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Consumer Daily Reports


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Consumer News: Everyone wants to be a pioneer in the fight for boxed mattress dominance

PhotoGreeting every young shopper who wonders if they can just order a mattress online, one that will arrive in a box somehow small enough to fit through their apartment elevator, is a hip and slick mattress company announcing that this is in fact possible, thanks to their heroic efforts alone.

"Tuft & Needle is a bootstrapped, Phoenix-based company that pioneered the disruption of the mattress industry," Tuft & Needle says about itself. "Founded in 2012 by John-Thomas Marino, 31, and Daehee Park, 28," two Silicon Valley entrepreneurs, "T&N is leading the revolution against unfair mattress markups."

The revolution has been well-publicized. "If Warby Parker could disrupt the eyewear business and TOMS the footwear market, why not use technology to try to disrupt mattresses?...The result is Tuft and Needle," wrote Fortune Magazine, just one of many magazines to report on Tuft & Needle's disruptive mattresses.

But the mattress retailer Brooklyn Bedding, a competitor, has a different story about the origins of the direct-to consumer, online-only boxed mattress. On their website, Brooklyn Bedding writes that the idea of turning mattresses into an e-commerce industry came from founder John Irwin's wife in 2008. "John was very hesitant, 'Who is going to buy a mattress without trying it,' but his wife convinced him.”

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Now Brooklyn Bedding has an Instagram endorsement from Kevin Jonas of Jonas Brothers fame, who promotes a photograph of his mattress, still in its impossibly small box, with the company's hashtag, #bestmattressever.

Not to be outdone, Casper Sleep launched in 2014 with an estimated $70 million raised in venture capital. Investors included actor-turned businessman Ashton Kutcher and rapper Nas. Now Casper mattresses can be seen on display at the South by Southwest musical festival and on the Instagram account of Kylie Jenner. Casper COO Neil Parikh framed the idea for his boxed bed company this way an interview with Inc Magazine: "Let's disrupt the mattress industry. It's broken." 

Casper's founders told the press it occurred to them, almost suddenly, that there is no way to carry a queen-sized mattress up to a fourth-floor New York City apartment. "We said, 'What if we could compress a mattress to fit into a box the size of a dorm refrigerator?'" 

So Casper did. And then Casper began suing professional mattress bloggers who gave better reviews to the other mattresses compressed to fit into a box the size of a dorm refrigerator, charging that Casper’s lesser competition was paying the reviewers. "Casper’s success has spawned numerous 'imitators' that duplicate Casper’s innovative approach without investing in any of the innovations that led to Casper," Casper claims in one such lawsuit. (By some counts, there are now an estimated 50 boxed bed e-commerce companies on the market.) 

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The growth of the boxed bed industry is both amusing and a source of pride to Susan Chase and Mary Thomas. Their father Bill Bradley, an 84-year-old welder who still goes to work every day, trademarked the phrase Bed-in-a-Box in 2006, records show, well before the better-known competitors who claim to have developed this idea entered the fray. He and a business partner created their own machine to compress the mattresses and in 2007 began selling the boxes directly to consumers from the web, well before it was considered normal to do serious shopping online.

Asked about the rise of the “copycat” e-commerce boxed mattress companies, the sisters simply laugh. Even Tempur Sealy, part of the Big Mattress old guard that the hipster mattress startups were supposed to disrupt, has launched its own discounted bed-in-a-box. Cocoon by Sealy advertises that their boxed bed line is “A NEW WAY TO BUY A MATTRESS.”

"It's not really a new way,” Thomas says. The sisters will ping their company lawyer when they catch a competitor using the phrase “Bed-in-a-Box.” A cease-and desist letter will get the offending company to change the wording to something like mattress-in-a-box, which is not trademarked. As long as the competitor respects the family’s “Bed-in-a-Box” trademark, the family will leave the rest alone. 

“They've been able to very well pinpoint their market,” Chase says of the competition, “and probably take some of the things that we initiated and improve on them." And, she added when we first talked, “I’m not interested in making lawyers really wealthy.”

The boxed origins

Armed with degrees in industrial art and chemistry, Bill Bradley owned a fabrication company and worked as a manager for a brick company when he was younger. He later purchased a machine shop. "Anything that needed to be built out of metal, he built it,” Thomas tells ConsumerAffairs. 

The Bed-in-a-Box he eventually trademarked in later years did not come without previous inspiration. The idea of compressing mattresses into a small box was actually something that Bradley’s business partner had seen companies in China do. But Bradley and his partner wanted to roll-pack higher quality mattresses, produce the mattresses in the United States and use the Internet to sell them.

"At that time there wasn't anyone else selling mattresses in a box online,” Chase says. Bradley and his partner had apparently tapped into the public’s growing thirst for e-commerce as well as the frustrations of buying a mattress from a store, where prices still run much higher.  And with his background in machinery, “it was kind of a natural fit for him to be able to make that compression machine.”

The sisters agree to describe the compression process in layman's terms: the mattress is heat-sealed, which compresses all of the air out of the memory foam. It is then shrink-wrapped to hold its circular shape and stored in a heavy-duty duffel bag. Once the mattress is removed from the packaging by the customer, it takes the atmosphere of the air with it and literally grows before a customer’s eyes. 

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The sisters say that Bed-in-a-Box averages $20 million annually in sales. Their factory and offices in Johnson City, Tennessee employ 35 people.The memory foam is produced by a company in North Carolina, but the sisters say that nothing else in the production process is outsourced. They estimate that they have sent around 100 cease-and-desist letters to the other boxed mattress companies who have advertised with the “Bed-in-a-Box” phrase. "It’s important for us to protect our name and protect our brand,” Chase says. 

Tuft & Needle, in a telephone interview, similarly gives credit to Bed-in-a-Box for pioneering aspects of the industry, taking a much more modest attitude than the Tuft & Needle marketing material might suggest. “We definitely did not pioneer Bed-in-a-Box,” spokeswoman Brooke Medansky tells ConsumerAffairs. She says that Tuft & Needle, which came on the scene in 2012, describes itself as a pioneer because they sell only one style of mattress, eliminating what she describes as “a paradox of choice” in the mattress buying experience. “We find that only providing one option is really best for most people.”

"The other things we have pioneered, that really caught on, are being the first to offer the online sleep trial with no hassle returns," Medansky says. (Tuft & Needle says all their returned mattresses are donated to charity).

Tuft & Needle’s stylish online advertising and business model is clearly a hit. Last year, their sales reached $100 million, Medansky says, more than double $40 million from the year prior, and vastly outpacing its $8 million the year before that. 

Like the family behind Bed-in-a-Box, Medansky credits the competition that came on later with boosting the industry as a whole. "With their funding, they were able to make a lot of noise," she says of Casper.

“I think all of the companies that have come after us have really helped prove this concept, and really what we set out was to change the mattress buying experience."

Casper, on the other hand, is not as generous in its characterization of the competitors. 

Legal battle between Casper and mattress bloggers in Federal court

During South by Southwest this year, advertising executives piled on praise for Casper as reporters listened and tested out Casper mattresses themselves. It was just the latest peek into the trendy company's successful advertising and media campaign. Casper has been the star of the boxed mattress media buzz since it launched in 2014, immediately getting a wave of celebrity endorsements, and is still regularly written about, recognized as one of the “most innovative” companies by Fast Company in February and then featured in Architectural Digest the following month. “For a specific yet sizable market in the United States, Casper is utterly synonymous with the word mattress,” the magazine gushed. 

Casper chief executive Parikh told the Digest that the company faced hurdles initially when it launched in 2014. “Almost everyone said ‘no one will ever buy a mattress online’ but we set out to prove that that's not true, especially if you offer amazing service and you have the best product,” Parikh said.

With its glowing reputation, a reported 250 employees in multiple cities and “hundreds of millions of dollars” in annual sales, one might assume that Casper would have little interest in what professional mattress bloggers have to say about the company, but one would be mistaken.

“In early 2014, Casper launched as an innovative new sleep start-up, radically disrupting the traditional mattress industry with one mattress sold directly to consumers online with a risk free in-home trial—eliminating mattress stores and their inflated prices,” the company wrote last year in a federal lawsuit.

Casper filed suit in federal court in 2016 against the review site Sleepopolis and then followed with lawsuits against two more mattress review sites. While the legal fight itself focuses on the technical boundaries between honest online reviews and online advertising, the suit also gives Casper the opportunity to further assert its role as chief disruptor of Big Mattress.

Tellingly, Casper cites press reports as proof of its pivotal role in the creation of the boxed bed industry; “TechCrunch, a leading media publication, recently noted that since Casper launched in April 2014, 'the past two years have also seen a boom in mattress startups. . . Casper does seem to have started a trend.’”

The company stresses this claim repeatedly in its complaint against Sleepopolis. “Casper’s ascent has also inspired competitors. Since Casper pioneered the digital mattress marketplace, dozens of online mattress retail start-ups have followed suit, selling mattresses on their own websites and on third-party platforms such as Amazon… In the wake of Casper’s success and disruption of the traditional retail model, consumers can now purchase a wide variety of competing mattresses without ever stepping foot in a mattress store.”

In comes Derek Hales, the operator of Sleepopolis. Casper writes in its suit that independent product review sites such as Sleepopolis have an important role in the e-commerce industry, as shoppers are now similarly doing their research online instead of in the store. They charge that Hales is taking advantage of this, misleading consumers with his reviews, and that he makes his money off the site by directing customers to affiliate partners--or mattress companies which have paid him. Therefore, they argue that the unbiased reviews he is presenting to the public are really just a form of advertising, potentially violating FTC guidelines.

Hales declined an interview. On his website, he portrays the legal fight as a fight to assert his First Amendment rights. "The lawsuit has already taken a heavy personal and financial toll, but I refuse to be bullied or silenced," Hales writes online. He also provides readers with links to the federal court documents.

On his site and in court, Hales says that he makes sales commissions off of “referral links,” or links to mattress companies. Should a customer purchase a mattress that came from a Sleepopolis link, Hales receives a referral fee, but he says that fee does not influence his reviews. 

“Hales has been mildly critical of Casper’s mattresses,” he writes in court filings, referencing reviews in which he told readers that he felt Casper charged too much for its boxed mattresses. (With a king mattress for $950, Casper mattresses are vastly cheaper than the $3,000+ mattresses found in traditional stores, but not as cheap as some of the newer boxed mattress competitors).

“A Sleepopolis visitor who looked only at the facts asserted in Hales’ reviews would have seen that the Leesa, Brooklyn Bedding, and GhostBed mattresses Hales compared were all less expensive than Casper’s, and at least as fully-featured as Casper’s,” Hales continues in court filings, referencing some of the cheaper boxed mattress companies. 

Casper forwarded an interview request from ConsumerAffairs to a spokeswoman at a public relations firm, who said the company had declined the request. They did not return follow-up questions from ConsumerAffairs.

In the federal lawsuits, which are ongoing, Sleepolis and Casper continue to tussle over the difference between protected speech and commercial speech and which category Sleepopolis falls under. 

Whatever happens with the suit, at least one thing is clear. Everyone wants to claim credit as the chief disruptor in the boxed bed industry. To Bed-in-a-Box, the original Big Mattress disruptor, it's obvious that competitors like Casper and Tuft & Needle have better funding and are doing a volume in sales that Bed-in-a-Box can’t compete with. But they don’t sound too bitter about it. "I think we can all work together in this particular industry to provide a positive customer experience,” Thomas says. 

Learn more in the ConsumerAffairs Mattress Buyers Guide

Read more...

Consumer News: Parents beware: air mattresses are dengerous to infants

PhotoAir mattresses, or inflatable beds, have become popular in recent years because they aren't expensive and easy to store. They're a nice alternative in a small apartment when overnight guests arrive.

But researchers at the University of Wisconsin-Milwaukee and the University of Georgia are warning parents these inflatable beds are not a substitute for a crib. Infants, they say, should not lie on them.

Writing in the American Journal of Public Health, the nursing and social work researchers say the inflatable beds, popular in low-income and transient households, can be fatal for babies.

“Even when fully inflated, air mattresses can mold to the infant’s face and obstruct the airway by forming an occlusive seal,” they write. “The risk increases when air mattresses leak during use. Under-inflation was a factor in some of the infant deaths reviewed.”


Official record may understate the threat

The official record, compiled by the National Child Death Review Case Reporting System, shows 108 infant deaths involving air mattresses between 2004 and 2015. But the researchers say that probably understates the real threat. They suggest a number of factors and limitations within the database could lead to under-reporting.

At the same time, government agencies and professional organizations aren't doing much to warn parents about the hazard, they contend. The research analyzed policy statements from 12 organizations and found just a single mention of an air mattress's potential danger to infants.

Other risky bedding options

And it might not just be inflatable beds that pose the risk. The researchers say bedding options like mattress toppers and mattresses with adjustable firmness are also problematic, presenting an unrecognized hazard.

The researchers say there needs to be changes in the way public health organizations communicate about bedding options, emphasizing the types of bedding that should, and should not be used for infants.

The message to young parents, they say, is inflatable beds should never be used as a crib.

Read more...

Consumer News: Senators re-introduce bill that would open Cuba to American tourism

PhotoEfforts to repeal all travel restrictions to Cuba are moving forward after a group of U.S. senators reintroduced a bipartisan bill that would once again allow tourists to visit the island nation.

The Freedom to Travel to Cuba Act, which was first introduced in 2015, received support from 55 co-sponsors on Thursday, only five votes short of the needed number to advance the legislation. If passed, the bill would shore up travel numbers, which airlines say have lagged since they were allowed to open routes to Cuban cities last year.

The chief sponsors of the bill, Sen. Jeff Flake (R-AZ) and Sen. Patrick Leahy (D-VT), have said that lifting the travel ban would benefit both the American and Cuban people by giving the entrepreneurial and private sectors room to flourish.

“It is Americans who are penalized by our travel ban, not the Cuban government,” said Sen. Flake, according to a Reuters report.

Lagging travel numbers

While the number of U.S. visitors to Cuba rose by 74% last year, experts say that many consumers are foregoing travel to the country because of restrictions and economic factors that still make the trip difficult.

Currently, travelers need to fit into one of a number of categories that qualifies them for a visit to Cuba, since tourism to the island is still banned under a 54-year-old U.S. embargo. And for those who do manage to make the trip, the prospect of carrying around large amounts of cash isn’t all that appealing, since no debit or credit cards work in the country because of the embargo.

President of the Washington-based Engage Cuba group James Williams commended the leaders of the bill, saying that he applauded the senators’ “leadership in supporting the American and Cuban people by eliminating archaic, outdated policy."

Strong opposition remains

While the bill has gained traction over time, some lawmakers still heavily oppose any ending of isolationist policies towards Cuba. Senators Marco Rubio (R-FL) and Robert Menendez (D-NJ) say travel to Cuba should not be made easier until the country has made a concerted effort to move towards democracy.

President Trump has also expressed reservations about opening relations with Cuba. After his 2016 election campaign, he said that he would scrap normalization efforts unless the U.S. gets a “better deal.”

At this time, there has been no indication that Republican leaders would allow the proposal to come up for a vote.

Read more...

Consumer News: Why Alzheimer's disease deaths are sharply rising

PhotoIt's an alarming statistic. The Centers for Disease Control and Prevention (CDC) reports deaths from Alzheimer's disease surged 55% from 1999 to 2014.

So, what exactly are we to take from that, given that estimates of future Alzheimer's cases are also rising, since the aging population is growing at a fast pace?

The CDC lists several reasons for the sharp rise in deaths. First, the aging population is growing. The first Baby Boomers turn 70 years-old this year, and each year after another group of Boomers passes the 65 year-old mark, a milestone for the development of Alzheimer's.

People are also living longer, meaning they aren't dying from other diseases. Alzheimer's is a fatal form of dementia, and if someone lives long enough, their chance of developing it -- and dying from it -- increases.

Attributed to other causes

In recent years, doctors have done a better job of diagnosing Alzheimer's. In the past, it is possible people died from Alzheimer's but their deaths were attributed to other causes.

So it doesn't necessarily mean more people are developing the disease than they otherwise would, there are simply more people now who are at risk.

Dr. Anne Schuchat, CDC's acting director, says there's another statistic that should stand out. The number of people with Alzheimer's who died at home jumped from 14% to 25% over the same period. That means caregivers -- primarily a spouse or child -- is bearing a heavy burden.

Burden on caregivers

"As the number of older Americans with Alzheimer's disease rises, more family members are taking on the emotionally and physically challenging role of caregiver than ever before," Schuchat said. "These families need and deserve our support."

Christopher Taylor, Ph.D., lead author of the study, says caregiving becomes even more important in the latter stages of the disease.

"Caregivers and patients can benefit from programs that include education about Alzheimer's disease, how to take care of themselves and their loved one, and case management to lessen the burden of care," he said. "Supportive interventions can lessen the burden for caregivers and improve the quality of care for people with Alzheimer's disease."

Early intervention and diagnosis may also slow development of the disease. People 65 and over should be aware of symptoms such as memory loss, difficulties with problem solving, or misplacing objects. The CDC says an early diagnosis can allow patients and their families to better prepare for medical and caregiving needs at all stages of the disease.

Read more...

Consumer News: Education Department blasted over $6 billion in improper student aid payments

PhotoCurrent and former officials at the Department of Education are in hot water for making improper payments through its federal student aid programs.

In a hearing on Thursday, Education Department inspector general Kathleen Tighe told Congress members that over $6 billion in improper payments were made in 2016, according to a New York Times report. CFO of the Federal Student Aid office Jay Hurt said that a zero-percent rate of improper payments isn’t feasible, but Rep. Virginia Fox (R-N.C.) was less than sympathetic to the claim.

“I think we should strive for zero mistakes. You are not dealing with your own money, you are dealing with someone else’s money and I want people in the department to remember that,” she responded.

$6 billion in improper payments

An audit of the Education Department found that the $6 billion in improper payments had been made through its Pell grants program ($2.21 billion) and its Direct Loan program ($3.86 billion). An improper payment is defined as a disbursement that should not have been made, went to the wrong recipient, was not for the correct amount, or was not documented properly.

The improper payments accounted for roughly 5% of the department’s $125 billion grant payments last year, which provided financial aid to nearly 12 million college students. Hurt called an acceptable rate, citing a recent study which found that organizations tend to lose 5% of their revenue to fraud.

However, Rep. Mark Meadows (R-N.C) called the losses “abysmal” and said that chief operations officer for the financial aid program James Runcie, an Obama appointee, should be held accountable by having to forfeit any bonuses he received.

“It’s a slap in the face to the millions of taxpayers who provided this gentleman with over $430,000 in bonuses since 2010,” Meadows said, suggesting that a subpoena be issued for the former official. Runcie was scheduled to testify at the hearing but resigned from his post on Tuesday, citing political disagreement with his superiors.

National Association of Student Financial Aid Administrators spokesman Justin Draeger said that it was unclear how many of the improper payments were intentional or accidental, but Tighe said that the Education Department is doing its best to respond to the audits and fix the problem.

“They’ve done some work to try to resolve some of our audits, but there are still some ways to go,” she said.

Read more...

Consumer News: The growing conflict between insurance companies and repair shops

PhotoYou've been in an accident and it's the other guy's fault. No one is hurt but now you've got to file an insurance claim and get the damage repaired. It sounds simple, but sometimes it isn't.

You want your car returned to as close as possible to the condition it was in before the accident. The insurance company paying for the repair has a strong interest in how much it's going to cost to do that.

The fact is, insurance companies and auto repair shops often argue over what is necessary to repair the vehicle and the consumer can get caught in the middle. By law, the consumer filing the claim has the right to choose the repair shop, but it's very possible the insurance carrier will reject the estimate, especially if it is not one of its "preferred" repair shops.

We got a revealing glimpse of this growing conflict when we researched the issue and came across an article on the website for Mark's Body Shop in Baltimore, with the not-too-subtle title "5 lies insurance companies tell you after an accident."

Pressure to cut corners

In the article, Mark claims insurance companies have pressured his shop in the past to use non-OEM, reconditioned and salvage parts. And the issue isn't just limited to Maryland.

“Our Consumer Protection Division receives complaints from consumers about disputes between insurance companies and collision repair shops,” said Mississippi Attorney General Jim Hood.

He notes the issue has increased in recent years because of changes in the way cars are made. The lighter, synthetic materials used in the body are much more expensive to repair, in part because of the training required to do the work.

“In order to place a vehicle back in its pre-accident condition, some body shops have to buy expensive machines or tools and have their technicians trained and certified on the repair procedures for certain makes of vehicles," Hood said. "Some collision repair shops which do not obtain these certifications and tools, may offer to do a repair cheaper. The goal of the insurance companies is to keep repair prices as low as possible. Therein lies the conflict for consumers to navigate."

The conflict poses a problem for the insurance industry as well. Thomas Hambrick, assistant vice president of media and public relations at The Hartford, told USA Today there could be an initial disagreement with the repair shop, but the two sides usually reach an agreement on the price and the repairs.

Consumer guide

In response to the conflict, Hood's office has published a "Consumer Guide to Insurance and Auto Body Repair," which lays out consumers' rights when their vehicle is being repaired and paid for by an insurance claim. The guide points out that insurance companies are only required to pay the lowest estimate for "properly repairing" the vehicle.

But that "properly repaired" is key. Consumers should discuss with the person doing the repair, how it will be done, and whether OEM -- original equipment manufacturer -- parts are being used.

While the insurance company will suggest shops to make the repair, the decision is ultimately yours. In making it, ask the shop manager about the technology and training the shop uses. Checking out online reviews is a good idea as well.

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