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Consumer News & Alerts

January 2, 2007

THE YEAR AHEAD ...
It's hard to say just exactly what tomorrow will bring, but it's not all that hard to speculate about what's likely to be discussed, debated and decried over the next year or so. We'd say the list includes the following:

• Presidential Politics The hopefuls are lining up. Some will be poll-driven media candidates trying to push voters' hot buttons by telling them what they want to hear. Others are already out aerating the grass roots, talking to working people about pocketbook issues. Our observation: Government's not the church, it's the tax collector. It can't do much about morality and isn't in charge of making everyone be polite but it most certainly does control foreign policy and such crucial domestic issues as education, health care, workplace safety and environmental protection. Money, including yours, flows into Washington faster than the Potomac surges into the sea. As citizens and consumers, we ought to demand that it be properly spent, not given away to pols' playmates.

• The "New, Improved" Congress We were standing in line at a downtown D.C. parking garage the other day while the fellow in front of us ranted about the high price of parking. "Things will change when the Democrats take control of Congress!" he fulminated. Maybe, maybe not. At the very least, the "new" Congress may be a little more discreet in its pandering to corporate interests, whereas the last crew operated with all the subtlety of a Deadwood saloon-keeper. Among issues we're fired up about: cram artists, usurious interest rates, credit bureaus, health care and food safety.

• What You Eat As the last year has shown, high fat content isn't the only problem with today's modern diet. There are food-borne agents like E. coli that can kill you in a hurry and others, like mad cow disease, that can do so slowly and agonizingly. While the industrialization of the food chain has made affordable food widely available year round, it can also spread disease far and wide. As the new year sputtered to a start, scientists said they had created genetically-engineered cattle immune to mad cow disease. Just a few days earlier, the feds said they could find no safety issues with milk and meat from cloned animals though skeptics are, well, skeptical. A new test, meanwhile, is said to detect E. coli and Salmonella quickly -- like, maybe, before the contaminated food is eaten?

• Privacy Blunders While consumers wrestle with recalcitrant credit bureaus and online data pirates, government and big business go sloppily along their merry way, spewing forth the private data entrusted to them. Latest instance: Wisconsin's tax department mails out forms to 170,000 taxpayers with Social Security numbers in plain view.

• Gas Prices Yes, prices dipped for a few months before the election but there is no scenario we can think of that would lead to a permanent reduction and, sure enough, prices closed the year 15 cents above last year. There is only so much oil in the world, a lot of it is in politically unstable and/or unfriendly areas and developing countries are competing with us for what's available. Leaving aside global warming for a moment, our dependence on imported oil is a severe threat to our economy and our national security. The Prius is cute but it's time for everyone, including consumers, to get real and start practicing what we preach -- energy conservation. But never mind that, said a top GM executive -- domestic manufacturers can't sell enough fuel-efficient cars to meet higher mileage standards.

• AT&T Forever Barely two decades after it was broken up for its abysmal anti-trust record, AT&T is bigger and more powerful than ever. Its consumption of BellSouth was approved by a unanimous vote of Republican and, ahem, Democratic FCC commissars after it agreed to be on its good behavior for a few months. AT&T, alias SBC, alias Southwestern Bell, SNET, Pacific Telesis and Ameritech, is now four times larger than Verizon, which it is likely to begin nibbling at come lunchtime. Oh, and besides the merger, the FCC in a holiday mood also gave the once-deposed despot free rein to provide cable service without seeking local franchise approval. This giveaway supposedly speeds the arrival of competition to a broadband-starved nation. We shall see.

THE MORNING AFTER
Many consumers woke up to higher credit card balances in the new year. That's unfortunate, because once the debt's there, it's hard to get rid of, especially with banks gleefully charging interest rates that would make Tony Soprano blush. Mark Huffman has a few tips on how you can get started whittling away your own little mountain of debt.

About those credit bureaus ... Rep. Barney Frank, the incoming chairman of the House Financial Services Committee, says he will hold hearings on how the credit bureaus can improve their reporting and error-correcting procedures. The Massachusetts Democrat vows action on the problems consumers encounter in trying to correct and update their credit records.

Currency For Criminals You might think credit card interest rates are criminal, and you'd be right. Here's something else that's criminal: Crooks are finding all kinds of uses for gift cards. Among other things, they're a great way to launder money without leaving a trail.

Ameriprise Penalty The unit formerly known as American Express Financial Advisors will pay $9 million to settle a suit by three retired airline pilots who charged their savings were mishandled. The jet jockeys said Ameriprise stuck their money in poor-performing, high-fee mutual funds.

FAFSA Time If you have a college student, new or returning, in your family, now's the time to start lining up financial aid for the next academic year. The FAFSA form is the place to start. It's the key to getting federal and state financial assistance and is also used by many colleges that offer their own financial aid packages. Warning: There are scam artists galore, offering phony aid packages. The best source of advice is your high school guidance counselor or college financial aid officer. Trust no one who calls, emails or writes you promising an inside track.

MICROSOFT GETS THE MESSAGE
After doing immeasurable damage to its brand, Microsoft grudgingly extended the warranty on its trouble-prone Xbox 360 from 90 days to one year from the date of purchase in the United States and Canada. In its oddly-worded statement, Microsoft said the change in "these territories" (i.e., the U.S. and Canada) would make the Xbox warranty consistent with "most of the world." What they were trying not to say is that consumers in the rest of the world have been enjoying longer warranties than those in the U.S. and Canada.

Microsoft, which behaves as though it were a sovereign and somewhat totalitarian nation, took its lesson from Washington's lizards and issued its announcement on the Friday afternoon before Christmas, virtually assuring no one would hear it.

TRAVEL COSTS HEAD NORTH
High demand and rising fuel costs will combine to boost the price of business travel in the near year. An American Express report notes that airfares have jumped 18 per cent over the last two years because carriers have made seats more scarce -- even though demand for them has been steady. Leisure travelers will still be able to find bargains but will have to plan ahead. Adding to the squeeze is the merger mania currently afflicting carriers large and small. Mergers may be good for the airlines but for consumers they result in higher ticket prices and fewer flights.

JetBlue Rips Out Seats Once again taking a contrarian approach, JetBlue is ripping out one row of seats in many of its jets, creating more legroom for passengers while cutting its fuel and staffing costs.

More travel notes ...

• Caribbean Resort Offers Respite for Troubled Couples Not too long ago, folks went to the Club Meds of the world to meet eager, eligible singles. Now a posh Caribbean resort is setting itself up for couples whose marriages are in trouble. You can combine sun, fun and counseling. Double beds available.

• Education Adrift? Bored with the same old campus and classrooms? Royal Caribbean is offering 16-week travel and study packages. Naturally, it's being called the "Scholar Ship" program.

• Arizona Resort Goes All-Organic Then there's The Boulders resort in tony Scottsdale, Arizona. It's claiming to be the nation's first resort serving exclusively organic dishes.

• Smokers Find Trouble in Paradise Smokers beware: Not to be bested by the likes of New York City, Hawaii has outlawed smoking nearly everywhere. This could be bad news for those eager to get off that long plane flight and light up.

PETS, KIDS MAY BE HAZARDOUS TO YOUR HEALTH
We've all read the heart-warming stories about how married people live longer and how a faithful dog can lower one's blood pressure. But guess what? There's another side to each of those stories, according to a couple of recent studies. One group of debunking researchers found that pet owners were less healthy than those without pets. They were more likely to be obese and to get too little exercise. (Anyone who has ever tried to briskly walk a pug will understand this). Another study found that adults who live with children eat more fat than pathetic childless couples.

No Buzz, No Drink In Australia, where they know a little bit about drinking, researchers have come up with a new treatment that takes the "buzz" out of drinking. They say, with some understatement, that this makes it a lot less appealing.

SCAMS & OUTRAGES

• Red Cross Agrees to Reforms Settlement with California likely to have impact nationwide.

• 900 Scam Consumers told they've won big and invited to call a 900 number to learn more.

• Irish Jobs Scam At-home bookkeepers in Southern California targeted by latest Nigerian scam.

• Sony BMG Consumers will be eligible for reimbursement of computer repair costs.

DISTRACTED, DEMENTED DRIVERS
Cars keep getting safer, so why doesn't the accident toll go down? Congestion and higher speeds are a factor but so are the twin demons -- distraction and dementia. Cell phones, complex audio systems, eating and grooming are among the distractions blamed for the growing accident rate. Then there's the problem of dementia -- not just crazed, aggressive drivers but also those whose reflexes and mental processes are beginning to get a little foggy. As the big baby boom generation (that's big generation, not big babies) creeps into its 60s and beyond, there'll be more and more older drivers on the road, adding to the overall confusion.

Tiny Car, Big Risk Finding ways to cut fuel consumption is good but many consumers are doing so by buying the new subcompact cars. They're fuel sippers all right but they're also among the most dangerous cars on the highway, simply because of their small size, safety experts warn. A better way to save fuel: Get a regular-sized car with a smaller engine.

Zip or Flex? If you're a city dweller, one way to cut automotive expense is to get rid of your buggy and use one of the shared car systems that are spreading rapidly across the country. Whether it's Zipcar or Flexcar, you can save money, avoid maintenance and parking hassles by renting your car by the hour. Don't laugh. Our Joe Enoch's been doing just that since last spring and, in his review, reports that he finds it both convenient and economical.

RECALLS

TO-DO LIST
We have a big to-do list for 2007. It includes a couple of things we didn't get to in 2006 and several new goals. Although we are always a little behind in upgrading our hardware and software, we'd like to think we blew it out the tailpipe last year with our expanded commitment to investigative reporting and the great work of our tireless crew. We plan to do even more this year, budget and libel suits permitting. Your editor has always thought that muckraking was just about the best possible way to spend the day and he has seen nothing lately to change his mind. So stay tuned, let us hear from you and have a happy and reasonably prosperous new year!

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