2015 Naughty & Nice List

While Consumer Reports consistently puts products to the test, we have also developed an annual tradition where we scrutinize the policies, practices, and behavior of the companies that make and sell the goods and provide the services you use every day.

The release of our sixth annual Naughty & Nice List of not-so-friendly and consumer-friendly policies by well-known businesses, including automakers, banks, restaurants, and retailers, is timed to coincide with Black Friday and the upcoming holiday season, when spending is in the spotlight. (Check out the Naughty & Nice lists from 2014, 2013, 2012, 2011, and 2010.)

Whether you’re flying or buying, shoppers are particularly vulnerable during the high-octane holiday season. So there’s no better time to be vigilant about how—and with which companies—we choose to spend our shopping dollars.

This year, we took companies to the woodshed for gouging, annoying fees, and sneaky marketing practices. Conversely, we lauded others for transparency, generosity, and stand-up behavior that improves and enhances health, safety, and the overall quality of life.

The list, based on input from Consumer Reports experts and presented in alphabetical order, is neither an endorsement nor criticism of an overall company. In other words, we’re not rating the firms themselves. Rather, it’s praise or condemnation of a specific policy or practice that we believe helps or hinders consumers.

Naughty

Allegiant Air
Few industries rile customers more than air travel because of all the nickel-and-diming. But we couldn’t help but notice some of the extras imposed by the Las Vegas-based discount carrier that advertises “low-low fares.” They include (per one-way segment): A 3.2 percent processing fee ($8 max) for purchasing your ticket with a credit card; a $13 “Electronic Carrier Usage Charge” tacked onto each ticket bought outside of an airport ticket office; an additional $14.99 fee for tickets booked through the airline’s call center; up to $80 for a seat assignment; $5 for a printed boarding pass; $14.99 to $35 per first and second checked bag if you pay when you buy your ticket, $50 to $75 if you wait until you arrive at the airport. Similarly, you’ll pay around $15 to $20 to take a carry-on aboard if you pay in advance, $45 if you do so at the airport. (Find out which airline to fly.)

Citibank
The financial giant engaged in deceptive marketing and unfair billing for credit-card add-on products and services from at least 2000 through 2013. The federal Consumer Financial Protection Bureau ordered Citibank to pay an estimated $700 million to millions of consumers harmed by myriad illegal practices as well as $35 million in civil penalties. They include: misrepresenting costs, fees, and benefits of some products; enrolling consumers in services without their consent; misrepresenting or omitting information about eligibility for coverage; and charging for benefits consumers never received.

Citizens Bank
The bank has agreed to pay fines of $20.5 million to the Consumer Financial Protection Bureau and other federal authorities for failing to fully credit customer accounts for certain deposit discrepancies stemming from bank errors—either misreading a deposit slip or another gaffe. At the time, the bank, which operates branches in about a dozen states, required its customers making a deposit to fill out a slip listing the checks or cash being deposited, and the total amount. The customer then turned the deposit slip over to a teller and got a receipt. An investigation, however, showed that for more than five years, Citizens Bank ignored discrepancies when the scanner misread the deposit slip or the checks, or if the total on the deposit slip did not equal the total of the actual checks. Instead, the bank pocketed the difference, shorting consumers millions of dollars.

Costco
The warehouse club is facing a jury trial for trademark infringement for selling “counterfeit” Tiffany diamond engagement rings. In September, a federal judge in New York agreed with the luxury jeweler’s claim that Costco confused customers by using the word “Tiffany” in display-case signage. In doing so, the court rejected Costco’s argument that "Tiffany" was a generic description for a type of ring setting. A jury trial has been scheduled for early next year. Costco has filed an appeal. Tiffany originally filed suit on Valentine’s Day 2013, claiming hundreds, possibly thousands, of Costco members bought rings they thought were genuine Tiffany baubles.

FedEx and UPS
Why is it that companies continue to impose fuel surcharges even when prices are relatively low? According to the industry publication TruckingInfo.com, the price of diesel won’t rise markedly until next year and even then, the increase is expected to average well below that recorded in 2014. Yet the two shipping titans continue to add fees, based on U.S. Energy Information Administration averages. For November, FedEx adds a 4.25 percent surcharge for ground shipping services; the add-on at UPS is 5.25 percent. Both carriers already include a surcharge for residential home delivery.

LifeLock
The company has once again been accused of misleading consumers. The Federal Trade Commission says LifeLock violated a 2010 settlement with the agency and 35 state attorneys general by continuing to make deceptive claims about its identity theft protection services, and by failing to take steps required to protect its users’ data. Specifically, the FTC says it caught LifeLock "falsely advertising" that it protected consumers’ sensitive data with the same high-level safeguards as financial institutions; failing to establish and maintain a comprehensive information security program to protect users’ credit card, Social Security, and bank account data; and falsely claiming that it protected consumers’ identity 24/7/365 by providing alerts “as soon as” it received an indication there was a problem. In late October, LifeLock announced that it had reached an agreement (which is awaiting final approval) with the FTC to settle charges as they relate to its “past marketing representations and information security programs” and has set aside $116 million “for this matter.”

Sprint and Verizon
The companies billed customers for millions in unauthorized third-party premium text messaging services, a fraudulent practice called “cramming.” As a result, the companies were ordered to pay $158 million in penalties and restitution (Verizon's share is $90 million; Sprint's is $68 million). “For too long, consumers have been charged on their phone bills for things they did not buy,” said FCC Chairman Tom Wheeler. “Consumers rightfully expect their monthly phone bills will reflect only those services that they’ve purchased,” added Travis LeBlanc, chief of the FCC’s Enforcement Bureau. These two latest cramming cases bring to 19 the total number of enforcement actions brought against various companies since January 2014. Under the terms of the agreement with Verizon, the $90 million settlement will include a minimum of $70 million to fund a consumer-redress program, $16 million for state governments participating in the settlement, and $4 million as a fine paid to the U.S. Treasury. Sprint’s $68 million settlement will include a minimum of $50 million to fund a consumer-redress program, $12 million for state governments participating in the settlement, and $6 million as a fine paid to the U.S. Treasury. (See our review of cell phone carriers.)

Tom’s of Maine
The company made a name for itself by touting its use of only natural ingredients in its toothpaste, deodorant, lotions, sunscreen, and other products. But plaintiffs in a class action accused Tom’s of being less than pure. Earlier this year, the company, without admitting wrongdoing, agreed to create a $4.5 million fund to help settle claims that it mislabeled personal care and beauty products as natural when they allegedly contained chemical ingredients including the sweetener xylitol and cleaner sodium lauryl sulfate. As part of the preliminary settlement, which covers purchases between March 25, 2009, and September 23, 2015, consumers can claim a $4 refund on up to seven Tom’s products (without a receipt); the company also agreed to provide enhanced disclosure on its website about the ingredients it uses, and better define how it defines terms like “natural,” “sustainable,” and “responsible.” A hearing in U.S. District Court for the Southern District of Florida is scheduled for late January to decide whether the settlement is reasonable and adequate.

Turing Pharmaceuticals
The biotech startup created a firestorm over drug pricing when its 32-year-old founder and CEO, Martin Shkreli, a former health industry hedge-fund manager, purchased the prescription drug Daraprim (generically known as pyrimethamine) in August from Impax Laboratories and increased the price by more than 5,000 percent at hospital pharmacies, from $13.50 to $750 a tablet. Daraprim is an old drug primarily used to treat potentially life-threatening parasitic infections such as toxoplasmosis in people with compromised immune systems, including HIV and AIDS patients and those suffering from certain cancers. Now Congress is demanding an explanation. A committee is looking into the staggering price hike, and in a letter to the firm’s chief executive, legislators say there’s "no justification for an increase of this magnitude for a medication approved by the Food and Drug Administration in 1953." Responding to the swell of negative publicity, Turing, which has been in business less than a year, changed its tune. In mid-October the company announced what it termed “improvements” in “accessibility and affordability" to the medication. We'll be following developments carefully. (Check the Consumer Reports' Best Buy Drugs guide.)

Volkswagen
The German automaker is accused of circumventing the emissions control system in more than half a million diesel vehicles sold in the United States. Following notice by the EPA in September 2015, the company admitted that it cheated by installing software that enabled four-cylinder diesel vehicles, including Beetles, Golfs, Jettas, and Passats, and the Audi A3, to pass emission tests while emitting up to 40 times the permissible U.S. levels of nitrogen oxides in the real world. In November 2015, the EPA cited six 2014-2016 models fitted with 3.0-liter V6 diesel engines from Audi, Porsche, and Volkswagen, all owned by Volkswagen AG, as not complying with emissions regulations. The situation continues to worsen, with Volkswagen telling the EPA that the issues with the 3.0-liter V6 diesel engine impacts model years 2009 through 2016. As investigations continue, Audi, Porsche, and Volkswagen diesel-car owners await corrective measures. (Check our guide to the Volkswagen emissions recall.)

Whole Foods
The grocery chain, known for its social responsibility, was caught twice overcharging customers—by selling products with the weight incorrectly labeled. In June, the New York City Department of Consumer Affairs released the results of its investigation that revealed that Whole Foods routinely overcharged customers by overstating the contents of prepackaged foods. The discrepancies resulted in overcharges of 80 cents to nearly $15 per package. In addition, the Department of Consumer Affairs said that 89 percent of the packages it reweighed failed to meet the federal standard for the maximum amount that a package can deviate from the actual weight. Earlier, Whole Foods and attorneys in several California cities settled charges of widespread pricing violations that included: Failure to deduct the “tare” weight of containers when ringing up charges for self-serve foods at the salad bar and hot bar; giving less weight than the amount stated on the label for packaged items sold by the pound; and selling items such as kebabs and other prepared deli foods by the piece, instead of by the pound as required by law. The chain agreed to pay close to $800,000 in penalties and implement a strict in-house pricing-accuracy program.

Nice

Brinkmann and Home Depot
When you buy a gas grill you expect it to work and work safely. When it doesn’t, you have to hope that the problem will be quickly resolved. That’s exactly what these two companies did when Consumer Reports testing uncovered a safety issue with a Brinkmann grill and gave it a Do Not Buy designation last spring. While Brinkmann challenged the existence of a safety threat, the company nevertheless made available an easy-to-install, do-it-yourself fix for grill owners. Meanwhile, Home Depot, which sold the vast majority of the grills, put a freeze on its sale—the stores’ checkout systems wouldn’t allow a purchase transaction at the register. The grills were fitted with the new part that solved the problem, and soon were made available for sale. We bought and tested the revamped grill, then removed the Do Not Buy designation.

California Health Insurance Exchange
Shopping for health insurance can be overwhelming. But Covered California, the state’s Health Exchange, has eliminated much of the confusion because it allows for simple at-a-glance comparisons among all plans within the various “metal” tiers—Platinum, Gold, Silver, and Bronze—created as part of the Affordable Care Act. While the Affordable Care Act established plans that differ in generosity of benefits—the top tier being Platinum, which typically carries higher monthly premiums but lower co-pays, the lowest being Bronze—it did not require consumer cost sharing within those tiers to be identical. Covered California chose to standardize cost-sharing within each tier. For example, all Bronze plans on the Exchange have the same out of pocket costs for particular services whether you select one from Blue Cross, Kaiser, Blue Shield of California or Health Net. In any Bronze Plan, there is no charge for preventive care, and your first three doctor visits (primary or specialty) are $70 per visit without having to satisfy the big deductible. “For too long, benefit designs have been nightmares of confusion and all too often barriers to consumers getting needed care,” Covered California’s executive director Peter Lee told Consumer Reports. “These standard designs not only promote true apples-to-apples comparisons when consumers are shopping, they also make sure there are no ‘gotchas’ like not being able to get to a primary care doctor because of a surprise deductible.” (Read more about California Health Compare.)

Chipotle Mexican Grill and Panera Bread
These fast-food restaurant chains were the only ones to publicly affirm that the majority of their meat and poultry offered is produced without routine use of antibiotics. (The overuse of antibiotics contributes to the problem of antibiotic resistance.) In addition, the prevalence of antibiotic misuse and overuse in U.S. meat production reflects a broader tendency of poor farm management and animal welfare practices in industrial U.S. meat production. Eliminating unnecessary uses of these antibiotics by the meat industry is an important step towards creating a healthier food system, according to Consumer Reports advocates. Subway, which has more restaurants than any other chain, also recently announced its plan to eliminate antibiotic use in its entire meat supply. Subway says all of its chicken products will be antibiotic free by the end of next year. It will take until 2025 for all of its beef and pork to complete the transition, the company said. (Check our food safety guide.)

CVS
The drugstore chain already boasts almost 1,000 walk-in medical clinics and plans to expand its wellness commitment this fall to include hearing centers in some stores in the Dallas and Cleveland markets, and professional optical services (exams, contacts, and glasses) at select locations in the Baltimore and Washington, D.C., areas. Free audiology services will include in-store hearing loss screenings and hearing-aid checks and cleanings. All prescription glasses come with a 90-day total-satisfaction guarantee, and can be returned for any reason for a full refund. Glasses purchased for children 14 and under will be covered by a 1-year guarantee that provides free replacement for pairs that are lost, damaged, or broken. Will the services eventually expand to all 7,800 CVS pharmacies? “We will use learnings from these locations to determine how we can continue to serve our customers and help them on their path to better health in innovative ways,” said spokeswoman Stephanie Cunha.

There is one area where CVS can improve in the wellness space. We found in a recent retail drug pricing analysis of five common generic prescription drugs that three big drugstores, including CVS, charged more for the combination of those five drugs together than did some independent pharmacies, an online retailer, supermarkets, and national chains.

Dish Network
The pay-television service unveiled a helpful online appointment tool called My Tech that allows customers to receive personalized information about their service appointment including the name and a photo of the technician, and his or her proximity to your home. “We recognize that people want control of their own time and Dish’s My Tech tool helps them get on with their day without waiting on the TV guy,” said Erik Carlson, executive vice president of operations. “A minute-by-minute countdown and interactive map allow the customer to track their Dish technician to determine when to leave work or if they have time to run to the store.” My Tech is available on mydish.com to all customers with a scheduled service appointment.

Dr. Martens
You’ve got to love a product with an honest-to-goodness lifetime guarantee. Dr. Martens, the venerable British footwear maker, has a line of products guaranteed for life, meaning for as long as you live, the company will repair any component subjected to normal wear and tear—upper leather, stitched seams, eyelets, soles, welt, linings, and reinforcements. “With a little help from you, these boots and shoes will give you years of wear,” the company says. “Even so, they will eventually wear out. When they do, we will repair or replace them. We will go on repairing or replacing them for the rest of your life—guaranteed.”

JetBlue
Paying for Internet connectivity on a flight can break the bank. But not with JetBlue. The carrier’s Fly-Fi service offers free broadband in the sky, available on most aircraft, that allows travelers to browse the Internet, surf websites, stream video, and scan social media. Fly-Fi+ is an upgrade ($9 per hour) that will additionally allow large file transfers, the ability to play online games, download audio and video, and access VPN and cloud storage. (Check out where JetBlue landed in our latest review of airlines.)

Nomorobo
More than 200 million Americans have signed up for the federal Do Not Call list, but many continue to be harangued by the incessant, annoying and, often, illegal, robocalls. Enter Nomorobo, a winner of the FTC Robocall challenge. Nomorobo, which has blocked more than 40 million robocalls, is a cloud-based app that analyzes caller IDs and automatically disconnects suspicious calls. It’s free and is available to many consumers who use Internet-based VoIP service. The goal is to eventually include Nomorobo into all phone lines. (Read our report, "Rage Against Robocalls.")

Procter & Gamble
Since 2012, thousands of children have been injured or sickened after ingesting or coming into contact with those tasty-looking laundry detergent packets or pods. Roughly 12,000 of the 2.2 million calls to poison control centers every year are related to laundry packs. The hazard is so troubling that Consumer Reports, which has been lobbying manufacturers since September 2012 to make pods safer, will not include pods on our list of recommended detergents until we see that the injury rate declines meaningfully. We are encouraged by recent developments achieved through a voluntary industry standards-setting committee, which was co-led by Procter & Gamble, maker of Tide, Gain, and Ariel pods, and included Consumer Reports. P&G's brands represent 80 percent of total category sales. Thanks to the new standards, P&G and other manufacturers are putting new safeguards in place that are based on what the European Commission enacted in June. They include: applying a bitter tasting substance to the outer layer, making the packet stronger to resist a child’s squeezing, and designing the packet in such a way that the release of liquid is delayed long enough to give a child the chance to spit out the packet. These are safety improvements we can get behind, and we are hopeful that they will reduce injuries. Next steps: Consumer Reports is co-chairing a committee with P&G as part of the standard-setting process to ensure that all stakeholders have access to real-time data on injuries, so we can see if the changes have gone far enough to assure public safety. (Learn more about laundry detergent pods.)

PwC (PricewaterhouseCoopers)
The global business consulting firm introduced a new employee benefit that will pay $1,200 a year to staffers with one to six years of work experience to help reduce their student loan obligations by as much as $10,000, and shorten loan payoff periods by up to three years. The new benefit will be available to approximately 22,000 of PwC’s U.S. employees, more than 45 percent of its entire domestic workforce. “Seventy-one percent of students are now graduating with college loans with an average loan balance of $35,000,” said Tom Codd, vice chairman, US Human Capital Leader, PwC. “As a firm that recruits more than 11,000 new hires off campus each year, this is an opportunity to differentiate ourselves with a key talent group—millennials—and provide a meaningful way to help reduce their debt.”

Southwest
Kudos to Southwest for providing the most frequent-flyer award program trips of any big airline, according to a recent Consumer Reports analysis of millions of passenger trips for the fiscal year ended September 2014: 11.9 million, or 11.5 percent of total passenger seats. The Dallas-based carrier also did some Texas-sized butt-kicking of rivals by providing the highest percentage of award-seat availability on 72 percent of the 25 most popular U.S. award routes. “The most frequent pain point for consumers is having all these miles they can’t use,” Jonathan Clarkson, director of Southwest’s Rapid Rewards program, told us. “We don’t hear that much around here.” He said the airline’s high availability of rewards is possible because it has fewer restrictions. “Every seat is available as an award seat, even the last seat on the day before Thanksgiving.” (Check our ultimate frequent-flyer guide and see how Southwest fared in our airline Ratings.)

Target
The retailer has enacted several policy revisions that benefit consumers. The chain (and its website) expanded its price-match policy to include all major in-store and online competitors, including warehouse clubs, Amazon, and Walmart, and dozens more, and doubled (to 14 days) the timeframe to seek a price adjustment. Target also revised its policy earlier this year on shipping, lowering the purchase minimum to $25, from $50, required for free year-round shipping on online orders. Walmart still has a $50 minimum. In addition, the chain has extended the return period for all Gift Registry items from 90 days to one year from the guest-designated event date. Guests can return most new, unopened items at any Target store using a gift receipt or their Gifts Purchased List.

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