Consumer Federation of the Southeast Names List of "Who's Playing Consumers For Fools"

- Web Video Skewers Anti-Consumer Practices and Policy and Recognizes Lawmakers Who Fight for Consumers -

April 1, 2009

TALLAHASSEE - The Consumer Federation of the Southeast (CFSE) today released its April Fools' Day "Crazy 8 Hall of Shame" list of the special interests that are "playing consumers for fools." CFSE Executive Director Walt Dartland released the list via a Web video.

Topping the "Crazy 8 Hall of Shame" list are telephone, health insurance and tobacco companies, along with electric utilities. Dartland jabbed the industries by awarding each a "joker" card for trying to "put a joke over on consumers," and he recognized lawmakers who are working to protect consumers from bad policy. To see the "Crazy 8 Hall of Shame" video, go to www.consumerfederationse.com.

The 2009 April Fools "Crazy 8 Hall of Shame" offenders are:

The Florida Medical Association. The Florida Medical Association is pushing sneaky legislation (HB 855) to raise the cost of medical care for consumers. This bill would eliminate group purchasing power that gives consumers lower rates on doctor services - a huge whammy for consumers and employers relying on PPOs to save money. The bill would destroy the way group health insurance works in Florida by forcing insurers to provide direct payment to out-of-network doctors at the PPO rate - which is usually much less than what the out-of-network doctor would charge. The consumer would be responsible for the difference - and could be sued for thousands of dollars. Moreover, the bill would raise costs to state taxpayers by an estimated $22 million a year. In this tough economy where people and employers can barely afford health insurance, lawmakers should stand against this raid on consumers' wallets to pad doctors' bank accounts.

Big health insurers. Many big health insurance companies are trying to cut costs by switching patients from drugs prescribed by their doctors to less expensive drugs, even if they are chemically different and not designed to treat the same illness. Watch out for confusing jargon here: Terms like "incentivized therapeutic substitution," "therapeutic switching," "generic alternative" and "generic equivalent" mean some company is making money by baiting you to switch from what's best for YOU to what's best for the company's bottom line. Congratulations to Sen. Mike Fasano and Rep. Alan Hays for sponsoring legislation (SB 558/HB 263) to protect consumers from this bad practice.

Tobacco companies, and the legislators who defend them. Florida could raise nearly $1 billion a year in desperately needed revenue by raising Florida's tobacco tax rate from among the lowest in the country and closing a loophole that allows off-brand tobacco companies to charge less and grow their market share. Opponents say Florida shouldn't be raising taxes in a recession, but these increases are no brainers. If higher assessments impel smokers to quit, Florida saves health care costs and consumers get healthier. Either way, the state - and consumers - win.

Dartland also awarded a special "joker" to Dosal Tobacco Company. The company is trying to pass itself off as a little "mom-and-pop" Florida business. With reported annual revenues exceeding $100 million and production topping 80,000 to 90,000 cartons of cigarettes a day, the Dosal Tobacco Company actually is the third-largest seller of cigarettes in Florida. While the health consequences of smoking Dosal cigarettes is the same as other cigarettes, Dosal does not have to pay into Florida's Chiles Endowment to fund health programs and anti-tobacco education efforts.

Phone companies. Phone company giants are pushing for legislation (CS-SB 2626/CS-HB 1465) they say will lower consumer rates through competition under the friendly sounding but misleading name of the ''Consumer Choice and Protection Act.'' In fact, the legislation would take away the Public Service Commission's ability to protect customers from poor service and unreasonable rate increases. An army of lobbyists is pushing the legislation, making it very possibly the most heavily lobbied bill the 2009 session.

Utility companies. Florida is one big storm away from weeks of darkness because the state's energy companies rely on just two pipelines to bring natural gas to Florida. This energy supply could easily be disrupted in a hurricane, which could plunge Florida into prolonged darkness. The state's biggest utilities so far have resisted efforts to establish an in-state natural gas storage facility critical to Florida's disaster response efforts, even though the Public Service Commission and the state's emergency managers have recognized the need for an emergency supply. In-state storage of natural gas not only would provide energy security and reliability for Florida during emergencies, it also would help reduce volatility of consumer electric rates, produce jobs and investment, and even help improve Florida's air quality by reducing the vast amount of fuel oil burned as a back-up fuel every year by state utilities.

Credit card companies. This is the only industry that can change its price AFTER consumers purchase the service. In this difficult economic environment, consumers who are even slightly late in making their mortgage payments or paying other bills are suddenly subject to dramatic credit card interest rate increases. Often rate hike language is buried in paperwork and consumer notification is hidden or non-existent. Sen. Charlie Justice and Rep. Maria Lorts Sachs receive kudos for legislation (SB 772/HB 553) they have filed to prohibit in Florida the practice of "universal default" - where a credit card company increases a cardholder's interest rate on one card because of making a late payment to another credit card or creditor.

Auto insurance companies. Insurance companies are prohibited from "redlining" - setting rates based on the neighborhood where someone lives. But auto insurers are practicing a form of "financial redlining" by setting car insurance rates based on consumers' credit scores. With many consumers losing their jobs or absorbing pay cuts, this practice inflicts a "double whammy," slamming Floridians who are temporarily down on their luck with a higher auto insurance rate. Recognition goes to Sen. Ronda Storms and Rep. Priscilla Taylor whose proposed legislation (SB 1524/HB 683) would outlaw this practice.

Payday loan companies. Payday loan companies pay consumers advances on paychecks while they extract outrageous interest rates. Yet, incredibly, a bill pending in Congress could allow payday loan companies to collect 390 percent APR for two-week loans and 780 percent APR for one-week loans. Dartland awarded a big joker to anyone in Congress who thinks it's fair to charge interest rates that would make underworld loan-sharkers blush.