Current Events in June 2008

H&R Block's sweepstakes promotions might have been all about fun and games, but New York Attorney General Andrew Cuomo says the tax preparer didn't play by the rules. Cuomo's office has settled a suit against Block in connection with the allegedly deceptive advertising practices..

As part of the agreement, Block must pay $245,000 in penalties and costs for failing to post rules and regulations of its promotions at its offices and using false and deceptive advertising material to promote two sweepstakes games. The company also must disclose that the purchase of H&R Block products is not necessary to enter any promotional contest.

"H&R Block has agreed to implement the necessary changes so that all future promotions are in full compliance with New York state law," said Cuomo. "This settlement, while directed at H&R Block, serves as a warning to companies to make sure that all sweepstake rules and regulations are clearly spelled out with absolutely no ambiguity."

The Kansas City, Mo.-based company conducted two sweepstakes games: "Double Your Refund Instant Win Game" from January through April 2006 and "Toss Out Your Bills Instant Win Game" from January through April 2007. In both games, consumers could win by means of a scratch-off card, which was given to customers who purchased H&R Block tax preparation services.

New York state law requires companies conducting sweepstakes to give consumers an opportunity to enter and win without purchasing a product. H&R Block did not provide this opportunity for non-paying consumers.

The company's television, radio and print ads announced the ability to play if consumers had their taxes done by the company, and then directed consumers to H&R Block offices or hrblock.com for official rules on how to enter without a purchase.

However, the "no purchase necessary" qualification was either: flashed on screen briefly with no verbal announcement in television ads; announced with rapid-fire language at the end of radio ads; or buried in a small footnote in print ads. Cuomo's investigation found that no such information about entering the contest without purchasing a product was available at H&R block tax offices.

In addition to paying $245,000, H&R Block also must:

• Cleary post contest rules and regulations at participating H&R Block retail offices to enable non-purchasers to obtain the information for entry in contests

• Conduct training to ensure that sales employees are able to direct consumers to the information regarding non-purchase methods of entry

• Comply with all rules and regulations of promotions

• Clearly disclose the availability of alternative methods of entry in all advertising that refers to the purchase of an H&R Block product or service as one of the means to enter the contest.

Consumers are urged to consider the following guidelines before entering a sweepstakes:

• No purchase necessary: It is illegal for a sweepstakes to require you buy a product or make a donation.

• Be wary of claims of huge cash awards and prizes: If it looks to good too be true, it probably is too good to be true

• Don't be swayed by celebrities: They are paid to appear and they don't guarantee a sweepstakes is reputable.

• Be cautious: By participating in a sweepstakes, your name, address, and phone number might be sold to other solicitors

• Never give away your credit card, bank account or social security numbers on entry forms.

• Completely avoid any prize award that requires you first send money to cover taxes and other costs before the prize can be shipped to you.

• Be skeptical of letters and post cards claiming to be "official" or "urgent." If the envelope is sent "bulk rate" or costs less than 33 cents to send, you can certainly bet that thousands of people are receiving the same notice.

But the Consumer Federation of America says consumers who drink alcohol should have that information. It's assembled Alcohol Facts, a side-by-side comparison of the alcohol, calorie and carbohydrate content per serving of the 26 top selling domestic and imported alcohol brands.

Designed to help consumers follow the advice that men limit their consumption to two drinks a day and that women restrict their consumption to one drink per day, Alcohol Facts further explains what constitutes a "standard drink" -- 12 ounces of regular beer, 5 ounces of wine and 1.5 ounces of 80-proof (40%) distilled spirits.

According to the government's dietary guidelines, these amounts represent moderate drinking. Public health officials warn that consuming too much alcohol contributes to dependence, obesity and a range of diseases, such as liver cirrhosis and cancers of the upper gastrointestinal tract.

"Right now, consumers really have no way of knowing the most basic information about alcoholic beverages," said Chris Waldrop, Director of the Food Policy Institute at the Consumer Federation of America. "It's time to end the confusion so consumers can make informed and responsible purchasing and consumption decisions. We're making information available today on some of the top selling brands, but the federal government needs to require standardized and complete alcohol labeling on all alcoholic beverages."

Based on liquor industry sales data compiled by Adams Beverage Group, CFA's analysis focused on 26 top-selling alcohol brands, comprising 13 beers and flavored malt beverages, 8 spirits products (vodka, rum, whiskey, gin and tequila), and 5 brands of wine.

Using the standard serving size for each category, CFA found the alcohol per serving ranged from 0.42 fluid ounces to 0.70 fluid ounces depending upon the specific brand and type of alcoholic beverage. In contrast, calorie and carbohydrate content varied significantly among the categories and bands as follows:

• Among spirits, calories per serving ranged from 86 calories for spiced rum to 120 calories for gin. The average (not including mixers) was 98 calories per serving;

• For wines, calories per serving ranged from 105 calories for a merlot to 125 calories for a cabernet sauvignon. The average was 118 calories per serving;

• The greatest variation in calories occurred among beers and flavored malt beverages. Light beers (5 brands) averaged 100 calories per serving, regular beers averaged 140 calories (5 brands) per serving, and the flavored malt beverages (3 brands) ranged from 190 calories per serving to 241 calories per serving;

• Variations were greatest when analyzing carbohydrate levels. Compared to no carbohydrates in spirits, wines ranged from 0.8 grams per serving for chardonnay to 5.0 grams per serving for cabernet sauvignon. Among different beers and malt beverages, carbohydrates ranged from 3.2 grams per serving for light beer to 38 grams per serving for a flavored malt beverage.

"Consumers should not have to search out information on website pages to figure out what is in their drink," Waldrop said. "The fact that this information wasn't readily available underscores why Americans need the same helpful and easily accessible labeling information on alcoholic beverages that is now required for conventional foods, dietary supplements, and nonprescription drugs."

Anheuser-Busch's recent decision at the prodding of eleven state attorneys general to discontinue its two energy drinks, Tilt and Bud Extra, has won nods of approval from health care professionals.

But despite Busch's action, there are an estimated 200 energy drinks still on the market. That's a lot of energy.

"There was a time when we would get our caffeine intake from coffee and cola, but now there are a number of caffeine containing beverages and we need to be careful because over a period of 24 hours that caffeine intake is cumulative," said Dee Rollins, R.D., PhD, dietitian with Baylor Regional Medical Center at Grapevine, Texas.

In fact, experts say energy drink consumers should keep careful track of the amount of caffeine they get in a day.

"If you know that 400 milligrams a day is the upper limit you can check the back of the labels and make sure that you don't get more than that," Rollins said.

It may sound like a lot, but 400 milligrams is roughly the equivalent of just one energy drink and two cups of coffee. Getting more than that can lead to jitteriness, nausea, heart palpations and in extreme cases more severe symptoms.

"It can be so bad that if you take too much caffeine you can end up in the hospital thinking you have flu-like symptoms and really it's caffeine overdose."

So remember as you're sipping take it slow or it may not just be energy you end up with.

"We don't think of caffeine as being a drug that we need to monitor, but we can overdo it," Rollins said.

For most people if they're not getting more than around 400 milligrams of caffeine a day these energy drinks are safe. But Rollins says there are some important things to remember:

• Don't drink energy beverages while exercising. It can lead to severe dehydration.

• Don't ever mix these drinks with alcoholit's popularbut doing so can not only mask how intoxicated you really are, it again can be extremely dehydrating.

In addition to caffeine, most of these energy drinks contain very high amounts of sugar and sodium which can be dangerous for diabetics or those with high blood pressure, Rollins said.

Under fire from the attorneys general of 11 states, Anheuser-Busch has agreed to discontinue its popular alcoholic energy drinks, including Tilt and Bud Extra, and vowed it will not produce any caffeinated alcohol beverages in the future.

Anheuser-Busch, the largest brewing company in the United States, has taken an important action to protect young people from attractive alcohol advertising and marketing, California Attorney General Edmund G. Brown Jr. said. Other major alcohol manufacturers should follow Anheuser-Buschs lead and eliminate dangerous combinations of caffeine and alcohol from the marketplace.

Alcoholic energy drinks are prepackaged beverages that combine alcohol and caffeine, guarana, taurine, ginseng and other ingredients associated with non-alcoholic energy drinks. Brown asserts that Anheuser-Busch marketed Bud Extra and Tilt in violation of state consumer protection statues by:

• Making misleading health-related statements about allegedly energizing effects of Bud Extra including increased strength and increased ability to stay up all night after drinking the products

• Failing to disclose its effects on consumers, and ignoring potential consequences of drinking alcoholic beverages that are combined with caffeine or other stimulants

• Directing advertisements of Tilt and Bud Extra to consumers under the age of 21

In November 2007, researchers at Wake Forest University of Medicine found that the combination of caffeine and alcohol sends mixed signals to the nervous system, causing the effect of a wide awake drunk.

Students who consumed these energy drink cocktails were twice as likely to be involved in alcohol-related accidents and injuries than when drinking alcohol alone. The combination of alcohol and caffeine can be dangerous because individuals may not feel impaired even when blood alcohol levels are very high.

California, along with ten other states, asserted that Anheuser-Busch made misleading health-related statements about the energizing effects of its caffeinated alcohol beverages. Marketing that promoted the alleged energy component of the drinks made the drinks appealing to teens.

The company advertised Bud Extra with taglines such as You can sleep when youre 30 and Say hello to a night of fun and utilized MySpace, YouTube, and other Internet sites popular with underage youth.

In addition, the packaging for many of the alcoholic energy drinks was similar to that for non-alcoholic energy drinks, leading to retailer and parent confusion.

Anheuser-Busch cooperated during the investigation and agreed to reformulate its products to exclude caffeine. As part of the agreement, Anheuser-Busch will discontinue two of its popular alcoholic energy drinks, Tilt and Bud Extra, and will not produce any caffeinated alcohol beverages in the future. Under the agreement the company will:

• Stop manufacturing and marketing all caffeinated alcoholic beverages, including Bud Extra and Tilt as currently formulated

• Reformulate its alcoholic energy drinks so that they do not contain caffeine or other stimulants that are metabolized as caffeine, such as Guarana

• Eliminate all references in advertising to caffeinated formulations and remove any reference to using Bud Extra and Tilt as mixers for other drinks.

Anheuser-Busch also agrees to immediately discontinue the current Tilt website www.tiltthenight.com without hyper linking or directing visitors to a new site. Any new Website may only to promote the reformulated Tilt without caffeine.

Other states which joined California in reaching an agreement with Anheuser-Busch include: Arizona, Conneticut, Idaho, Illinois, Iowa, Maine, Maryland, New Mexico, New York and Ohio. A copy of the multi-state agreement is attached.

Hundreds of millions of dollars later, federal health officials say that maybe tomatoes weren't to blame for the odd strain of salmonella that has sickened hundreds of consumers after all.

Stores pulled tomatoes off the shelves, restaurants filled dumpsters with them and shoppers shunned them, all as the U.S. Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) said they were trying to find the tomatoes that were causing the problem.

But now, the CDC thinks that perhaps it's been something else causing trouble all along, the Wall Street Journal reports. Jalapeño peppers, maybe. Or maybe cilantro and Serrano peppers.

The current theory making the rounds is that salsa prepared in restaurants may be the common thread that ties all the incidents together. After all, salsas is made with tomatoes. And jalapeño peppers. Cilantro too, come to think of it.

The reason the CDC thinks this is that it has been interviewing people who got sick, asking them what they ate and when, and then looking for a common element that might explain the outbreak of the Saintpaul strain of salmonella, a relatively rare and rather virulent version of the disease.

Consumer advocates have been irate for years with the apparently declining state of food safety in the U.S. Now restaurants and tomato growers are angry as well. They've lost millions of dollars and thrown away mountains of what may have been perfectly good produce.

The FDA has been hedging its best for the past few weeks, saying it couldn't be certain tomatoes were the problem. The biggest clue? Although tomatoes had been taken off the table, people were still getting sick.

So now, the prevailing theory is that maybe it's something that is commonly eaten with tomatoes. Salsa, after all, is made with tomatoes and other produce like, oh, jalapeño peppers.

CDC is hedging its bets this time around, saying it is looking at "certain restaurants" but refusing to name them. It's dropping little hints, though, saying it's not looking at chain restaurants.

All of this frustrates restaurateurs no end.

"To blame salsa brings nothing to the table," a Texas Restaurant Association executive told the Journal. "There's all kinds of salsas."

Symptoms of salmonella include bloody diarrhea, abdominal pain and fever.

It can cause serious and sometimes fatal infections particularly in young children, frail or elderly people, and those with weakened immune systems. Healthy people often experience fever, diarrhea, nausea, vomiting, and abdominal pain. In rare circumstances, the organism can get into the bloodstream and produce more severe illnesses.

Tomatoes are back on grocers' shelves and on McDonald's hamburgers, but federal investigators still haven't identified the source of the salmonella outbreak tentatively linked to certain types of tomatoes and they concede that the outbreak may be continuing -- meaning consumers may still be getting sick.

In its latest report, the Centers for Disease Control and Prevention (CDC) raised the number of salmonella cases linked to raw tomatoes to 810 people in 36 states, making this biggest U.S. salmonella outbreak linked to fresh produce.

The actual number is likely much higher. The CDC estimates that for every case that is reported, there are 30 cases that go unreported.

Symptoms of salmonella include bloody diarrhea, abdominal pain and fever.

While CDC scientists say the link to tomatoes still appears "strong," investigators are looking at other culprits as well.

"We always keep an open mind," CDC official Patricia Griffin said.

Not only have investigators not pinpointed the source of the outbreak, they're not sure it's over.

The latest known salmonella victim became ill on June 15, more than two months after the first reported illness and weeks after the first warnings about tomoatoes were issued.

Investigators have looked at farms in Florida, Mexico and elsewhere and they've examined packing houses and other facilities but have so far come up empty-handed.

Officials caution that the source may never be found.

The task is made more difficult because many tomato fields are no longer in production. Also, tomatoes from various sources are routinely mixed together at packing houses and other transit points, making it nearly impossible to say for sure where a given tomato came from.

Tomatoes thought to be the riskiest include raw red Roma, raw red plum, raw red round tomatoes, or products that contain these types of raw red tomatoes.

Standing room only may be the rule as hybrid hunters line up outside Toyota showrooms to join the ever-growing waiting list for a new Prius.

But not every Prius owner is smiling. Disillusioned Prius owners routinely report their view of the hybrid's dark side to ConsumerAffairs.com.

Recent reports settled into several areas: unintended acceleration, troublesome traction control, battery failure, trouble filling the fuel tank, unusual tire wear and relatively poor gasoline mileage.

Unintended acceleration

An Eagle, Colorado, Prius owner reported this story: "On August 10, my wife experienced an unintended acceleration of our Prius resulting in a totaled car and long-term minor injuries for her.

Toyota has repeatedly blamed unintended acceleration with the Prius on faulty floor mats jamming the acceleration pedal.

"NHSTA has checked out our after-market floor mats which could have caused the problem but my wife claims that they were not the problem, that she looked at her feet to be sure they were on the brakes and the mats were still in their usual place as they had been for almost 10 months," our reader reported.

The tale of this runaway Prius is frightening. "I had to apply my brakes to keep the speed at 65 mph. I noticed that when I let up on the brake the car was starting to speed up even though I was not pressing on the accelerator," the driver said.

"No matter how hard I pressed on the brake, the car would not slow down. While keeping my right foot on the brake I slammed my left foot on the emergency brake." she said. "When I looked at the speedometer I was going 90 miles per hour."

The Prius barreled through a stop sign, and crashed through a grove of trees. "This whole time I had been pressing on both brakes, and the car was not slowing down at all. I felt the car tumbling and was aware of the air bags deploying. I finally came to a stop," the former Prius owner said.

Toyota's official position regarding the accident is that worn brakes are to blame, according to the owner of the totaled hybrid.

The owner said that is not true. "The brake shoes and pads were taken down to the shear metal in an attempt to stop this vehicle."

Runaway Priuses have been reported in California, Michigan, Colorado and Washington. The wreckage of the Colorado Prius is now in storage as possible evidence in a lawsuit.

Traction control

Pirus owners in cold and snowy regions report the traction control system in the hybrid is unable to cope with even a slight snow-covered incline.

Some Prius owners suggest the traction control is intentionally designed to prevent wheel spin that might damage the hybrid's electric motor. The corporate position from Toyota on Prius traction control is to deny there is a problem.

One California Prius owner finds the Toyota excuse to be absurd. On June 12, he discovered the dark side of his hybrid.

"The traction control system on my 2008 Toyota Prius is worthless. I have a steep gravel driveway that is extremely hard to climb due to the unnecessary engine cut outs, especially if there is any extra weight in the rear of the car," he said.

"Had I known about the problem with this earlier, as I have just found reported on the Internet, I would not have purchased this car."

A second Prius owner reported a similar traction control issue.

"In snow or ice conditions the wheels lock up due to the traction control system and leave me stranded," he said. "Almost resulted in my car sliding from a stand still off the side of the road down an embankment. This is dangerous and modifications need to be done to the computer software to allow more control for snowy or icy conditions."

Battery failure

More than one Prius owner has returned from a business trip or vacation to find their hybrid dead in the garage with no power and unable to start.

Jump-starting the Prius can be tricky. The enormous and expensive main battery is easily damaged and convincing Toyota to replace the battery is difficult, as an Idaho owner discovered June 3.

"My new 2007 Prius Toyota with 5,000 miles on it quit running, would not start. Called dealer and had maintenance department walk me through a jump start as with these cars you do it under the front hood not in the back where the battery is," she said.

"Car still would not start. They said have it towed in. I did have it towed in the 85 miles to the dealer. After several calls and two different reports on my car I found out they will not fix under warranty. They say I jumped it wrong. They say I caused the damage and that warranty is only for defective parts," she told ConsumerAffairs.Com.

The repair bill is a whopper "They want me to pay a minimum of $4,800 and maybe the towing. I bought this car because of the high maintenance rating and know look what a mess I am in."

Refueling

A Woodland, Washington, Prius owner reported in June about the difficulty filling the hybrid's fuel tank.

"We stopped to fill up in Ashland, Oregon (the gas is pumped for you here) and thought the tank was full. After switching drivers, not quite 83 miles later, we were down to four clicks on the fuel gauge."

"Luckily, there was one last station before we headed into an area of no gas stations. I filled up and managed to nearly fill the tank," our reader reported.

The Washington State Prius owner reported the problem to Toyota. She was told unofficially that filling the Prius gas tank to the top "was becoming an issue, even though Toyota was not acknowledging it."

Toyota responded with an official reply June 11. "Well, it is official from Toyota Corporate, if you do happen to have challenges filling your gas tank there is no fix," our reader was told.

Toyota noted that 6 to 7 gallons at a fill-up is normal.

"We apologize with your dissatisfaction with the fuel tank bladder in your 2008 Prius," Toyota wrote. "As your case manager explained to you, this is the design of the fuel tank and there is no repair available to change the design."

Tire wear

Unusual and premature tire wear has troubled the Prius since the first hybrid arrived in the U.S. almost 8 years ago.

A Huntsburg, Ohio Prius owner reported the tire wear problem June 15 with his 2002 Prius. He is now on his third set of tires. "The tires are supposed to last 65,000 miles and neither Toyota nor Bridgestone will do anything about this potentially life threatening problem," he said. "We had the tires rotated, balanced and aligned as needed. In my opinion, if you want an environmentally friendly car, buy a Honda."

Poor gas mileage

Mileage claims for the Prius vary widely. At one time Toyota claimed 60 miles to a gallon when the electric motor was providing the majority of the hybrid's power. But so few Prius owners have obtained the 60 mpg that the Japanese automaker eventually backed off the claim, blaming the error on Environmental protection Agency fuel mileage testing.

A ConsumerAffairs.Com reader in Casper, Wyoming missed the Toyota retraction. "We just bought a used 2005 Prius and thought it would be great to get 60 miles to a gallon. Like others who hoped for 60 mpg we have been disappointed," he wrote.

"The onboard computer reads about 41 to 43 around town. I have not figured the mileage by the old fashioned way but my guess is it is less than the computer. We have had the vehicle for about a week and are thinking of selling it."

Two companies that generate payday loan leads have agreed to settle Federal Trade Commission charges that their Internet advertising misled the public. Specifically, the FTC said the ads stated what the loans would costs and when they would have to be repaid, but didn't show the annual percentage rate information as federal law requires.

Since the APR on the typical payday loans can run several hundred percent, consumers who realize they are being charged 350 percent interest on that $200 loan might think twice before taking it out. At least, that's the idea behind the law.

The settlements require the advertisers to disclose APR information in similar payday loan ads in the future and to comply in all other respects with the Truth in Lending Act. APR information helps consumers compare the costs of these payday loans with others and with alternative forms of short-term credit.

In typical payday loan transactions, consumers receive cash in exchange for their personal checks or authorization to debit their bank accounts, and lenders and consumers agree that consumers' checks will not be cashed or their accounts debited until a designated future date.

Payday loans have high fees and short repayment periods, which translate to high annual rates, and they often are due on the borrower's next payday, usually about every two weeks.

The two companies, We Give Loans, Inc. and Aliyah Associates, LLC, d/b/a American Advance, are lead generators based in Minnesota and Arizona, respectively. They advertise payday loans on their Web sites and collect information from consumers through their online applications. They then sell this "lead" information to lenders that ultimately offer payday loans to consumers.

The Truth in Lending Act requires that those who advertise the cost of credit must disclose the APR of the loans to help consumers make better-informed decisions, including assisting them in comparison shopping among loans.

According to the FTC's complaints, the two firms stated loan costs on their Web sites -- a $20 fee for a $100 loan, for example -- but failed to disclose the APR. For a typical 14-day pay period, consumers who obtained payday loans advertised by We Give Loans, Inc. would pay an APR from 260 percent to 521 percent or higher, and consumers who obtained payday loans advertised by Aliyah Associates would pay an APR of 782 percent.

The proposed consent orders prohibit We Give Loans, Inc. and Aliyah Associates, LLC from advertising certain credit offers without providing consumers with key disclosures, such as the APR, and bar them from violating the Truth in Lending Act in any other manner.

The report marks the first time the annual National Survey on Drug Use and Health asked detailed questions about the behavior and social situations involved in underage drinking.

"In far too many instances parents directly enable their children's underage drinking -- in essence encouraging them to risk their health and well-being. Proper parental guidance alone may not be the complete solution to this devastating public health problem -- but it is a critical part," said Acting Surgeon General Steven K. Galson, M.D., M.P.H. in releasing the report.

Some of the key findings include:

• Ninety percent of underage drinkers were either given alcohol for free or had someone else purchase it for them.

• Eighty-four percent (84%) of underage drinkers were in their own home or someone else's home when they had their last drink; 9.4 percent were at a restaurant, bar or club.

• Among all underage current drinkers, 31 percent paid for the alcohol the last time they drank, including 21.6 percent who gave money to someone else to purchase the alcohol and 9.3 percent who purchased the alcohol themselves. The remaining 69 percent of underage drinkers did not pay for the alcohol on their last drinking occasion.

• Of the 9.3 percent of underage individuals who purchased alcohol for themselves, 5.2 percent of individuals bought it at a liquor, convenience or grocery store and 2.8 percent bought it at a restaurant, bar or club.

• Over 40 percent of underage drinkers received alcohol for free from adults over 21 including 25.8 percent who were given alcohol by an unrelated person aged 21 or older, 6.4 percent who were given alcohol by their parent or guardian, and 8.3 percent who were given alcohol by another family member aged 21 or older.

• Past month alcohol use dropped 11 percent (from 7.4 percent in 2002 to 6.6 percent in 2006) for youth aged 12 to 14; declined 8 percent (from 28.3 percent in 2002 to 26.1 percent in 2006) for youth aged 15 to 17; and remained flat at around 51 percent for 18 to 20 year olds in the same time period.

Distilled Spirits Council President Peter Cressy said that this study's findings on sources of youth alcohol access are mirrored by research by the National Academy of Sciences and the Federal Trade Commission, which both found that youth primarily obtain alcohol from social sources including parents or adult family members and friends.

"While parents may believe they have no impact on their teens' behavior, this study once again underscores that parental involvement is key to the decisions underage make about drinking or not drinking," said Cressy. "Our country is making important progress in preventing and reducing underage drinking but much more needs to be done. Parents and the entire community working together can make a difference."

Filing bankruptcy is a growing option for many struggling Americans, but a new study suggests it takes a long time to recover from such a setback. Researchers at Ohio State University conclude that it can take 10 to 20 years or more for those who file bankruptcy to reach the same financial status as their peers.

"Bankruptcy is not a lifelong curse, but it doesn't provide an immediate fresh start either," said Jay Zagorsky, co-author of the study and a research scientist at OSU's Center for Human Resource Research.

Compared to those who have similar social and economic backgrounds, people who declare bankruptcy catch up to non-filers in terms of savings in about 12 years, total income in 14 years, home ownership in 14 years, and net worth in 26 years.

However, on some measures, those who go through bankruptcy do as well as or slightly better than those who never filed, the researchers found.

For example, 90 percent of those who went bankrupt have a car less than a year after bankruptcy, compared to 89 percent of those who never filed. About 74 percent of bankruptcy filers have full time jobs after one to five years, compared to 73 percent of non-filers.

"Along some dimensions, such as access to a car, bankruptcy doesn't seem to have any negative effect at all," Zagorsky said. "But on most measures, bankruptcy does set people back quite a bit."

Zagorsky conducted the study with Lois R. Lupica, the Maine Law Foundation Professor of Law at the University of Maine. Their research will appear in a forthcoming issue of the ABI Law Review, published by the American Bankruptcy Institute.

The results of the study are important because it is one of the few studies that has looked at how Americans fare after bankruptcy, Zagorsky said. The main reason for the lack of studies has been a lack of good data.

However, for this study, the researchers had good data from the National Longitudinal Survey of Youth, which has questioned the same group of randomly selected Americans 22 times since 1979. The NLSY is conducted by Ohio State's Center for Human Resource Research.

This study focused on data from the 2004 survey, when respondents were asked about possible bankruptcy filings. The survey included 7,661 respondents who were in their mid-40s in 2004, of which 13.5 percent said they had declared bankruptcy.

In general, the study showed that people who file for bankruptcy are more likely to be divorced, female, less educated, have lower income, live in urban areas and have bigger families than people who have never filed.

What's measured

What happens after bankruptcy depends on what is being measured.

While those undergoing bankruptcy do better than others in car ownership, they are saddled with more car debt. The percentage of respondents with car debt declines over time from 52 percent just after bankruptcy to 46 percent among those who filed more than 15 years ago. But it never reaches the 42 percent level of those who never filed.

Home ownership increases steadily from 50 percent of those who recently filed to 68 percent of those who filed more than 15 years ago. But no matter how long ago the bankruptcy occurred, the homeownership rate never reaches the 73 percent level of those who have never filed.

The percentage of bankruptcy filers with savings increases from 60 percent immediately after bankruptcy to 74 percent among those who filed more than 15 years ago. About 81 percent of people who have never filed have savings.

Those who go bankrupt also eventually regain use of credit cards. Just 18 percent of recent filers had a credit card, but that increases to 68 percent after 15 years, nearly the same percentage as those who never filed.

The study also compared consumers who filed for bankruptcy under Chapter 7 (in which much of the filer's assets are sold to pay off creditors) with those who filed under Chapter 13 (in which the filer pays off all or some of his debts over time).

In general, results showed that those who filed under Chapter 7 took longer to catch up with their non-filing peers than did those who went the Chapter 13 route, Zagorsky said.

Predates new law

Zagorsky noted that the data from this study came before a new federal bankruptcy law was enacted in October 2005 which made it more difficult for consumers to file for bankruptcy protection.

"This means that the numbers discussed in this research might underestimate the length of time the average person needs to catch up under the new law," Zagorsky said.

Data on people who filed under the new law will eventually become available, he said. Earlier this year, the NLSY began the 23rd round of interviewing respondents. That data will be available in 2010.

But this study offers a glimpse at what life may be like for financially troubled people today who may be considering bankruptcy.

"Many people are finding themselves in financial straits, given the price of gas, food and housing, coupled with high levels of debt, particularly if they have an adjustable mortgage," Zagorsky said.

"The bankruptcy discharge offers debtors immediate relief from current debts, but to experience what people may heard of as a 'fresh start,' that may take longer than they expect or would like."

By Joseph S. Enoch
ConsumerAffairs.com

June 26, 2008
After three and a half months of secretive backroom bickering and intense lobbying, U.S. senators and representatives agreed late yesterday on 21 uncontroversial items of what many have called the most sweeping consumer legislation in a generation.

The bill, the Consumer Product Safety Commission Reform Act, would greatly increase the beleaguered safety agency's funding, staff and authority. Both the House and the Senate passed their versions of the bill earlier in the year and since March 6, the two sides have been in conference trying to find agreeable compromises between the skeletal House version and the Senate version, which consumer advocates believe is far better suited to protect consumers and reinvigorate the CPSC.

Despite the differences, the two sides were able to agree on 21 items out of a total of about 30.

While many of the specifics are still being worked on and no official documents have been released, of those 21 items, the most notable are:

• Required tracking labels for children's products, which would probably make recalls easier and more effective. This also would make it easier to track the source of manufacturing.

• A return to a five-member commission and reinstatement of interim quorum. In August 1986 two commissioners resigned and their seats were never filled, leaving the agency for the past 22 years with three commissioners to vote on rules and fines. Two years ago, then-chairman Hal Stratton, a George W. Bush appointee, abruptly resigned to become a lobbyist and Bush has not filled the vacancy. There is a good chance Bush will never fill that vacancy, said Rachel Weintraub, director of Product Safety at the consumer advocacy group, Consumer Federation of America. This legislation would give the agency a temporary quorum with the remaining two commissioners until the new president fills the three vacant posts.

• More transparency in the agency. This includes more submissions of documents to Congress while requiring the agency to submit annual reports something almost every agency does -- yet the CPSC stopped doing it in 2003.

• More effective recalls by way of requiring manufacturers to send recall notices to customers and advertise the recall on the Internet and in catalogs and enhancing the agency's authority to order recalls.

• Expedited rulemaking. The CPSC often takes two years or more to pass rules.

• Ban industry-sponsored travel. This comes after The Washington Post reported that Stratton and the acting chairwoman, Nancy Nord, another Bush appointee, went on many expensive trips, including one to China, on the tab of companies the commission regulates.

• Increased civil penalties. Currently the agency can fine companies that knowingly break rules a maximum of $1.8 million a paltry sum for many of the multi-million and -billion dollar companies the agency regulates. An exact figure has yet to be released but it is believed to be $15 million a compromise between the House bill's proposed $10 million and the Senate's $100 million.

There are about eight more controversial items the senators and representatives did not have time to fully address yesterday afternoon due to votes on the House floor.

While they were not specifically addressed, they are believed to be:

• Preemption expansion. This is easily the most controversial and complicated item in the bill. Manufacturers and their lobbyists are pushing hard to include language that would make it nearly impossible for consumers injured by dangerous products to sue while consumer advocates would like all preemption language removed from the bill.

• Authority of state attorneys general. This is also a very controversial and complicated item. The Senate bill allows attorneys general to act essentially as mini CPSCs -- a move that would allow the agency to expand its overall power and effectiveness, consumer advocates argue. The House Bill gives some authority to attorneys general, but on a considerably more limited basis. Industry lobbyists argue that increased state authority will make it harder for them to manufacture their products to code.

• Publicly searchable database. This would allow consumers to read the thousands of complaints the agency receives every year instantly on the Internet, similar to what the National Highway Traffic Safety Administration offers on its Web site. Currently, one must file a Freedom of Information Act request to view those complaints a process that frequently takes many months for the agency to fulfill. The senate bill's author, Sen. Mark Pryor (D-Ark.), argued that this clause would be important because it takes the agency too long to pass rules and thus consumers will be safer by reading about the potential hazards of any product long before the agency does anything about it. Manufacturers say this process will lend itself to competing companies filing false complaints with the agency. Currently, millions of readers read complaints from the ConsumerAffairs.com database every month.

• Mandatory all-terrain vehicle rules. The rules for ATVs expired in 1998 and although larger manufacturers have continued to abide by them voluntarily, less scrupulous foreign manufacturers have imported cheaper ATVs that do not follow the voluntary rules. Manufacturers want the rules to become mandatory while consumer advocates would rather the rules be withheld so much stronger ones can be implemented. ATVs are among the most deadly products under the CPSC's jurisdiction.

• Phthatlate restrictions. In recent years, scientists have identified a possible connection to the plastic components known as phthalates and cancer and genital defects. The European Union, California and some retailers, including Wal-Mart, have banned some types of phthalates. Many Democrat conferees want rules similar to the EU ban included in the legislation, while some Republicans, most notably Rep. Joe Barton (R-Texas), believe the fears to be overstated.

• Whistleblower protections. Consumer advocates believe the marketplace will be safer if employees can release information proving a company knowingly makes defective goods without fear of being sued. Manufacturers believe this will pave the way for trial lawyers and disgruntled employees to make frivolous accusations.

• Lead levels in children's products. Very few details are known yet except that a deal on a figure is close, Pryor said. The current standard is 600 parts per million and the new standard is expected to be less than half that.

Regardless of the outcomes of these controversial items, we will have a much safer marketplace if the bill becomes law, Pryor said.

Many senators and representatives present at the conference meeting said that completing the conference before August would be an aggressive goal.

It is unknown whether President Bush will sign the impending bill into law. He has not threatened a veto, but in a memo from the White House, has indicated that he disagrees with many of the more aggressive clauses.

The staff members of the House and Senate Commerce Committees were told to work over the upcoming July 4 recess, starting Friday, to continue to try and find workable compromises on the controversial items. The next public meeting has been tentatively scheduled for soon after the recess, said Rep. John Dingell (D-Mich.), who co-chairs the conference.

June 26, 2008
About 1,700 Mongoose youth ATVs are being recalled by KYMCO. A manufacturing defect in the carburetor can cause the throttle to stick open, posing a risk of serious injury or death to the rider.

This recall involves model year 2008 Mongoose 50cc, 70cc and 90cc Youth ATVs. KYMCO is printed on a label located on the front of the vehicle, and the model name is printed on a label located on each side of the fuel tank.

The ATVs were sold by KYMCO dealers nationwide from August 2007 through June 2008 for between $1,700 and $2,100. They were made in Taiwan.

Consumers should immediately stop using the recalled ATVs and contact any authorized KYMCO dealer to schedule a free repair. Registered owners were sent direct mail notification of this recall.

For additional information, contact KYMCO USA toll-free at (888) 235-3417 anytime, or visit the firms Web site at www.kymcousa.com

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

Anheuser-Busch, the largest brewing company in the United States, has taken an important action to protect young people from attractive alcohol advertising and marketing, California Attorney General Edmund G. Brown Jr. said. Other major alcohol manufacturers should follow Anheuser-Buschs lead and eliminate dangerous combinations of caffeine and alcohol from the marketplace.

Alcoholic energy drinks are prepackaged beverages that combine alcohol and caffeine, guarana, taurine, ginseng and other ingredients associated with non-alcoholic energy drinks. Brown asserts that Anheuser-Busch marketed Bud Extra and Tilt in violation of state consumer protection statues by:

• Making misleading health-related statements about allegedly energizing effects of Bud Extra including increased strength and increased ability to stay up all night after drinking the products

• Failing to disclose its effects on consumers, and ignoring potential consequences of drinking alcoholic beverages that are combined with caffeine or other stimulants

• Directing advertisements of Tilt and Bud Extra to consumers under the age of 21

In November 2007, researchers at Wake Forest University of Medicine found that the combination of caffeine and alcohol sends mixed signals to the nervous system, causing the effect of a wide awake drunk.

Students who consumed these energy drink cocktails were twice as likely to be involved in alcohol-related accidents and injuries than when drinking alcohol alone. The combination of alcohol and caffeine can be dangerous because individuals may not feel impaired even when blood alcohol levels are very high.

California, along with ten other states, asserted that Anheuser-Busch made misleading health-related statements about the energizing effects of its caffeinated alcohol beverages. Marketing that promoted the alleged energy component of the drinks made the drinks appealing to teens.

The company advertised Bud Extra with taglines such as You can sleep when youre 30 and Say hello to a night of fun and utilized MySpace, YouTube, and other Internet sites popular with underage youth.

In addition, the packaging for many of the alcoholic energy drinks was similar to that for non-alcoholic energy drinks, leading to retailer and parent confusion.

Anheuser-Busch cooperated during the investigation and agreed to reformulate its products to exclude caffeine. As part of the agreement, Anheuser-Busch will discontinue two of its popular alcoholic energy drinks, Tilt and Bud Extra, and will not produce any caffeinated alcohol beverages in the future. Under the agreement the company will:

• Stop manufacturing and marketing all caffeinated alcoholic beverages, including Bud Extra and Tilt as currently formulated

• Reformulate its alcoholic energy drinks so that they do not contain caffeine or other stimulants that are metabolized as caffeine, such as Guarana

• Eliminate all references in advertising to caffeinated formulations and remove any reference to using Bud Extra and Tilt as mixers for other drinks.

Anheuser-Busch also agrees to immediately discontinue the current Tilt website www.tiltthenight.com without hyper linking or directing visitors to a new site. Any new Website may only to promote the reformulated Tilt without caffeine.

Other states which joined California in reaching an agreement with Anheuser-Busch include: Arizona, Conneticut, Idaho, Illinois, Iowa, Maine, Maryland, New Mexico, New York and Ohio. A copy of the multi-state agreement is attached.

June 26, 2008
Kawasaki is recalling about 6,000 2008 Model Year KFX 50 and KFX 90 Youth ATVs. The throttle can fail to return to the idle position when released or could fail to be at idle on start-up. This could result in loss of vehicle control, posing a risk of serious injury or death to the rider.

The recall includes 2008 model year KFX 50 (50cc) and KFX 90 (90cc) youth ATVs. The affected models are green or white with black trim. The model name is located on either side below the handlebars.

The ATVs, made in Taiwan, were sold by Kawasaki dealerships nationwide from August 2007 through June 2008 for about $1,750 (KFX 50) and $2,200 (KFX 90).

Consumers should immediately stop using the recalled ATVs and contact any authorized dealer to schedule a free repair. Registered owners were sent direct mail notification of this recall.

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

Talk about timing. Honda's rollout of its first hydrogen fuel cell car couldn't have come at a better time. Introducing a vehicle that basically runs on water instead of gasoline quite predictably caught the world's attention.

But these cars, called Fuel Cell Vehicles, or FCVs, are highly complex, and to say they run on water greatly oversimplifies the subject and, understandably, has already led to some consumer confusion.

FCVs are actually electric cars, running on a set of super-strong batteries. But unlike normal batteries that have to be plugged in to be recharged, FCVs use a hydrogen-based fuel that constantly recharges them. So, far from running on water, these engines require a hydrogen-mix fuel, which combined with oxygen from the air, create a chemical process that powers the batteries.

The first FCVs are very, very expensive in the price range of an Italian sports car. And since you can't just fill the tank with water, fueling stations have to begin providing the hydrogen fuel mix, so that motorists can confidently drive from one point to another, knowing they will be able to fill up when they need to.

But even with those problems, petroleum-dependent motorists have reason for excitement. Here is a vehicle that doesn't require oil to operate. While it doesn't run on water, its hydrogen fuel is made from water. There are no carbon emissions, only water vapor.

Before most consumers can trade in their hybrid for a FCV, a lot more research and development must take place. The biggest task is to reduce the cost and improve performance. Being able to mass produce the cars will likely bring down the cost, but it will remain an expensive technology for quite some time.

But Honda has not been alone in developing its FCV. Other automakers, along with governments, fuel cell developers, and component suppliers, have been working to make FCVs cheaper and more practical.

In 2003, President Bush announced a program called the Hydrogen Fuel Initiative during his State of the Union Address. The initiative, supported by legislation in the Energy Policy Act of 2005 and the Advanced Energy Initiative of 2006, aims to develop hydrogen, fuel cell and infrastructure technologies to make fuel-cell vehicles practical and cost-effective by 2020. The United States has dedicated more than one billion dollars to fuel cell research and development so far, according to DOE.

The Japanese government has also been highly supportive of this effort, and Honda researchers have beat everyone out of the gate. Its FCX Clarity fuel-cell car goes on lease in California this year, but for all practical purposes, it will be a plaything for the rich and famous.

Honda says its Clarity will have a range of 270 miles between refueling, a top speed of 100 miles per hour, and be able to go from 0-60 in ten seconds. While that sounds good, Honda says it plans to only turn out 300 of the cars in the next three years.

With the publicity and excitement surrounding the FCV, scammers are already seeking to cash in. A Google search of "hydrogen fuel cell" produces dozens of sponsored links to Web sites that promise "Yes, you CAN run your car on water," and offer to sell "conversion" kits.

It goes without saying, no such kits exist.

California Attorney General Edmund G. Brown Jr. today sued Countrywide Financial, its chief executive Angelo Mozilo, and president David Sambol, for engaging in deceptive advertising and unfair competition by pushing homeowners into mass-produced, risky loans for the sole purpose of reselling the mortgages on the secondary market.

Countrywide exploited the American dream of homeownership and then sold its mortgages for huge profits on the secondary market, Brown said. The company sold ever-increasing numbers of complex and risky home loans, as quickly as possible.

"Countrywide was, in essence, a mass-production loan factory, producing ever-increasing streams of debt without regard for borrowers. Todays lawsuit seeks relief for Californians who were ripped off by Countrywides deceptive scheme, he said.

Illinois' complaint is similar to California's.

"Countrywide used egregiously unfair and deceptive lending practices to steer borrowers into loans that were destined to fail," said Illinois Attorney General Lisa Madigan.

Her suit was filed on behalf of thousands of people in the Chicago area who Madigan says are in danger of losing their homes. Some 35 percent of Countrywide's sub-prime mortgages are reportedly in default.

Brown alleges that Countrywide Financial used deceptive tactics to push homeowners into complicated, risky, and expensive loans so that the company could sell as many loans as possible to third-party investors. According to the lawsuit, the company marketed complex and difficult to understand loans with very low initial or teaser interest rates or payments.

Countrywide employees, including loan officers, underwriters, and branch managers -- who were under intense pressure to process a constantly increasing number of loans -- misrepresented or obfuscated the fact that borrowers who obtained certain types of loans would experience dramatic increases in monthly payments.

In the past, lenders like Countrywide sold home loans to customers and held the loans in their own portfolio, an incentive to maintain strong underwriting standards. Countrywide, however, sold its loans to third-parties in the form of securities or whole loans, often earning more profit for riskier loans. The business model generated windfall profits for Countrywide.

Teaser rates

The company pushed these loans by emphasizing a low teaser or initial rate, often as low as 1 percent for pay option ARMs.

Countrywide obscured the negative effects -- including rising rates, prepayment penalties and negative amortization -- which would inevitably result from making minimum payments or trying to refinance, Brown charged. He said the company misrepresented or hid the fact that borrowers who obtained its home loans -- including exploding adjustable rates and negatively amortizing loans -- would experience dramatic increases in monthly payments.

In an effort to rope in as many customers as possible, Countrywide greatly relaxed and liberally granted exceptions to its mortgage lending standards. Traditionally, lenders required borrowers to document income and assets but Countrywide offered reduced or no documentation loan programs to increase its loan sales. Angelo Mozilo and David Sambol actively pushed for easing underwriting standards and granting exceptions to documentation requirements.

In Countrywides 2006 annual report, the company touted the massive growth of its loan production from $62 billion in 2000 to $463 billion in 2006 -- three times the increase of the U.S. residential loan production market, which tripled from $1.0 trillion in 2000 to $2.9 trillion in 2006. 26 percent of Countywide loans were for California properties.

The company sold an ever-increasing number of loans in an effort to gain a 30 percent market share of loan originations and then sell its loans on the secondary market, as mortgage-backed securities or pools of whole loans. Countrywides securities trading volume increased from $647 billion in 2000 to $3.8 trillion in 2006.

Countrywide routinely sold loans based upon a borrowers stated income and without verifying the information, Brown's suit alleges. Loan officers memorized scripts that marketed low payments by focusing on the potential customers dissatisfaction, saying, for example, Which would you rather have, a long-term fixed payment, or a short-term one that may allow you to realize several hundred dollars a month in savings? The loan officer did not state that the payment on this new loan would exceed the payment on the current loan.

Countrywide paid greater compensation to brokers for loans with a higher interest rates, as well as prepayment penalties, because it could sell those loans for higher prices on the secondary market. Countrywide also paid rebates to brokers who originated loans with prepayment penalties, adjustable rates and high margins.

Countrywide operated an extensive telemarketing operation in which it touted its expertise and claimed to find the best financial options for customers. Customer Service representatives at Countrywide call centers were required to complete calls within three minutes, often processing sixty-five to eight-five calls per day. Employees who did not meet quotas were terminated.

The lawsuit charges that the companys deceptive marketing practices, designed to sell costly loans while hiding or misrepresenting the terms and dangers, included:

• Encouraging borrowers to refinance or obtain financing with complicated mortgage instruments like hybrid adjustable rate mortgages or payment option adjustable mortgages

• Marketing complex loan products by emphasizing a very low teaser rate while misrepresenting the steep monthly payments, increased interest rates and risk of negative amortization

• Dramatically easing underwriting standards to qualify more people for loans

• Using low or no-documentation loans which allowed no verification of stated income

• Hiding total monthly payment obligations by selling homeowners a second mortgage in the form of a home equity line of credit

• Making borrowers sign a large stack of documents without provider time to read the paperwork

• Misrepresenting or hiding the fact that loans had prepayment penalties

As the secondary markets appetite for loans increased, Countrywide further relaxed its standards to finance borrowers with ever-decreasing credit scores. Countrywide employees routinely overrode the companys computerized underwriting system, known as CLUES, which issued loan analysis reports recommending or discouraging loans based on factors such as a consumers credit rating.

As the pressure to produce loans increased, Countrywide set up an entire department in Plano, Texas, at the direction of Mozilo and Sambol, where employees could submit requests for underwriting exceptions. In 2006, 15,000 to 20,000 loans a month were processed through this exception process.

Countrywides deceptive sales practices resulted in a large number of loans ending in default and foreclosure, Brown said. According to Countrywides February 2008 records, a staggering 27 percent of its subprime mortgages were delinquent. Overall, approximately 20,000 Californians lost their homes to foreclosure in May 2008 and 72,000 California homes were in default, roughly 1 out of 183 homes.

Despite receiving numerous complaints from borrowers claiming that they did not understand their loan terms, Countrywide ignored loan officers deceptive practices and loose underwriting standards. Countrywide also pushed its borrowers to serially refinance, repeatedly urging borrowers to obtain home loans to pay off their current debt.

Todays lawsuit, filed this morning in Los Angeles Superior Court, redacts confidential information Countrywide provided during the attorney generals investigation. The attorney general is seeking the companys consent to file an amended complaint that removes the redactions.

During the course of its investigation into Countrywide, state investigators reviewed hundreds of thousands of documents and interviewed scores of witnesses including consumers and former employees.

Consumers who believe they have been victimized by Countrywide Consumers should file a complaint by contact the Attorney Generals Public Inquiry Unit in writing at Attorney General's Office California Department of Justice Attn: Public Inquiry Unit P.O. Box 944255, Sacramento, California or through an online complaint form.

Madigan's suit says that Countrywide knowingly put people in unaffordable loans by falsifying their income. Madigan's suit not only seeks restitution from Countrywide, but also seeks damages from Mozilo.

"Countrywide's unfair lending practices have harmed tens of thousands of borrowers who've been placed in unaffordable loans and, as a result, our communities are now being de-stabilised by a skyrocketing number of home foreclosures," Madigan said.

Countrywide is a shell of its former self, but is in the process of being acquired by Bank of America. The lawsuits were filed on the same day that Countrywide stockholders were voting on the BOA sale.

Millions of consumers could collect repair costs from General Motors for engine damage caused by the coolant Dex-Cool following a hearing in California scheduled for late August.

Two class-action lawsuits are pending in California state court involving GM customers who claim Dex-Cool damaged engines, formed a brown sludge in the radiator and caused coolant leaks.

More than 30 GM cars and trucks built from 1995 to 2004 are involved.

The hearing to consider a settlement is scheduled for August 29 in the California Superior Court in Alameda to consider the suits which affect GM customers in 49 states. The only state not included, Missouri, has a hearing scheduled for September 5.

As many as 20 million GM customers could be covered by the settlement with GM owing up to $800 to current and former customers for repair cost reimbursements.

GM customers with Dex-Cool engine damage who are eligible for reimbursements have until October 27 to submit a claim.

The settle requires GM to pay up to $27 million in attorney fees and expenses.

The automaker would also be required to pay for the notice of the settlement, including all mailings and advertisements throughout the U.S.

GM claimed Dex-Cool would last five years or 150,000 miles, almost twice as long as conventional coolants. The automaker placed labels under the hoods of cars and trucks containing Dex-Cool warning consumers not to mix other coolants with Dex-Cool. GM added an advisory to its 1995 owner's manual advising consumers and service technicians to use Dex-Cool only.

The first lawsuit claiming Dex-Cool damaged engines and cooling systems was filed in April 2003. GM argued that customers neglected maintenance instructions for their vehicles and caused the problems with engine or cooling systems.

GM vehicles covered by the lawsuits are:

Buick: LeSabre, Park Avenue, Regal, Riviera, Century, Rendezvous, Regal, and Skylark Chevrolet Camaro, Impala, Lumina, Monte Carlo

Chevrolet: Camaro, Impala, Lumina, Malibu, Monte Carlo, Venture, Corsica, Beretta, Lumina APV

Oldsmobile: Alero, Cutlass (Supreme and Ciera), Silhouette, Bravada, Eighty-Eight, Intrigue, LSS, Ninety-Eight

Pontiac: Aztek, Grand Am, Grand Prix, Montana, Trans SportBonneville, Firebird, Grand Prix

GMC: Envoy, Jimmy, S15

Florida Attorney General Bill McCollum is warning senior citizens about scams involving reverse mortgages, a type of home equity loan frequently abused by con artists and scammers.

These loans are often popular options for senior citizens because they offer a cash source which can help meet unexpected medical expenses, supplement Social Security and more.

When our senior citizens are concerned about finances and are seeking a legitimate option for financial relief, they should not have to worry about predatory lenders or brokers trying to capitalize on their precarious position, said Attorney General McCollum. Consumers should take every precaution to avoid scams and situations which could leave them in even worse financial shape.

Reverse mortgages are a special type of home loan that allow homeowners who are 62 and older to borrow against their home equity without having to repay the money until the home is sold or the borrower passes away or moves out permanently.

When the home is sold, lenders recover their principal plus interest. The remaining value of the home goes to the homeowner or to his or her survivors.

Unfortunately, as the popularity of reverse mortgages grows, so does the potential for fraud. Predatory lenders, unscrupulous loan agents and dishonest brokers may target senior citizens who may be anxious about their financial security.

Deceptive practices and allegations of high-pressure sales tactics are being more frequently encountered as senior citizens are being taken advantage of under the guise of a helpful and legitimate reverse mortgage. Borrowers also run the risk of being steered into inappropriate loans and annuities by sales agents and insurance brokers who could be working together without disclosing that relationship to the borrower.

McCollum noted that reverse mortgages can serve a purpose when financed through legitimate lenders.

According to the U.S. Department of Housing and Urban Development (HUD), homeowners who take out a reverse mortgage can receive payments in a lump sum, on a monthly basis, or on an occasional basis as a line of credit. Homeowners whose circumstances change can restructure their payment options.

HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders. HUD does not recommend using an estate planning service or any service that charges a fee just for referring a borrower to a lender.

This information can be obtained by calling HUD at 1-800-569-4287.

More Scam Alerts ...

June 24, 2008
About 320,000 Jardine Cribs sold by Babies R Us stores are being recalled. The wooden crib slats and spindles can break, creating a gap, which can pose an entrapment and strangulation hazard to infants.

There have been 42 incidents of crib slats and spindles breaking. Four children became entrapped in the space created by a broken slat or spindle. Two of the children had abrasions and bruising.

Jardine wooden cribs in various styles and finishes, as listed below, are included in this recall.

The model number is printed on the inside of the bottom rail of the headboard or footboard.

The cribs were sold at KidsWorld, Geoffrey Stores, Toys'R'Us, and Babies'R'Us stores nationwide, and at babiesrus.com, from January 2002 through May 2008 for between $150 and $300, with one model, 0309K00 Mahogany Positano Lifetime Crib, which sold for $450. They were made in China and Vietnam.

Consumers should immediately stop using the recalled cribs and contact Jardine to receive a full credit toward the purchase of a new crib.

For additional information, contact Jardine at (800) 646-4106 between 8 a.m. and 4:30 p.m. ET Monday through Friday and between 9 a.m. and 1 p.m. ET Saturday, or visit the firm's Web site at www.jardinecribrecall.com

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

The engine timing chain used in the Saturn L-Series equipped with a 2.2 liter engine is under investigation again at the National Highway Traffic Safety Administration (NHTSA), and consumers tell ConsumerAffairs.com the problem may also affect some Saturn Vue models.

The safety agency previously recalled 20,500 Saturn vehicles because of a faulty timing chain. The Saturns involved in the first recall were manufactured November 2000 and February 2001.

At the time, NHTSA stated that "timing chain failure could result in engine stall while driving with no chance for a restart."

Now the Office of Defects Investigation (ODI) at the federal agency reports that "the timing chain assembly used in the recalled vehicles was also used in approximately 391,00 other model year 1999 through 2003 Saturn L-Series vehicles with 2.2 liter engines." The recalled vehicles, according to NHTSA have "experienced and elevated spike in timing chain failures."

General Motors and NHTSA have received 890 consumer complaints about timing chain failure in the Saturn L-Series. The automaker has repaired 2,932 vehicles under warranty because of timing chain failure.

Vue too?

Some consumers have told ConsumerAffairs.com of similar problems with their Saturn Vue SUVs.

Heather of Stratford, NY, said her Vue lost power while driving at highway speed in January 2007, leaving her, her three children under six and her mother shivering at the side of the road..

"I was told my timing chain went and completely destroyed my motor, since it was a zero tolerance engine," she said.

Erin of Garden Grove, Calif., said she had to purchase a new engine after her Vue's timing chain broke at 38,000 miles.

North Carolinians complain

The renewed NHTSA investigation was prompted in part by a complaint May 22 from the North Carolina Consumers Council (NCCC).

The group submitted a defect petition to safety regulators urging an expanded Saturn L-Series recall "to include all model year 1999 through 2003 Saturn L-Series vehicles with 2.2 liter engines." NCCC reported a continuing stream of consumer complaints about timing chain failures "in vehicles built outside the production range covered by the recall" previously ordered by NHTSA.

NCCC told the agency that the initial recall should should be modified to "include all vehicles built with the original timing chain part."

NHTSA has also received 51 new complaints from consumers experiencing a timing chain failure in the 1999 to 2003 Saturn L-Series.

As many as 412,000 Saturns manufactured between 1999 and 2002 could be affected by the investigation. They are the Saturn L-Series manufactured from 1999 to 2002, including the sedan, wagon, L200, L300, LS, LS300, LW300, LS1 and LS2.