uITT Educational Services Target Of Federal Fraud Investigationr

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• Things don’t appear to have gotten better for for-profit college operator ITT Educational Services since it announced in September 2014 that it was under increased scrutiny from federal regulators, as the owner of the ITT Technical Institute chain revealed on Monday that the Department of Justice is looking into whether the company defrauded the federal government.

  The for-profit educator revealed the investigation in a regulatory filing [PDF] with the Securities and Exchange Commission.

  The company noted in the filing that it had received a Civil Investigative Demand from the DOJ seeking “to determine whether there is or has been a violation of the False Claims Act,” which imposes liability on companies who defraud government programs.

  In this case, the violations investigation is “focused on whether [the Company] knowingly submitted false statements in violation of the Department of Education’s Program Participation Agreement regulations.”

  Under the CID, the Dept. of Justice asks ITT to submit documents and answers to questions related to the company’s compliance with the U.S. Department of Education’s compensation regulations.

  ITT says it “believes that its practices with respect to compensation matters are in compliance with applicable laws and regulations.” The company says it is cooperating with the DOJ’s investigation.

  This is just the latest regulatory and legal issue for ITT Educational Services.

  Back in May, the SEC filed fraud charges against current and former executives with the company for their part in concealing problems with company-run student loan programs.

  The charges against the company, former CEO Kevin Monday and current CFO Daniel Fitzpatrick stem from their alleged fraudulent concealment of the poor performance and looming negative financial impact of two student loan programs the company financially guaranteed to investors.

  According to the SEC complaint [PDF], the loans performed so poorly by 2012 that the company’s guarantee obligations were triggered. However, instead of disclosing the issue to investors, the SEC alleges that ITT and the executives engaged in a fraudulent scheme and made a number of false and misleading statements to hide the magnitude of ITT’s guaranteed obligations to the loan programs.

  Before that, in February 2014, the Consumer Financial Protection Bureau sued ITT for allegedly pressuring students into predatory loans and mislead students on future job prospects and salaries.

  Additionally, the company has faced actions from several states, including the suspension of GI Bill Eligibility in the state of California in May of this year.

  [via Inside Higher Ed]

  
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by Ashlee Kieler via Consumerist

uSome California Pumpkin Crops Ripening Way Before Halloween Due To High Temperaturesr

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  Californians might be making a rush on the fake pumpkin aisle for their Halloween displays this year, as high temperatures have pushed the gourds to ripen much faster than they usually would. That could mean a jack-o-lanternless holiday for many, at least when it comes to the hand-carved kind.

  At some Northern Californian pumpkin farms, the summer heat has seen pumpkins growing old before their time and withering on the vine, reports CBS Sacramento.

  “The early heat that we had brought the crop forward quite a bit,” one farmer explained, noting that some of his pumpkins have been orange for at least two weeks already.

  When the wee pumpkins burst out to greet the light, the summer sun has been pounding them relentlessly.

  “With this heat, compounded heat, it’s just withered away,” the farmer said. “It’s going to be soft if we don’t get it off the vine and into somebody’s hands.”

  He says he and his staff are working hard to save Halloween, despite the heat. It could hit customers, too — if pumpkin patches don’t have as many pumpkins to sell, farmers might increase the price to compensate for the product that never made it to market.

  This isn’t the first time drought-stricken California has had pumpkin concerns — ABC 7 reported last year that a brutal autumn heat wave combined with the ongoing drought resulted in fewer pumpkins, many of which were much smaller than usual.

  California is the second-largest pumpkin producer, after Illinois.

  High Temperatures Bring Fear California Pumpkin Crop May Not Last Until Halloween [CBS Sacramento]

  
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by Mary Beth Quirk via Consumerist

uMissouri Attorney General Suing Walgreens Over Pricing Practices… Againr

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  Barely a year after Walgreens reached a deal with the Missouri attorney general to close the state’s investigation into allegations of overcharging and deceptive advertising, the state’s top prosecutor is taking the drugstore chain back to court.

  The St. Louis Post-Dispatch reports that Missouri Attorney General Chris Koster announced during a press conference on Tuesday that he filed a motion to hold the drug store chain in contempt for allegedly committing more than 1,000 violations of its 2014 settlement.

  The filing comes after the AG’s office conducted a one-week investigation in July that found 49 stores across the state continued to employ “shoddy” pricing practices, calling the actions a “flagrant defiance of the court’s order.”

  Specifically, the investigation found instances of 1,300 expired and inaccurate sales tags on store shelves. Koster said the tags ranged from being expired by weeks to two years.

  “Consumers have a right to rely on the pricing that they see on the shelves without having to verify the cost of each item in their basket when they go up to the cash register,” Koster said.

  The AG’s motion seeks to fine the company up to $5,000 for every violation the investigation discovered, plus an additional fine for every day that an expired tag is found on the store shelve, the Post-Dispatch reports.

  Allegations that the company continued its unfair pricing practices comes two years after the AG’s office first filed a lawsuit against the chain.

  Back in 2013, Koster filed a lawsuit seeking an injunction to make the chain stop using allegedly deceptive practices, and to pay unspecified fines and damages.

  According to that suit, consumers were overcharged by way of outdated price displays for sale items; confusion created by multiple prices displayed for the same item; displays offering discounts for rewards members, but with no discount given; and full prices charged for items in clearance bins.

  Last June, the company reached a settlement with the AG’s office that included the company employing an independent auditor monitor at its Missouri stores for three years.

  The Post-Dispatch reports that since that time, Walgreens has paid the state $136,500 for pricing violations uncovered during audits.

  On Tuesday, Koster reminded customers to be “vigilant”while shopping at the drug store chain.

  If a customer finds they have been overcharged while shopping at the store, Koster says they are entitled to reimbursement: overcharges for an item under $5 is entitled to receive that item for free, while overcharges on products more than $5 will receive a $10 store gift card and the item at the lowest advertised price.

  Walgreens’ issues with pricing haven’t been relegated to the Show Me State. The company previously agreed to pay $1.4 million in civil penalties as the result of a California price discrepancy case, and settled claims in Wisconsin that it scanned inaccurate prices and didn’t post refund notices at store.

  Koster accuses Walgreens of violating 2014 pricing settlement [St. Louis Post-Dispatch]

  
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by Ashlee Kieler via Consumerist

uAmerican Airlines Apologizes After Veteran Says He And His Service Dog Weren’t Allowed To Board Their Flightr

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  American Airlines says it’s apologized to a retired U.S. Marine, after the veteran said he wasn’t allowed to board a flight he’d booked out of Los Angeles because he had his service dog with him.

  The man, his wife and service dog Axel were on their way back to Virginia after attending an award ceremony over the weekend, where the canine won a “Service Dog of the Year” award from the American Humane Association, reports CBS Los Angeles.

  According to a post the veteran wrote on Facebook, he and his wife had been “denied access and not been allowed to board our plane by American Airlines due to us not being able to prove that Axel is a Service Dog.”

  He said he answered all the gate staff’s questions but that he didn’t provide any paperwork — because he’d called ahead and believed everything was fine, and they’d never had an issue in the past, including on the flight out to California.

  Besides, he wrote, they’d been waiting in front of the gate for the last two hours where surely staff must have seen them, but instead, he’d been pulled out of line as he tried to board.

  “We take these matters very seriously and are looking into what exactly occurred,” American Airlines said in a statement, adding that the company apologized to the veteran and his family, “and are very appreciative of his service to our country.”

  The man and his family have returned home, and say they are now urging airlines to step up their training to better serve veterans.

  Marine Corps Veteran Says Service Dog Was Denied Entry On American Airlines Flight [CBS Los Angeles]

  
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by Mary Beth Quirk via Consumerist

uMacy’s Opens A Bargainless Basement Store Targeting Millennialsr

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  Filene’s Basement started its existence as the literal basement of the Filene’s department store, with fewer amenities but lower prices. Now the Filene’s Basement brand is back (online) and Macy’s is trying out a basement concept of its own, but it’s not for bargain-hunters. It’s for the younger half of the Millennial generation, who are currently in high school or in their twenties.

  This literal basement is called One Below, and finally opened this week. It’s not to be confused with Five Below, a discount store that sells items for $5 or less. The new Macy’s basement, which the company will test as a concept first at their Herald Square store in Manhattan, is designed to keep young adults in the store, buying the latest junior fashions, getting their hair blown out, and charging their smartphones.

  The store’s offerings sound like a list of “things that young people probably like” from a marketing executive, with the stated goal of keeping customers inside the store as long as possible, as is the department store tradition. You want a blow-out bar, kids? It’s there. (That’s where someone blow-dries and styles your hair without cutting it.) 3-D printed accessories? Sure! A way to print your own face on a genuine Fossil watch? It’s Kayleigh O’Clock!

  The new subterranean millennial lair will be an “incubator” for Macy’s, and the company says that they plan to take whatever they learn there about attracting and keeping young shoppers to stores nationwide

  Macy’s Hopes to Attract Millennial Shoppers with ‘One Below’ [Racked NY]

  
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by Laura Northrup via Consumerist

uAmazon Chops $32 Off Amazon Prime Membership Price In One-Day Sale For New Subscribersr

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  Amazon is in a pretty good mood after snagging five Emmys for its original series, Transparent, and to celebrate, it’s giving new subscribers to its Prime service $32 off the usual price.

  This is a one-day only kind of deal: starting Sept. 25 from 12:00 a.m. ET and lasting through 11:59 p.m. PT, new members will pay $67 for their first year of Prime, instead of $99, Amazon announced Tuesday. Though there aren’t more details included on the site right now, we’d presume that the price would return to $99 after that first year of membership is up.

  Along with free, two-day shipping on millions of items, Prime members have access to free streaming TV shows, movies, music and books, as well as unlimited cloud storage for photos. And don’t forget those free and discounted Washington Post subscriptions.

  While this kind of a discount might seem like it’d take a big chunk out of Amazon’s profits, the e-commerce giant is betting it’ll make that $32 back pretty quickly: Prime members may spend more than double on Amazon per year than non-members do: Prime members may spend more than double on the site per year than non-members do, according to research we read about back in January that estimated that the average Amazon Prime customer spends $1,500 per year on the e-commerce site, compared to $625 for nonmembers.

  
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by Mary Beth Quirk via Consumerist

uGroupon Slashing 1,100 Jobs, Promises To “Do More With Less”r

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  When Groupon went public in Nov. 2011, its stock was selling for more than $20/share. With the startup shine gone and so many other companies offering local deals, Groupon shares now trade for around $4 each. In an attempt to breathe new life into the still-young company, it announced today that it will be cutting around a tenth of its workforce and closing up shop in six countries and Puerto Rico.

  “Over the next several months we will eliminate approximately 1,100 positions, primarily in international Deal Factory and Customer Service,” explains a blog post from Groupon chief operating officer Rich Williams. “Our teams have done great work to streamline our operations in these and other areas, and our global capabilities and strong regional service centers allow us to do more with less while still providing the high level of service our customers expect and trust.”

  In addition to ending its Puerto Rico operation, Groupon will cease to do business in Morocco, Panama, The Philippines, Taiwan, Thailand and Uruguay. The company had already closed up shop in Greece and Turkey.

  “We believe that in order for our geographic footprint to be an even bigger advantage, we need to focus our energy and dollars on fewer countries,” writes Williams.

  
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by Chris Morran via Consumerist