The Reynolds "Charity" Empire in Decline

A few years ago I wrote a post entitled, "Is The Breast Cancer Society a Worthy Charity", to which the answer was "No". The comments to that thread are extensive, and include a defense of the organization from Kristina Hixson, which avoided answering any of the tough questions or giving an honest explanation of the organization's operations. She went so far as to post a series of fake endorsements to the thread, trying to bury valid criticism behind fictitious praise.

Oh yes, and she went on to marry the man who ran that "charity", James T. Reynolds II.

Over time, the Reynolds' family of "charities" started to receive press scrutiny. The Tampa Bay Times published an article, "Intricate family connections bind several of America's worst charities". It opens

Carol Smith still gets angry when she remembers the box that arrived by mail for her dying husband.

Cancer Fund of America sent it when he was diagnosed with lung cancer six years ago.

Smith had called the charity for help. "It was filled with paper plates, cups, napkins and kids' toys," the 67-year-old Knoxville, Tenn., resident said.

"My husband looked like somebody slapped him in the face. "I just threw it in the trash."

The story continues,

In the past three years alone, Cancer Fund and its associated charities raised $110 million. The charities paid more than $75 million of that to solicitors. Cancer Fund ranks second on the Times/CIR list of America's worst charities. (Florida's Kids Wish Network placed first.)

Salaries in 2011 topped $8 million — 13 times more than patients received in cash. Nearly $1 million went to Reynolds family members.

The network's programs are overstated at best. Some have been fabricated.

The Federal Government has finally managed to partially shut down the Reynolds empire:

In reality, officials say, millions of dollars raised by four “sham charities” [Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America and the Breast Cancer Society] lined the pockets of the groups’ founders and their family members, paying for cars, luxury cruises, and all-expense paid trips to Disney World for charity board members.

The 148-page fraud lawsuit accuses the charities of ripping off donors nationwide to the tune of $187 million from 2008 to 2012 in a scheme one federal official called “egregious” and “appalling.”...

Among the allegations is that [Reynolds' ex-wife, Rose] Perkins gave 10% across-the-board bonuses twice a year to employees [of the Children’s Cancer Fund of America], regardless of performance, and was allowed to set her own salary and bonuses up to a limit without the approval of board members. In 2010, when donations to the Breast Cancer Society were declining, Reynolds II’s salary ballooned from $257,642 to $370,951, according to the complaint.

What can a grifter do, but grift? Even having been shut down, the Breast Cancer Society promises to come back to leach off of the good intentions of people who want to help cancer survivors:

The silver lining in all of this is that the organization has the ability to continue operating our most valued and popular program, the Hope Supply. Our Board will work tirelessly to maintain the Hope Supply program services that have benefitted our many patients for years – initially under the TBCS banner as it transitions under a different organization – all with the goal of seamlessly providing services to you. I take solace in the fact that this wonderful program has the chance to continue operating.

There is a note of honesty, "I have loved leading TBCS...." Why wouldn't James love working in a job that paid him royally for performing little work, despite his indifference to the needs of the people his charity was supposed to help? It's a gravy train he's eager to re-board, so watch out for his next "charity", coming soon to a list of the nation's worst charities near you.

If you want a good measure of James Reynolds II's character, watch him on video.

Don't Trust Addiction Treatment Claims About Success Rates or Not Being a 12-Step Program

When you're trying to find a drug or alcohol treatment center for somebody you care about, you'll likely find yourself at a disadvantage. First, the person who needs treatment may attempt to impose conditions on the treatment center you choose and, even when they sound reasonable, some of those objections may be more about "How do I stay out of treatment or find something more akin to a spa than a treatment center" than about trying to find a good fit. Second, when you call treatment centers for information about their programs, you are trusting somebody at the other end of the phone to tell you the truth. Sometimes that happens, but often it does not - you may in fact be talking to somebody who works in more of a sales capacity than an intake capacity. Also, sometimes they'll share information in good faith but the experience will turn out to be quite different. If at all possible, visit a facility and get a sense of its program and stability before writing a check. Please note, even if the center is suggested to you by a facility that has a strong reputation, you should not trust the recommendation - you need to investigate any recommended facility and, if at all possible, visit the facility and see it for yourself.

One claim that many addiction programs make, that they really shouldn't, is a claim of how many people who complete their program remain sober. First, even if accurate (and it won't be) the statistic is going to be highly misleading - if you focus on treating teenagers who smoke marijuana, you're going to have a much higher "success" rate than if you're treating IV drug users. The same is true if you're counseling people who are concerned that they might be using too much alcohol or using too many drugs, coming to you as self-referrals, as opposed to people coming out of a multi-day medical detox who are not even slightly interested in being sober. Second, the definition of sobriety used by the program may be designed to give a misleading picture of the client's sobriety - focused on the "right now". Third, as responses to patient surveys are voluntary many clients who have relapsed either won't be located or won't respond. Fourth, the questions almost never extend to subsequent treatment - the quack program doesn't care if you had four relapses, completed three IOP's and spent 90 days in Hazelden between your graduation and the present, if you're sober they'll count you as a success. Fifth, the definition of what it means to complete a program can render the statistic meaningless.

One program I saw touted an 80% success rate at five years for patients who completed its program, and while it was a good program what they didn't tell you unless you asked was that they defined their program as being five years in duration, with completion meaning that through those five years you attended weekly meetings (free, or should I say, included in the price of the program) at their facility. If you stopped attending, you didn't complete the program. If you lived in another part of the state or country and thus couldn't attend those meetings, you weren't included in the statistic.

But the claim that makes immediately skeptical of a program is when it presents as a front and center part of its marketing, "We're not a 12-step program". Let me be clear: I am not wedded to the twelve step model. Twelve step program have an interesting history, emerging out of a religious self-improvement program and being transformed into a somewhat secular model for addiction support and recovery. A lot of people have difficulty with the notion of turning their will and life over to a higher power, or with making prayer and meditation part of their daily lives, even if you can do both in a largely secular manner. But as one addiction counselor, who himself had struggled with his fit with the twelve-step model, explained to me, "I tell my clients who have difficulty with the steps that if I had something better, I would send them to it instead, but I don't." Part of that is the fact that AA groups are everywhere, while non-12-step support groups remain relatively obscure. Part of AA's success results from primacy but, whether or not its critics choose to admit it, its success depends on people voting with their feet - the addicts in long-term recovery who go back to AA year after year do so because it works for them.

Through experience, 12-step programs implemented some measures that correspond to certain aspects of addiction and recovery. For example, in active addiction the addict's impulse control diminishes - desire and action become unchecked by rational thought. Twelve step programs attempt to interpose an outside reality check on the addict - if you are craving drugs or alcohol, go to a meeting or call your sponsor. As a period of sobriety expands, the internal mechanism between impulse and action can start to rebuild itself. Similarly, the concept of "90 in 90" - doing ninety meetings in your first ninety days of recovery - is reasonably consistent with the amount of time it takes for the addict's impulse control to start to approach normal levels. The social aspect of the group can be reinforcing - you're dealing with people who have been through what you have, or worse, and they want you to succeed in your recovery. They'll also welcome you back if you relapse. The group's sayings and slogans can give you something to think about, even if you reject the larger program.

It's important to recall, however, that although treatment and therapy can incorporate aspects of the twelve-step model, twelve step programs are not therapy. They're structured peer support, coupled with a structured self-improvement program. Twelve step programs are an adjunct to treatment and, while some people achieve and maintain sobriety without any treatment or participation in 12-step or non-12-step support program, many people need the longer-term peer support and accountability. If you find a program that works for you, be it a 12-step program or one of the lesser-known non-12-step alternatives, it makes sense to take full advantage of the program. There's no reason you can't try more than one program, even at the same time, to see what works.

One of the reasons that long-term participants in 12-step programs can be dismissive of the argument, "I tried a twelve-step program and it didn't work for me," or "The twelve steps are nonsense", or "I don't see why I need to completely abstain from alcohol or substance use to be sober," is that they made those same arguments in their own early recovery. Sometimes they made those arguments for a period of years before they finally did what AA demands, surrendering themselves to the program, and that's when it worked. Again, I'm not arguing that 12-step programs can or will work for everybody, and if you're around addicts long enough you'll see unfortunate cases where a person who had achieved many years of recovery ends up relapsing despite seemingly doing everything right, but there is something to the argument that if you surrender to the program it can work for you.

The primary purpose of a marketing hook, "We're not a 12-step program", is to reach people who either are alienated by the very concept of the 12 steps, or people who find them difficult or intimidating. Were the argument intended to reach people interested in science-based recovery, it would put science front and center rather than a rejection of the twelve steps. To the extent that a recovery program can identify addicts who will or will not benefit from a particular treatment modality and channel them into programs and support groups that are likely to work for them, I'm all for it. But, as much as they may protest otherwise, when they flatly reject the 12-step model in toto they are rejecting approaches to treatment that have been documented to work for many people. If you're going to claim to offer science-based treatment of addiction the science should be front and center, not the rejection of a particular approach to treatment.

L.A. Weekly published an in-depth article about a treatment center that claims to reject the 12-step model,

I tell [a person who completed the program] that despite [the proprietor] Prentiss’ denouncements of 12-step programs, I saw residents’ schedules on the wall that indicated optional A.A. meetings.

“When I was there, we did six or seven [A.A.] meetings a week. Two or three in-house and the rest out,” he says. “And they were mandatory. When Chris wrote his book [The Alcoholism and Addiction Cure],that ended. That’s when he decided A.A. was the villain, because he decided he could make a fortune if he just claimed he had found the cure for alcoholism.”

The business executive continues in an upbeat, almost appreciative tone: “Chris has a brilliant scheme that they have cooked up there. He has the perfect sales pitch.” His voice suddenly drops. “I know. I fell into it. It’s a beautiful sales pitch when someone is at the end of their rope.”

When I tell Stuart I couldn’t find any of the success stories Prentiss brags about, he tells me, “People come in there, they fail and nobody can call him on it. He’s got clients with confidentiality agreements to hide behind.”

How did anybody at all get sober, I ask? The answer, says Stuart, is the ironic one: A.A. I remind Stuart just how adamant Prentiss was with me in mocking A.A.

“Chris was having trouble filling the beds, and the minute he changed the message, they filled to the brim. He created a cash machine,” Stuart [a person who spent $250,000 on the program] says. “After my stay in ’05, I was invited back as someone early in recovery, and I started talking of all the people I had been there with who had relapsed. And my message was, this is a great place, it’s just not gonna teach you anything about staying sober when you leave.”...

[Dr. Jason Giles, former medical director of the center] repeatedly hedges when asked to talk about Prentiss, but finally says, “The interesting part, I think, is how people are vulnerable to charlatans. I think these rehabs are modern-day quackery.”

Then he lowers his voice to a whisper and adds, “I’ve been in contact with a lot of my former patients from when I was there and the data, the data do not come anywhere near what he is quoting as his [84.4 percent] success rate.”

This came to mind when I saw an invitation to submit questions to the medical director of an addiction treatment center on the New York Times website. The center utilizes the 12-step model, so predicably the critics of the twelve-step approach appeared to denounce it. One in particular was pushing an "education program" as an alternative to treatment, sharing this link.

Outside independent professional research firms have certified a long-term success rate of at least 62% for the St. Jude’s Program. This compares to a success rate in the range of 0-20% for conventional programs.

Let's take a look at an example of that "research".

Clearwater consulted with BRI regarding the specific information needed for fielding. Baldwin [the parent company for the education program] and Clearwater mutually agreed to have Clearwater use Microsoft Access to randomly choose names from a list provided to Clearwater by BRI. After the names were selected, Clearwater accessed BRI’s in ‐ house database containing contact information for each participant in the Jude Thaddeus Program to gather specific information that was copied manully into a spreadsheet. The contact information was loaded into our CATI system and the interviewers began to contact designated individuals and complete interviews.

It catches my attention that no claim is made that BRI provided a complete list of people who have completed the program.

Out of a total of 956 records called, 232 resulted in completed interviews with both parties, giving an overall response rate of 26.17%. Clearwater interviewers “chased” members of the sample who were not reachable at the household or telephone number provided by BRI when someone we contacted could provide us with an updated telephone number.

The low response rate should catch anybody's attention, especially given this note:

Many Guests to whom we were never able to speak with were actually back in rehabilitation again. That information was tracked in the attempt messages, but may be something that should be tracked more quantitatively using a specific disposition or answer choice.

First, it's a misnomer to say "again", given that the program being investigated is an educational program, not a therapeutic program. Second, why exclude from the claimed success rate the percentage of people who could not be surveyed because they were in treatment?

Also, the survey appeared designed to maximize the number of respondents who could claim to be sober,

Have you been sober, not using any illicit drugs or alcohol, for at least the last 30 days?

Self-reporting is a relatively poor method of evaluating sobriety. Some of the people contacted had provided a "corroborator" who was independently asked if the alumnus was sober. When reached, the corroborators indicated a lower level of sobriety than the alumni. Yet the program's official website presents a conspicuous pie graph labeled "62.5% sober for the past 23 years", a claim that they know to be at best highly misleading. As I interpret the graph they are deliberately implying that 62.5% of people who complete their program are verifiably sober after completion, when they know that's anything but the truth.

Going back to the website linked from the New York Times, the statistical argument gets worse,

This compares to a success rate in the range of 0-20% for conventional programs. Data published by Alcoholics Anonymous (A.A.) indicates that its 12 step method has a success rate of no more than 5%. Research also finds that no treatment at all has a success rate of about 30%. This suggests that traditional 12 step programs are less effective than doing nothing.

The "success rate in the range of 0-20% for conventional programs" statistic seems to have been fabricated. No source or context is provided.

In terms of the claim that AA "has a success rate of no more than 5%", if you hear that from any person or entity claiming to be an expert in either addiction treatment or 12-step programs, my suggestion is to run away. The figure being described is a one-year retention rate - how many people who start AA within a particular 12-month period continue to attend meetings. In a survey of people who are attending AA, "35 percent were sober for more than five years; 34 percent were sober from between one and five years; and 31 percent were sober for less than one year. The average time sobriety of members is more than five years." As I indicated earlier, the people who keep going back to AA (and who do the work necessary to pay for meeting space, set up the space, provide coffee, make literature available, etc.) do so because it works for them. If you have to fabricate a 95% failure rate in order to promote your program, the reflection is on your program and not on AA.

According to somebody who reports having twice completed the St. Jude program,

For me, the greatest injustice of all is St. Jude/BRI's CONSTANT slandering of A.A. No, not because I support A.A. (it's a religious cult, with rigid dogma and rituals and little to zero efficacy), but because....well....the St. Jude Thaddeus program IS A.A. I know, weird right? Basically, the St. Jude program is identical to the 12-steps, and its crux (and a "guests" likelihood of success) rests on willingness to "serve others". In A.A. that means make coffee, give away cigs, and **** vulnerable women. At St. Jude it means do dishes, hide candy under your roommate's pillow, and **** vulnerable women. Essentially, instructors act as sponsors who aid in a "guest's" acceptance, surrender (formal surrender prayer said with a sponsor, shit, I mean instructor) a detailing of misdeeds and character flaws, a drafting of an ammends list, and on and on. The only difference? St. Jude insists meetings are unnecessary, it's all about choice, and that after completing the "workbook" you're cured for life!! I just can't believe how much effort they put into distancing themselves from A.A. whilst simultaneously being A.A.

So again we have a program that bashes AA but reportedly adopts or utilizes many of its precepts. The alumnus recognizes the marketing aspect, "St. Jude needs A.A. to exist so they can sell their services based around NOT being A.A.". It's also surprising how some of the most vocally anti-AA treatment centers and programs seem to be owned or operated by people who have no credentials in either behavioral health or addiction treatment.

Somebody who makes a statement along the lines of, "Conventional treatment and 12-step methods of recovery don't work", is being no more true to the facts than somebody who claims "Conventional treatment and 12-step methods of recovery always work". No treatment works for all addicts all of the time, and some treatments that won't work for an addict at one state of addiction or recovery may well be effective when they've reached a different stage in their recovery (or lack thereof).

Apple, Amazon, eBooks, and Antitrust

I am not a close follower of antitrust law. I studied the law as it then existed more than twenty years ago, at which time the state of the law and its enforcement was in significant flux. Prior antitrust litigation had cast a shadow over the enforcement mechanisms, with the break-up of International Shoe being widely seen as a cautionary tale for how too strong a remedy for antitrust violations (e.g., the break-up of a company) can undermine an industry - a caution that didn't save AT&T from being broken up, but likely did play a role in the decision to preserve Microsoft as a single entity. Since that time, I've watched from the distant sidelines as the courts have relaxed restrictions on what a company may do without running afoul of antitrust law, including in relation to minimum advertised price (MAP) and minimum retail price (MRP) policies.

What strikes me about the argument of the attorney generals and Justice Department, in essence that they pursued Apple in order to protect consumers from higher prices, is that the courts have demonstrated less concern about consumer prices than consumer advocates. Polices such as MAP and MRP can help protect a manufacturer and its retailers (particularly brick and mortar retailers facing online competition) from downward price pressure, but with the inevitable result that prices will go up for consumers.

An early reaction from Jonathan Gans, I think, reasonably summarizes the outcome. I admit, I have not read the 120 page opinion, and I would welcome comment from anybody who has. I'm not sure that I agree with him that "Apple didn't need to do this", at least in the sense of having a viable bookstore. Amazon's approach was, in the eyes of the attorneys general, a boon to consumers, with Amazon selling many titles below cost in order to expand and entrench its market share. The entire controversy with Apple was kicked off by the fact that Apple was not interested in following that path - yet unless they followed Amazon's model, or inspired publishers to convince Amazon to change its pricing model, Apple's eBook store would not have been viable.

Once upon a time, Apple might have been able to accuse Amazon of anti-competitive product dumping, but that theory has been all-but-abandoned, and Amazon was careful enough not to issue subsidies across-the-board such that there was little chance of it's being revived. So we ended up in an odd situation where any potential competitor to Amazon would have to provide subsidies to buyers, likely resulting in its inability to turn a profit on an eBook store, doing something akin to what Apple did, or staying out of the market. Also, through its agency model, Apple cleared the way for additional eBook stores to come online - because they could enter the market without having to worry that they would not be able to turn a profit due to Amazon's subsidized prices. The attorneys general seem to believe that consumers would have been better served by having Apple stay out of the market than by having it enter on terms under which it could turn a profit and which did not in fact give it a competitive advantage. Even accepting the court's conclusion that they proved an antitrust violation I don't think they made that case.

Like any appellant, Apple is going to have a difficult time appealing based upon the argument that the judge misunderstood the facts. The judge's rulings were extensive and, in simple terms, on appeal any ambiguity is construed in favor of the nonmoving party. I expect them to try, and I expect that they are going to identify some findings by the court that arguably contradict the lower court record. But I expect their focus on appeal to be a bit different - that they will be less focused on what the law is, and more focused on what the law should be. That is, just like the deep-pocketed manufacturers who decided to litigate issues of MAP and MRP with what amounted to a law reform argument, Apple is well situated to present... let's call it the "Mr. Bumble defense"¹... to present antitrust law. You don't have to sympathize with Mr. Bumble, or believe he is undeserving of his fate, to see that there's some substance to his reaction.

In short, Apple is likely to take its appeal to the highest court that is willing to hear the case and, while happy to win on the facts, can be expected to also argue that to the extent that the law as applied should be distinguished from the facts of their case, and to the extent that it cannot that it should be reversed.
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1. In Oliver Twist, after being told that the law presumed his wife to be acting under his direction Mr. Bumble, the workhouse manager, sputters, "If the law supposes that... the law is a ass—a idiot. If that’s the eye of the law, the law is a bachelor; and the worst I wish the law is that his eye may be opened by experience—by experience."

Shipping Cost Fraud and Misrepresentation on Ebay

One of the problems with buying on eBay is that, although there are many legitimate sellers, there are also many sellers who engage in dubious or even fraudulent business practices, and even in cases of unambiguous fraud eBay seems to do nothing to shut down dishonest sellers. (Similar problems seem to be arising on Etsy - it looks like they shut down some obviously fraudulent sales, but the vendor is still going strong.)

One convenience of eBay is that you can search by price, with or without shipping, to sort through the offerings of vendors who are selling the same product at various price points. By including shipping in your sort, you avoid the vendors who try to trick you into buying what seems like a low-priced item, but makes up for it (or more than makes up for it) with excessive shipping fees.

Or, at least, that's the way it should work. eBay's listing policies should ensure that there's no confusion:

When you create a listing, make sure all your text and other information are complete and consistent throughout. For example, you can't say one thing in the title and then describe it differently in the description....

Not Allowed: Inconsistent details throughout your listing (titles, descriptions, product details, shipping, payment information, and so on)

To push misleading shipping costs into the search feature not only necessarily involves hiding additional fees somewhere in your listing other than the area in which shipping costs are to be described, it undermines the integrity of the search feature - the abusive seller can rank above honest sellers who accurately list their shipping costs.

I expect that regular users of eBay are well aware of this type of fraud. It's the less frequent user who is apt to get burned. Shipping cost manipulation has been going on long enough that last year somebody did a study of how hidden shipping charges affect sales. They did not do the experiment on the U.S. eBay site because the U.S. site is designed to "automatically reveal[] shipping charges in its search listings". But that, of course, presupposes an honest vendor.

Let's take a look at how this works. Here's a screen capture of a sale by a vendor named garrys_world_exchange_square (Yee Mei Tam):

Very clearly, shipping to the U.S. is listed as $3. Does that seem low? If so, you probably click on "See details" to see additional terms.

And right there, you find a shipping calculator. Enter your ZIP code and, sure enough, it confirms that shipping to your address is $3.

So you place your order and next thing you know, you're being told that you have to pay an additional shipping charge. "What?", you say, "I made this purchase based upon the flat shipping fee you described in your listing. I confirmed it with your calculator! What gives?" And a vendor like garrys_world_exchange_square will respond, "If you read the description for the product you'll see that I said there's an additional charge for shipping to the United States."

Note that as eBay listings are described, when you click that "See details" link for shipping - you know, to get to the place where any additional details related to shipping are supposed to be described - the description is no longer visible on the page. So unless you click back to the description and scroll way down "below the fold", you are not going to learn about the additional charge. The content is hidden from the "Shipping and payments" view of an eBay sales page.

Again, this seems to be a painfully obvious violation of eBay's rules for listings - you aren't allowed to have inconsistent details in your listing, including inconsistent details pertaining to shipping. But a very useful site called Toolhaus provides a more comprehensive look into a seller's conduct than you can get directly through eBay - particularly given the games and tricks that dishonest sellers use to get negative feedback removed from their profiles.

With this particular seller you learn that he has a long history of misleading consumers about his products (e.g., for movie sales, "Never told in description it is uncut. Already listed the total running time" and "I have never mentioned that it is the remastered version"), has many complaints about misleading shipping prices ("False Advertising - stated shipping 3.00 then wants 30.00 let money to pay ebay"; "If you buy from this seller, scroll all the way down for TRUE shipping charges"; "Ensure DVD region code works in your country +Read fine print on his shipping"), and on top of it all he's obnoxious ("Refused to pay and left me -ve feedback! Are you nuts?"; "I already return your money order, Why do you leave bad feedback? How absurd !!"). I like this one:

Feedback: Dvd did not contain complete movie. No reply to my emails. Got Taken !

Response: You're already left Negative for me, How can I refund payment for you ? Crazy !!

I had no idea that it became impossible to refund a purchase price if the buyer complains that you sent a poor product. You learn something every day.

Seriously, hasn't eBay established a sufficient base of sellers that it can afford to enforce its rules and purge sellers who engage in sales tactics that are fraudulent or intentionally misleading, even to the point of diminishing the quality of its search and rendering its postage calculator useless?

Would You Buy a Domain on a New TLD

If you purchase a new TLD (top-level domain) from ICANN, you have the potential to make a lot of money. You also have the potential to lose a lot of money.

Speaking of fees, if you want one of the new domain suffixes and are not a wealthy individual or company, get ready to put a major dent in your bank balance. The Icann application alone will be $185,000, with an annual fee of $25,000. Who sets this fee? Why, Icann, of course. Is it reasonable? Icann says it is. Why is it reasonable? Because Icann says, based on evidence that is less than persuasive, that it needs the money for things like legal costs.

So if you're not able to buy example.com, would you buy example.example? Domain owners have on occasion experienced difficulties when existing registrars have gone out of business, but they've largely been able to get past the problem by virtue of the fact that the TLD's are not owned by the registrar. If you pay somebody $6 for your example.example domain, though, and they decide they're not making enough money to justify the continued registration of the TLD, your domain name vanishes - and even if it's worth it to you to try to acquire the TLD I'm expecting that ICANN wouldn't only want you to increase your annual registration cost by $25,000 to keep your domain going, it would want a new application fee - and would reserve the right to reject your application.

Particularly during the early years of the Internet there were a number of efforts to create alternatives to domain names, usually by allowing people to buy keywords and key phrases that would cause people using the sponsor's service, or perhaps a browser plugin, to navigate to the registrant's (ostensibly relevant) website. None ever acquired the volume of users necessary to succeed.

A partial bypass already exists for end users. It's called Google – though this also applies to Bing and other search engines. Internet users are learning that it's easier, almost always with better results, to type the name of the enterprise they're searching for into the browser's search bar than to guess at a domain name and type that guess into the address bar. Google isn't the DNS, but its method suggests new approaches. To that end, some technologists have suggested creating a DNS overlay, operated in a peer-to-peer way that incorporates modern search techniques and other tools. Making this workable and secure would be far from trivial, but it's worth the effort

If you can come up with a viable, superior alternative to the URL and get a sufficient volume of users to adopt to your system, you will become very rich.

Handing the Virtual Credit Card To Your Kid

A parent has sued Apple (or, more correctly, is the named plaintiff in a class action lawsuit directed at Apple) after his daughter acquired "game currency" through an in-App purchase using his Apple account.

Despite the fact that Apple now requires users to enter passwords before making in-app purchases, Garen Meguerian says that minors can still easily make purchases on their parents' accounts....

Since the passwords for in-app purchases are the same as the main Apple passwords, kids who are "aware of such password may purchase Game Currency without authorization from their parents for that purchase," Meguerian argued.

In other words, if parents choose not to implement a PIN to protect their accounts from being used by their children or choose to let their children know their account passwords, their kids will be able to make purchases through their accounts? No kidding.

From a legal standpoint, I'm wondering what's the distinction between this and the controversy from a few decades ago in which kids were calling 976 numbers without parental permission, resulting in significant charges to their parents' phone bills. I don't recall any phone companies being held liable for billing the parents, threatening to cut off phone service if the bills weren't paid, or in fact cutting off phone service over unpaid bills. The issue then, as now, would appear to be one of parental supervision and control over their kids - except it's actually much easier to exercise control over your passwords than it is over general use of your phone and, as previously suggested, it appears that at least since 2009 a concerned parent could have learned how to implement an additional layer of protection by implementing a PIN.

Ever since Apple enabled in-app purchases in 2009, parents have been able to restrict this feature with parental controls, behind a separate PIN.

I am also left wondering whether the children were old enough to read and, if so and even assuming that they didn't have to enter their parent's password to do so, why it's more Apple's fault than the parent's that they chose to make purchases on the parent's account. No, I don't think parents can prevent all forms of misbehavior, but I do think that parents bear more responsibility for a child's deliberate misbehavior than is a remote third party who supposedly failed to prevent that misbehavior.

If Kids Eat it in a Commercial...

It must be nutritious, right? I mean, kids are eating it. In a commercial.

Who would have thought that if you take some type of nut butter and add sugar and chocolate, you would end up with, you know, candy. (To borrow another product's one-time tagline, "Candy? For breakfast? It's Reese's!") And if you taste Nutella, surprise - it tastes like candy.

As I recall, the commercial doesn't say "Nutella is healthy". Its statements are more along the lines of, "I use Nutella to get my kids to eat healthy food," and "I spread a little on all sorts of healthy things." It seems to me to be akin to touting cheese sauce as a way to get kids to eat broccoli.

Ah, childhood memories....

Shopping Safely in the Online World

In terms of customer service nightmares - from the customer side - the recent New York Times story about "DecorMyEyes" is about as bad as it gets. I mean, seriously, when was the last time you heard of an attempt to return merchandise resulting in a criminal warrant for stalking being issued against the proprietor of a business?

Danny Sullivan of Search Engine Land quickly pointed out how Google was addressing customer reviews in other areas of search, and suggested steps Google could take to minimize the chance of an online consumer confusing a top result in a search engine results page with the suggestion that the merchant was honest or ethical.

To Google's credit, it appears that by that time they were already on the case, attempting to develop an algorithmic solution that will detect merchants that Google believes "provide a extremely poor user experience", and... presumably prevent them from achieving top search engine rankings. But as Google notes, they won't catch everybody.

But when you're dealing with online merchants, particularly those of which you haven't previously heard, caveat emptor. Check the reviews carefully, keeping in mind that for newer vendors a series of positive reviews may be planted for the purpose of tricking would-be customers. Check the website - not just to see if it looks professional, but to see what it says about the business, its location and phone number. No business name other than the website title? No contact information other than a phone number? Watch out. If you look up the domain name for the store (e.g., through Whois.sc) do you get a real address and contact information, fake information or an anonymous registration? Real stores don't hide.

And if it’s important enough for you to have “designer” handbags, watches, eyeglasses, etc., know up front that a huge percentage of online merchandise is going to be counterfeit or, at best, gray market - it may cost more, but consider shopping through an authorized merchant.

Gingrich & Goodman Idea #2: "Make Health Insurance Portable"

Why is it that group health insurance plans cost less - usually far less - per enrollee than individual plans with comparable benefits? There are two obvious reasons. First, the larger the group, the more health care costs can be spread across the group, making the insurer's costs far more predictable even while insuring people with pre-existing conditions. Second, people who are healthy enough to work jobs that carry health insurance benefits are, on the whole, going to be healthier than a population of people willing to pay out-of-pocket for comparable coverage but who do not hold jobs.

Newt Gingrich is acutely aware of the fact that people who want health insurance, and perhaps particularly those who want comprehensive health insurance coverage but cannot afford it, are concerned about the cost of medical care for themselves and their families. He has thus made it a cornerstone of his own "reform" proposals to shift risk from the insurer to the individual - that is, to make the individual "responsible" for more of the cost such that the individual will "choose" to consume fewer healthcare services. I don't know how much Gingrich believes that this approach would "save" in the broader market - relatively healthy individuals who take a fevered infant to the emergency room rather than waiting to see if a high fever breaks, or who seek treatment for a lung infection before it either clears up on its own... or turns into pneumonia). But I suspect that his actual goal is to target people with chronic health conditions so that, for example, diabetics will pay more out-of-pocket for their continuing care, medicine and supplies. It would be nice if Gingrich were more specific on the subject but, if my hunch is correct, it's easy to understand why he's not.

The second idea proposed by Gingrich and Goodman as a "GOP health idea" is to "Make health insurance portable". They propose portability as a "way of solving the problems of pre-existing conditions", and advocates for employment-based insurance to "travel" with employees between jobs and "in and out of the labor market". It's really difficult for me to be charitable to Gingrich here - to find a way to interpret this proposal as consistent with his words. Because the net effect of the proposal would be to eliminate the insurer's ability to define a predictable group for its group rates. If, three years into the plan, the "group" now includes a significant number of people who have quit to take dangerous jobs, who have become too sick to work, who are self-employed doing who-knows-what, who are scattered across dozens of employers... the dynamics of the group are no longer the same. The "group" rate can be expected to skyrocket, amounting to an averaging of individual rates as opposed to the formerly discounted group rate.

Gingrich and Goodman are similarly dishonest in suggesting, "individuals should have the ability to purchase health insurance across state lines". At present, if I want to offer insurance in a state with strong consumer protection laws, I have to abide by the laws and regulations of that state. Gingrich and Goodman want me to be able to skip across state lines into whatever state offers the fewest protections and mandates the least amount of coverage, yet still be allowed to offer insurance in the more protective state without following its laws.

This proposal is unlikely to draw additional insurers into a state due to high costs of entry: there is a huge cost in developing a provider network within a state, signing up enough customers to make a plan profitable, and maintaining that level of subscribers. But you can bet your money that insurers will scramble into the state with the fewest regulations to fatten their bottom lines.

Gingrich and Goodman state, without connecting the thought to their specific proposals, that "When insurers compete for consumers, prices will fall and quality will improve." That goal can be achieved within the current system, such as when an employer offers a cafeteria plan allowing employees to choose between participating insurers and multiple insurance plans. That goal could be advanced by adding a serious national player to the scene - such as a "public option". But it's at best disingenuous to pretend that undermining group-based insurance rates or allowing insurers to regulate across state lines to avoid consumer protection laws and state regulations will increase "competition" in any way that is beneficial to consumers. On the other hand it is consistent with Gingrich's long-stated goal of weakening the scope of insurance coverage while forcing consumers to pay for more of their care out-of-pocket. What a surprise.

Finally, given that the current Senate bill includes some language allowing for the type of portability Gingrich and Goodman favor, why isn't the GOP working with the Senate over the details of that idea rather than stonewalling the Democratic bill and pretending that this is exclusively a GOP idea?

(Return to Parent Article.)

Amazon Prime Rip-Off Prices

Something I've seen recently on Amazon Prime are flagrantly inflated prices from participating merchants. If you look carefully, you might see a warning from Amazon,

Note: There are lower-priced buying choices available from other sellers that are not eligible for Amazon Prime.

But from the prevalence of the practice it appears that few people notice (or that enough don't notice that the vendors still make huge profits from their inflated prices), and the size of the "note" suggests that Amazon is cool with that.

I would propose three simple remedies that would restore some honesty to Amazon Prime:

1. If another vendor offers a lower price, that information be provided along with the price. "Price: $35.93 & eligible for free shipping with Amazon Prime; Available for other vendors for $14.99 plus $3 shipping."

2. If a vendor's Amazon Prime price exceeds the MSRP, that information be provided right next to their price - Price: $35.93 (MSRP $14.99) & eligible for free shipping with Amazon Prime"

3. If a vendor is found (algorithmically) to engage in excessive pricing as compared to either the MSRP or to other vendors offering the same product, they be excluded from the Amazon Prime program.

After all, the idea of Amazon Prime, at least as pitched to the consumer, is that you're prepaying for shipping - not that you're paying extra for the privilege of getting ripped off by Amazon's dishonest "partners".

Bloodsucking Lenders

Bob Herbert called his piece Climbing Down the Ladder; I might have called it "The Bloodsucking Lenders of Transylvania County". His column describes an elderly widow in Rocky Mount, N.C. (in case you haven't guessed by now, Transylvania County) who may lose her house to foreclosure.

If you believe Ms. Richardson’s account, and I do, she was fast-talked into a mortgage that would have been impossible to pay off with her fixed income. Foreclosure would have seemed inevitable. But Ms. Richardson and her current lawyer, Carlene McNulty of Raleigh, N.C., said the figures that would have made it obvious to Ms. Richardson that she couldn’t afford the mortgage were deliberately concealed.

I think it goes without saying that there were lenders for whom deceit was a primary tool in closing loan agreements. I think we can all agree that the elderly as a group are more likely to be targeted by, and are more likely to fall for, predatory schemes involving their homes and money. But even then, a common thread in a lot of scams is "getting something for nothing (or next-to-nothing)" or "believing an offer that's too good to be true."

I don't know the background to the story Herbert shares, and I'm content to accept his impression that Ms. Richardson was scammed. But at the same time, I have to wonder what she received under her mortgage. Was she refinancing an existing mortgage for what she thought was a lower rate? Refinancing a mortgage and withdrawing equity for what she believed would be approximately the same rate? Or was this a new mortgage where she was receiving a substantial amount of cash in return for a mortgage payment that, in retrospect, was simply too good to be true?

I can see a lender targeting her for a "too good to be true" deal - "Refinance your current $80K mortgage, pull out $60K in equity to pay off all your bills, buy a new car, and redecorate, and your monthly payment only goes up $45! [until the teaser rate expires]" Who wouldn't want to believe that? Mix in a vulnerable population to target, and you have a formula for big, ill-gotten profits.

But at the same time, how do we get past that part of human nature that just doesn't want to hear the message, "There's no such thing as a free lunch"? (And if we accept that we can't - that at some level, all of our educational efforts will fail - what else can we do?) If we can't answer that, whatever the nature of the scheme or scam, it's another case of "same story, different day".

Fraud on eBay? No Kidding....

The New York Times has noticed that not everything offered for sale on eBay is genuine. They observe in relation to buyer and seller feedback, which ostensibly helps prevent fraud:

EBay's feedback system that allows buyers to post negative reviews of bad sellers is supposed to protect customers like Ms. Pollack. Yet all of the alleged counterfeiters had consistently positive ratings.

Ms. Steiner of AuctionBytes.com said this situation was not uncommon. Buyers and sellers are often reluctant to leave bad reviews, lest their own reputations suffer.

I think more explanation would be helpful, as eBay's system of feedback permits sellers to effectively coerce buyers into leaving good feedback or withdrawing negative feedback.

I have purchased a number of items over the years from eBay, none of which were counterfeit. Each and every time, the seller did not give me feedback until I had rated the seller's performance. During the same period I have heard numerous complaints from aggrieved buyers who left what they claim to be accurate negative feedback about sellers, only to find that the seller posted a negative rating and comments on their account. The seller then offers mutual withdrawal of the comments, never mind the truth. eBay's policies on negative feedback are effectively seller-oriented. I don't know if they were designed to be so favorable to the seller, but I am not particularly surprised that they remain that way - eBay makes its money, after all, by keeping its sellers happy and maximizing the number of items available for sale.

In most cases the only action by a buyer that can be rated by the seller is how quickly the buyer paid for the purchased item. Given that reality, eBay should consider adjusting its feedback system such that the buyer can leave feedback about the seller at any time, but the seller cannot see the feedback and the rating is not incorporated into the seller's profile until after the seller rates the buyer. While there may be some buyers who manage to manipulate that system, for the most part I think it would lead to more accurate ratings and reduce the fear buyers face when they receive shoddy, broken, or counterfeit merchandise.

Update: Over at Crime and Federalism, Mike proposes a reasonable ratings reform of his own, and promises a future analysis of whether eBay is a criminal enterprise under the RICO statute.