Sunday, January 05, 2014

Judge Fines Overstock.com $6.8 Million, Rules It Needs a 'Price Coach'

Sam Antar's blog is out this weekend with an item describing how a California judge has slammed Overstock.com with a $6.8 million penalty for consumer fraud.

Ruling on a lawsuit brought by a consortium of California district attorneys, the suit contends that Overstock used phony price comparisons in claiming that it offered customers a bargain.

What's interesting about this case, I think, is how Overstock worked overtime to head off the bad news. In a TV commercial (see below) featuring Mike Ditka, the "price coach," the company claimed that it "price checked over 500,000 products a week" to make sure customers got the best prices.


But Judge Wynne S. Carvill, a Superior Court judge in Alameda County, didn't buy that malarkey. He ruled that Overstock systematically overstated the amount of savings customers could get by buying at Overstock.

To make matters worse for the company, it not only has to pay the fine, but is likely to be assessed attorneys fees and investigative costs, which could run into the millions, and it will be subject to an injunction requiring Overstock to provide proper price comparisons.

That's a real "price coach," not an actor playing one.

The irony is that customers don't need a price coach to find out if they're getting a good deal at Overstock. All they need is Google or a free browser add-on called Priceblink, which automatically compares prices at a variety of online vendors.

Anyway, it's not over for Overstock. I'm sure the company will appeal, throwing more good money after bad. Sam reported that last quarter "the company reported a $2 million increase in legal fees resulting in large part from the 'defense of a case brought by district attorneys in eight California counties.'" That's dumb, I guess, but not as dumb as the consumers who actually buy there expecting the best deal.

Just today I was looking for a cheap corded phone. At Amazon.com an AT&T 210 corded phone costs $9.34. At Overstock the price is $13.59. OK, that stinks, $4 more than Amazon. That's bad, but what's worse is this:  

Save $12.23 (47%) Compare $25.82
 Yep, that's what it says. $25.82-- $7 above the list price, which, as the Amazon listing points out, is $18.79.




 When you click on "compare" you get the following gobbledygook:
What is "Compare"?
The term "Compare" means the price at which, in the reasonable judgment of our experienced buyers, manufacturers or suppliers, the item may be sold in the U.S. on an everyday basis. Other vendors sometimes refer to this as the "retail price" exclusive of special promotions or sale prices, at which the item might be offered at retail stores and at customary retail mark-up. In many instances, though not all, the "Compare" prices reflects a price suggested by the manufacturer or supplier of these goods, without reference to actual retail sales and may amount to an estimation of a retail offer price in accordance with standard industry practices. It may also include a reasonable average estimated shipping cost, if ordinary shipping costs have been discounted or eliminated.

We make no representation that the products have been sold or offered at the "Compare" price, and the price may or may not reflect the average or prevailing market price in any area on any particular day. For some items listed as a set, the "Compare" price may be an aggregate of the suggested or estimated prices for all items included in the set. Actual retail sales in your area may substantially differ from the "Compare" price. Moreover, the nature of internet sales on a national or international basis, and the fact that we deal in overstocks, closeouts, end-of-season, and unique items that may be sold only on Overstock.com, precludes our ability to know whether our products are sold at the "Compare" price at any particular location or time by other vendors.

You may choose to use the "Compare" price as an approximate guide to what you would or could pay for these items in other locations, at other times, or under other conditions, including full retail price.

Translation: "ain't nobody selling it for $25.82." A Priceblink price search bears that out.

When Overstock says "the nature of internet sales on a national or international basis, and the fact that we deal in overstocks, closeouts, end-of-season, and unique items that may be sold only on Overstock.com, precludes our ability to know whether our products are sold at the 'Compare' price at any particular location or time by other vendors..."--that's just sheer ca-ca. A quick Internet search, with or without Priceblink, shows quickly that the "compare at" price is as phony as a $3 bill.

Yep, Overstock customers sure could use a "price coach," though I don't think there's much the "coach" would say except, "shop somewhere else." 


© 2014 Gary Weiss. All rights reserved.
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Please note that the comment function does not work, possibly because I've screwed up the settings. Drop me a line at the email address on the right side of this blog, and I'll include your comments.

My latest book is AYN RAND NATION: The Hidden Struggle for America's Soul, published by St. Martin's Press. Click here to order the book from Amazon.com, and here to order it from Barnes & Noble. Follow me on Twitter: @gary_weiss


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United Healthcare, Obamacare, Franz Kafka, and the 'Positive Healthcare Experience'

United Healthcare was excited to have me

The letter from United Healthcare was dated December 9, 2013. It said as follows:

Dear GARY WEISS,

Thank you for choosing United Healthcare. We are excited to be able to provide you a positive healthcare experience and to ensure that you understand your benefits and payment requirements.

I was very pleased to receive this letter.

As I recounted a few weeks ago, United Healthcare had previously provided me with differing and inconsistent versions of my 2014 health insurance, which I had purchased in early November on the New York Health Exchange. The letter included a bill for the premium, which correlated with the amount of the premium previously disclosed to me.

Since the payment was due on January 1, I felt that there would be no problem with waiting until Dec. 28 to make my payment. I did so. My payment, which was by credit card, was acknowledged.

There was only one problem. At no time after receiving that letter did I receive anything else from United Healthcare--such as, most importantly, insurance ID cards  that would permit me to actually use my health insurance. That was a matter of some concern to me, as my previous healthcare coverage expired on December 31.

On January 2, I telephoned United Healthcare at the Member Services phone number (877-856-2429). That put me into its automated service, which asked me whether I had questions about "benefits" or "enrollment." There were no other categories. I pressed the number for "enrollment," which seemed closest, and after a while a person answered.

I explained my situation. I expressed concern that I could not actually use the health insurance for which I had enrolled and actually paid for.

The United Healthcare person expressed sympathy. He was here to help me. So I asked for assistance. Could he tell me when I would be receiving my cards?

He could not. He said that apparently (he was not sure himself) cards are only sent out after payment is tendered, so I would have to wait another "seven to ten business days."

In the interim, I asked, could I have my member and group number? That way I at least could sign up online, and actually give this information to any doctor I may need to utilize prior to receipt of the membership card.

Expert assistance was available
No, he could not.

However, he told me that if I called the billing information line, 800-708-2848, I could obtain the information that I requested.
I telephoned that number. A very nice lady said to me that she did not have the information that I requested, but that it would be available at another number that she provided: 877-856-2429. In other words, the number that I had just called.

At that point I  decided to go to the website that I had used to pay my bill.  There was a link on the left: "Ask the Expert." I decided to do so. At that link there was a form that could be used to contact United Healthcare. Four categories were given: "Account changes," "Coverage questions," "Payment Inquiry," and "Website Assistance."

Nonreceipt of insurance (and prescription, I imagine) cards and ignorance of one's member number did not seem to be covered by any of those choices. The closest seemed to be "Coverage questions," and below that, the subject that seemed closest was "confirm coverages." In the message field, I asked as follows
I have not yet received my ID cards for my wife and myself, and do not know my Member or Group Number. Please advise when the cards will arrive and, in the interim, please provide me with my Member and Group Numbers. Thank you.

I pressed the send button. At that point the "send" on the button turned into "please wait." I did. After a few seconds, the screen stated that my message had been submitted. That was good. "Please keep this request number. . . " it said. I reached for a pencil. But then I read on:



". . . (Error code 101) for Future Reference" it said.  My reference number was an error code? Below were the words "Unable to submit your request. Please try again later."

I tried again later and received the same result. I did so on subsequent days, and received the identical error code and message.

When I had spoken to the person at Member Services, he was reassuring. Not to worry, he said. I have insurance, he said. Even if I hadn't paid, he said, payment by Jan. 10 would assure me of coverage retroactive to January 1.

But in the interim, I asked, what do I do if I get sick? How do I prove to the doctor that I have coverage? How do I obtain prescription drugs? He did not have an answer to those questions.

© 2014 Gary Weiss. All rights reserved.
------------------------------
Please note that the comment function does not work, possibly because I've screwed up the settings. Drop me a line at the email address on the right side of this blog, and I'll include your comments.

My latest book is AYN RAND NATION: The Hidden Struggle for America's Soul, published by St. Martin's Press. Click here to order the book from Amazon.com, and here to order it from Barnes & Noble. Follow me on Twitter: @gary_weiss


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