Consumer Reports reveals its 2014 Naughty & Nice List

Some of these company policies earn a Ho! Ho! Ho!, while others are more No! No! No!

Published: November 24, 2014 06:00 AM

Consumer Reports is known for putting products to the test, but we're equally committed to scrutinizing the policies and practices of the companies who make those goods as well as supermarkets, airlines, ticket sellers, hotels, and other retailers and service providers.

The release of our fifth annual Naughty & Nice list of consumer-friendly and not-so-friendly policies is timed to coincide with Black Friday, when spending takes center stage. Shoppers are particularly vulnerable during the hectic holiday season. There's no more important time to be vigilant about how and where you spend your money.

The list, based on input from Consumer Reports experts and presented in alphabetical order, is neither an endorsement nor a criticism of an overall company. In other words, we're not covering the companies themselves. Rather, it's a thumbs-up or thumbs-down on a specific policy or practice that we believe helps or hinders consumers. In previous lists, companies such as Amazon and Southwest Airlines, for example, have landed on the positive side one year and the negative side another.

What company policies or practices make your personal Naughty & Nice list? Join the conversation via Facebook and Twitter (#CRNaughtyNice) and let us know what you think.

—Tod Marks

Check our Naughty & Nice lists from 2013, 20122011, and 2010.



The Federal Trade Commission sued the company for allegedly misleading millions of smartphone users who signed up for unlimited data plans, claiming the carrier failed to adequately disclose that data speeds would be dramatically slower if customers exceeded a certain amount of data in a billing cycle, a practice known as "throttling," which Consumers Union strongly opposes. According to the suit, AT&T slashed speeds by as much as 90 percent, making common activities like web browsing, streaming video, and GPS navigation difficult or nearly impossible. AT&T insists the allegations are baseless and says it has been completely upfront and transparent with customers. The case has yet to be resolved.


The department store won't give price adjustments as a matter of policy, for either online or in-store purchases.

Hearthware Inc./NuWave

Hearthware markets the popular NuWave infrared oven, sold primarily by infomercial (but also at stores such as Walmart and Bed Bath & Beyond). The company has an F rating from the Better Business Bureau for misleading consumers regarding exorbitant shipping fees. We checked out the site and discovered that shipping fees can exceed some of the accessories themselves.

M&T Bank

The Buffalo, N.Y.-based bank, with hundreds of branches mostly in the Northeast, advertised "no strings attached" free checking accounts, but didn't bother to tell them about key eligibility requirements. Oops. When consumers failed to meet the requirements, M&T automatically switched them to accounts with fees. For that deception, the bank will have to refund $2.9 million to the approximately 59,000 consumers who were duped, according to the Consumer Financial Protection Bureau, a government watchdog group, and pay a $200,000 penalty. "Although M&T promised people free checking, tens of thousands of consumers ended up paying for a product they had thought was free," said CFPB Director Richard Cordray. "This is an important reminder to all banks and credit unions that they cannot misstate to consumers whether a financial product or service is free."


The Federal Communications Commission slammed the hotel chain with a $600,000 fine for violating the law by jamming mobile hotspots at its Gaylord Opryland Hotel and Convention Center in Nashville, so guests couldn't log onto to their personal networks. At the same time, the hotel charged from $250 to $1,000 per device to use the Gaylord's Wi-Fi service in the conference facilities. "Consumers who purchase cellular data plans should be able to use them without fear that their personal Internet connection will be blocked by their hotel or conference center," said FCC Enforcement Bureau Chief Travis LeBlanc. "It is unacceptable for any hotel to intentionally disable personal hotspots while also charging consumers and small businesses high fees to use the hotel's own Wi-Fi network. This practice puts consumers in the untenable position of either paying twice for the same service or forgoing Internet access altogether."

If you're in the market for a big-screen television, Overstock might not be your top choice: No returns, no refunds on television sets 37 inches and larger, the policy says. The company advises customers to "carefully inspect the package" when it arrives and refuse delivery if you spot damage or defects. But what if you don't notice a problem until you unpack the set, set it up, and plug it in? Overstock says take it up with the manufacturer.

Spirit Airlines

The low-priced carrier, which famously nickels and dimes passengers for everything aside from the basic ticket, has hiked baggage fees by $2 per bag for the holiday season. They characterize the fee as "temporary." Humbug! (Read more about airline fees.)

Victoria's Secret

In yet another reminder that Big Brother is watching, the lingerie chain has a warning for those contemplating a merchandise return: "In select stores, a government-issued ID is required for all returns and exchanges. Victoria's Secret will electronically scan this ID for the sole purpose of preventing return abuse." We contacted the company to ask for an explanation of "select stores" and how capturing such information would prevent abuse but didn't get a response.


The user-review website, which invites customers to rate their experience with local businesses, was slapped with a $450,000 civil penalty by the Federal Trade Commission because it collected personal information from children through its mobile-device app without first notifying parents and obtaining their consent, a violation of the Children's Online Privacy Protection Act (COPPA). The FTC said that between 2009 and 2013, Yelp gathered names, e-mail addresses, and locations, among other information from "several thousand" children even after they registered and indicated they were under age 13. According to the FTC complaint, Yelp did not adequately test its apps to ensure that underage users were prohibited from registering. The COPPA requires that companies collecting information about children under 13 online follow steps to ensure that children's information is protected, including clearly disclosing how the information is used directly to parents and seeking verifiable parental consent before collecting any information from a child.


The cost of borrowing from your favorite retailers is on the rise. The average APR is now 23.23 percent, according to tracker That's more than 8 points higher than the national average for general-purpose cards. However, the award for the single highest retailer APR goes to jewelry chain Zales, whose borrowing rate is 28.99, the most of any large merchant in the survey.

Visit our Holiday Gift Ideas page for for deal information, product reviews, money- and time-saving tips, and more.



More than 7,700 CVS pharmacies became tobacco-free as of Sept. 3. "CVS Health is always looking for ways to promote health and reduce the burden of disease," Troyen A. Brennan, the company's chief medical officer, said. Putting an end to the sale of cigarettes and tobacco will make a significant difference in reducing the chronic illnesses associated with tobacco use." In addition, the pharmacy chain has launched a high-profile smoking cessation program and enhanced its selection of nicotine replacement products in select stores.



We're always urging consumers to be vigilant about checking their credit scores. Discover made it easier by becoming the first major credit-card issuer to provide free FICO scores on monthly statements of qualifying cardholders. The data is from TransUnion, one of the big-three credit reporting agencies. "We think Discover customers deserve to have ready access to this information and should not have to go through hurdles to get it," said Julie Loeger, senior vice president of brand and acquisition.



The insurance company's mobile app speeds up the claims process for fender benders. "With photo claims, there's no need to wait for an appraiser to come out and inspect the damage," the company said. Customers involved in minor mishaps can upload accident photos and usually receive a repair estimate within one business day. "In the old days (say, circa 1990, before the boom of the Internet and the birth of mobile apps), getting your car back on the road meant filing a claim over the phone, scheduling an inspection, and waiting for your check in the mail. But today you can start a claim, snap a few pics with your smart phone, upload them for an appraisal using photo claims, and get your money fast." (Read more about car insurance.)



The carrier has a generous price-adjustment policy. If you notice a fare drop for your flight within 14 days of booking, you can call the airline (800-538-2583) and receive a JetBlue credit of the difference in fare. If you notice a lower fare 15 days or more after booking, JetBlue will issue a credit for the difference minus $75. One nitpick: We wish the airline would promote the policy on its website.


Sam's Club

Walmart's warehouse club has a novel guarantee on its perishables—fresh meat, produce, and baked goods. If members don't love the food, the chain will refund double their money or exchange the product and still refund the purchase price.



More than 70 percent of Starbucks' employees are students or aspiring students, and the company is offering them the opportunity to finish their bachelor's degree with full tuition reimbursement. Full- or part-time, benefits-eligible workers can choose from among 40 undergraduate-degree programs through Arizona State University's online program. The program is open to employees at all the company's businesses including Teavana, La Boulange, Evolution Fresh, and Seattle's Best Coffee. And they're not obligated to continue working for the company after graduation.



We dislike come-ons that tout a low up-front price that balloons with fees only after you enter your personal and payment information at the end of the checkout process. The ticket reseller has committed itself to price transparency from the get-go. "The price you see listed on StubHub is the final price you'll pay—for every game, concert, or show you want to attend. Every ticket. Every day. On StubHub, we believe you deserve to know how much your tickets will cost upfront, and that's why no additional fees will be added to the price. Not even delivery charges. It's that simple."


Tesla Motors

Cars have become incredibly complex, relying on elaborate computer systems to control virtually all aspects of behavior. The software that goes into those computers can require you take the car to the dealership for periodic updating. Not with Tesla. The innovative manufacturer regularly beams updates to every vehicle's telematics system, identifying and activating new features that can enhance driving enjoyment. We were particularly impressed by a neat feature beamed into our test Tesla. It allows the navigation system to memorize the location of a road impediment, say, a steep approach to your driveway, and automatically adjusts the air suspension so the bottom of the car doesn't scrape.



Few things are as aggravating during the holidays as missing a package delivery because you're not home or having to travel out of the way to drop off a package. Enter UPS Access Point, an innovative service from UPS that allows customers to drop off and drivers to deliver goods to a safe, preapproved nearby location—The UPS Store, supermarket, convenience store, and the like. The service offers the convenience of evening and weekend pickup. And there's little chance for skullduggery because a government-issued photo ID or a mobile device is required for pickup. Widely available in Europe, the Access Point network is now in New York City and Chicago and will expand rapidly to cover key U.S. markets during 2015. (Read more about holiday shipping and the cost of expedited shipping.)


Whole Foods

A Consumer Reports poll earlier this year revealed that 92 percent of Americans want to know on the label if their food is genetically modified. As many states are considering such labeling laws, Whole Foods became the first national grocery chain to commit to mandatory labeling of products that include GMOs. The company already labels many products, but will require transparency among all such products by 2018. (Learn how to be a smarter supermarket shopper.)

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