Wednesday, October 28, 2015

Federal Law Favors Remanufactured Parts in Government Vehicles

Legislators are always looking for ways to streamline government spending without interfering with services. The federal government's latest cost cutting measure encourages federal agencies to use remanufactured parts to repair government vehicles. But the bill could spell trouble for consumers who buy used cars.

Wednesday, October 21, 2015

Why Consumers Shouldn't Rely on the Better Business Bureau

Whether you are looking for a reliable service provider or trying to choose the best product among a field of options, you may be inclined to look to the Better Business Bureau to help you choose. A new report from CNN Money explains why that might be a bad idea.
A CNN Money investigation recently revealed more than 100 businesses facing serious legal trouble from government regulators, but still maintained at least an A- rating from the Better Business Bureau. Here's a sample of the companies that made the list:
  • Recall Failures: Stove manufacturer Electrolux failed to issue recalls for ovens it knew malfunctioned causing flames to shout out of them, causing facial burns. The company paid a $750,000 fine to the Department of Justice in May 2014. BBB Rating: A+
  • Discriminatory Lending: Provident Funding Associates, a mortgage broker, charged African-American and Latino borrowers higher interest rates and fees based on their race. They faced a lawsuit from the Consumer Financial Protection Bureau and the Department of Justice. The company paid $9 million in damages to borrowers. BBB Rating: A+
  • Abusive Collections Practices: Drive Time harassed borrowers and their friends and families with excessive phone calls at inappropriate times, and even at work. It also sent false information to credit bureaus. The lender paid $8 million in civil penalties and provided free credit reports to affected borrowers. BBB Rating: A-
What did all these companies have in common that let them maintain their high ratings? For one, they are all paying members. In 2013, the BBB had nearly 400,000 paying members, resulting in nearly $200 million in revenue. “Accreditation” is something that companies can purchase through membership fees.
The Better Business Bureau is a non-profit company with a set of internal criteria that it uses to rate companies – both members and non-members. But even when the BBB issues “red flags” against a company, it can still maintain a high rating based on long-time membership. Companies can also receive higher ratings for addressing complaints through the BBB system than for any other factor – including not having any complaints at all.
At the same time, government lawsuits and penalties may have such a small impact that a company can maintain an A rating while paying regulators thousands of dollars in fines. Consumer protection lawsuits rank even lower: they aren't a factor at all.
The Better Business Bureau isn't a consumer protection agency. Instead it is in the business of offering paid endorsements to companies, even in the face of regulatory penalties. Don't get fooled by their ratings. Make sure you know whether any review is paid for before you put your money on the line.
Dani K. Liblang is a consumer protection attorney at The Liblang Law Firm, P.C. She represents consumers against businesses that would take advantage of them. If you have been injured by a product defect or are facing harassing debt collections, contact The Liblang Law Firm, P.C., today for a free consultation.

Wednesday, October 14, 2015

Fiat Chrysler in Hot Water for Failing to Report Claims to NHTSA

2015 has been a tough year for auto makers. In July, Fiat Chrysler paid $105 million and agreed to three years of close monitoring to settle charges by the National Highway Traffic Safety Administration (NHTSA) that the company had not met recall requirements. Now, that close scrutiny has revealed the company significantly under reported defect claims to the agency, a mistake that could cost them even more in fines and recalls.

Wednesday, October 7, 2015

Volkswagen Faces International Consumer Protection Scandal

Over the past couple weeks, all eyes have turned to Volkswagen. The U.S. Environmental Protection Agency directed the company to recall a half million vehicles for having deceptive emissions systems. The act sparked an international crisis and caused CEO Martin Winterkorn to resign. And that is only the beginning.