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Consumer News & Alerts

March 20, 2006

DON'T OUTLIVE YOUR MONEY
Sometimes things just don't work out the way they're planned. Kids who think they'll never get old find themselves celebrating their 60th, 70th, 80th or even 90th birthday. No doubt about it -- Americans are living longer than ever and most of us are fitter than our parents were at the same age. That's the good news. The bad news is that way too many of us haven't saved enough money to maintain ourselves in the manner to which we've become accustomed, and nearly as many are finding that the company pension and health coverage we'd counted on are in much worse shape than we are.

What to do? Well, you can always don the orange apron at your nearest Home Depot but that's hard on the feet. One solution that is right for some is an annuity -- an insurance product that can pay you a monthly stipend for the rest of your life. However, like all financial planning, annuities are fraught with peril. Make a mistake and you can lose not only a lot of money but also that leisurely retirement you've been dreaming of.

Let's be honest. Annuities are not only complicated, they're on the dull side, so we asked Joan Lisante, a lawyer who doesn't write like a lawyer, to give us a simple starter kit. She did and it's this week's cover story -- Annuities: Fool's Gold or Fiscal Smarts? It's essential reading for anyone who plans to be around a few more years.

The Wrong IRA Just as you can lose money if you pick the wrong annuity, you can also lose money if you invest in an IRA without checking it out thoroughly. That's what New York Attorney General Eliot Spitzer alleges happened to thousands of consumers who trusted H&R Block. Spitzer says the giant tax chain marketed an IRA that was almost certain to lose money.

AT THE OTHER END OF LIFE
Retirement planning is one thing. Birth control is another. Mistakes in either area can be troublesome. Thus, it's good news to many that Wal-Mart this week begins dispensing the Plan B "Morning After" pill in its pharmacies, although it is permitting its individual pharmacists to refuse to issue the drug if they object to it. That opens the door to more protests from pro-choice advocates. Meanwhile, anti-abortion groups are lobbying legislatures to pass laws allowing all pharmacists to refuse to issue birth control pills.

Meanwhile, two more deaths have been tentatively attributed to RU-486, the medical abortion drug that is often confused with Plan B. The FDA is investigating the latest incidents.

GAS PRICES GET THE LEAD OUT
The price of crude oil is down but gas prices at the pump are up sharply, now exceeding $2 for a gallon of regular throughout the U.S., and heading towards $3 in high-cost areas. Why? There are quite a few reasons, among them increased demand as warmer weather supposedly gets more of us out on the road. Also, analysts say, you can thank new government regulations that mandate lower sulfur requirements for gasoline and diesel fuel. New regulations require refiners to replace the gasoline additive MTBE with more costly ethanol. This is good news in the Corn Belt, at least.

A Fuel Cell in Every Home? While other automakers tinker with hybrid -- another word for improvised -- systems, Honda is pouring money into development of a home-based hydrogen system that would provide electricity to your home while also generating hydrogen to fuel your car. This is what's called innovation.

A Tale of Two SUVs Out-of-control Ford has been making lots of noise about its Escape Hybrid SUV but, while Priuses fly off Toyota lots, the Escapes mostly just sit there. Oddly enough, the hot U.S. model at the moment is the Chevrolet Tahoe, a big SUV with a standard gas engine. Its main selling point? Its gas mileage isn't as bad as most other SUVs.

More SUVs Stay Upright The feds' latest side-impact and rollover tests give top marks to no fewer than seven SUVs. Whether this is because manufacturers have improved the trucks' performance or whether it just means they've managed to gerrymander the test is not for us to judge.

Mad about March Madness? Maybe you should be. General Motors is using its sponsorship of the NCAA broadcasts to beat the drum for its March Madness car and truck sale. But while it's telling consumers they'll save big bucks, it's telling its dealers the NCAA promotion will actually reduce per-unit incentives. Who do you believe -- GM or, uh, GM?

A Tarheel Diogenes Roy Cooper doesn't seem like a particularly naive and trusting fellow. After all, he is the Attorney General of North Carolina. Despite that, or maybe because of it, Cooper thinks he can clean up the sales practices of car dealers in his state. Now, cynics would say this is like trying to teach table manners to dogs, but Cooper has made his first conversion and has faith that more will follow.

CREDIT BUREAUS CONSPIRE
The three major credit bureaus have rolled out a new system, VantageScore, that supposedly makes it easier to understand your credit score. Instead of pondering credit data from Equifax, Experian and TransUnion, you can get a single letter grade based on the information -- or misinformation -- in your combined file.

This supposedly makes life easier for consumers. But perhaps more significantly, it's a competitive threat to the Fair Isaac Corporation's FICO score, which is most commonly used by mortgage lenders. Critics say it's hard to see the supposed benefits of VantageScore. Perhaps some consumers have trouble understanding their credit ratings but the far more common complaint is that the agencies are sloppy and slow to update and correct their files.

WHERE'S THE BEEF?
Normally, cows wouldn't think of eating other cows but that's exactly how mad cow disease is spread. Ground-up cow and steer carcasses are fed to the living, spreading the odd protein that's thought to be responsible for the brain-wasting disease. Anyone who thinks the ever-vigilant federal government is on top of the problem needs to read up on the meat inspection program in this country. A third infected animal was found recently and even cattlemen are saying the feds are asleep at the chute.

Something Fishy Not afraid to state the obvious, researchers find that Americans are confused about the health effects of eating fish. Since most health experts seem a little conflicted on the subject as well, that's hardly surprising. The authors of the study offer the weak assurance that most of us don't eat enough fish to do any harm. And as for the rest, well ...

Smoking and Drinking Yes, they do go together and researchers say it's not just a coincidence. Scientists rounded up some hard-drinking rats -- real rats, not Congressmen -- and found that, given the opportunity, they soon became nicotine fiends as well. This lends credence to the notion that a single gene may be responsible for both afflictions.

CVS Locks Up the Smokes The pharmacy chain is the latest to agree to tighten up its tobacco-sales policies to restrict sales to minors. A group of state Attorneys General have wrestled similar agreements out of numerous retailers and the likes of FedEx and UPS. As we noted last week, the United States Postal Service is the sole hold-out.

Asthmatic Kids Need No-Smoking Rules Tobacco smoke is one of the worst irritants for asthma sufferers. Even a whiff of smoke outdoors can cause asthmatic bronchia to clamp down like a pit bull on a mailman's leg. Researchers were shocked to find in a recent study that way too many parents and caregivers smoke around their asthmatic children.

New Imaging System Detects Cervical Pre-Cancer The FDA has approved a new system that could detect pre-cancerous cervical conditions much earlier. Cervical cancer is among the most treatable if it's found in time.

HIGHER FARES, CROWDING, DELAYS GREET TRAVELERS
Having used the bankruptcy courts to wiggle out of labor contracts and decimate their upstart competitors, the major airlines are now raising fares, reducing flights and switching to smaller planes. Translation: air travel is rapidly becoming even more uncomfortable and expensive and the federal government, not always first when seconds count, predicts the situation will -- surprise! -- get worse. Among the frustrated are frequent flyers who are facing new obstacles to redeeming their "free" miles.

Amtrak Tries a Makeover A possible solution to the travails of air travel is the train, but too often Amtrak manages to combine the worst of both air and rail travel. Amtrak management is trying to change that, attempting a makeover of its long-distance trains. It had better hurry. The Bush Administration is ready to throw the switch that would divert Amtrak onto a permanent dead-end.

A New Queen If the airlines annoy you, perhaps the Queen Victoria would be more to your liking. Her maiden voyage is set for December 2007, Cunard tells us. For land-lubbers, car rental companies are beginning to offer E-Z Pass and other toll transponders for a few bucks a day. These little devices can be major time-savers, well worth the cost.

SCAMS & OUTRAGES

• Lottery Scammers Pennsylvania prosecutors upend Canadian lottery scam.
• Bogus Collect Calls on Hold Feds charge telecom billing company scammed consumers for millions of dollars.
• Fake Sales Federated Stores settle charges filed by New York Attorney General Eliot Spitzer.
• Identity Theft Victims Getting Younger It's like, well, stealing candy from babies.

MINNESOTA TAKES ON CELL PHONES
Minnesota has asked the Supreme Court to consider its appeal of a decision overturning its cell phone consumer protection law. The state prohibits cell phone carriers from making unilateral changes in cell phone contracts but the companies have so far been successful in their argument that federal law preempts states' authority to regulate the carriers.

Six Million Americans Could Be Wronged New York has plugged what it says is the largest Internet data leak ever discovered. Datran Media allegedly disclosed data on six million Americans, even though it knew the data was supposed to be confidential.

California Tracks Down Data Trace The company allegedly obtained and sold cell phone calling records. California is seeking damages estimated at $10 million.

RECALLS & SAFETY WARNINGS

• Walgreens High Potency Iron Supplement Recalled The packaging is not child-resistant.
• Olympus Recalls 1.2 Million Film Cameras They can overheat, posing a burn hazard.
• Coca-Cola Lamps Sold at Rite Aid Electrical arcing poses burn and shock threat.
• Jordache Hooded Sweatshirts Strangulation hazard.

A WAYWARD WIND
Fairmont Hotels will be using wind power to run their check-in computers, we're told. We're not sure how this will work -- windmills on the roof? -- but the chain is adamant in its claim that it will save 100 tons of greenhouse gases.

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