First on the cut list is a $10 million severance package for its former CFO. AIG has also announced that it will work with Cuomo's office to help "recover tens of millions of dollars in improper expenditures, including compensation given to two former top executives" (which we discussed in this post yesterday).

Under the terms of the agreement, A.I.G. will provide the attorney general’s office with an accounting of all compensation paid to its senior executives. A.I.G. also agreed agreed to cancel all junkets and benefits that are not justified by legitimate business needs. AIG will immediately cancel more than 160 conferences and events, some exceeding more than $750,000 per event, for a total savings of more than $8 million.

On Thursday, the company also agreed to establish tighter management controls on future expenses to prevent any future unwarranted spending on salaries, bonuses, stock options, severance payments, gratuities, benefits, junkets and perks.

AIG also hinted to ABC News that they'll let their contract for a luxury suite at Madison Square Gardens expire in February, although we suspect they'll wait to see whether the public scrutiny has passed by then.

"A.I.G. to Help Cuomo Recover Millions in Executive Pay" [DealBook at New York Times]
(Photo: Gene Hunt)

Bill, who sent us the tip, writes,

Note that to replace this service, a person would have to buy at least a $7.99 per month service from a Usenet provider. But Comcast is not going to lower the price of their Internet service to compensate customers for the loss of Usenet access.

(Photo: Getty)

From the Associated Press:

Citigroup's "account sweeping program" automatically removed positive balances from customers' credit card accounts, Attorney General Edmund G. Brown Jr. said. For instance, if a customer double-paid a bill by mistake or refunded a purchase for credit, that positive balance was then taken from the customer without notification, Brown said.

The news stories that announced the settlement last week don't explain why the sweeping program was set up in the first place, or why it ran for so long. They do point out, however, that a whistleblower brought the program to the attention of an internal audit team in 2001, but that person was ignored and later fired.

One unnamed Citibank executive explains Citibank's position pretty succintly in the AG's press release:

In the words of a Citibank executive, “Stealing from our customers is a business decision, not a legal decision.” The same executive later said that the sweep program could not be stopped because it would reduce the executive bonus pool.

Citibank says it admits to no wrongdoing, although we're not sure how you can characterize pocketing overpayments and credits for yourself as crime-free.

According to the settlement (PDF), Citibank must identify all affected accounts and mail a notice via first class mail to the account holder's last known address, or to the person in charge of the customer's estate. You'll have to respond within 60 days of this notice, and then will be reimbursed the skimmed fees plus 10% interest. The bank has until June 1st, 2009 to refund the money.

"Citi pays $18M for questioned credit card practice" [Associated Press]
"Citibank Stole From 53,000 Customers" (Thanks to Claire!)
(Photo: Getty)

Acrylamide forms naturally when starchy foods are baked or fried. Studies have shown the chemical, which also has industrial uses, causes cancer in lab animals and nerve damage to workers who are exposed to high levels. The Food and Drug Administration is researching whether acrylamide in food poses a health risk.

''Everybody's trying to figure out how to lower levels (of acrylamide) without significantly, adversely affecting taste,'' said Michele Corish, an attorney for Lance, which produces Cape Cod chips.

Corish said the modified snacks will be available nationwide. Messages left with the other three companies were not immediately returned Friday night.

The attorney general's office said the levels of acrylamide in most Cape Cod chips are already near the compliance level as defined by the settlement. However, Brown said Cape Cod Robust Russets contain 25 times the acceptable amount.

Corish said ''Robust Russets'' chips are no longer being sold.

Pringles was not included in the settlement because they are not potato chips, and Proctor & Gamble along with McDonald's, Wendy's, Burger King, and KFC agreed back in 2005 to either "properly label their products or lower levels of the chemical."

Settlement will reduce carcinogens in potato chips [AP]
(Photo: Getty)

McCollum said the main culprits are third-party companies that advertise ringtones and other services on the Internet, often promising that the service will be free. When customers—often teenagers—sign up, they or their parents are then surprised to find charges on their wireless bill.

"They will download this thinking it's free because the advertising on the Internet says it's free," McCollum said. And when the charge shows up on the bill, it's not always clear what it is, either, he added.

"This advertising is wrong, it's deceptive ... and it's all over the Internet," he said.

AT&T (T: 35.06, +0.23, +0.66%) Mobility has agreed in the settlement to police such agreements with third-party providers and make it clear what the charges are for.

"It's going to say 'ringtones,' and it's going to give them an opportunity to cancel," McCollum said.

"AT&T to repay Florida customers" [Orlando Business Journal]
"AT&T Mobility Agrees to Pay Consumers for 'Free' Ringtones" [Fox Business]

She writes:

When I went to pay for the order, I noticed a gratuity already included on the bill. I told the waiter, "this is take out gratuity is not included."

He looked at me and said "that's how we always do it." I sat there staring at my bill scratching my head wondering if i should sign this receipt. A few seconds later they told me that they were out of what i had ordered. Good I thought. Cancel my order completely, but I'm taking the receipt.

...Rule 12A- 1.011(11), F.A.C., provides that the unless the following conditions are met, a gratuity is taxable as part of the total sales price:

• The charge is a voluntary gratuity or tip added to or by the purchaser to his bill or money given freely by the purchaser over and above the sales price of such food or drink product; and
• Separately stated on the purchaser's bill or invoice as a gratuity or tip; and
• All such voluntary gratuities must be distributed in full to the employees at least every six months with no part accruing to the benefit or advantage of the dealer.

Restaurants and Bars Standard Industry Guide [Florida Department of Revenue]

Under the new regulations:

• Lenders will be required to treat all borrowers fairly and equally;
• Lenders must have a "reasonable belief" that the borrower can repay the proposed mortgage;
• Lenders would be required to offer the cheapest loan for which the borrower qualifies;

The Massachusetts Senate in June adopted many of Governor Deval L. Patrick's proposals for increased regulation. The version before the House today is similar. Mortgage brokers and lenders must be licensed, pay an annual fee and be subject to greater regulation and oversight by the Massachusetts Division of Banks. The money would be used to finance housing counselors who would assist first-time homebuyers planning to use adjustable-rate loans.

The legislation would also give borrowers a 90-day grace period in which to catch up on loan payments if they fall behind. And it limits the fees lenders can charge if borrowers convert from adjustable-rate loans to fixed-rate loans, which are generally easier to repay.

State toughens rules on mortgages [Boston Globe]
(AP Photo/Reed Saxon)

Missouri doctors cited numerous objections to the pilot program, which was halted and is being redesigned. For example, most faculty members of the Washington University School of Medicine in St. Louis were initially excluded from the quality rankings because university-based care is generally more expensive. Doctors in major specialties were ranked by cost alone.

Tyler Mason, a spokesman for UnitedHealthcare, said the company had been meeting with the attorney general's staff. He said: "We share their commitment to looking at cost and quality. That's exactly what this is about. The assertion in the letter that sometimes higher cost equals higher quality is actually not what experts nationwide find. Sometimes lower cost means higher quality."

N.Y. Attorney General Objects to Insurer's Ranking of Doctors by Cost and Quality [NYT]
(Photo: Waldo Jaquith)

This happened to me last week. 2 people came to my door from IDT, impersonating ConEd.

I called the Attorney General's office at 212-416-8000 and they said this was the first they had heard of it. They need more complaints about IDT in order to start an investigation.

If IDT Energy attempted to slam you or someone you know, be sure to call and register the complaint. Obviously, not enough people. Then again, Andrew Cuomo's team is in there now. Maybe Elliot Spitzer's team didn't just leave good notes. — BEN POPKEN

All Floridians who filed a complaint with the AG's office are eligible to take part in the settlement. Visit Myfloridalegal.com for more info.

See, this is why it's important to file official complaints! — BEN POPKEN

AOL settles over consumer complaints [Miami Herald] (Thanks to Sean!)

The office of the Attorney General sent a letter to the ISP on June 28th demanding answers. The letter was sent on June 28th, fifteen days after Vinny's phone call hit the net.

In August of '05, AOL and Spitzer struck a deal after whereby AOL agreed to revamp its retention procedures to make it easier for consumers to leave, agree to third-party verification and pay $1.25 million in costs.

Steve Case's heirs must have a spanking fetish. Good thing Spitzer's got a big paddle and we hope he's going to use it, and not just for consumer's sake. Otherwise, he risks looking like a chump, not a particularly well-advised fashion to sport prior to his November gubernatorial bid.

"Spitzer says AOL customer woes remain an issue" [Reuters] (Thanks to Vincent & Philip!)

The company operated sites like FreeiPods.com; FreeCDs.com; FreeDVDs.com and FreeVideoGames.com. Users typed in their contact info in hopes of getting something for nothing.

According to readers Mary O. and Adrian, Gratis actually DID give people iPods and Mac Minis and such. They also gave them chum buckets of spam.

Billions of dollars, after the jump...

Gratis has a privacy policy which claims, in several places, in several different ways that it "We will never give out, sell or lend your name or information to anyone." However, Gratis did exactly that, selling the data to three different "email marketers" who sent millions of pieces of spam to the addresses. No doubt, these companies also then sold the lists to other marketers, who also emailed to the lists and sold them, and so on and so on.

According to the notice of verified petition, the prosecution is recommending a penalty of $500 (or such other amount the court deems appropriate) per user unlawfully sold.

Based on the amount of data they are conservatively projected to have sold to Datran, just one of the three companies they provided data to, if the court fined Gratis Internet the full $500 that would equal over 73 billion dollars.

The total amount Gratis is estimated to have earned selling the records is $413,117.

The press release believes the Gratis case "to be the largest deliberate breach of privacy in internet history." Perhaps only in recorded history. There's hundreds of companies like Gratis, Datran, JDR and Jumpstart, in various shades of off-black. Hopefully this lawsuit will send them a message.

Suit Accuses Website Operator of Massive Privacy Breach [OAG.NY via Digg]

A few months ago, a consumer complaint launched an investigation by Eliot Spitzer (pictured) of Kaufman's, which was found guilty of engaging in various deceptive marketing and advertising tactics.

For example, Kaufman's conducted a near constant sale of a high-end coffee maker from September 29, 2005 through December 31, 2005. During this time, the store offered the Braun Tassimo Hot Beverage System at a sale price of $169.99, discounted from its regular price of $219.99, for 74 out of 94 days. However, the MSRP is is in fact $169.99, and could be widely found in other stores for that price.

"This is the second agreement that Kaufmann s has entered into with the Attorney General s Office. In the first, which was signed in January 2005, Kaufmann s agreed to stop promoting fake sales. As revealed by the Attorney General s more recent investigation, however, Kaufmann s failed to do so," reported the press release.

More shenanigan details in the press release.

New Yorkers wanting to file a complaint about false advertising can call the Attorney General s consumer help line at (800) 771-7755.

Don t worry, it s absolutely free. We re doing a special promotion a Best Buy cashier allegedly told Chelsea Tulin at checkout.

After getting home, she checked receipt and saw at the bottom Best Buy had given her credit/debit info to Time. They also gave Time permission to charge her card after the 8 issue free trial for 24 issues at 24.95 and to auto charge renewals every 6 months afterwards.

On Time s website you can get 84 issues for $29.95

Dawn Bryant, a Best Buy spokesperson, told the SF Gate that, the reasoning behind this promotion is for us to give customers things they can appreciate. It s to best serve the customer.

Tell that to the attorney generals of Wisconssin, Ohio and New Jersey, who all filed suits against Best Buy for deceptive practices.

Chelsea canceled her subscription once she saw what was happening. "It shouldn't be up to consumers to have to stay on top of these things," she said, "But it is."

Magazine Offer Not a Best Buy [SF Gate]