Current Events in August 2006

A man in South Venice, Fla. believes his Dell laptop is the cause of his house burning down.

Louis Minnear told the Sarasota Herald-Tribune that about 5 a.m. Thursday he smelled what he believed to be an electrical fire. He searched the house for the source, didn't find it and went back to sleep. About 45 minutes later he awoke to find his couch engulfed in flames.

Minnear led his pregnant wife, 9-month-old son and two dogs to safety while scrambling for what belongings he could.

"It moved fast; it burned hot," Minnear told the Herald-Tribune. "But they got it out quickly."

In the end, all he could salvage were a few family photos, toys and his wife's purse.

The Dell was a Latitude D500, equipped with one of the 4.1 million batteries Dell recalled two days before the fire.

Minnear is "convinced" the Dell, which he said was sitting on a pile of papers, started the blaze.

The flames took less than 20 minutes to tear through the small home, destroying everything and leaving it uninhabitable.

Sarasota fire officials have yet to determine a cause but did verify that a laptop was on the remains of a couch. The case currently rests in the hands of the Florida State Fire Marshal.

"Sometimes the fires are left undetermined," Sarasota Assistant Fire Chief Paul Dezzi said. "Sometimes you cannot figure out what would have caused it."

Dell and the office of the Florida state fire marshal did not return two phone calls for comment. Dell also did not return phone calls made by the Herald-Tribune.

Should the fire marshal determine that the laptop was the cause of the fire, this would be the most destruction any Dell laptop has caused. In the first publicized case, in June, only the Dell laptop was destroyed. Then a month later, a Dell laptop in an office in Illinois charred itself and the desk it was sitting on.

Then, later in July, a truck in Nevada went up in flames sending two men fleeing as the flames reached the gas tank and two boxes of bullets in the glove box.

Following Dell's massive battery recall last week, mobile device designers are beginning to worry that the problem may be larger than the 4.1 million recalled batteries used in Dell laptops. It also appears Dell's recall is not a cure-all.

"It's a matter of how systems are architected," Bodo Arlt, publisher of Bodo's Power Systems magazine in Germany told the EE Times, an online technology publication.

"You need to know how much energy the computer extracts from the battery, and how a system is designed to manage the current flow that generates heat inside the battery. Knowing the limitation at the critical temperature is important," he said.

In the wake of the recall, Sony, which manufactured the lithium-ion batteries, has taken much of the blame for the 12 reported incidents of burning laptops and hundreds unreported.

Reports suggest that faulty crimping on a Sony production line may have introduced metal contamination to the cathodes of the affected battery packs.

As was suggested in a ConsumerAffairs.com story on August 3, that contamination would likely yield some sort of combustion if the battery got too hot.

The Dell recall may not end stories of Dell laptops going up in flames. Thomas Forqueran, whose Inspiron 1300 set his truck ablaze, did not have one of the 4.1 million recalled batteries. The 1300 is not one of the listed laptops.

Some laptop designers believe that the architecture of the computer is to blame, not the rare battery defect.

Dell laptops frequently place the battery toward the front of the laptop - near the two hottest components of the computer - the CPU and graphics processor. Whereas Apple and Sony, which use the same Sony batteries Dell recalled, tend to place their batteries toward the back, which may explain why there is only one known case of an Apple laptop igniting and no Sony cases.

"If Dell used a thermometer that would automatically shut down the computer when the battery gets too hot, this could be avoided," Ronald Riley, president of the Professional Inventors Alliance USA, told ConsumerAffairs.com on August 3. "The point is, the computer should not be able to get hot enough to do that."

There are also concerns that with the increased demand for lithium-ion batteries, there may be more frequent quality control issues.

"It is basically a quality [control] problem in the cells," John Drengenberg, an electrical engineer and manager of consumer affairs for Underwriter Laboratories Inc. in Northbrook, Ill. told the EE Times. "Power density is increasing dramatically while battery cell materials have failed to keep pace."

If materials cannot meet the electrical and safety requirements, the task of keeping the battery cool may rest in hands of computer designers, not battery manufacturers.

A Sony spokesman in Tokyo said, "Our analysis thus far shows that a tiny metal particle that contaminated the electrolyte inside the battery cell caused a short-circuit." But he added, "Usually, that alone would not cause a fire, because the battery just goes dead at that point."

"We believe the fire was caused by the combination of batteries and system architecture," he said.

Dell has not commented on whether their architecture is to blame.

A study warns that homeowners in the Midwest and South and minority communities nationwide are most at risk of mortgage rate shock as the three-fourths of all subprime home loans that are adjustable rate mortgages (ARMs) become harder for borrowers to repay.

The report, "The Impending Rate Shock: A study of home mortgages in 130 American Cities," looks at which communities will be hit hardest by rising interest rates. It was issued by ACORN, a grass-roots community activist organization.

Using data available under the Home Mortgage Disclosure Act, ACORN's study examines the extent of high-cost (subprime) lending in 130 metropolitan areas and the disparities between borrowers of different race and income levels.

Borrowers with subprime loans are already paying higher interest rates and are more likely to be lower-income and have fewer resources to cope with the coming "rate shock" when their interest rates adjust even higher.

The top 10 areas at the greatest risk of "rate adjustment shock," where high-cost loans represented more than two of every five home purchase and refinance loan, were largely concentrated in the South and Midwest. These areas are: Detroit and Flint, Mich.; Memphis, Tenn.; Jackson, Miss.; McAllen, El Paso, Laredo and Brownsville, Texas; Springfield, Ill.; and Birmingham, Ala.

"Rate shock could mean and a sharp increase in foreclosures in some of the urban and minority communities that most need to build wealth through homeownership," said ACORN President Maude Hurd. "Too many of our neighbors are being steered into ARMs without given an option for a fixed rate and without given an explanation of the risks."

Racial Disparities

The study revealed that minority neighborhoods are at a greater risk of rate shock than neighborhoods that are predominantly white, because of the disproportionately high share of subprime loans held by homeowners in these communities.

In most metropolitan areas, upper-income minority borrowers are at a greater risk than upper and lower-income white borrowers as well.

There were 12 metropolitan areas where upper-income African-Americans were at least three times more likely to receive a high-cost loan than upper-income whites. Five of those areas are in California -- San Francisco, Oakland, San Jose, Los Angeles, and San Diego.

The disparities were even greater between upper-income African-Americans and upper-income white homebuyers. The study identified 15 metropolitan areas where upper-income African-Americans were at least five times more likely to receive a high-cost purchase loan than upper-income whites.

And upper-income Latinos were at least five times more likely than upper-income whites to receive a high-cost refinance loan in the following seven metropolitan areas: San Francisco, Calif.; Bethesda, Md.; Washington, D.C.: San Jose, Calif.; Bridgeport, Conn.; New York, N.Y.; and Santa Ana, Calif.

ACORN used a sample of 275 lenders that are owned by 15 of the largest lenders in the country. According to industry estimates, these lenders represent 65.5 percent of all residential mortgages originated in 2005 and 55 percent of the subprime market.

ACORN recommends that federal banking regulators require lenders to underwrite risky loans, such as interest-only and option ARMs, based on the borrower's capacity to repay the mortgage during the life of the loan considering the highest interest rates, the maximum possible negative amortization, and significant increases in monthly payments after the introductory minimum payment period expires.

Borrowers are advised to seek HUD-certified homeownership counseling to receive advice about receiving an appropriate loan and to ensure they are not taken advantage of by unscrupulous lenders. Borrowers can also call a local ACORN office for assistance.

The complete text of the report is available online (.pdf file).

Mazda plans a voluntary recall of all 2004 and 2005 RX-8 sports cars along with some 2006s because of damage to the catalyst resulting from oil leaks in the RX-8's rotary engine.

Mazda is preparing to replace the engines in many of its top of the line sports cars as a result of the recall. Any engine that does not pass a specific vacuum test will be replaced according to Mazda.

Engines prone to failing the vacuum test are mostly in hot climates and use synthetic oils, according to the automaker.

Earlier this month Mazda, in an attempt to soothe intense dealer dissatisfaction with the RX-8 maintenance record, promised dealers that it would no count RX-8 owners' opinions in its internal customer-satisfaction scores.

Mazda dealers complained that problems with the RX-8 were unfairly lowering the Mazda customer-satisfaction results.

A video of the dealer complaints was leaked to a Mazda owners' web site and caused an immediate uproar.

In the video, a member of the Mazda National Dealer Advisory Council states, "Mazda is well aware of the negative impact on the scores caused by the RX-8 surveys. They agreed with us that the situation had to be changed. And so, effective July 1st, RX-8 will be continued to be included in the survey, but the scores will no longer be included in the results."

The engine recall is the latest in a series of problems for the RX-8. Mazda will also check each RX-8's battery and starter, which tend to fail in cold climates.

Mazda has already issued service bulletins on such trouble spots as squeaky brakes and engine flooding. Squeaky brakes on the RX-8 are the subject of three Technical Service Bulletins, according to owners. RX-8 owners have also repeatedly complained of engine flooding to failure.

Mazda executives promise to give the RX-8 "white glove treatment" to finally deal with the problems associated with the sports car.

The automaker has a remanufacturing plant in North Carolina that will rebuild faulty rotary engines and return them to service.

What most of them perceive as a personal tragedy of the highest order also amounts to a tidal wave of spending, which many parents can ill afford this year.

A recent study by Money Management International (MMI) found that nearly half of surveyed parents plan to spend more than $200 per child on back-to-school shopping; 9 percent plan to spend more than $400 per child. More of them will be buying uniforms, as the number of schools requiring uniforms rises.

The National Retail Federation is hoping parents will spend even more. It quotes a study predicting the average family will spend $527 this year, up from $443 last year.

For larger families, or those without a savings cushion, those expenses can put a big dent in the budget and woefully inflate credit card balances.

To make matters worse, this expensive annual tradition has not adapted to a time when there are more single parents and, in general, less money in the average family budget, thanks to rising energy prices, usurious interest rates and stagnant wages for many workers.

Here are some tips from the professional money managers:

• Create a budget. Start by taking a thorough inventory of what you already have and then develop a budget for what you still need. Then, list each item in priority, from most important to least important. A prioritized shopping list can be easily trimmed by cutting from the bottom. Be sure to factor in often-overlooked expenses such as extra-curricular activity uniforms, field trips, and immunizations. Also, be sure to check your child's school dress code policies before purchasing any clothing.

• Save on school supplies. Shopping the "back-to-school" section at an expensive retailer may be convenient but comparing prices with lower priced outlets and office supply stores could save you money. Each teacher will have his or her own requirements, so have your supply list in hand prior to making any purchases to eliminate non-essential expenses.

• Involve your children. While back-to-school shopping can be painful financially, it offers the opportunity for parents to teach their kids a valuable lesson about budgeting, credit, and wants and needs. A 2006 MMI poll revealed that a majority (57 percent) of parents say their children share the responsibility for selecting back-to-school supplies and clothing. To make the most of the experience, sit down with your children and decide on a budget. Teach them to comparison-shop and point out that if they get the expensive jeans, they will have to cut back in other areas.

• Pay cash. "Finally, avoid putting back-to-school purchases on a credit card -- the price is just too high," said Cate Williams, vice president of financial literacy for Money Management International. "For example, if you spend $400 on an 18 percent interest rate credit card during your child's first year of high school and make only the minimum monthly payments (4 percent of the balance), he may get his high school degree before you finally pay off the balance."

Retailers Smell Money

To retailers, the back-to-school season is right up there with Christmas and Halloween. Indeed, the combined $54.2 billion spent this year for back-to-school and back-to-college will rank second only to holiday spending.

The National Retail Federation's (NRF) 2006 Back-to-School Consumer Intentions and Actions Survey, conducted by BIGresearch, families with school-aged children will be spending more on back-to-school shopping this year than last, with the average family spending $527.08, up from $443.77 in 2005.

Total spending is estimated to reach $17.6 billion, up from $13.4 billion last year, accoridng to the National Retail Federation's (NRF) 2006 Back-to-School Consumer Intentions and Actions Survey, conducted by BIGresearch.

While spending will jump in all categories, electronic and apparel purchases will fuel this year's back-to-school growth. Total spending on electronics or computer-related equipment, such as home computers, laptops, PDAs, or calculators, is estimated to increase by more than $1.5 billion this year ($3.82 billion vs. $2.06 billion), rebounding after a sharp decline in 2005.

Apparel is also expected to be a big performer, with the average consumer expected to spend $228.14 (up from $205.31 in 2005). Other popular items on consumers' back-to-school lists include shoes ($98.34) and school supplies, such as notebooks, folders, pencils, backpacks, and lunchboxes ($86.22).

One in five (15.9%) parents with school-aged children have kids that are required to wear a uniform. According to the survey, those parents will spend more on apparel and accessories ($233.73 vs. $228.14) and shoes ($119.91 vs. $98.34) than parents who do not have to buy uniforms.

In addition, more consumers with children who are required to wear uniforms will shop at department stores (56.8% vs. 53.3%), specialty shops (36.2% vs. 30.9%), and through catalogs (7.1% vs. 5.0%) than those with children that do not wear uniforms.

Once again this year, the survey found shifts in spending by region. Consumers in the West are beefing up their back-to-school budgets ($409.19 last year vs. $479.45 this year), while spending in the South is expected to rise as well ($434.09 in 2005 vs. $544.54 this year). While consumers in the Midwest cut back in 2005 ($404.68), they are expected to bump up spending ($521.10) this year.

The only area where consumers are pulling back is in the Northeast, where they will be spending an estimated $456.38, down from $513.07 in 2005.

According to the survey, discount stores will remain popular back-to-school shopping destinations, with nearly three-quarters (72.2%) of shoppers heading to discounters to purchase items on their lists. Department stores and specialty stores will be seeing increased traffic this year.

Children will once again be investing more of their own money in back-to-school items. Parents said that their teenagers will be spending an average of $28.99 of their money, up from $20.47 in 2005, though still down from $38.51 in 2004. Pre-teens will be spending more as well, with the average pre-teen spending $12.72, up from $8.12 last year.

Uniform Attitudes Far From Uniform

They may be more expensive but uniforms are becoming increasingly popular at schools across the country.

In fact, the rate of mandated school uniform policies has risen three percentage points since 2000, according to The NPD Group, a provider of consumer and retail information.

Since the majority of schools do not include the cost of school uniforms in tuition and fees, many parents are forced to pay for the child's uniforms independently. NPD found moms and dads spend an average of $162 on school uniforms per year, per child.

Eighty-six percent of mothers of children who wear school uniforms are in favor of the practice, while just 14 percent were against it. Half (51%) say their kids are indifferent about school uniforms, similar to the levels seen in 2000.

The number of moms reporting their kids like wearing uniforms has decreased six percentage points versus 2000 (25% in 2005 vs. 31% in 2000).

As children enter an age of heightened brand awareness and develop a keener fashion sense, they become disenchanted about wearing school uniforms. More than one-third of children age 12-14 dislike wearing school uniforms versus only 14 percent of children age 5-8 years.

"Many children may not like wearing school uniforms, but mothers and a select few kids can find piece of mind knowing that it takes ease off peer pressure and competition of buying and wearing brand name designer clothes," said Marshal Cohen, chief industry analyst, The NPD Group.

Back to College

Even bigger spenders than their little brothers and sisters are the college-bound. They're not only buying clothes and school supplies but also furnishing dorm rooms with an expanding array of electronics.

The fourth annual NRF 2006 Back-to-College Consumer Intentions and Actions Survey, conducted by BIGresearch, found that college students and their parents will spend $36.6 billion returning to campus this year, up 6.3 percent and more than double what parents of K-12 students will spend on back-to-school.

The biggest driver in college spending this year will be in electronics. College students are expected to spend 27.5 percent more on electronics purchases ($10.46 billion) as the category expands to include flat screen TVs, XBoxes, iPods, and notebook computers.

Spending on dorm furnishings, which has been a large driver of college spending, is expected to be moderate this year with the category growing 5.4 percent to $3.82 billion.

Clothing and accessories sales, at $5.78 billion, are expected to be flat, though shoe sales will see an impressive 13.0 percent increase to $2.26 billion. Two categories, school supplies (down 14% to $2.55 billion) and textbooks (down 1.8% to $11.69 billion) will see decreases in spending.

"Today's college students were using computers before they could write, which explains their gravitation toward electronics," said NRF President and CEO Tracy Mullin.

While spending remains hefty, the number of stores parents visit is expected to decline from previous years.

"As consumers remain concerned about gas prices, they are more inclined to scale back on the number of stores they visit," said Phil Rist, Vice President of Strategy for BIGresearch. "College students, who are some of the most technologically-savvy shoppers, will likely use the Internet to look for prices and research merchandise before setting foot in a store."

As in previous years, freshmen will spend the most this year with the average first-year college student spending $1112.62, largely on electronics and dorm furnishings. Seniors, at $558.25 on average, will spend the least.

If it's Friday, it must be time for disclosure of yet another theft of a laptop containing the confidential personal information of thousands of workers. This time it's oil giant Chevron confessing to the data loss.

The California-based company notified employees earlier this week that a laptop containing names, Social Security numbers, and "other sensitive information" had been stolen from a third-party accounting firm that was conducting an audit of Chevron's employee health and savings plans.

David Lazarus of the San Francisco Chronicle quoted an internal e-mail sent by Chevron to its employees. "We believe that it is unlikely that any Chevron benefit plans will be impacted by this theft with the security measures we have in place for those plans," it said.

The accounting firm was not identified, and Chevron provided few details as to the nature of the theft, or why the data was not encrypted. The company claimed the laptop was password-protected, but security experts called that a modest protection at best.

Chevron, which recently posted a record $4.4 billion in net income for the second quarter of 2006, pledged to assist law enforcement in recovering the laptop and to provide protection for any employees that were affected by the theft.

Third-party companies being tasked to handle other companies' data has led to numerous data breaches and laptop thefts in the past 12 months alone. Both the Royal Ahold food marketing company and Hotels.com suffered data breaches when independent auditors lost equipment containing workers' information.

Student loan company Texas Guaranteed lost information on 1.3 million borrowers when data downloaded onto a mobile storage device by third-party contractor Hummingbird disappeared.

And the Veterans' Administration, already battered by the theft of a laptop containing data on 26.5 million veterans from an analyst's home, suffered another blow when a desktop computer containing veterans' insurance and medical records was stolen from the headquarters of technology services firm Unisys.

The Reston, Va.-based company had been contracted by the Veterans' Administration to assist with processing insurance claims.

InfoWorld's Ted Samson admonished companies that don't scrutinize relationships with their outsourcing partners closely enough, and don't implement and enforce data security procedures strictly enough.

"I think it's inevitable that we'll soon see hefty lawsuit settlements against companies that have negligently exposed their employees SSNs and other personal information," he said. "In the meantime, though, companies (and governmental agencies) need to get on the ball."

Rushing to latch the barn door as the horses thunder into the sunset, government agencies are rushing to implement safeguards for data security following an embarrassing series of data breaches and equipment thefts.

The Veterans Administration (VA) announced that it had contracted with two "mobile security specialist" companies to impose new data encryption on all of its machines, including desktop computers, laptops, and thumb drives.

In a press release trumpeting the initiative, VA Secretary Jim Nicholson said that the agency-wide encryption program will be "a tremendous step forward in improving the safety and security of sensitive veteran information."

Nicholson claimed that final testing of the new encryption products was underway, and that all of the agency's laptop computers would be updated and protected within four weeks.

Not to be outdone, the Justice Department's chief information security officer announced that he was launching an examination of all of the agency databases for potential security vulnerabilities.

CIO Dennis Heretick told Information Week that he has an agency-wide license to deploy AppDetective, a security program that examines databases for vulnerabilities and reports its findings back to the user.

According to Heretick, only 30% of the Justice Department's active databases are currently being examined by AppDetective, including systems used by the FBI. Heretick said that he wants personnel fully trained in the program before rolling it out agency-wide.

The Office of Management and Budget (OMB) had set a deadline of August 7th for federal agencies to meet a "security checklist" for protecting remotely used data, but many agencies have not yet met the deadline.

Laptop on the Loose

The saga of the stolen VA laptop remains the standard-bearer for government-based data security breaches.

The laptop, containing unprotected personal information on 26.5 million veterans, was stolen from the home of VA data analyst Wayne Johnson, who is currently fighting his termination from the agency.

Two Maryland teens and a juvenile were arrested and charged with the theft, and the laptop was returned by an anonymous informant.

Not only did the VA reveal that two other security breaches had occurred in the past twelve months and were kept quiet, it suffered another blow when a desktop computer containing information on thousands of veterans was stolen from Unisys, a technology services company contracting with the VA to process insurance claims.

The VA wasn't the only agency to suffer embarrassing data breaches.

In July 2006, a contractor working for defense and aerospace giant BAE Systems hacked the network of the FBI offices in Springfield, Illinois. Joseph Colon, who claimed he did so with permission of local FBI higher-ups, was spared jail time in the incident, but was terminated from his job.

Just last week, a special agent with the Department of Transportation (DOT) reported his laptop stolen from an agency vehicle in Miami, Florida. The laptop contained information on thousands of people in the area with commercial drivers' and pilots' licenses, and was being used in a fraud investigation.

Many government data breaches don't involve theft, but simple incompetence.

In January 2006, the Justice Department moved to "scrub" many of its Web sites after it was tipped off that it had published the names, addresses, and Social Security numbers of individuals involved in litigation against it.

And the Navy accidentally published personal data on Web sites not once, but twice in two weeks. Both times, the data was quickly scrubbed and information remains scanty as to why the data breaches occurred.

The Government Accountability Office (GAO), the watchdog arm of the government, has published numerous reports warning Congress that many federal agencies do not have proper data safeguards or protections for data, and that an excessive reliance on contractors and third parties for infrastructure and business tasks may lead to more breaches in the future.

Or to put it simply, a few barn doors have been latched but many others remain wide open.

It's a mixed bag for cable and satellite TV providers. Although cable TV service continues to lose market share to satellite, penetration of digital cable has increased 11 percentage points, according to J.D. Power and Associates.

The company's 2006 Residential Cable/Satellite Satisfaction Study study finds the industry-wide penetration of digital cable has increased from 30 percent in the 2005 study to 41 percent in 2006, largely fueled by the increased availability of digital video, data and voice bundling options.

Currently, 29 percent of U.S. households subscribe to satellite service alone -- up 2 percent since the 2005 study -- while 58 percent of households subscribe only to cable -- down from 60 percent in the 2005 study.

An additional 1 percent of households subscribe to both cable and satellite services, with a total of 88 percent of households with either or both.

"Digital service is the key for consumers in taking advantage of the aggressively marketed 'triple play' bundle of digital video, voice and Internet services," said Steve Kirkeby, executive director of telecommunications and technology research at J.D. Power and Associates.

"With analog cable subscribers increasingly converting to digital, this becomes a major advantage for cable companies in the race against satellite providers to maintain market share."

Increased popularity of bundled services is also a likely contributor to a decrease in monthly payments for cable subscribers. Cable customers report spending $58 monthly -- down $1 from 2005 -- while satellite subscribers report spending $61 per month for service, up $3 from a year ago.

Although satellite providers still have a significant lead over cable providers in overall customer satisfaction, cable providers continue to close the satisfaction gap. The difference in satisfaction scores between cable and satellite subscribers is currently 50 index points on a 1,000-point scale-down from a 69-point gap in 2005.

Satisfaction for cable and satellite providers has fallen 29 and 48 points, respectively, since 2005.

"Recent mergers and acquisitions within the cable industry will undoubtedly impact satisfaction in the very near future," said Kirkeby. "During an acquisition, subscribers are likely to be more sensitive to how their carrier is going to impact the reliability of service and whether there will be any changes to the price structure or payment plan. These two areas are the most critical factors driving a customer's intent to switch carriers."

DVR Usage Grows

The use of digital video recorders (DVRs), which allow viewers to freeze and record live TV, has increased significantly since 2005. Thirty-eight percent of cable subscribers and 25 percent of satellite subscribers report that they are using DVRs supplied by their provider. Another 24 percent of cable and satellite customers report using TiVo as their DVR.

For the first time, the study measures customer satisfaction with cable and satellite TV providers in four regional segments: North Central, East, West and South. The shift to an expanded regional ranking structure in the study was made to provide respondents with choices more applicable to their regional markets.

Within each segment, six factors are measured to determine overall customer satisfaction: customer service, performance and reliability, image, billing, cost of service, and offerings and promotions. Study results by region are:

North Central Region: WOW! ranks highest in the region with an index score of 708 points-the highest satisfaction score in the study. WOW! receives top ratings from customers in five of the six study factors: customer service, performance and reliability, billing, cost of service, and offerings and promotions. DIRECTV follows WOW! in the North Central region rankings with a score of 677 points.

East Region: DIRECTV ranks highest in the East with an overall index score of 686 points, receiving the highest ratings from customers in performance and reliability, billing, image, cost of service, and offerings and promotions. Cox Communications follows with an overall score of 664 points.

West Region: Cox Communications ranks highest in the region with a score of 690 points. Cox receives top ratings from customers in customer service, performance and reliability, image, billing, and offerings and promotions. DISH Network ranks second overall in the West with a score of 662 points.

South Region: Bright House Networks ranks highest in the South region with an index score of 682 points. Bright House receives the highest ratings from customers in customer service, image, billing, and offerings and promotions. DIRECTV follows Bright House in the South region with a score of 676 points.

The 2006 Residential Cable/Satellite TV Customer Satisfaction Study is based on responses from 15,819 U.S. households that evaluated their satellite or cable TV provider.

The Federal Trade Commission has entered into a court settlement with Nomrah Records, Inc. and its president, Mark Harmon, defendants in the recent DIRECTV telemarketing case.

Under the settlement, Harmon will pay a $75,000 civil penalty and both he and the company will be barred from violating the Do Not Call (DNC) Rule and Telemarketing Sales Rule (TSR) in the future.

In December 2005, the Commission charged DIRECTV and other defendants that telemarketed on DIRECTVs behalf with violating the DNC Rule and the TSR by calling consumers, despite the fact that their numbers were on the National DNC Registry.

In settling the charges, DIRECTV paid $5.3 million, representing at the time the largest-ever DNC penalty obtained by the Commission.

The stipulated final judgment and order against Nomrah and Harmon contains strong injunctive relief, barring them from calling consumers on the DNC Registry, as well as from violating any other provisions of the TSR in the future.

The judgment and order also requires Harmon to pay a $75,000 civil penalty, with the stipulation that $400,575 will become due if he is found to have misrepresented his financial condition to the Commission. Finally, the order contains standard record keeping and reporting terms to ensure the defendants comply with the order.

Litigation continues against several other companies and individuals.

Dell's recall of 4.1 million fire-prone laptop batteries takes the heat off the company for now, but a former Dell technician says Dell has known about the problem for more than two years.

Robert Day, Dell's lead acoustic technician from 1997-2005, said the computer company received hundreds of laptops that were charred or melted as a result of the defective battery, which Dell is now recalling.

Day shared hundreds of photos of laptops with ConsumerAffairs.com that he downloaded prior to leaving the company in January 2005. His lab was next to the Product Safety Investigations lab (PSI).

Day says Dell tried to hide the problem from the public for years. "They didn't want anyone to know how serious of a problem it was," Day said.

The photos are from one of PSI's technician's archives. By 2005 there were 14 technicians in that lab.

The findings of each lab, including the PSI, were submitted monthly to executives, so Day said there is no way many of the senior executives at Dell have not known about this problem for years.

He said after Dell started using the Sony batteries in 2003, the PSI started receiving so many charred laptops that Day's lab, located next to the PSI, had to store many of the laptops.

Day said he didn't know how many charred laptops Dell received as a result of the batteries, but said it was, "in the hundreds."

Day sent ConsumerAffairs.com over 300 photographs of about 100 different laptops. It appears that about 12 of those melted laptops were the result of the battery while the rest were from various other electrical shorts and CPU fan failures. He said there were many more battery-burned laptops than that, but he only had access to one technician's archives.

Day now works as a technician for Apple and said he left Dell after he turned in a Dell executive involved in a sex scandal. Dell did not return two phone calls.

Sony Batteries Blamed

The recall of the batteries is the largest electronics-related recall ever conducted by the U.S. Consumer Product Safety Commission.

The batteries were made by Sony Corp. and placed in in some models of Dell's Latitude, Inspiron, XTS and precision mobile workstation notebooks that were shipped between April 1, 2004, and July 18 of this year.

On August 3, ConsumerAffairs.com reported the story of Thomas Forqueran, stranded at Lake Mead State Park in Nevada after a Dell laptop set his vintage truck ablaze.

That story came in the wake of two other summer Dell laptop blazes -- one in which cameras caught an exploding Dell laptop at a conference in Japan. The other took place in Illinois where a Dell laptop spurted flames for over five minutes and forced an evacuation of an office building.

Airline regulators have also become alarmed and may ban laptops in planes.

Ronald Riley, president of the Professional Inventors Alliance USA, said the battery is the prime suspect in the laptop fires.

Riley gave two possible reasons for the battery combustion. He said the battery could have an internal short, as part of a manufacturer's defect, causing the battery to explode. He said any number of variables could trigger the flames.

He also said it's possible that when the battery gets hot, it "wants" to expand, but has no room.

"As the temperature rises, the conductors and plates buckle because they have no room to expand," Riley said. "If Dell used a thermometer that would automatically shut down the computer when the battery gets too hot, this could be avoided. ... The point is, the computer should not be able to get hot enough to do that."

Highways crowded with large trucks are much less safe if the drivers haven't had a good night's sleep.

A new study says truck drivers who have severe sleep apnea or who sleep less than five hours each night while at home are more likely to suffer from sleepiness, performance impairment and decreased task vigilance while behind the wheel.

The results of the study appear in the second issue for August 2006 of the American Journal of Respiratory and Critical Care Medicine, published by the American Thoracic Society.

Allan L. Pack of the University of Pennsylvania and six associates tested 247 commercial drivers at high risk for sleep apnea and 159 at lower risk for sleep impairment.

They evaluated the role of short sleep duration at home over one week in 340 drivers, with 55 sleeping less than five hours. Of the 406 drivers examined for sleep apnea, 118 had mild to moderate forms of the disease, and 28 had severe sleep apnea.

"In the United States, approximately 5,600 people are killed annually in crashes involving commercial trucks," Pack said. "Falling asleep while driving is an important factor in serious crashes involving commercial vehicles, prompting the question, why?"

According to the authors, the two culprits are chronically insufficient sleep and obstructive sleep apnea.

The researchers defined mild to moderate sleep apnea as "from 5 to less than 30 temporary breathing pauses per hour of sleep," a process that decreases the amount of oxygen in the blood. Severe sleep apnea, on the other hand, involves more than 30 breathing pauses per hour.

However, the investigators also found that 77 percent of those with mild sleep apnea and 56 percent of with moderate sleep apnea did not have what could be termed "pathologic sleepiness" as a result of their problem.

The authors used the Epworth Sleepiness Scale to assess subjective sleepiness, the Multiple Sleep Latency Test to objectively determine the driver's propensity to fall asleep, and the Psychomotor Vigilance Task to assess behavioral alertness and define vigilance lapses. These tests were administered in addition to a normal sleep test (polysomnography) to measure breathing pauses and movement disorders in the sleep laboratory.

"In this study, we showed that both subjective and objective sleepiness, as well as performance impairments are common in our sample of commercial driver's license holders," Pack said. "Our analyses reveal that chronic short sleep duration is a risk factor for subjective sleepiness, objectively measured sleepiness and performance impairments. The results for sleep apnea are less clear."

August 15, 2006
Dell is recalling about 2.7 million Dell-branded lithium-ion batteries made with cells manufactured by Sony. The recall affects about 2.7 million battery packs (an additional 1.4 million battery packs were sold outside the U.S.).

These lithium-ion batteries can overheat, posing a fire hazard to consumers.

Dell has received six reports of batteries overheating, resulting in property damage to furniture and personal effects. No injuries have been reported.

The recalled batteries were sold with or sold separately to be used with the following Dell notebook computers:

• Latitude D410, D500, D505, D510, D520, D600, D610, D620, D800, D810;
• Inspiron 6000, 8500, 8600, 9100, 9200, 9300, 500m, 510m, 600m, 6400, E1505, 700m, 710m, 9400, E1705;
• Dell Precision M20, M60, M70 and M90 mobile workstations; and
• XPS, XPS Gen2, XPS M170 and XPS M1710.

"Dell" and one of the following markings are printed on the batteries: "Made in Japan," "Made in China," or "Battery Cell Made in Japan Assembled in China." The identification number for each battery appears on a white sticker.

The batteries were sold through Dell's Web site, phone and direct sales as part of a service replacement program, and catalogs from April 2004 through July 2006. The computers with these batteries sold for between $500 and $2850 and individual batteries sold for between $60 and $180.

Consumers should stop using these recalled batteries immediately and contact Dell to receive a replacement battery. Consumers can continue to use the notebook computers safely by turning the system off, ejecting the battery, and using the AC adapter and power cord to power the system until the replacement battery is received.

For additional information, contact Dell toll-free at (866) 342-0011 between 8 a.m. and 5 p.m. CT Monday through Friday, log on to the firm's Web site at www.dellbatteryprogram.com, or write to: Dell Inc., Attn: Battery Recall, 9701 Metric Blvd., Austin, Texas 78758.

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

As stories about Dell laptop fires spread, Dell has decided to recall 4.1 million laptop batteries, a Dell insider told ConsumerAffairs.com.

The insider, ex-Dell engineer Robert Day, said the problem appears to be caused by batteries Sony manufactured for Dell between 2003 and 2006.

A source at the U.S. Consumer Products Safety Commission, who did not want to be identified, confirmed the recall but said full details would not be made available until early tomorrow morning.

A Dell spokesman confirmed the company had "negotiated conditions of the recall" with the U.S. Consumer Product Safety Commission. It will be the largest electronics-related recall ever conducted by the agency.

The spokesman said the batteries were made by Sony Corp. and placed in in some models of Dell's Latitude, Inspiron, XTS and precision mobile workstation notebooks that were shipped between April 1, 2004, and July 18 of this year.

On August 3, ConsumerAffairs.com reported the story of Thomas Forqueran, stranded at Lake Mead State Park in Nevada after a Dell laptop set his vintage truck ablaze.

That story came in the wake of two other summer Dell laptop blazes -- one in which cameras caught an exploding Dell laptop at a conference in Japan. The other took place in Illinois where a Dell laptop spurted flames for over five minutes and forced an evacuation of an office building.

Airline regulators have also become alarmed and may ban laptops in planes.

Ronald Riley, president of the Professional Inventors Alliance USA, said the battery is the prime suspect in the laptop fires.

Riley gave two possible reasons for the battery combustion. He said the battery could have an internal short, as part of a manufacturer's defect, causing the battery to explode. He said any number of variables could trigger the flames.

He also said it's possible that when the battery gets hot, it "wants" to expand, but has no room.

"As the temperature rises, the conductors and plates buckle because they have no room to expand," Riley said. "If Dell used a thermometer that would automatically shut down the computer when the battery gets too hot, this could be avoided. ... The point is, the computer should not be able to get hot enough to do that."

Dell did not return two phone calls.

The use of laptop computers on airliners may be banned entirely because of a series of incidents involving overheated batteries, including a May 15 incident in which a laptop caught fire in an overhead luggage compartment as a Lufthansa airliner prepared to leave Chicago's O'Hare International Airport, The Wall Street Journalreported.

The U.S. Consumer Product Safety Commission has documented 339 cases in which lithium and lithium-ion batteries overheated, began to smoke or exploded since 2003, the Journal said.

Laptop fires have also been a problem on the ground. Two outdoorsmen narrowly escaped injury when their Dell laptop exploded and set fire to their pickup truck, setting off ammunition stored in the glove compartment.

The Federal Aviation Administration (FAA) has recorded 60 incidents involving laptops and other battery-powered devices since 1991, according to the Journal.

In February, a United Parcel Service air cargo plane caught fire in Philadelphia and a shipment of batteries is suspected to be the cause. In 2004, a television news crew's battery exploded aboard an aircraft chartered by Vice Presidential candidate John Edwards, forcing an emergency landing.

The National Transportation Safety Board (NTSB) has held hearings on the issue and is reportedly considering new rules tightening the use and transport of battery-powered devices on commercial airliners.

Writing in a scientific journal, Dr. Robert Lustig, of the University of California San Francisco, said today's processed food is loaded with sugars that alter the body's hormonal balance, creating a "toxic environment" and an "addiction" to food.

Lustig's theory is published in the latest issue of Nature Clinical Practice: Endocrinology and Metabolism.

Lustig's position is diametrically opposed to the industry and other advocates of personal responsibility, who say people make choices about the food they eat. Lutsig claims there are very few choices when almost all processed food is loaded with sugars that cause the body to believe it is always hungry.

According to Lutsig, consumption of sugar causes the body to step up its production of insulin. Insulin blocks hormones in the body that have the function of controlling appetite.

Lustig's practice is based at UCSF Children's Hospital. According to the hospital's Web site, he is a nationally recognized expert in the field of neuroendocrinology, with an emphasis on the regulation of energy balance by the central nervous system.

Lustig's prescription for the problem is not educating consumers about the dangers in processed foods but improving what he calls "the toxic environment." That means making drastic changes in the nation's food supply.

Lustig said he believes food manufacturers must change the way they make food products, refraining from adding sugar to bread, chips and condiments -- many items consumers don't normally associate with sweeteners.

According to the Centers for Disease Control, about two-thirds of American adults are overweight, and about one-third can be classified as obese. Obesity is defined as being 20 percent to 25 percent over the ideal weight for one's height.

By Martin H. Bosworth
ConsumerAffairs.com

August 12, 2006
While Homeland Security was issuing color-coded alerts and warning travelers of the dangers of liquids on a plane, the theft of data on 40,000 licensed pilots went largely unnoticed.

The Department of Transportation (DOT)'s office of the Inspector General (OIG) reported that a laptop belonging to a special agent assigned to the agency's Miami office was stolen on July 27th.

The laptop, which the agency claimed was password-locked, contained personally identifying information on roughly 133,000 Florida residents, including:

• Personal information on over 86,000 commercial driver's license holders in the Miami area, including names, addresses, and Social Security numbers.

• Information on over 40,000 licensed pilots in the Florida area

• Data on 9,500 personal and commercial license holders in the Tampa area who received their credentials from a particular office in Largo, Florida.

Ironically, the agent responsible for the data was part of a task force investigating the acquisition of driver's and pilot's licenses using false information, and whether fraud was being committed at the licensing facility in question.

The unidentified agent had been working at home with the data, and had missed a security upgrade that would have encrypted the laptop against intrusion, The Register reported.

A spokesman for the OIG stated that the agent had left the computer in a government-owned vehicle, and when he returned to pick it up, he noticed it was missing. Further investigation revealed that the vehicle had been tampered with.

"We do not have reason to believe that the perpetrators targeted the computer based on knowledge of thedata," the OIG said in a statement. "However, we are taking all possible steps to inform Florida residents. We have dispatched a team of Special Agents to the Miami area to work with the Miami-Dade Police Department."

The DOT is offering a $10,000 reward for return of the laptop or information on its whereabouts. No information was provided as to why the theft was not made public until August 10th, or what the current status of the agent was.

Observers noted the potential danger of the information being loose in "the wild," as anyone who had access to the data could use it to gain false credentials for pilot's and driver's licenses.

Same Old, Same Old

The DOT laptop disappearance is the latest in a series of computer thefts and data breaches that has reached nearly absurd levels.

Government agencies, in particular, have been experiencing unheard-of levels of "laptop theft" and equipment losses, all of which contained valuable personal data that could be used for fraud and data theft.

The Veterans' Administration (VA) still claims the dubious honor of being the agency with the largest breach of personal data, due to the loss and retrieval of a laptop containing personal and medical information on 26.5 million veterans.

The VA reported recently that a desktop computer containing information on another 38,000 veterans had been stolen from the offices of Unisys, a contracting company that was assisting the VA with processing insurance claims.

Unisys announced that it would provide a year of free credit monitoring for any veteran potentially affected by the computer theft, free of charge.

Although the VA withdrew its own offer of credit monitoring for the stolen laptop after it was recovered and tested, California-based data analysis company ID Analytics recently offered to monitor the veterans' credit data to look for patterns of fraud and misuse, also at no charge.

ID Analytics published a study in 2005 that claimed small breaches of data were more dangerous than large exposures of information, given the amount of data to sift through, and that it was unnecessary to alert affected individuals every time there was a potential breach.

America may have the market cornered on embarrassing data security breaches, but other countries are catching up fast. A security flaw in the UK's HSBC Bank online banking system has left over three million customers' accounts dangerously vulnerable to outside attack from hackers.

A research team from Cardiff University discovered the flaw and alerted HSBC on August 9th. According to the team, the flaw has been active for at least two years, rendering many accountholders' finances vulnerable to hacking "within nine attempts," they said.

Professor Antonia Jones, leader of the research team, told The Guardian that "as long as this flaw exists, customers are at risk. For banks or institutions that are making huge amounts out of their customers not to protect them is pretty scandalous."

HSBC downplayed the discovery of the flaw, saying that, "It is an extremely sophisticated attack that would require a particular and time-consuming focus on one individual victim" and therefore criminals wouldn't be bothered to try it.

The Cardiff team declined to provide details about the flaw, saying that they would publish their full findings later in the year.

The team did say that hackers who use "keyloggers," remote programs that can hijack a user's machine and make records of the keystrokes as they type, would be most able to take advantage of the HSBC flaw.

According to Cambridge University's Richard Clayton, HSBC's online banking security would not sufficiently protect users from a keylogger.

The password system involves providing random letters from a secret "pass phrase" to gain access to your account. Although this was thought to be sufficient to fool keyloggers, Clayton claims the new find has a way around that.

"They have an anti-keylogging system that doesn't work they might as well not have it" Clayton said. "The only reason it's a theoretical [flaw] is that they're fortunate no bad guys have [exposed it] yet.

A keylogger was discovered last year by researchers working for Florida-based Sunbelt Software. That discovery led Sunbelt's team to a treasure trove of financial information stolen by unknown parties, believed to be based in Russia.

Sunbelt president Alex Eckelberry personally contacted victims of the hack and publicized the keylogger's existence.

Security experts and tech geeks furiously debated the threat level of the flaw after the announcement. One commenter on the tech web site Slashdot expressed amusement at the news, saying that it would take nine tries and many possible factors for the flaw to present a danger.

"Whereas, at another bank which asks for a username and passcode, the dishonest individual with the keylogger only needs me to log in ONCE to have the run of my account," they said. "So why is this news?"

"Andy," an anonymous and self-proclaimed "ex-bank hacker," posted his theory on the flaw on the Web, saying that HSBC's online banking security relied too heavily on repeatable number sequences, and didn't factor in the ability of hackers to wait out multiple login attempts before the challenge returned to a sequence the keylogger recorded.

"The rest is easy peasy, lemon squeezy, as they [say] in the business," he said.

A settlement has been reached with GlaxoSmithKline (GSK) to resolve allegations that the company inflated the price of drugs, including medications for cancer patients.

Under the settlement, which was reached in conjunction with a settlement by the U.S. Department of Justice and the National Association of Medicaid Fraud Control Units, GlaxoSmithKline (GSK) will provide over $1 million in restitution to New York's Medicaid program, which represents New York's share of an agreement involving over 40 states for two drugs used in connection with cancer treatment, according to New York Attorney General Eliot Spitzer.

Additionally, GSK will pay $940,000 to Medicaid for claims relating to payments for an antibiotic.

GSK, under a separate settlement of a private class action suit in federal court in Boston, will also establish a national restitution fund of approximately $40 million to which Medicare consumers in New York and across the nation and the New York Elderly Pharmaceutical Insurance Coverage (EPIC) program may make claims.

"Our lawsuit helped stop a longstanding practice that inflated the cost of drugs for people suffering from cancer and cheated the Medicaid system" Spitzer said. "Today's settlement provides significant restitution for consumers and the Medicaid program."

Spitzer sued GSK and two other pharmaceutical manufacturers in 2003 on charges of having made false statements that inflated the average wholesale price (AWP) of a class of drugs known as anti-emetics, which help people deal with the side effects of chemotherapy, and other drugs.

The practice had two main consequences: First, it caused government health plans and consumers nationwide to overpay for certain drugs. Government health plans overpaid because they reimbursed pharmacies and doctors at the inflated price; Medicare beneficiaries overpaid because they paid, as coinsurance, a percentage of the inflated amount.

Second, an inflated AWP allowed the companies to market the drugs to doctors, pharmacists and other health care providers with the promise that they could keep the "spread" between the actual price of the drug and its inflated reimbursement rate, thereby providing a financial incentive for doctors to choose the companies' drugs over competitors' products.

The settlements have the following components:

• GSK will pay the New York Medicaid program a total of $1.53 million in restitution for inflating the prices of three specific drugs -- Kytril and Zofran, injectable anti-nausea drugs used in connection with chemotherapy, and Amoxil, the antibiotic. Under federal law, the federal Medicaid program will receive an additional $470,000 from New York's settlement of GSK's inflated pricing of Amoxil;

• GSK will establish a nationwide fund of approximately $27 million to which EPIC, New York's program that provides drug coverage for seniors with Medicare, may present its claims;

• GSK will establish a nationwide fund of approximately $13.5 million to which Medicare beneficiaries in New York State who paid inflated coinsurance amounts for certain drugs may make claims; and

• GSK will pay New York $740,000 to cover the costs of the state's investigation.

In addition, GSK will report to the New York Medicaid program two federally defined prices, one of which is used to set current Medicare Part B reimbursement.

The cases filed against two other drug manufacturers, Aventis and Pharmacia, are pending, as are numerous other similar suits filed by counties, states and private plaintiffs.

By Martin H. Bosworth
ConsumerAffairs.com

August 10, 2006
Millions of Americans use online resume boards to get new jobs and make new connections, posting their resumes for thousands of employers to view.

One unforeseen side effect of this practice is that it leaves job hunters wide open to potential data fraud, as virtually all resumes contain personally identifying information, with some unsuspecting job seekers even posting their Social Security numbers online.

Now online job hunters can rest a little easier, because there's an "angel" watching out for them, and ready to warn them if they've posted too much sensitive data to be safe.

Carnegie Mellon University professor Latanya Sweeney has developed a program called "Identity Angel," a sort of specialized search engine that trolls online job boards and other sources to look for what she calls the "Holy Trinity" of personally identifying information -- a person's name, address, and Social Security number.

Although the first two are all too easy to find on the Web, finding all three is the gold standard for anyone who wants to commit fraud or steal someone's identity.

If the Identity Angel program finds all three, and can locate the person's e-mail address, they will receive an automated message warning them that their identity may potentially be in danger.

Sweeney, an acclaimed computer scientist and privacy expert and director of the Laboratory for International Data Privacy at Carnegie Mellon, developed the tool as a method of warning people as to how easy it was to obtain a credit card using someone else's identity.

As far back as 1996, Sweeney was developing systems to extract personally-identifying data from text documents.

In a 2005 presentation to the American Association for Artificial Intelligence (AAAI) on the uses of AI in homeland security systems, Sweeney outlined how she developed a new system designed to target information in "rosters," online lists of information that were not easily searchable by keyword or phrase, such as a Google Web search.

According to Sweeney, when job seekers who had the Holy Trinity combination of personal data and a viable e-mail address were contacted, every single one removed their information shortly thereafter.

"Imagine a benevolent program that e-mails people for whom information, freely available on the Web can be combined sufficiently to impersonate them in financial transactions," Sweeney wrote. "This is the ambitious goal of 'Identity Angel.'"

The program has been active since July 23rd, and has already captured thousands of records containing the three necessary components for fraud.

Sweeney told National Public Radio that many of the initial responses to the original "Identity Angel" e-mail complained that it was endangering them, or that it was a fraud. She noted that the e-mail was retooled to explain their purpose more clearly.

Testifying before the Department of Homeland Security's Privacy and Integrity Advisory Committee in June 2005, Sweeney advocated the belief that tools like Identity Angel would enable people to secure their identities while not sacrificing their privacy rights.

"Following the events of September 11, there is a common false belief that in order for America to be safe, the public must give up its privacy. This is not necessary, "Sweeney said.