices that masked the high levels of harmful emissions. Continue reading