Current Events in November 2007

You think youre insulated from the subprime fallout just because your credit rating is good and you have a fixed rate mortgage? Think again.

Foreclosures on loans to those with shaky credit are resulting in a severe drain on property values -- even for families paying their mortgages faithfully every month.

According to the Center for Responsible Lending, such defaults will cause 44.5 million homes to lose a total of $223 billion in wealth over the next few years, most of it in 2008 and 2009.

In addition to foreclosed homeowners, the $223 billion drain -- which amounts to $5,000 per nearby household -- will have a severe impact on many cities and communities, because lower property values translate into less revenue to fund schools, hospitals, and other vital community organizations at the county level.

The Centers research finds that, as a result of subprime foreclosures, 42 counties and about half the states will suffer a loss of more than $1 billion each in reduced property values.

"These losses are particularly tragic when you consider that most subprime foreclosures never should have happened," said Martin Eakes, CEO of the Center and also head of Self Help, a credit union and non-profit lending fund.

"The subprime industry became intoxicated with large fees from dangerous loan products. Unfortunately, lenders and Wall Street aren't the only ones suffering through the hangover -- forty-four and one half million innocent bystanders are feeling the pain, too. The subprime problem has become everyone's problem," Eakes said.

Shanna Smith, president and CEO of the National Fair Housing Alliance, noted that diminished property values would have a disproportionate impact on minority communities.

"Many of these [subprime] foreclosures are concentrated in African-American and Latino neighborhoods," said Smith. "This research documents the costs of lending abuses we see every day, resulting in the tragic theft of hard-earned wealth in communities that already have the lowest rates of homeownership."

The report is based in part on foreclosure projections that the Center released last December assessing how homeowners have fared with subprime home loans, as well as on data collected by the Federal Reserve and the Census Bureau along with other published research.

The report is being released as civil rights, consumer and housing advocates seek meaningful and lasting solutions to reckless lending and fair treatment for homeowners.

Congress is "considering proposals to address the subprime mess, both to try to help families now facing foreclosure because of abusive loans and to ban the practices that caused the problem in the first place.

Everyone knows winter is cold and flu season, but most people dont know that its also the prime season for heart attacks too.

In the United States, the risks of having a heart attack during the winter months are twice as high as in the summertime. And, a heart attack in the winter is also more likely to be fatal than a heart attack during any other time of year.

Why? Lots of reasons, and theyre not all tied to cold weather. Even people who live in warm climates have an increased risk.

Wintertime Risks

Here are some reasons why heart attacks are more common during the winter than other months and some tips to help you combat them:

• Cold weather: When a person gets cold, the bodys automatic response is to narrow the blood vessels. Cutting down on blood flow to the skin means the body doesnt lose as much heat. But for people who already have arteries filled with plaque, the narrowing of the blood vessels raises the risk that one will become blocked, triggering a heart attack.

The narrowing also increases blood pressure, which can strain a diseased heart. So bundle up this winter, and keep your blood flowing freely.

• Snow shoveling: Believe it or not, studies show that heart attack rates jump dramatically in the first few days after a major snowstorm, usually a result of snow shoveling. Shoveling snow is incredibly strenuous causing the heart to work harder and raising your blood pressure. Couple that with the cold temperatures and heart attack risk soars.

If you must shovel, push rather than lift the snow as much as possible, stay warm and take frequent breaks or better yet buy a snow blower. And if youre over age 50, overweight or out of shape, or have suffered a previous heart attack, dont shovel at all.

• New Years resolutions: Its not just shovelers who run the risk of taxing their heart in the winter. Every Jan. 1, millions of people join gyms or start exercise programs as part of their New Years resolution to get in shape, and many may overexert themselves too soon.

If you have a heart condition or risk factors for heart disease like high cholesterol and high blood pressure, talk to your doctor about what may be appropriate for you.

• Stressful season: The holiday season for many people is a very stressful time, causing anxiety, loneliness and depression which are also linked to heart attacks. Check your mood at www.depressionscreening.org and get help, if needed.

• Holiday feasting: People tend to eat more, drink more, and gain more weight during the holiday season and winter months all of which are hard on the ticker and risky for someone with heart disease. Keep a watchful eye on your diet, avoid binging on fatty foods or alcohol, and remember. Everything in moderation!

• Less daylight: Its a fact that less daylight in the winter can worsen mood problems, increase depression risk, and can also affect the heart. Studies have looked at heart-attack patients and found they have lower levels of vitamin D (which comes from sunlight) than healthy people.

To boost your vitamin D intake during the dark winter months, everyone over 50 should take a daily vitamin that contains at least 400 IU (international units) of vitamin D. Those over age 70 need at least 600 IU.

• Flu: The flu is another culprit responsible for the winter surge in heart attacks. A flu infection can increase blood pressure, stir up white blood cell activity, and change C-reactive protein and fibrinogen levels in the blood all bad news for your heart. Get an annual flu shot. It can cut your heart attack risk in half.

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Jim Miller is a contributor to the NBC Today show and author of The Savvy Senior books.

Outliving ones retirement savings is a financial nightmare that haunts many retirees. Thats why a handful of insurers have recently introduced a new type of annuity that caters specifically to that fear.

It's basically insurance that pays you for living a long life. Its called longevity insurance, and like an annuity, it pays you income for life, but only if and when you make it to a certain age.

How does it work? You give an insurance company a lump-sum of money when you retire (say age 60 or 65), in return for monthly income starting at age 80 or 85.

Advantages

The advantage of choosing longevity insurance over an annuity is that the payouts are much higher.

For example, a 65-year-old man who puts $50,000 into a longevity policy can expect to receive around $3,400 per month (that comes to $40,800 per year) starting at age 85. With a traditional income annuity, hed get only around $640 per month.

Why such a big difference?

Because the insurance companies are betting you wont be around to collect. National statistics show that a 65-year-old male will live, on average, to 82, and a 65-year-old woman to 85. Another great benefit with longevity insurance is it gives you the freedom to spend down your nest egg, knowing youve locked up an income stream for your later years.

Drawbacks

As tantalizing as those big payouts may be, longevity insurance has its drawbacks.

For starters, a basic longevity policy offers no escape hatch for you to retrieve your money during the 20 years or so youre waiting for benefits to start. And your heirs wont get death benefits if you die before you begin to collect.

Recognizing that many people might balk at these limitations, insurers are also offering add-ons to the basic policy that include a death benefit to be paid to heirs, early payments for nursing home care, cash withdrawal options and inflation protection.

The downside, however, is that every piece you add on reduces your monthly benefit.

When to Buy

Most people purchase longevity insurance at or just prior to the time they retire. Figure out how much of your essential expenses you can cover with Social Security, pensions, and other forms of guaranteed income and consider buying coverage for the rest.

But dont overdo it!

Experts recommend you use no more than 10 to 15 percent of your assets to purchase a policy, and leave the rest in your portfolio to provide income until it kicks in. Also, when choosing a product, remember that youre buying income that will not kick in for 20 years or more.

So be sure to go with a company with a good reputation and solid financials. Some major players offering this type of insurance are MetLife, Hartford, Integrity and New York Life.

Alternatives

If you dont like the idea of longevity insurance, you could always invest the money that you would spend on this type of insurance on your own and come up with a similar result.

If you took your $50,000 and invested it at age 65, for example, assuming a conservative 6 percent growth per year, you would end up with $160,000 in 20 years. At age 85, you could then begin spending the money or use it to buy an immediate annuity.

An 85-year-old man who invested $160,000 in an immediate annuity would get about $2,200 per month for the rest of his life. Thats a lot less than youd receive with a longevity policy, but youd have access to the money for emergencies or to leave to your heirs.

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Jim Miller is a contributor to the NBC Today show and author of The Savvy Senior books.

At the request of the U.S. Food and Drug Administration, U.S. Marshals have seized 12,682 applicator tubes of Age Intervention Eyelash, a product the FDA says could lead to decreased vision. Authorities said the sales value of the seized tubes is approximately $2 million.

Age Intervention Eyelash is sold and distributed by Jan Marini Skin Research, Inc., of San Jose, Calif.

The FDA considers Age Intervention Eyelash to be an unapproved and misbranded drug because Jan Marini Skin Research has promoted the product to increase eyelash growth. Before a new drug product may be legally marketed, it must be shown to be safe and effective, and approved by FDA.

FDA said it also considers the seized Age Intervention Eyelash to be an adulterated cosmetic. The product contains bimatoprost, an active ingredient in an FDA-approved drug to treat elevated intraocular pressure, or elevated pressure inside the eye.

For patients using the prescription drug, using the Age Intervention Eyelash in addition to the drug may increase the risk of optic nerve damage because the extra dose of bimatoprost may decrease the prescription drug's effectiveness.

Damage to the optic nerve may lead to decreased vision and possibly blindness.

In addition, the agency warns use of Age Intervention Eyelash may cause other adverse effects in certain people due to the bimatoprost, including macular edema - swelling of the retina- and uveitis, which is an inflammation in the eye. Both may lead to decreased vision.

The U.S. Attorney's Office for the Northern District of California filed the complaint requesting the seizure, and coordinated with the FDA. The California Department of Public Healths Food and Drug Branch had previously embargoed the seized products at the San Jose facility.

Jan Marini Skin Research has notified FDA that the company ceased manufacturing and shipping any Age Intervention Eyelash product containing bimatoprost last year.

The FDA recommends that consumers, dermatologists, and estheticians who may still have Age Intervention Eyelash discontinue using it and discard any remaining product. FDA also recommends that consumers consult their health care provider if they have experienced any adverse events that they suspect are related to the product's use.

Public Citizen filed the suit on behalf of veteran Julius Briggs and a class of soldiers and veterans nationwide.

For years, the AAFES has offered credit cards, known as Military Star cards, to military personnel to purchase uniforms and other items from the stores it operates on military bases.

If a service member is delinquent in paying a debt, the government has the right to deduct the money owed from the members government benefits or tax refunds. The government can add interest, penalties and administrative costs as permitted by the credit card contract or federal law.

AAFES, however, is not permitted by law to collect debts that have been outstanding for more than 10 years or amounts in excess of what the contract allows. In improperly collecting these debts, the AAFES has steadily appropriated millions of dollars from soldiers and veterans nationwide, Public Citizen says.

It is shocking that a U.S. government agency would illegally take this money from veterans who have served our country well, particularly from those veterans who may be depending on government benefits, said Deepak Gupta, an attorney for Public Citizen who is working on the lawsuit.

Briggs, the plaintiff, is a 21-year veteran of the U.S. Army and Army Reserves with an honorable record. He served in Germany and later in Saudi Arabia in the aftermath of Operation Desert Storm.

While on active duty in 1977, he suffered a back injury that has since limited the number and types of jobs he can take.

Since 2004, the U.S. government has withheld more than $2,300 in federal payments to Briggs to pay an AAFES debt that was outstanding more than 10 years.

The withheld payments have caused Briggs to be unable to pay his housing costs, leaving him homeless for several periods over the past few years. Not only has the government collected money beyond the time limit, but it also has inflated the amount due through improper interest rate calculations.

With any luck, this lawsuit will force AAFES to stop collecting money that it has no right to take, said Briggs.

The lawsuit seeks an injunction against further illegal collection of debts by AAFES and restitution of all funds inappropriately collected.

Add the voice of Well Fargo CEO John Stumpf to those who are warning the mortgage crisis will get worse before it gets better. Stumpf says he believes the U.S. housing collapse, brought on by massive defaults of subprime mortgages, is the worst since the Great Depression.

Though Wells Fargo has so far managed to avoid most of the turmoil that has gripped other lenders, Stumpf says hes concerned that the frightening downward spiral in housing has not played itself out.

"We have not seen a nationwide decline in housing like this since the Great Depression," the banker told a Merrill Lynch banking conference in New York.

Stumpf had reassuring words for his companys stockholders, saying his bank is well positioned to weather the storm. However, he cautioned that losses from home equity loans will be higher than normal well into 2008.

Wells Fargo made more than $200 billion in home loans from January to September of this year, making it the second largest home loan lender, following Countrywide Financial, which is cutting 12,000 jobs after losing $1.2 billion in the third quarter.

Stumpf says Wells Fargo remains in a more stable condition because it never altered its lending policies to include more exotic mortgages, such as 100 percent, interest-only loans, and adjustable rate loans that allow borrowers to pay less than the principal due.

Foreclosure record

Home foreclosures have reached a record level in 2007 and Stumpf is not alone in his worries that the worst could be ahead. Earlier this month, Federal Reserve Board Governor Randall Kroszner told the Consumer Bankers Association that two considerations suggest that conditions for subprime borrowers have the potential to get worse before they get better.

The first problem, he said, is that all indications show that housing activity is continuing to weaken. Incoming data in recent weeks show that sales and new residential construction have continued to fall. In such an environment, house prices are likely to remain flat, if not actually decline.

More to come

But a bigger problem, he said, is that most of the adjustable rate mortgage resets have yet to occur. That means many more homeowners could face unaffordable increases in their mortgage payments and this year's record foreclosure rate could quickly be eclipsed.

On average, in each quarter from now until the end of next year, monthly payments for more than 400,000 subprime mortgages are scheduled to undergo their first interest rate reset, Kroszner said.

That number is up from roughly 200,000 per quarter during the first half of 2007. Delinquencies and foreclosures are therefore likely to continue to rise for a number of quarters.

Honda and Ford led list the Insurance Institute for Highway Safety for safest vehicles in 2008.

The Toyota Tundra is the first full-size pickup truck to make the "Top Safety Picks" of the insurance institute.

In all, 34 vehicles earned the IIHS safety award for 2008. The group recognizes vehicles which it considers do the best job of protecting people in front, side, and rear crashes based on crash.

Every vehicle on the list has electronic stability control (ESC), which IIHS research indicates can significantly reduce the risk of crashing.

The 34 vehicles from the 2008 model-year include eight from Ford Motor Co., the Ford Edge, Lincoln MKX, Taurus and Taurus X, Mercury Sable, and the Volvo unit's S80, XC90 and C70.

Honda Motor Co. had seven vehicles on the list. They are the Odyssey, Element, Pilot, Accord, CR-V and the Acura MDX and RDX.

Hyundai, Subaru and Audi all had three vehicles on the IIHS list. Chrysler LLC had none.

General Motors Corp.'s new Saturn VUE, which will be built starting in December, is included because of an improved head restraint system.

Also on the list are GM's Saab 9-3 and 9-3 convertible.

11 NEW WINNERS FOR 2008

Midsize cars
Audi A3
Honda Accord

Small car
Subaru Impreza equipped with optional electronic stability control

Minivan
Honda Odyssey

Midsize SUVs
BMW X3
BMW X5
Hyundai Veracruz built after August 2007
Saturn VUE built after December 2007
Toyota Highlander

Small SUV
Honda Element

Large pickup
Toyota Tundra

ALL 34 WINNERS

Large cars
Audi A6
Ford Taurus with optional electronic stability control
Mercury Sable with optional electronic stability control
Volvo S80

Midsize cars
Audi A3, A4
Honda Accord
Saab 9-3
Subaru Legacy with optional electronic stability control

Midsize convertibles
Saab 9-3
Volvo C70

Small car
Subaru Impreza with optional electronic stability control

Minivans
Honda Odyssey
Hyundai Entourage
Kia Sedona

Midsize SUVs
Acura MDX, RDX
BMW X3, X5
Ford Edge, Taurus X
Honda Pilot
Hyundai Santa Fe
Hyundai Veracruz built after August 2007
Lincoln MKX
Mercedes M class
Saturn VUE built after December 2007
Subaru Tribeca
Toyota Highlander
Volvo XC90

Small SUVs
Honda CR-V, Element
Subaru Forester with optional electronic stability control

Large pickup
Toyota Tundra

A number of vehicles almost made the Best Pick list. Volkwsagen's Eos, Jetta, Passat and Rabbit, as well as Nissan's Pathfinder, Xterra, Quest and Infiniti M35/M45, would have made the list if they had better head restrains, according to says Institute President Adrian Lund.

Also close but not quite on the list are the Toyota Prius, Avalon, Camry, RAV4 and Sienna.

ALSO RANS
Twenty-three vehicles earn good ratings in front and side crash tests. They have ESC, standard or optional. They would be 2008 Top Safety Pick winners if their seat/head restraints also earned good ratings:

• Acura RL, TL
• BMW 3 series
• Chrysler Sebring convertible
• Infiniti M35/M45
• Kia Amanti
• Lexus IS 250/350, ES 350, GS 350/460
• Nissan Pathfinder, Xterra both with optional side airbags
• Nissan Quest
• Toyota Avalon, Camry, FJ Cruiser, 4Runner, Prius, RAV4, and Sienna
• Volkswagen Eos, Jetta, Passat, Rabbit

Lund said his organization would continue to toughen the "Top Safety Pick" program.

The U.S. isn't the only nation buried by massive consumer debt.

Several recent studies have found that many Canadians are struggling with tens of thousands of dollars in credit card debt, and 90 percent of those surveyed felt that they were deeper in debt than they were five years ago.

One survey of 4,000 Canadians found that 28 percent of the respondents had no idea what the interest rate on their credit card was; 25 percent of the respondents had consumer debt between $10,000 and $40,000, not counting debt from mortgages; 53 percent of Canadians surveyed said they had no budget for their income.

The top worry for the survey participants was having money saved for emergencies, but 53 percent of the respondents felt they would be able to retire between 60 and 65, despite having little or no money saved.

The surveys were conducted as part of "Credit Education Week," a nationwide event from November 13 to 16, co-sponsored by the global financial industry and Credit Canada, a nonprofit credit counseling service.

The findings substantiate the need for greater education on key personal finance issues including credit, savings, and retirement planning, said Credit Canada's Laurie Campbell.

It is critical for Canadians to have the knowledge and capacity to effectively manage their finances today in order to plan for and build a stronger future.

A study released in October by the Lafferty Group found that while Canadians had fewer credit cards, less debt on their credit cards, and paid their balances in full more regularly than Americans, the number of credit cards in Canada overall actually increased by 7 percent over the previous three years, compared to a yearly one percent decline for American credit cards.

Canada In Crisis

Although the slide of the American dollar against the Canadian loonie has boosted the spending power of Canada's consumers, the country is by no means insulated from the meltdown of the mortgage market and corresponding credit crunch.

The Financial Post reported this week that Canada's major banks were quietly cutting the discount rate on mortgages sold at "prime" interest rates, shoring up bank profits by passing increased costs on to the homeowner.

The Post quoted Monster Mortgage vice-president Vince Gaetano as saying "The banks are going to make their profits somewhere and that's what they are doing."

Royal Bank of Canada, the country's biggest bank, said Tuesday that it would take a fourth-quarter loss of 160 million Canadian dollars, or $167.3 million, as a result of its holdings in securities bolstered by U.S. mortgages. The Bank of Nova Scotia quickly followed suit with an announcement that it was writing down $135 million ($141 million in American dollars) as a result of exposure to the subprime mortgage market.

Irate consumers say Sony is taking a hard line on PlayStation 3 warranty repairs, in one case refusing to honor the warranty of a consumer whose PlayStation 3 is too dusty.

Digging in its heels, Sony refused to share the photos of the dusty machine with the consumer and said he would have to file a subpoena to get them.

According to "Ive," who filed a complaint on The Consumerist, a consumer blog, his PlayStation 3 would not read a disc he inserted and then would not eject it.

Despite the fact that Ive no longer had the receipt, Sony customer care said the product would still be under warranty and gave him instructions on how to return the defective product.

Five days later he received a call from "Neil" at Sony who says they had taken pictures of the inside and outside of the case and that it is too dusty to be eligible for repair or replacement.

Ive explained to Neil that in the eight months he has owned his PlayStation 3 it has never moved from his entertainment center, which holds other functioning electronic devices, and that he wiped clean the exterior before he shipped it.

"I told him that someone needed to double check because I really took care of my PS3 and there was no way it was so dirty that they wouldn't replace it," Ive wrote on The Consumerist.

Neil said he would look into it and he called the next day to inform Ive that there was no error and that after reviewing photos of the excessive loads of dust on the exterior and interior of his console, he would have to pay a $150 out-of-warranty replacement fee.

When Ive asked to see the photos, he was transferred to a supervisor, "Daria Wu," who told him he would have to subpoena Sony for them. She said that his warranty was voided under the "Acts of God/Customer Abuse" clause of his warranty.

Ive asked Wu if he could record the conversation so he could educate other consumers and Wu "snapped" back at him that he could not and that his only options were to pay the $150, have his defective machine sent back or to do do nothing and Sony would automatically ship it back in 10 days.

"I'm not paying $150 for someone to use an air compressor to dust off my PS3 re-test it and send it back," Ive wrote. "Maybe Sony should let their customers know that excessive dust voids the warranty so that people can start selling air filter sets for it and air-sealed boxes for the PS3 to sit in."

Ive told Wu to keep the console so that he could build a defense by sending e-mails and making phone calls until his unit is fixed. She responded that all phone calls and e-mails go through her and that she'd make sure it doesn't get fixed.

Wu did not return two phone calls by ConsumerAffairs.com and Sony's press office did not return a phone call and an e-mail.

In a later phone call to Sony's customer service department, Ive recorded a customer service representative saying excessive dust does not void the warranty. The recording can be heard on The Consumerist and here is the transcript:

Ive: I'm calling just to pretty much clarify the PS3's warranty, if there's any clause in the warranty that makes it so that if the PS3 is too dusty that the warranty is void.

CSR: No.

Ive: No?

CSR: No. The only way that it, um, voided is if it was neglected, um, abused, dropped or anything like, modificated like if you opened it up, modification, if you didn't have your receipt, um, any power failures like mother nature or anything like that then that actually does void the warranty. Other than that any defective PS3s or anything like that is still, um, still under the warranty.

Consumers who believe they have been cheated by companies that bend warranty rules should file a complaint with ConsumerAffairs.com, their state attorney general and the Federal Trade Commission.

As of this writing, ConsumerAffairs.com has received no complaints regarding the PlayStation 3's warranty. However, we have received 1,049 complaints from consumers whose Microsoft Xbox 360 suffered from the famed red rings of death just before the 90-day warranty expired. Microsoft extended that warranty to one year Dec. 26, 2006 and on July 6, 2007 Microsoft promised to spend $1 billion fixing the machines, but still ConsumerAffairs.com receives almost daily complaints from consumers whose Xbox 360s continue to fail, often multiple times, during and after the one-year warranty.

ConsumerAffairs.com has received no complaints regarding Nintendo Wii's warranty and many industry professionals have heralded Nintendo's warranty program as one of the best in the business.

November 14, 2007
Fisher-Price's "Go Diego Go" animal rescue boat tops the 10 Worst Toys of 2007 list assembled by a Boston consumer group. It was subject to a recall in October because of potential lead ingestion injuries.

World Against Toys Causing Harm, or WATCH a Boston-based consumer group says it had a hard time narrowing its list to 10 this year.

There is simply no excuse for the sale of toys containing known poisons such as lead. Research has shown that exposure to this neuro-toxin can have serious long-term effects, particularly for children, WATCH said in a statement.

Rounding out the top ten are

• Sticky Stones, which have the potential for choking and internal injuries;

• Jack Sparrows Spinning Dagger, flagged for its potential eye and other impact injuries;

• Dora the Explorer Lamp, which WATCH points out is an electric appliance and not a toy;

• Lil Giddy Up Horse, cited for its potential for ingestion or aspiration injuries;

• Spider Man 3 New Goblin Sword, which WATCH says is too much like a real sword instead of a toy; Hip Hoppa, singled out for potential head and other impact injuries;

• BLoonies Party Pack, cited for potential chemical ingestion and burn injuries;

• My Little Baby Born, spotlighted for its potential to cause choking; and Rubber Band Shooter, making the list for its potential to cause eye injuries.

The alarming number of recent toy recalls is evidence of an industry that has put profits before child safety, WATCH said in a statement.

Many of the recalls issued were the result of lead and small parts violations both hazards are well known by manufacturers and have no place in childrens products. Yet, toxic toys with excessive lead content accounted for at least thirty toy recalls, representing over five million units, since W.A.T.C.H.s 2006 '10 Worst Toys' conference.

Federal Communications Commission chairman Kevin Martin is advocating new regulations for the cable television industry that may level the playing field for smaller competitors -- but which may also leave cable incumbents vulnerable to challenges from big telecom companies.

Martin's plans are outlined in the commission's annual report examining the state of competition in the cable television market, according to an FCC official who got an early look at the report.

The strategy is built on an obscure section of the 1984 Cable Act called the "70/70 Rule." It provides that if 70 percent of American households can receive cable services, and 70 percent of those households subscribe, the industry is once again subject to greater federal control.

Martin's plans including slashing the "lease access" payments that smaller television programmers pay large cable companies to use spare channels, and to impose a national "ownership cap" that would prevent any single cable company from having more than 30 percent of available subscribers in a region.

Sources say Martin is confident that he has enough votes on the commission to pass the proposed changes.

Although the report will not be released until the FCC's November meeting, the leaked plans set the technology and communications world abuzz. Consumer groups largely hailed the plan as a welcome change for the largely monopolistic and anticompetitive cable industry, while cable executives were considerably less enthused.

"Twisting statistics in order to breathe life into this rule is simply another attempt to justify unnecessary government intrusion into a marketplace where competition is thriving and new technology is providing consumers more choices, better programming and exciting new interactive services," said Kyle McSlarrow, president of the National Cable & Telecommunications Association (NCTA).

Cable crusade

Martin's proposed plans are the latest salvo in his crusade to change the cable industry. He has lobbied extensively for cable companies to carry "a la carte" programming, where customers only pay for the channels they want. The "a la carte" model, which won support from providers like Cablevision, was part of Martin's desire to appeal to religious conservatives who disapproved of cable providers' more sexually explicit channels.

Consumer groups also largely support "a la carte" models of programming, as it prevents subscribers from paying high fees to subsidize less popular channels that are bundled with better-known offerings.

More recently, Martin proposed rules that would outlaw apartment building managers and condominium associations from granting exclusive contracts to cable providers, claiming the practice harmed competition and subjected low-income families to high cable prices.

Challenges to cable's domination couldn't come at a worse time for the business, as aggressive competition from Verizon's FiOS service and AT&T's U-Verse are chipping away at cable's success. Time Warner Cable's earnings for the third quarter of 2007 showed its penetration rate in territories dropping to 50 percent, losing 83,000 subscribers in some of its biggest areas.

And cable heavyweight Comcast is under fire from consumer advocates and net neutrality supporters after the discovery that the Philadelphia-based company actively interferes with users' traffic, including blocking usage of the popular BitTorrent file-sharing service.

Hidden agenda?

Martin's pro-regulation stance towards the cable industry is unusual, given his marked tendency towards limiting government's role in business in almost every other respect.

Even as news of Martin's plan was leaked, the FCC chair was being criticized for rushing a planned vote on relaxing rules against media consolidation. Several Senators introduced legislation specifically designed to slow down the process and grant consumers more time to voice objections.

Martin has seldom crossed his friends in the telecom industry, doing his part to shepherd the mega-merger of AT&T and BellSouth late last year, creating the world's largest telecommunications company. Martin has also aggressively supported new video franchising rules that enable telecom companies to bypass state and local ordnances to roll out their video offerings--ordnances that cable competitors comply with.

Even when the major telecom companies were implicated in the National Security Agency's warrantless wiretapping program, Martin declined to use the FCC's power to investigate, citing national security concerns and the fear of divulging state secrets.

Complex terms can make the contracts difficult to enforce. And it also seems that many retailers who sell these contracts can just refuse to pay off. After all, they wrote the contract and know its loopholes intimately.

Case in point -- Ahron, of Lexington, Kentucky, tells ConsumerAffairs.com that he recently took his laptop computer to Best Buy for a repair under his three-year in-store warranty.

Cracked case

The computer casing had started to crack in three areas a manufacturing defect that Ahron says was clearly covered under the warranty. The casing on his computer had never been opened and no liquid had ever been spilled on the keyboard, he says, conditions that would have voided any warranty.

When I arrived at Best Buy I presented my problem to the technician. He told me this should definitely be covered but it would have to be shipped off for a couple of weeks for the casing to be repaired, Ahron said.

In less than a week Ahron says he received a call from Best Buy, informing him that parts had previously been removed from his computer, meaning the casing had been opened and the warranty, therefore, was void. Ahron said he asked to speak to a supervisor.

About an hour or more later I received a call back from the same technician, who told me he had spoken with a manager and that nothing could be done to help me because the liquid spilled on the keyboard had voided my in-store warranty, Ahron recalled. When I told the technician that nothing was mentioned about liquid before he denied ever telling me parts had been removed.

Ahron said he believes the company simply didnt want to pay for the repair to his computer and fabricated a reason not too. And hes not alone.

A matter of time

Mark, of San Diego, said he opted for a four-year extended warranty when he purchased a plasma TV in April 2003. Because he was traveling extensively in his job with the Department of Defense, Mark arranged to have the TV delivered in September, five months later.

The TV was delivered September 13, 2003 and the Best Buy installers attached it to my wall, hiding all the wires on Sept 17, Mark told ConsumerAffairs.com. The TV operated fine until Sept 4, 2007, when it suddenly went out. Although I thought I still had a few more days left on the extended warranty Best Buy informed me that the warranty had started 5 months before I received the TV.

Mark took Best Buy to Small Claims Court and won. In the process, he made some interesting discoveries.

I found out from Samsung that the TV was manufactured in Korea 17 days after Best Buy said the warranty started, he said.

Interestingly, Samsung showed the date of purchase as September 13, 2003, the date Mark received the set. Samsungs 24-month manufacturer's warranty began on that date.

The judge ruled that I am entitled to costs of Best Buys repair service visit on Sept 12, 2007 for $100 and to have the TV fixed or replaced, Mark said. Best Buy personnel are the only people that I speak to that cannot understand why. Even the judge spent most of the time explaining it to them.

Yet despite experiences like Ahrons and Marks, a recent J.D. Power and Associates survey shows consumers continue to buy service contracts when they purchase major appliances.

Among owners of refrigerators, stoves, dishwashers and laundry appliances, approximately 25 percent report purchasing an extended warranty, while approximately 15 percent of microwave oven owners do so.

Think twice

Extended warranties certainly provide a degree of peace of mind, said Dale Haines, senior director of the real estate and construction industries practice at J.D. Power and Associates. With some appliances -- particularly those with complex electronics and potentially high repair costs -- purchasing an extended warranty may make sense.

"However, major appliances tend to be very reliable, and consumers should consider very carefully -- depending upon their circumstances -- whether an extended warranty is worth the additional cost, Haines said.

Perhaps one other factor should be considered as well.

Will the retailer selling the extended warranty actually honor it, or will it try to weasel out of its obligations, requiring the consumer to drag them into a courtroom to gain satisfaction?

Texas Attorney General Greg Abbott has filed an enforcement action against an allegedly fraudulent Yellow Pages company and its owner for deceiving business owners, nonprofits, churches and other organizations.

Barbara Sommer and her company, Ad Telamerica Inc., which does business as Yellow Pages Directories, are charged with sending misleading direct mail pieces to businesses across the nation.

The mailers suggest that the recipients had a pre-existing relationship with the defendants and therefore owed money to maintain their businesss Yellow Pages Directories advertisement. Although the word free appears in several locations, recipients who think they need to renew their advertisement are required to pay about $300 for the listing.

Deceptive mailings, hidden charges and the deceptive use of a well-known corporate logo were all part of a complex scheme to defraud small business owners and others, said Attorney General Abbott. Texas law provides important protections to shield businesses from false advertising schemes. The Office of the Attorney General will continue to enforce laws that protect small businesses.

Since March 2006, Sommer and her company have mailed more than 2 million deceptive solicitations in an effort to lure customers from across the United States.

Sample mailing, provided by Texas AG

More than 19,000 of those contacted responded to the solicitation forms, which were printed with the words Final Notice in all capital letters, as well as the bolded words listing confirmation form. The form alarms customers by stating that the customers Yellow Pages listing will be omitted if the form is not returned, giving the business the false impression that it previously maintained such a listing.

The customers confirmation form includes the word free in several locations, leading them to believe they will not be billed if the form is returned. However, the business is expected to pay almost $300 for the listing, a detail that unlawfully appears only on the reverse side of the form in tiny print.

State law requires that advertisers clearly and fully disclose advertising costs. The company also includes the familiar walking fingers logo in its correspondence, which falsely implies that customers are entering into a business relationship with AT&Ts Yellow Pages.

The Attorney Generals legal action, brought under the Texas Deceptive Trade Practices Act (DTPA), requests that the court order restitution to recipients who were harmed by this scheme. The lawsuit seeks civil penalties of $20,000 per violation of the DTPA, as well as reasonable attorneys fees.

More Scam Alerts ...

November 8, 2007
American Honda Motor Corp. is recalling about 22,000 lawn mowers because of a fire hazard.

Due to a manufacturing defect, a crack can occur in the fuel tank causing a fuel leak. If gasoline leaking from the fuel tank is ignited, a fire or explosion can occur.

American Honda Motor Corp. has received six reports of fuel leakage. No fires or injuries have been reported.

The recall involves HRX walk-behind lawn mowers with model numbers HRX217KHXA and HRX217KHMA. Only serial numbers from 1400001 through 1453714 are included in the recall. The model and serial number are printed on a label located on the upper rear of the deck. The lawn mower is dark gray with a red engine cover.

The mowers were sold at Honda Lawn and Garden dealers nationwide, including The Home Depot stores, from January 2007 through September 2007 for between $800 and $900. They were made in the United States.

Consumers should stop using these recalled lawn mowers immediately and contact any Honda Lawn and Garden dealer to have the fuel tank replaced. Registered owners of the recalled lawn mowers will be mailed a notice.

Consumer Contact: For additional information, contact Honda at (800) 426-7701 between 8:30 a.m. and 5 p.m. ET Monday through Friday, or visit the firms Web site at www.hondapowerequipment.com.

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

As an expectant mom, Kendra of Brooklyn, New York wanted the best for herself and her baby. Part of that care was a prenatal vitamin.

My doctor gave me a prescription for the prenatal vitamin, Primacare One, wrote Kendra. I dropped off my prescription at the CVS pharmacy and when I returned to pick up the prescription, I was instead given Prednisone.

The problem Kendra encountered is one of the most common prescription errors -- the kind that occurs when a pharmacist cant read the prescription properly. Instead of contacting the authorizing physician to confirm the prescription, the pharmacist plays Russian roulette with someone elses life.

Kimberly, of Hudsonville, Michigan, ran into a similar problem at Walgreens.

Kim wrote that the pharmacist couldnt read the prescription and assumed it said Corgard, a blood pressure drug. However, Kimberlys husband didnt need a blood pressure drug. He needed Cortef, a drug to treat his brain tumor.

Walgreens was also the target of another complaint, this time from Elana, who lives in Cranston, Rhode Island.

Elana said that her five-year-old daughter spent a very uncomfortable and scary five hours in the emergency room due to lethargy and vomiting. The Walgreens pharmacist gave the correct medicine, but it was 10 times the prescribed dosage, complained Elana.

Light rings

How would you like to use an eye drop to help your vision and instead end up seeing rings around street lights? A Mount Laurel, New Jersey man knows exactly how it feels.

I talked with Earl, who visited his CVS pharmacy for a prescription eye medication. He carefully read the box which said to put a drop in the left eye every six hours.

No problem, Earl thought. But it was a problem, because when Earl later read the paper instructions, he saw that the medication was for ear use only.

I called CVS and found that they gave me the wrong medicine. Now I have only one good eye, and CVS didnt even say they were sorry, said Earl.

No apologies

Not hearing Im sorry after a pharmacy mistake is typical, according to one California-based pharmacist who spoke on the condition of anonymity.

We are told to never apologize for giving a wrong prescription because it automatically implies guilt. I suppose the company wants to leave that to the attorneys, the pharmacist said.

Unfortunately, pharmacy errors happen more frequently than you might think. The Institute of Medicine took a hard look at prescription errors, including those in hospitals and long-term care facilities. The study, released in July 2006, showed that at a minimum, 1.5 million consumers annually are killed, injured, or made sick by drug errors.

Then there are the errors that are never caught or reported, not to mention the debate as to what constitutes an error.

How they happen

ConsumerAffairs.com contacted pharmacists across the country in an attempt to learn how mistakes happen -- and what you can do to make sure it doesnt happen to you. Not surprisingly, many of those we contacted did not want their name or city published.

So how do mistakes happen?

There were common themes among pharmacists we interviewed. The first:

• Unreadable prescriptions I dont know how some doctors ever passed med school with their lousy handwriting, commented one New Jersey pharmacist. I have to call the doctor to verify the script, then I cant reach the doc, and the whole time the customer is waiting for their medicine.

If I see one big problem, its with the doctors writing, said Dan Freund, owner of a Medicap pharmacy in Farmington, Missouri. If Im wrong about one little letter, it could change the name of the drug. Its even worse if its a first-time customer. And Im trying to read this chicken-scratch while working in a busy environment.

That busy environment leads to the second biggest issue for pharmacy employees:

• Never-ending distractions Its nothing to have someone on the phone, someone at the drive-thru, all while youre trying to fill a prescription. And then someone walks in and starts asking questions, said Susan Freund, Dans pharmacist wife and partner at the Missouri pharmacy.

In pharmacy training, it is drilled into each student that before the prescription is given to the customer, that script needs to be checked three times for accuracy, Susan said. But, unlike a surgeon who is working in a relatively quiet atmosphere, were sometimes trying to verify things in the middle of a phone-ringing circus.

Working in a hectic pharmacy might come with the territory, but when it comes to reading a doctors handwriting, one possible solution might be to get rid of the paper prescription.

Some physicians are now moving to a paperless prescription process. One example is Dr. Raul Borrego, a Missouri internist.

Moving to paperless has slowed me down, but I have no doubt that the chance of a prescription error will lessen, noted Raul. Instead of just jotting down the drug and instructions, I have to input everything into a laptop computer.

Its a very precise system. Once I choose and verify the drug, I then must choose the dosage, frequency, etc. The pharmacy will receive it in text, so they dont have to read my writing. Even my wife says I have terrible handwriting, Borrego said.

"Dont trust us"

It might sound odd for pharmacists to say we shouldn't trust them, but that's what several told us.

I wish more people would ask questions, said one Illinois pharmacy tech. I consider myself good at what I do, but I know I have made a mistake in the past, she said. Customers have to realize we are as human as they are.

What you can do

There are measures you can take to help ensure your prescription isn't among the hundreds of thousands that go awry each year. They include:

• Dont be naive. Stay up to date on your condition and medication. Ask your doctor the name of the drug and why it is being prescribed. Once at the pharmacy, ask them the same thing. One simple question from you could alert the pharmacy to a possible error.

• Diagnosis If your doctor writes the prescription on paper, ask him or her to write why the drug is prescribed. For instance: "Toprol 100 Milligrams ... for blood pressure." Additionally, make sure you can read the prescription because if you cant, maybe the pharmacy cant either.

• Get a copy. If the physician sends the prescription electronically, ask for a copy.

• Get the name. If the prescription is called in, ask the doctor the exact name of the drug. Example: Your doctor says he is calling in an antibiotic ... you ask for the specific name of the antibiotic. Make a note of it and compare it to what the pharmacist gives you.

• Verify. Verify the name on the bottle and packaging. Many mistakes arise when the pharmacy gives the wrong prescription based on someone having the same last name.

• Go off-peak. Are you filling the prescription at the beginning of the month? According to research, there is an increased chance of error at busy times.

• Go online. Use the internet to your advantage. Before taking any medication, verify what the drug is, based on color, shape, or the imprint code. Two good resources are the Pill Identification Wizard from drugs.com, and the RxList Pill Identification Tool.

Mistakes do happen

So what happens when the pharmacy makes a mistake and you know it? ConsumerAffairs.com receives many complaints about drug errors and questions about how to handle the situation.

Suvithia, of Frisco, Texas, wrote that after she received the wrong prescription, the insurance company for Walgreens offered an apology compensation in the hopes of keeping the case out of court.

The insurance company offered $350.00, Suvithia said. My husband and I declined their offer and then we received a letter offering a $1,000.00 settlement.

So what should you do when mistakes happen to you? The answer depends on whether you have been seriously harmed or merely inconvenienced.

Serious harm

If you or a family member suffer grievous harm from an incorrect prescription, or if someone dies because of a pharmacy error, do not contact the pharmacy. You should never try to negotiate a settlement yourself and, just as your insurer tells you not to make any statements after a serious traffic accident, you should not communicate with the pharmacy in any way. You can only hurt your case.

Instead, collect all the evidence -- any remaining medication, hospital and doctor bills, receipts, death certificates, etc. -- and lock them up in a safe place, preferably a safe deposit box.

Also, take notes. Write down what happened and when, get the names of doctors, nurses, pharmacists and everyone else who played a role in the accident. Do it now, while your memory is fresh. Put the notes in the safe deposit box with the rest of the evidence.

Once you have secured all of the evidence, you must find the most accomplished and most experienced personal injury lawyer in your area. Forget everything you have heard about what a litigious society we are and how too many people are filing lawsuits.

The fact is that more than 90% of lawsuits are filed by businesses. It's not lawsuits filed by greviously injured consumers that are clogging the courts. If you have been harmed, the legal system is the place to go for justice. That's why it's there.

You must find the right lawyer. Most lawyers, like most of anything else, are just so-so and most never go to trial and do not aggressively represent personal injury cases. You need to find an accomplished lawyer in your state who: a.) only represents injured consumers and b.) whose practice consists largely of trial work.

Remember that most lawyers represent corporations. You want to find the local Johnnie Cochran, the attorney who defends the little guys -- because all of us are very little guys indeed when we are up against a major corporation.

Otherwise ...

If you are not seriously harmed or killed, there is no reason to hire a lawyer. There is also no reason to expect the pharmacy to do much of anything about the error. Pharmacies won't admit fault, even when no serious injury occurred.

If you believe the pharmacist should be held accountable for being negligent and putting your well-being at risk, you should file a complaint with your state pharmacy board, the entity that licenses pharmacists.

Each state's board has an established complaint procedure. You can find a list of the state boards at the National Association of Boards of Pharmacy Web site.

A popular cholesterol-lowering drug appears to disrupt sleep patterns of some patients, researchers reported at the American Heart Associations Scientific Sessions 2007.

The findings are significant because sleep problems can affect quality of life and may have adverse health consequences, such as promoting weight gain and insulin resistance, said Beatrice Golomb, M.D., lead author of the study and an associate professor of medicine and family and preventive medicine at the University of California at San Diego School of Medicine.

In the largest study of its kind, researchers compared two types of cholesterol-lowering drugs called statins -- simvastatin, which is soluble in fats, and pravastatin, which is soluble in water.

Because simvastatin, the generic name for Zocor, is fat-soluble it can more readily penetrate cell membranes and cross the blood brain barrier into the brain. The brain controls sleep, and many of the brains nerve cells are wrapped in a fatty insulating sheath called myelin.

The results showed that simvastatin use was associated with significantly worse sleep quality. A significantly greater number of individuals taking simvastatin reported sleep problems than those taking either pravastatin or the placebo, Golomb said. On average, the water-soluble statin had a greater adverse effect on sleep quality.

Earlier studies

In past studies and case reports, some people on statins reported having insomnia or nightmares.

Several small studies were done early on, including those focused on fat-soluble versus water-soluble statins, Golomb said. Most (researchers) didnt see a difference in sleep, but they had short durations of follow-up and enrolled just a handful of people -- often fewer than 20, which was not enough to see a difference unless it was very large.

One of these studies did report a significant difference between pravastatin and simvastatin. But without more and bigger studies, an effect was not considered to be established.

In this study, researchers tested 1,016 healthy adult men and women for six months in a randomized, double-blind, placebo-controlled trial using simvastatin, given at 20 milligrams (mg), pravastatin at 40 mg, or a placebo.

They assessed outcomes with the Leeds sleep scale, a visual analog scale of sleep quality, and a rating scale of sleep problems. Both scales were measured before and during treatment.

Those who reported developing much worse sleep on study medication also showed a significant adverse change in aggression scores compared to others, Golomb said We should also point out that although the average effect on sleep was detrimental on simvastatin, this does not mean that everyone on simvastatin will experience worse sleep.

Researchers did not include patients with heart disease or diabetes due to concerns about assigning these people to placebos.

Patients taking simvastatin who are having sleep problems should consult with their doctor, Golomb said. Sleep deprivation is a major problem in a minor number of people.