Current Events in September 2005

After years of turning a deaf ear to reports of fires in unattended F-150s and other trucks and SUVs, Ford Motor Co. is finally recalling nearly 4 million of the vehicles to replace a faulty speed control deactivation switch that may cause underhood fires.

The estimated 3.8 million Ford vehicles affected by the recall are from the 1994-2002 model years and include the Ford F-150 pickup as well as the Ford Expedition, Lincoln Navigator and Ford Bronco SUVs.

It's the fourth largest recall in Ford's history.

The brake fluid in the recalled vehicles may leak through the speed control deactivation switch into the speed control system electrical components, potentially corroding them and leading to fires, the company said.

Ford said it will install a fused wiring harness between the switch and the speed control mechanism of the affected vehicles to act as a circuit breaker.

In January, Ford recalled about 792,000 pickup trucks and SUVs for a similar problem involving the speed control switch. That recall included 2000 model-year F-150 pickup trucks, Expedition and Navigator SUVs and 2001 model-year F-Series Supercrew pickup trucks equipped with cruise control.

The government began the defect investigation in March involving F-150 pickups from the 1995 to 1999 and 2001 to 2002 model years and Ford Expeditions and Lincoln Navigators from the 1997 to 1999 and 2001 to 2002 model years.

NHTSA has received more than 550 complaints of engine fires from the cruise control switch in the Ford models.

When Congress returns this week, several members of the House will introduce legislation to shield victims of Hurricane Katrina from the new bankruptcy law that takes effect on October 17th.

The measure would "prevent new bankruptcy provisions from having adverse and unintended consequences for the hundreds of thousands now facing financial catastrophe by providing needed flexibility for victims of natural disasters in bankruptcy proceedings," Reps. Sheila Jackson Lee (D-TX), John Conyers Jr. (D-MI), Mel Watt (D-NC), and Jerrold Nadler (D-NY) said in a statement.

"Our common sense bill will insure that we do not compound a natural disaster with a man made financial disaster. We hope to obtain bipartisan support for expedited consideration of this critical legislation, they said.

The insurance analyst group Risk Management Solutions has estimated financial and economic losses from Katrina at over $100 billion. Hundreds of thousands of families are homeless and destitute as a result of the storm along the Gulf Coast.

It's estimated that more than half of New Orleans area homeowners did not have flood insurance and thus will not be covered for water damage to their homes, although they will be eligible for grants and low-interest loans administered by the Federal Emergency Management Agency (FEMA). But grant money is limited and the loan program is not without its problems.

After previous disasters, homeowners have complained that the loan application process was lengthy and bureaucratic.

Payouts from the National Flood Insurance Program can also be disappointing. A class-action suit was filed against FEMA and other agencies and private insurers in June 2005 by victims of Hurricane Isabel, charging that insurance payouts were inadequate.

Under the new bankruptcy legislation, homeowners' exemptions from liability are much more limited than in the past. As we previously reported, many homeowners who have refinanced their homes will be shocked to find that under the new bankruptcy act, they are liable for the full value of their home if it is destroyed.

The bankruptcy "reform" law restricts home equity protection to $125,000, if the buyer bought the house within four years of filing for bankruptcy.

In addition, the new bankruptcy law forces consumers to pay much more to file documents and retain lawyers to prove their claims, pushing a bankruptcy filing out of the reach of many cash-strapped Americans.

War on the Poor

"Consumers who have already lost everything may now find they literally do not have enough money to go broke," said ConsumerAffairs.com President James R. Hood. "Every voter who is not a multi-millionaire should make it a solemn duty to vote against any Senator or Representative who did not vigorously oppose the shameful MBNA enrichment bill."

"This session of Congress will be remembered as officially ending the War on Poverty by replacing it with the War on the Poor," Hood said.

All four sponsors of the bankruptcy relief legislation voted against the original "Bankruptcy Reform and Consumer Protection Act" when it was introduced for vote in the House in April 2005. The bill passed the House 302-126, and was passed by the Senate rubber-stamped it shortly thereafter. President Bush signed the bill into law on April 20th.

Besides opposing the bankruptcy "reform" legislation, Rep. Watt has also targeted predatory lending for reform.

Along with Reps. Brad Miller (D-NC) and Barney Frank (D-MA), Watt sponsored HR 1182, the "Prohibit Predatory Lending Act," which bars lenders from advocating loans buyers may not be able to afford without explicitly outlining the costs of the loan. It also prohibits "mandatory arbitration and other nonjudicial procedures."

The bill is currently awaiting action by the House Subcommittee for Finance and Consumer Credit.

Attorneys General from more than 30 states are investigating the underlying cause for sudden and dramatic increases in gasoline prices across the country.

The multi-state probe will focus on the factors that generated the rapid escalation in gasoline prices in days following Hurricane Katrina.

"Hurricane Katrina was an event totally outside human control," Pennsylvania Attorney General Tom Corbett said. "We want to determine if storm-related factors were the only things responsible for this sudden and dramatic jump of prices at the gas pump."

California Attorney General Bill Lockyer announced he will subpoena records from refiners and probe the pricing practices of gas station owners in his state.

Hurricane Katrina has broken families, devastated communities and destroyed lives, said Lockyer. Its during times such as this that its most important we pull together, act with one heart, and rebuild with a sense of community. To unjustly profit from tragedy is unconscionable. I hope this investigation does not find that such greed has afflicted oil companies and gas station operators in California.

In Florida, Attorney General Charlie Crist has sent teams of investigators and sworn law enforcement personnel from his office to locations throughout the state to look into complaints of price gouging on the price of gasoline.

Crist said investigators will be looking to determine whether the rapid rise of gas prices meets the legal definition of gouging, and vowed to prosecute any violations of the law.

As of 1:00 p.m. Friday, the Attorney General's toll-free consumer hotline had received 1,050 complaints about skyrocketing gas prices in the days since Hurricane Katrina ravaged the Gulf Coast.

"When we hear of 75- to 90-cent price spikes within two days, or reports that surcharges are being tacked onto consumers' fuel costs, then it is our duty to investigate," said Crist. "Floridians understood that damage from Hurricane Katrina would lead to some disruptions in fuel supply and some cost increases, but these spikes lead to legitimate questions that must be answered. Gouging will not be tolerated."

Alabamas AG, Troy King, said What we have seen in the last few days is a crisis unfolding throughout America and particularly in the Southeast -- on top of the terrible natural disaster of Hurricane Katrina -- with gas prices rocketing to such a degree as to create serious allegations of price gouging."

Other Attorneys General and I are committed to getting clear and understandable answers about why gas prices have risen so rapidly and dramatically, and if the law is being violated, we will take action," said King.

Gas prices have spiraled to more than $3.00 per gallon across much of the country since Hurricane Katrina smashed into the Gulf Coast earlier this week.

September 2, 2005
World Wide Cycle Supply Inc. is recalling about 25,000 Harley-Davidson 16-inch BMX bicycles. The fork that holds the front wheel can separate at the weld, causing the rider to fall and suffer injuries.

World Wide Cycle Supply Inc. has received 15 reports of fork welds breaking on these bicycles. There have been reports of six riders suffering injuries including injuries to the face, hands and mouth such as bruises, lacerations and lost teeth.

The bicycle has a yellow and red painted flame pattern with a yellow fork and a sticker containing the words Harley-Davidson on the fork leg. Only bicycles with the following serial numbers are being recalled:

• 02F0026155 through 02F0032454
• 03A0007772 through 03A0013271
• 03A0018849 through 03A0027348
• 03B0004011 through 03B0007460
• 03C0019597 through 03C0023496
• 03D0006431 through 03D0008030
• 03E0022835 through 03E0023134
• 03F0027500 through 03F0031059
• 03F0037194 through 03F0040493
• 03F0026276 through 03F0033275
• 03F0040194 through 03F0045493

The serial number can be found on the bottom bracket shell, which is located underneath the pedals and can be viewed by turning the bicycle upside down.

The bikes were sold at Toys R Us stores nationwide from July 2002 through June 2005 for about $80.

Consumers should stop riding the bicycle immediately and return it to a Toys R Us store for store credit in the amount of the purchase price.

Consumer Contact: Call World Wide Cycle Supply at (800) 944-9951 between 8:30 a.m. and 5 p.m. ET Monday through Friday, or visit the Toys R Us Web site at www.toysrus.com. These bicycles were sold through a licensing arrangement with Harley-Davidson and were not manufactured by Harley-Davidson. Consumers should not contact Harley-Davidson.

The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

New Orleans remains shut off from the outside world, with virtually no phone service and repair crews not yet allowed to enter the flooded, battered city.

The various telephone companies have been unable to estimate when service might resume, since they have not yet been able to physically inspect the damage to their equipment.

The landline network has been out in most of the New Orleans area since the storm hit and most cell towers failed during the first few hours. Emergency generators kept some facilities up but they soon ran out of fuel or became water-logged.

The situation has not been much better for police, fire and other emergency workers. Although most of their base stations remained operational, with virtually no electricity in the city, workers have not been able to recharge the batteries on their hand-held units, rendering them useless.

It's not only New Orleans that's affected. Long-distance service for much of the Gulf Coast and Florida Panhandle is routed through giant switches in New Orleans. Many of those switches shut down because of water damage, interrupting calls that would normally pass through them.

Cingular Wireless said its network is operating on a "limited basis" in the New Orleans area, although service has been almost fully restored in Baton Rouge and parts of Alabama. Cingular is rolling out its own mobile cell sites, as well as bringing in back-up generators and additional fuel, a spokesman said.

Sprint said it has 100 engineers on site in Baton Rouge, where it is concentrating its recovery efforts. The company is preparing to roll out mobile cell sites in an effort to boost cellular capacity in areas where the wireless infrastructure is knocked out.

Few Options

Hurricane Katrina demonstrates how few communications options most consumers have in the wake of a major disaster.

After a major storm, earthquake or fire, the landline network is often knocked out of service by damage to wires and cables. Extreme flooding can destroy network switching equipment and knock out emergency generators.

The cell phone network is even more vulnerable, as each tower must have electricity to operate. Most towers have very little back-up capacity and generators or batteries often fail after just a few hours.

Even when towers remain active, citizens can't recharge their battery-powered phones without electricity.

There are some options, such as satellite phones. But they are expensive, usually over $1,000, and are also limited by the battery life of the phone.

As many New Orleans residents have learned, cellular text messaging can be a last-ditch means of communicating; it requires less power than talking and does not require a constant connection. Also, those able to find a working Internet connection have been able to communicate via email and bulletin boards.

Push-to-Talk

Some users of Sprint Nextel push-to-talk phones were surprised to find they could get through to others on their push-to-talk list, even in areas where the network was down. That's because the push-to-talk phones connect directly to each other, bypassing the network, although they have a range of just a few miles and battery life is still a problem.

Such coverage is called "additional living expense" (ALE), according to the American Insurance Association.

"Hurricane Katrina evacuees may either be in hotels, in evacuation shelters, or staying with friends or relatives, and may be uncertain as to whether their home is uninhabitable," said Janet Bachman, AIA vice president.

"These policyholders should call their insurance company to inform them that they have been required to leave their residence and the area due to Hurricane Katrina, and to get advice on how their ALE coverage can assist with additional living expenses if either they were required to evacuate or if their home is uninhabitable due to windstorm or flood damage."

Homeowners insurance policies specify the amount of ALE coverage available. Generally, ALE pays for the difference between what it cost the family before the loss for housing and food and what it costs post-loss. As an example, before the loss a homeowner may have had a mortgage payment and utility bills (phone, electricity, etc.), and average monthly costs for groceries could be $500.

Post-loss, the homeowner/family is staying in a motel or rents an apartment and eats many meals in restaurants. The insurer will pay for the difference between the cost of all these items pre-loss (minus non-continuing expenses such as utilities) and the cost of these things post-loss. Policyholders should keep all receipts for lodging and meals to make the claims process easier.

Some insurers will provide ALE funds immediately upon being notified of a loss; others may reimburse policyholders at a later date. It is important for policyholders to contact their insurer or insurance agent for more information about this coverage.

No ALE Under Flood Insurance

It is important to note that ALE coverage is available only when the insured property is uninhabitable because of a loss covered under the homeowners policy. Federal flood insurance policies do not include ALE coverage, so this assistance will not be available when damage to a home occurred from flooding or storm surge.

The amount of coverage for ALE differs from insurance company to company and depends on the specific homeowners policy. Many policies provide coverage equal to about 20 percent of the amount of insurance on the home. For example, if the dwelling coverage is $500,000, ALE coverage would be $100,000.

"ALE coverage provides an important lifeline to policyholders whose lives are devastated by disasters like Hurricane Katrina," continued Bachman. "In many cases ALE coverage can help families leave shelters and move to better housing and hopefully improve the dire situation in even the slightest way."

The makers of the infamous ZabaSearch public search engine have decided to boldly go where millions have gone before -- into the realm of blogs.

As of Sept. 1, if a user searches for a particular name using the engine, they will find a link to the "ZabaBlog" underneath their target's listing. From there, they can post comments about this person as if it were an individual Web site or blog.

This sounds like a Web-enabled version of scrawling someone's name and phone number in a bathroom stall. It opens the door to sophomoric gossip, slander and calumny from ex-coworkers, ex-spouses, ex-lovers, and so on.

As a writer with About.com puts it, "[E]nabling users to write and post blogs about other individuals is so junior-high. 'Hey, folks! We'll give you the ability to pass notes about Clarice and her weird hair follicle problem; plus, you can even look up her address and phone number and prank call her. You'll just be the coolest.'"

Not to mention that this is a publicly accessible search engine. If a potential employer is scrolling through your records and sees things like "Alvin is a loudmouthed braggart who disrupts the workplace constantly," they'll definitely think twice before tapping you for a job, no matter if the comments are true or not.

Now, whether or not Alvin is a loudmouthed so-and-so is not the point. The point is that this service isn't part of ZabaSearch's paid background check. It's right there on the site for anyone to access, free of charge.

This could open the service to charges of libel and harassment, depending on the nature of the content. It's one thing to post personal opinions on a Web site or blog, even one of a public nature. It's another to post personal opinions on a public records database.

David Lazarus of the San Francisco Chronicle commented that "the Los Angeles company is blazing a trail into new territory by complementing its free-of-charge aggregating of personal data with an opportunity for others to comment on people who aren't public figures."

You can attempt to get your information removed from ZabaSearch, but as ConsumerAffairs.com has previously reported, getting your records removed is a time-consuming process that can leave you vulnerable to identity theft.

If you see your profile filled with derogatory comments and insults, remember that blogs enjoy the First Amendment's protection of speech, and the best defense is a good offense. Post some true, non-defamatory comments of your own and make sure readers know that what's being said about you may be false or inaccurate.

Remember, while ZabaSearch may be able to shield itself from libel charges, you can go after the person who vilifies you -- and you can subpoena ZabaSearch's records to find out who that person is, if necessary. You'll need an aggressive, experienced litigator who knows libel law, not someone who normally does real estate closing.

ZabaSearch was founded by businessman Nicholas Matzorkis and lawyer Robert Zakari in February of 2005. The founders have worked together on several Internet business ventures, including ZabaSearch's predecessor PeopleData, and U.S. Search.com.

Both are notable for their connection to the Heaven's Gate cult, whose members committed mass suicide in 1997. Matzorkis employed many members of the cult at his Web design firm, and Zakari represented one of the survivors while he tried to gain the rights of the estate and make a movie about the cult's demise.

In the early days of the Internet, geeky hackers competed to see who could create the most diabolical computer viruses. The motivation was a twisted kind of bragging rights. But a study released by IBM says hackers today have a different motivation -- profit.

In its Global Business Security Index, the computer giant says email continues to grow as a security menace, with messages often disguised as communications from legitimate entities that seek to pry personal and financial information from the unsuspecting. Believed to be largely driven by criminal gangs, phishing was tied to 35.7 million emails in the first half of 2005.

The experts also noted an increase in spear phishing, highly targeted and coordinated attacks at a specific organization or individual designed to extract critical data. Also, more and more electronic messages contain viruses that can harm computer or network operations.

The overall volume of viruses has exploded. In January of 2004, one in every 129 emails contained a virus; by June of this year, infections had spread to one in every 28 emails.

The first half of 2005 saw more than 237 million security attacks overall, more than 20 percent of which were aimed at government computers. The United States was overwhelmingly the target location for attacks (12 million), followed distantly by New Zealand (1.2 million) and China (1 million).

Surprisingly, spam, unsolicited and unwanted email, provided a bright spot in the study. The ratio of spam to legitimate email continuously decreased over the course of the last six months, from 83 percent in January to 67 percent in June 2005.

"IBM advises its clients to rapidly adopt a holistic, enterprise-wide approach to security and risk management," said John Lutz, general manager of IBMs Financial Services Sector.

The company said the losses are the result of two separate catastrophic events: first, the landfall of Hurricane Katrina in southeast Louisiana and coastal Mississippi on Aug. 29 causing extensive wind and coastal surge damage; and second, the Great New Orleans Flood which has resulted from failure of the levee systems that are supposed to protect the city.

At least 50 percent of total economic loss is expected to come from flooding in New Orleans, in addition to hurricane losses from wind and coastal surge, infrastructure damage, and indirect economic impacts.

The company said that what it calls the "2005 Great New Orleans Flood" has developed into the most damaging flood in U.S. history. It estimates that at least 150,000 properties have been flooded, surpassing the previous U.S. record from flooding and levee failures on the Lower Mississippi river in 1927, which inundated 137,000 properties.

"The economic and insurance consequences of the 2005 Great New Orleans Flood will depend highly on how quickly authorities can respond to the event," said Laurie Johnson, vice president of technical marketing at RMS.

She noted that the longer it takes to drain the water, the more damage will be done by the warm, polluted water now infiltrating wooden residential buildings and other structures.

Although hurricanes of category 4 or 5 strength are well-understood to occur in this region of the country, the levee system in New Orleans was designed only to protect against a category 3 strength storm. Also, Johnson said, shortcomings in preparedness are exacerbating the situation.

RMS said the nearest analogy to the New Orleans flood a 1953 flood in the Netherlands, also caused by a major wind-driven storm surge that overwhelmed poorly-maintained defenses protecting land below sea level. That flood led to more than 1,800 deaths and the inundation of 47,000 properties. It took six months to pump out all the water from the flood bowl.