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Consumer Daily Reports

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Companies offer fake reviews, bogus legal services, deceptive online storefront deals

By Truman Lewis Consumer News: Feds target companies that use artificial intelligence to swindle consumers of ConsumerAffairs
September 25, 2024

Like just about anything else, artificial intelligence can be used for good or evil. And human nature being what it is, there are plenty of early adopters out there thinking up new ways to use AI to scam, deceive and rip off consumers.

The Federal Trade Commission is trying to get out in front of the trend, taking action against multiple companies that have relied on AI to supercharge deceptive or unfair conduct that harms consumers.

The cases being announced today include actions against a company promoting an AI tool that enabled its customers to create fake reviews, a company claiming to sell AI Lawyer services, and multiple companies claiming that they could use AI to help consumers make money through online storefronts.

Using AI tools to trick, mislead, or defraud people is illegal, said FTC Chair Lina M. Khan. The FTCs enforcement actions make clear that there is no AI exemption from the laws on the books. By cracking down on unfair or deceptive practices in these markets, FTC is ensuring that honest businesses and innovators can get a fair shot and consumers are being protected.

The cases included in this sweep show that firms have seized on the hype surrounding AI and are using it to lure consumers into bogus schemes, and are also providing AI powered tools that can turbocharge deception.

DoNotPay

The FTC is taking action against DoNotPay, a company that claimed to offer an AI service that was the worlds first robot lawyer, but the product failed to live up to its lofty claims that the service could substitute for the expertise of a human lawyer.

According to the FTCs complaint, DoNotPay promised that its service would allow consumers to sue for assault without a lawyer and generate perfectly valid legal documents in no time, and that the company would replace the $200-billion-dollar legal industry with artificial intelligence.

DoNotPay, however, could not deliver on these promises. The complaint alleges that the company did not conduct testing to determine whether its AI chatbots output was equal to the level of a human lawyer, and that the company itself did not hire or retain any attorneys.

The complaint also alleges that DoNotPay offered a service that would check a small business website for hundreds of federal and state law violations based solely on the consumers email address. This feature purportedly would detect legal violations that, if unaddressed, would potentially cost a small business $125,000 in legal fees, but according to the complaint, this service was also not effective.

DoNotPay has agreed to a proposed Commission order settling the charges against it. The settlement would require it to pay $193,000, provide a notice to consumers who subscribed to the service between 2021 and 2023 warning them about the limitations of law-related features on the service.

Ascend Ecom

The FTC has filed a lawsuit against an online business opportunity scheme that it alleges has falsely claimed its cutting edge AI-powered tools would help consumers quickly earn thousands of dollars a month in passive income by opening online storefronts. According to the complaint, the scheme has defrauded consumers of at least $25 million.

The scheme is run by William Basta and Kenneth Leung, and it has operated under a number of different names since 2021, including Ascend Ecom, Ascend Ecommerce, Ascend CapVentures, ACV Partners, ACV, Accelerated eCom Ventures, Ethix Capital by Ascend, and ACV Nexus.

According to the FTCs complaint, the operators of the scheme charge consumers tens of thousands of dollars to start online stores on ecommerce platforms such as Amazon, Walmart, Etsy, and TikTok, while also requiring them to spend tens of thousands more on inventory. Ascends advertising content claimed the company was a leader in ecommerce, using proprietary software and artificial intelligence to maximize clients business success.

The complaint notes that, while Ascend promises consumers it will create stores producing five-figure monthly income by the second year, for nearly all consumers, the promised gains never materialize, and consumers are left with depleted bank accounts and hefty credit card bills.

The complaint alleges that Ascend received numerous complaints from consumers, pressured consumers to modify or delete negative reviews of Ascend, frequently failed to honor their guaranteed buyback, and unlawfully threatened to withhold the supposed guaranteed buyback for those who left negative reviews of the company online.

As a result of the FTCs complaint, a federal court issued an order temporarily halting the scheme and putting it under the control of a receiver. The FTCs case against the scheme is ongoing and will be decided by a federal court.

Ecommerce Empire Builders

The FTC has charged a business opportunity scheme with falsely claiming to help consumers build an AI-powered Ecommerce Empire by participating in its training programs that can cost almost $2,000 or by buying a done for you online storefront for tens of thousands of dollars.

The scheme, known as Ecommerce Empire Builders (EEB), claims consumers can potentially make millions of dollars, but the FTCs complaint alleges that those profits fail to materialize.

The complaint alleges that EEBs CEO, Peter Prusinowski, has used consumers money as much as $35,000 from consumers who purchase stores to enrich himself while failing to deliver on the schemes promises of big income by selling goods online.

In its marketing, EEB encourages consumers to Skip the guesswork and start a million-dollar business today by harnessing the power of artificial intelligence and the schemes supposed strategies.

As a result of the FTCs complaint, a federal court issued an order temporarily halting the scheme and putting it under the control of a receiver. The FTCs case against the scheme is ongoing and will be decided by a federal court.

Rytr

Since April 2021, Rytr has marketed and sold an AI writing assistant service for a number of uses, one of which was specifically Testimonial & Review generation. Paid subscribers could generate an unlimited number of detailed consumer reviews based on very limited and generic input.

According to the FTCs complaint, Rytrs service generated detailed reviews that contained specific, often material details that had no relation to the users input, and these reviews almost certainly would be false for the users who copied them and published them online.

In many cases, subscribers AI-generated reviews featured information that would deceive potential consumers who were using the reviews to make purchasing decisions. The complaint further alleges that at least some of Rytrs subscribers used the service to produce hundreds, and in some cases tens of thousands, of reviews potentially containing false information.

The proposed order settling the Commissions complaint is designed to prevent Rytr from engaging in similar illegal conduct in the future. It would bar the company from advertising, promoting, marketing, or selling any service dedicated to or promoted as generating consumer reviews or testimonials.

FBA Machine

In June, the FTC took action against a business opportunity scheme that allegedly falsely promised consumers that they would make guaranteed income through online storefronts that utilized AI-powered software.

According to the FTC, the scheme, which has operated under the names Passive Scaling and FBA Machine, cost consumers more than $15.9 million based on deceptive earnings claims that rarely, if ever, materialize.

The complaint alleges that Bratislav Rozenfeld (also known as Steven Rozenfeld and Steven Rozen) has operated the scheme since 2021, initially as Passive Scaling. When Passive Scaling failed to live up to its promises and consumers sought refunds and brought lawsuits, Rozenfeld rebranded the scheme as FBA Machine in 2023.

The rebranded marketing materials claim that FBA Machine uses AI-powered tools to help price products in the stores and maximize profits.

The schemes claims were wide-ranging, promising consumers that they could operate a 7-figure business and citing supposed testimonials from clients who generate over $100,000 per month in profit. Company sales agents told consumers that the business was risk-free and falsely guaranteed refunds to consumers who did not make back their initial investments, which ranged from tens of thousands to hundreds of thousands of dollars.

As a result of the FTCs complaint, a federal court issued an order temporarily halting the scheme and putting it under the control of a receiver. The case against the scheme is still under way and will be decided by a federal court.



Photo Credit: Consumer Affairs News Department Images


Posted: 2024-09-25 15:59:42

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Consumer News: Gold surges to record heights: What’s fueling the rally?

Tue, 02 Sep 2025 16:07:06 +0000

A confluence of factors is driving the price higher

By Mark Huffman of ConsumerAffairs
September 2, 2025
  • Traders are now pricing in about a 90% chance of a 25basispoint interest rate cut by the Federal Reserve in midSeptember, which diminishes yields on dollar assets and boosts golds appeal as a nonyielding haven.

  • Economic instability, inflation fears, and geopolitical tensions, combined with political pressure on the Fed and diminishing confidence in dollarbased assets, are driving investors and central banks alike toward gold for stability.

  • Unexpected tariff rulings, such as new duties on large gold bars, along with broader trade tensions and geopolitical threats, are spurring fresh interest in gold as a protective asset.


Gold prices started the holiday-shortened trading week by surging past $3,500 per ounce, reaching an all-time high. By the close of trading Tuesday, spot gold hovered around $3,496$3,509, while futures echoed the rally, signaling widespread investor confidence in the metal as a safe haven.

Whats behind the move? Markets are now pricing in a 90% chance of a 25basispoint cut at the Federal Reserves upcoming meeting on September 17, a shift that further diminishes return on treasury assets and elevates golds position as a non-yielding alternative.

This expectation-driven weakening of the U.S. dollar has made gold, which is priced in dollars, more affordable for foreign buyers, lifting demand and prices across global markets.

Flight to quality

Politically, President Trumps vocal criticism of the Federal Reserve, particularly his proposals to remove Fed officials, may have rattled investor confidence, raising concerns about central bank independence and long-run economic stewardship.

At the same time, inflation concerns, geopolitical flashpoints, and fragile markets are pushing investors and central banks to lean heavily into gold. Gold has now overtaken the euro as the worlds second-largest reserve asset, with large-scale accumulation seen in India, China, Turkey, and Poland.

A dramatic twist arrived when U.S. Customs unexpectedly ruled that one-kilo and 100-ounce gold bars would attract tariffs, potentially as high as 39%, a move that took markets by surprise and spurred a fresh surge in gold purchases. Additionally, persistent trade and geopolitical tensionsespecially involving Russia, China, and the Ukraine conflicthave exacerbated economic fears, further inflating safe-haven demand.

Golds rise so far in 2025, rising by roughly 30%35% year-to-date, stems from a potent blend of rate-cut speculation, safe-haven flows, central bank demand, and geopolitical jitters.

Analysts from major institutions like Goldman Sachs now speculate that gold could potentially reach $4,000 per ounce by mid2026, if current trends persist.


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Consumer News: Car Safety Recall Derby: Ford dominates again with 1.1 million vehicles recalled

Tue, 02 Sep 2025 16:07:06 +0000

The Blue Oval takes the crown once more, far outpacing competitors

By News Desk of ConsumerAffairs
September 2, 2025

Ford Motor Company: Multiple Major Recalls

Total vehicles affected: ~1.1 million

Ford continues to lead the derby, issuing several large-scale recalls spanning multiple models and safety issues.

Exterior Lighting Failure 20242025 Mustang

  • NHTSA ID: 25V546000

  • Units affected: 105,441

  • Hazard: Water intrusion may disable license plate, marker, and tail lights violating federal lighting standards.

  • Fix: Dealers will seal seams and replace corroded modules if needed. Owner notices start Sept. 1, 2025.


Rear Brake Hose May Rupture 20152018 Ford Edge, 20162018 Lincoln MKX

  • NHTSA ID: 25V544000

  • Units affected: 499,129

  • Hazard: Brake hose rupture could leak fluid, reducing stopping power.

  • Fix: Remedy in development. Notices begin Sept. 8, 2025.


Inoperative Trailer Tail Lights 2025 Explorer & Aviator

  • NHTSA ID: 25V543000

  • Units affected: 213,121

  • Hazard: Trailer tail lights may not illuminate, creating a crash risk.

  • Fix: Dealers will replace or inspect modules. Interim notices Oct. 13, 2025.


Airbag May Tear 20242026 Ranger

  • NHTSA ID: 25V541000

  • Units affected: 100,900

  • Hazard: Side curtain airbags may tear on deployment, failing ejection mitigation standards.

  • Fix: Protective shields installed. Notices begin Sept. 8, 2025.


Chrysler (FCA US, LLC)

Total vehicles affected: 219,577

Rear Camera Failure 20192021 Ram ProMaster, 20192020 Dodge Journey

  • NHTSA ID: 25V552000

  • Units affected: 219,577

  • Hazard: Cracks in microprocessor may cause rearview camera to fail, violating rear visibility rules.

  • Fix: Dealers will replace cameras free of charge. Notices begin Sept. 30, 2025.


General Motors

Total vehicles affected: 23,656

Fuel Leak Fire Risk 20232026 Chevrolet Corvette

  • NHTSA ID: 25V536000

  • Units affected: 23,656

  • Hazard: Fuel may spill into the filler pocket and ignite.

  • Fix: Dealers will install a shield. Notices begin Oct. 6, 2025.


Bottom Line

Ford once again tops the derby with multiple large-scale recalls, hitting both family SUVs and sporty icons like the Mustang and Ranger. Chrysler and GM follow with camera and fire-related defects.

Drivers should check NHTSA.gov to see if their car is affected. Repairs are always free of charge.


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Consumer News: Housing market shows rising inventories in July as sales cool

Tue, 02 Sep 2025 13:07:06 +0000

In a hopeful sign for buyers, the median price dipped slightly

By Mark Huffman of ConsumerAffairs
September 2, 2025
  • New home sales slowed in July 2025, falling to an annual rate of 652,000 units, down 0.6% from June and 8.2% lower than a year earlier.

  • Inventory levels rose to 499,000 homes for sale, a 7.3% increase from July 2024, pushing supply to 9.2 monthsthe highest in more than a year.

  • Prices declined as market pressures mounted, with the median sales price slipping to $403,800, nearly 6% below July 2024 levels.


The U.S. housing market continued to lose momentum in July, as new home sales slipped while inventories climbed to their highest levels in more than a year, according to data released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.

New single-family home sales in July 2025 fell to a seasonally adjusted annual rate of 652,000 units, down 0.6% from Junes revised pace of 656,000. Compared with the same month a year earlier, sales were off 8.2%, reflecting a broader slowdown in buyer demand amid elevated mortgage rates and affordability concerns.

While sales have softened, the number of new homes available on the market is climbing. At the end of July, there were 499,000 houses for sale, a 7.3% increase from July 2024.

Big rise in inventories

That level translates into a 9.2-month supply of homes at the current sales rate, up sharply from 7.9 months a year earlier. The supply measure, closely watched by economists as a gauge of market balance, has been trending higher throughout 2025, suggesting that builders are facing more difficulty moving inventory.

The combination of slower sales and rising inventory is putting pressure on prices. The median sales price of new houses sold in July fell to $403,800, down 0.8% from June and nearly 6% below the year-earlier level of $429,000. The average sales price also declined, dropping 3.6% month over month and 5% year over year to $487,300.

Market outlook

Analysts say the latest figures highlight the shifting dynamics in the housing market. While new home construction has boosted supply, affordability challenges and cautious buyers are limiting sales, leading to an accumulation of inventory. If the trend persists, price adjustments could deepen in the coming months, providing some relief for prospective buyers but straining homebuilders margins.


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Consumer News: Kraft Heinz splitting into two companies: What it means for consumers

Tue, 02 Sep 2025 13:07:06 +0000

Food products will get more focus after the split

By Mark Huffman of ConsumerAffairs
September 2, 2025
  • Kraft Heinz plans to split into two separate companies by 2026.

  • One company will focus on Heinz ketchup, Kraft Mac & Cheese, and Philadelphia cream cheese, while the other will manage staples like Oscar Mayer, Kraft Singles, and Lunchables.

  • Shoppers shouldnt see immediate changes, but the move is aimed at making each brand stronger in stores.


The maker of Heinz ketchup, Kraft Mac & Cheese, and Oscar Mayer hot dogs is breaking up. Kraft Heinz announced it will split into two companies in 2026, a move it says will give its brands more focus and allow them to grow faster.

The split will divide the companys products into two groups:

  • Global Taste Elevation Co.: This company will handle sauces, spreads, and ready meals including household staples like Heinz, Kraft Mac & Cheese, and Philadelphia cream cheese. These brands are already found in pantries worldwide and will get more investment in international markets and food-service outlets.

  • North American Grocery Co.: This side of the business will keep many of the U.S. and Canadian everyday favorites, such as Oscar Mayer lunch meats, Kraft Singles, and Lunchables. The company says it will continue to focus on family-friendly convenience foods that dominate grocery store shelves.

What shoppers can expect

For now, shoppers likely wont notice any immediate difference in the products they buy. Prices, packaging, and store availability will stay the same while Kraft Heinz works through the transition. The company insists the split is about making sure each group of brands gets the attention it needs to stay competitive and relevant.

Still, the change could pave the way for more product launches, quicker updates to packaging, and expanded options in grocery stores. For example, sauces and spreads could see new global flavors under Heinz, while Lunchables and Kraft Singles may branch into new convenience formats.

Kraft Heinz executives say the current structure makes it hard to give every brand the right resources. By splitting up, they hope each company can focus on what it does best: global growth for Heinz and Philadelphia, and everyday convenience for Kraft Singles and Oscar Mayer.

This move will unleash the power of our brands, said CEO Carlos Abrams-Rivera, who will lead North American Grocery Co. after the separation.

The transition is expected to wrap up in the second half of 2026. Shoppers may start hearing new company names and seeing brand updates before then, but the foods themselves will remain the same.


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Consumer News: Retirees face shrinking gains: rising healthcare costs may eat up 2026 COLA

Tue, 02 Sep 2025 04:07:07 +0000

Many seniors are already cutting cut back on essentials like groceries and medications.

By James R. Hood of ConsumerAffairs
September 2, 2025
  • Social Security benefits are expected to rise by about 2.7% in 2026, equating to roughly a $54 monthly boostbut rising Medicare costs threaten to eat most of it.

  • Medicare PartB premiums are projected to climb 11.6%, from $185 to about $206.50/month, which alone could consume nearly 40% of the COLA increase.

  • Broader healthcare expense hikesincluding rising PartD costs, deductibles, and outofpocket expensesare already pushing many seniors to cut back on essentials like groceries and medications.


Current projections indicate that Social Security recipients could receive a 2.7% cost-of-living adjustment (COLA) in 2026, slightly up from last years 2.5 %a modest gain that may nonetheless prove insufficient in the face of surging healthcare costs.

That projected increase would translate to approximately $54 more per month for an average beneficiary. However, as Medicare PartB premiums are set to rise 11.6%, increasing by $21.50/month to $206.50, Social Security checks may only gain $3233 neterasing nearly 40% of that new income.

And PartB premiums arent the only concern. Medicare PartD costs are also expected to increasearound 6% in premiumsand deductibles and other outofpocket costs, such as those for medications or services, are also on the rise. Moreover, the PartB deductible is projected to jump from $257 to $288, an 11.2% increase in itself, according toInvestopedia.

Effects are being felt

The rising burden is already having real effects: A recent nationwide survey found over half of retirees are cutting discretionary spending, and notably, more than one-third are forced to trim essentials like groceries and medical careall while COLA increases lag behind rising inflation and healthcare costs.

Experts warn that the disconnect between broad inflation measures (like the CPIW, which drives COLA) and the actual spending patterns of retireesespecially on healthcaremeans that many seniors will see little to no real improvement in their budgets in 2026, Barron'srecently reported.

Whats at stake?

Even with a COLA bump, rising medical costsespecially those automatically deducted from benefitsmean that many retirees will struggle to feel any real financial benefit next year. As the mismatch between inflation measures and seniors actual spending grows, advocates are pushing for a revision of how COLA is calculated or better indexing to retirees cost burdensparticularly healthcare.

Senior advocacy groups say none of this should surprise anyone.
Social Security checks arent keeping up with inflation. If four in five seniors think inflation was higher than the government reported in 2024, maybe we should stop questioning their experiences and start questioning why the COLA is failing to measure them, saidShannon Benton, executive director of the Senior Citizens League.


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