Current Events in December 2008

The makers of a widely-advertised dietary supplement have agreed to pay $7 million to 33 states and to stop promoting their product as a cure for the common cold. It's the second big penalty for Airborne. In August, the company agreed to pay the Federal Trade Commission $30 million.

Airborne dramatically misrepresented its products as cold remedies without any scientific evidence to back up its claims, California Attorney General Edmund G. Brown Jr. said. Under this agreement, the company will stop advertisements that suggest that its products are a cure for the common cold.

Airborne began selling its products as a cold remedy on the Internet around July 2000 and on television in 2004. In its advertisements, Airborne featured people suffering from cold and flu symptoms and made unsupported statements suggesting its products were a cure for the common cold. These included:

• Airborne Cold Remedy
• A Miracle Cold Buster!
• Sick of Catching Colds?
• Take at the first sign of a cold symptom.

The company also requested that retailers sell Airborne products in the cold/cough aisle.

To substantiate their claims, Airborne relied upon studies that claimed the major ingredients in their products — Vitamin C, Vitamin E, Selenium, and Zinc — prevent colds. However, subsequent definitive studies found that these ingredients do not have any discernable effect to prevent colds. Despite the information, Airborne continued to market its products as cold remedies.

Investigators raised concerns about the levels of Vitamin A in Airborne products. In older formulations, Airborne contained 5,000 International Units of Vitamin A. If the product was taken as instructed, consumers would ingest up to 15,000 International Units of Vitamin A daily.

This amount of Vitamin A poses potential health risks to vulnerable populations, including children and pregnant women. During the negotiation process, Airborne reformulated its product to contain only 2,000 International Units of Vitamin A.

Under todays agreement with 33 states, Airborne Inc. agreed:

• Not to make any claim concerning the health benefit, performance, efficacy or safety of its dietary supplements.
• Not to make any claims that imply that Airborne can diagnose, mitigate, prevent, treat, or cure colds, coughs, the flu, an upper respiratory infection or allergies.
• Not to require, demand, or otherwise influence where a retailer places Airborne, Inc. products, such as in the cold and cough aisle.
• Not to market any product that contains directions for use that would, if followed, result in an individual ingesting 15,000 International Units of Vitamin A per day.
• Pay a total of $7 million to the states.

Todays settlement covers all Airborne products including:

• Airborne- Original
• Airborne- Pink Grapefruit
• Airborne- Lemon Lime
• Airborne- Nighttime
• Airborne- Jr. On-The-Go
• Airborne- Seasonal Relief
• Airborne- Sore Throat Gummi Lozenges
• Airborne- Soothing Throat Gummi Lozenges
• Airborne- Power Pixies

The states involved in todays settlement include Alaska, Arkansas, Connecticut, Delaware, The District of Columbia, Florida, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Washington, and Wisconsin.

Lawyers from The Ohio State University Moritz College of Law filed the lawsuit in September, 2007 against Campus Dimensions Inc., a marketing and advertising firm; and OSU La Bamba Inc., a restaurant chain. The suit, filed in Franklin County, charged the companies with violating Ohio's Consumer Sales Practices Act.

Faculty and third-year law students in the Civil Law Practicum at Moritz had been monitoring credit card solicitation practices in the Columbus university area for more than a year.

According to the suit against La Bamba and Campus Dimensions, a credit card marketing event was held at the La Bamba restaurant, 1956 North High Street, in Columbus. Fliers for the event were posted around the OSU campus advertising a "Free Sandwich and Drink" for OSU students.

The original complaint stated violations occurred because the promotional fliers for the event advertised free burritos but did not disclose the offer's requirement that students apply for a credit card.

The settlement states that in the future, the companies will not participate in any credit card marketing plan which includes the violations alleged in the original suit. Those violations include:

• Failing to clearly state the conditions of an offer

• Using bait advertising

• Using "free" without clearly setting forth all terms and obligations of the offer

• Notifying prospective consumers about a prize or something of value without disclosing any and all conditions necessary to get it

The court also ordered La Bamba and Campus Dimensions to disgorge their profits from the marketing event, and to pay the Attorney General's Office money to be distributed to a nonprofit organization to promote the financial literacy of college students to improve their understanding and use of credit cards.

More Scam Alerts ...

If you're browsing the Internet with Microsoft's Internet Explorer, you could be vulnerable to hackers. That's the warning from computer experts, who say the browser has a security flaw that allows criminals to take control of consumers' computers and steal passwords.

Until Microsoft fixes the problem, experts suggest using another browser.

The technology security firm Trend Micro said its engineers detected a malicious JavaScript called JS_DLOAD.MD on several Web sites that exploits a zero-day vulnerability in Internet Explorer 7 through a heap spray on SDHTML.

After a successful exploit, it triggers a series of redirections to multiple URLs, then finally connects to one of several different domains.

"Unfortunately, since Microsoft's security updates failed to provide protection against this vulnerability, users of Internet Explorer are at risk even while surfing the Web on fully patched Windows XP and Windows 2003 systems," Trend Micro said in an advisory.

Microsoft says seven versions of Internet Explorer, which is used by most of the world's computers, are vulnerable to this security flaw. Microsoft is now at work trying to find a security patch.

"Microsoft is continuing its investigation of public reports of attacks against a new vulnerability in Internet Explorer," the company said.

Security experts say those still using Internet Explorer should be very careful about which Web sites they visit, since compromised Web sites can download the Trojan. They say the rule about never clicking on a link in a spam email is especially important to follow in this case, since hackers may be using spam to direct victims to compromised sites.

Once a hacker gains access to your computer, the keylogger software can capture your key strokes, stealing user names and passwords to your bank and other secure online accounts.

December 15, 2008
Cooper Tire is recalling Cooper CS4 Touring (VR) tires, size 215/55R17, produced between September 7 and October 11, 2008.

The tires may have been cured for an inadequate amount of time. This condition can lead to tread separation, possibly resulting in loss of vehicle control and a crash.

Cooper Tire will notify owners and replace, mount, and balance any defective tires free of charge. Dealers will examine suspect tires to see if they fall in the recall population. The recall is expected to begin on or about December 18, 2008.

Owners may contact Cooper Tire Consumer Relations toll-free at 1-800-854-6288.

Consumers may contact the National Highway Traffic Safety Administration (NHTSA) at 1-888-327-4236 (TTY: 1-800-424-9153) or at www.safercar.gov.

The latest cataclysm to rock Wall Street is the news that prominent financier Bernard Madoff has been arrested for running what he allegedly called "a giant Ponzi scheme." Losses to investors may run as high as $50 billion, the Securities and Exchange Commission (SEC) charged in a civil complaint.

It's potentially the largest such schemes ever uncovered -- nearly five times larger than the fraud that drove WorldCom into bankruptcy in 2002.

Madoff, a former chairman of the Nasdaq Stock Market, allegedly deceived wealthy investors who thought they were reliably earning 2% or more per month on their money even when financial markets were performing poorly.

Madoff, 70, for decades has headed Bernard L. Madoff Investment Securities LLC, a Wall Street firm that "makes a market" in securities, meaning that it puts buyers and sellers of privately-traded equities together. That firm's operations were separate from the money management services Madoff provided for high-net-worth individuals, many of whom now fear they have been wiped out.

FBI agents arrested Madoff yesterday, acting on a criminal complaint that alleged Madoff had used funds paid in by new investors to pay existing investors what they thought were earnings on their investments.

Madoff told agents who went to his apartment to arrest him that there was "no innocent explanation" for his activities, The Wall Street Journal reported. Madoff told the agents he was "broke" and had decided his scheme "could not go on" and said he expected to go to jail, the newspaper reported.

Madoff reportedly broke the news to his sons earlier this week, telling them he had "absolutely nothing" and "it's all just one big lie."

Individuals who had entrusted their wealth to Madoff were in shock. "This is going to kill so many people," said a current investor quoted by the Journal. "It's absolutely awful."

A New Jersey man said he was "in a state of panic." He said his family had about $1 million invested in Madoff's firm. His 86-year-old mother-in-law depended on the fund for her living expenses, he said.

The securities fraud charge carries a maximum penalty of 20 years in prison and a maximum fine of $5,000,000, according to Lev Dassin, Acting U.S. Attorney for the Southern District of New York.

In yet another sign of a collapse in consumer spending, KB Toys Inc., a staple of shopping malls coast to coast, says it's bankrupt again and will close all its stores.

"The liquidity crisis is directly attributable to a sudden and sharp decline in consumer sales, due to macro-economic forces," the company said.

The company previously reported that same store sales took a dramatic 20 percent decline in the critical early October to early December sales period.

The decision means that the nearly 460 KB Toys stores will be running liquidation sales in the closing days of the holiday shopping season, perhaps putting additional pressure on its competitors. Consumers should be able to find popular toys at steep discounts, until supplies run out.

Consumers with KB Toys gift certificates and gift cards should consider using them as quickly as possible. According to Consumer Reports, retail stores appear to still be honoring gift cards but the Web site did not accept a "test" purchase attempted Thursday evening, using a gift card.

A check Friday morning by ConsumerAffairs.com showed no information on the KB Toys Web site, or any indication that anything out of the ordinary was taking place. In fact, the site still promotes "no payments until April 2009."

KB Toys is not only one of the nation's largest retail chains, it's also one of the oldest. It began as a family owned business in 1922. It's been owned by Prentice Capital Management, Inc. since 2005, when it emerged from bankruptcy.

December 12, 2008
Britax is recalling certain Frontier child restraint systems because of a problem with the harness straps.

The recall affects Models E9L54E7 (Frontier Red Rock), E9L54H6 (Frontier Rushmore), E9L54H7 (Frontier Pink Sky), E9L54M6 (Frontier Canyon), and E9L5490 (Frontier Sahara), manufactured between April 1 and September 18, 2008.

If the harness straps are loosened using one strap at a time, the harness straps may become detached from the metal yoke located on the back of the child seat. Should the harness straps become detached, the child will not be properly restrained, possibly resulting in an increased risk of injury in the event of a vehicle crash.

Britax will mail the consumer notice and remedy kits to all registered owners free of charge. Owners who have not registered their seats with Britax must call Britax at 1-704-409-1700 and request a kit. The recall is expected to begin on or about January 7, 2009.

Information and instructions related to the campaign will be posted on the Britax website at www.britaxusa.com no later than December 17, 2008. Owners with other questions can contact Britax at 1-704-409-1700.

Consumers may contact the National Highway Traffic Safety Administration (NHTSA) at 1-888-327-4236 (TTY: 1-800-424-9153) or at www.safercar.gov.

Just about the time government statistics found that American families' net worth had plunged $2.8 trillion, a group of economists predicted that the current recession may turn out to be the longest and most painful downturn since the Great Depression.

The decrease in net worth during this year's third quarter was fueled largely by plunging real estate values. The U.S. Federal Reserve reported that real assets lost $646.9 billion as home values plummeted in a wave of foreclosures. Nationwide, the average price of a single family home is now back to what it was in 2004.

And look out — the fourth quarter is likely to be even worse, the Fed said. Job layoffs increased sharply in October following the sudden Wall Street credit crises in mid September. So far this year, nearly two million U.S. jobs have disappeared.

The findings coincided with the release of the Wall Street Journal's latest economic-forecasting survey, which found economists expect the downturn to conclude in June 2009, marking an 18-month duration, the longest postwar period of decline.

The economists on average said the unemployment rate will peak at 8.4% in response to this recession, as pain in the labor market extends into 2010.

"For the household sector, this will be the worst event we've had in the post-World War II period," said Bruce Kasman of J.P. Morgan Chase & Co.

But at least the economists surveyed by the Journal said the situation could be worse.

"The downturn would be deeper still, in our view, were it not for an ultra-aggressive combination of monetary and fiscal stimulus that will soon move into high gear," Morgan Stanley economists Richard Berner and David Greenlaw said in a research note. "Authorities are pulling out all the stops: Quantitative easing by the Fed and the largest-ever fiscal stimulus package likely will promote stability in the economy late in 2009 and a moderate recovery in 2010."

On the employment front, the situation is still deteriorating. The U.S. Labor Department reported today that the number of Americans filing for first time unemployment benefits surged to 573,000. That's a 26-year high and the number of workers now receiving benefits is at its highest level since 1982.

Approximately 38 percent of adults in the United States and nearly 12 percent of U.S. children aged 17 years and under use some form of complementary and alternative medicine, according to a new nationwide government survey.

This survey marks the first time questions were included on children's use of CAM, which is a group of diverse medical and health care systems, practices, and products such as herbal supplements, meditation, chiropractic, and acupuncture that are not generally considered to be part of conventional medicine.

The survey, conducted as part of the 2007 National Health Interview Survey, included questions on 36 types of CAM therapies commonly used in the United States — 10 types of provider-based therapies, such as acupuncture and chiropractic, and 26 other therapies that do not require a provider, such as herbal supplements and meditation.

"The 2007 NHIS provides the most current, comprehensive, and reliable source of information on Americans' use of CAM," said Josephine P. Briggs, M.D., director of the National Center for Complementary and Alternative Medicine.

"These statistics confirm that CAM practices are a frequently used component of Americans' health care regimens, and reinforce the need for rigorous research to study the safety and effectiveness of these therapies. The data also point out the need for patients and health care providers to openly discuss CAM use to ensure safe and coordinated care," she added.

CAM use among adults

Comparison of the data from the 2002 and 2007 surveys suggests that overall use of CAM among adults has remained relatively steady — 36 percent in 2002 and 38 percent in 2007. However, there has been substantial variation in the use of some specific CAM therapies, such as deep breathing, meditation, massage therapy, and yoga, which all showed significant increases.

The most commonly used CAM therapies among U.S. adults were:

• Nonvitamin, nonmineral, natural products (17.7 percent) Most common: fish oil/omega 3/DHA, glucosamine, echinacea, flaxseed oil or pills, and ginseng

• Deep breathing exercises (12.7 percent)

• Meditation (9.4 percent)

• Chiropractic or osteopathic manipulation (8.6 percent)

• Massage (8.3 percent)

• Yoga (6.1 percent).

Adults used CAM most often to treat pain including back pain or problems, neck pain or problems, joint pain or stiffness/other joint condition, arthritis, and other musculoskeletal conditions. Adult use of CAM therapies for head or chest colds showed a marked decrease from 2002 to 2007 (9.5 percent in 2002 to 2.0 percent in 2007).

Consistent with results from the 2002 data, in 2007 CAM use among adults was greater among:

• Women (42.8 percent, compared to men 33.5 percent)

• Those aged 30-69 (30-39 years: 39.6 percent, 40-49 years: 40.1 percent, 50-59 years: 44.1 percent, 60-69 years: 41.0 percent)

• Those with higher levels of education (Masters, doctorate or professional: 55.4 percent)

• Those who were not poor (poor: 28.9 percent, near poor: 30.9 percent, not poor: 43.3 percent)

• Those living in the West (44.6 percent)

• Those who have quit smoking (48.1 percent)

CAM use among children

Overall, CAM use among children is nearly 12 percent, or about 1 in 9 children. Children are five times more likely to use CAM if a parent or other relative uses CAM. Other characteristics of adult and child CAM users are similar — factors such as socioeconomic status, geographic region, the number of health conditions, the number of doctor visits in the last 12 months, and delaying or not receiving conventional care because of cost are all associated with CAM use.

Among children who used CAM in the past 12 months, CAM therapies were used most often for back or neck pain, head or chest colds, anxiety or stress, other musculoskeletal problems, and Attention Deficit/Hyperactivity Disorder (ADD/ADHD).

The most commonly used CAM therapies among children were:

• Nonvitamin, nonmineral, natural products (3.9 percent) Most common: echinacea, fish oil/omega 3/DHA, combination herb pill, flaxseed oil or pills, and prebiotics or probiotics

• Chiropractic or osteopathic manipulation (2.8 percent)

• Deep breathing exercises (2.2 percent)

• Yoga (2.1 percent).

"The survey results provide information on trends and a rich set of data for investigating who in America is using CAM, the practices they use, and why," said Richard L. Nahin, Ph.D., MPH, acting director of NCCAM's Division of Extramural Research and co-author of the National Health Statistics Report. "Future analyses of these data may help explain some of the observed variation in the use of individual CAM therapies and provide greater insights into CAM use patterns among Americans."

At the request of the Federal Trade Commission, a U.S. district court has issued a temporary halt to a massive scareware scheme, which falsely claimed that scans had detected viruses, spyware, and illegal pornography on consumers computers.

According to the FTC, the scheme has tricked more than one million consumers into buying computer security products such as WinFixer, WinAntivirus, DriveCleaner, ErrorSafe, and XP Antivirus. The court also froze the assets of those responsible for the scheme, to preserve the possibility of providing consumers with monetary redress.

According to the FTCs complaint, the defendants used an elaborate ruse that duped Internet advertising networks and popular Web sites into carrying their advertisements. The defendants falsely claimed that they were placing Internet advertisements on behalf of legitimate companies and organizations. But due to hidden programming code that the defendants inserted into the advertisements, consumers who visited Web sites where these ads were placed did not receive them.

Instead, consumers received exploitive advertisements that took them to one of the defendants Web sites. These sites would then claim to scan the consumers computers for security and privacy issues. The scans would find a host of purported problems with the consumers computers and urge them to buy the defendants computer security products for $39.95 or more. However, the scans were entirely false.

According to the complaint, the two companies charged in the case Innovative Marketing, Inc. and ByteHosting Internet Services, LLC operate using a variety of aliases and maintain offices in various countries. Innovative Marketing is a company incorporated in Belize that maintains offices in Kiev, Ukraine. ByteHosting Internet Services is based in Cincinnati, Ohio.

The complaint alleges that these two companies, along with individuals Daniel Sundin, Sam Jain, Marc DSouza, Kristy Ross, and James Reno, violated the FTC Act by misrepresenting that they conducted scans of consumers computers and detected a variety of security or privacy issues, including viruses, spyware, system errors, and pornography. The complaint also names a sixth individual, Maurice DSouza, as a relief defendant who received proceeds from the scheme.

On December 2, 2008 the FTC requested and received a temporary restraining order from the U.S. District Court for the District of Maryland. Under its terms, the defendants are barred from falsely representing that they have run any type of computer analysis, or that they have detected security or privacy problems on a consumers computer.

They also are barred from using domain names obtained with false or incomplete information, placing advertisements purportedly on behalf of a third party without that partys consent, or otherwise attempting to conceal their own identities. The order also mandates that companies hosting the defendants Web sites and providing domain-registration services take the necessary steps to keep consumers from accessing these Web sites.

The FTC seeks to permanently bar the defendants from engaging in scareware marketing. The FTC also asks the court to order the defendants to provide monetary redress to consumers or otherwise give up their ill-gotten gains.

As part of an ongoing effort to warn the public about the risks posed by scareware and other types of Internet fraud, the FTC has produced a new alert for consumers. To learn more, see the alert Free Security Scan Could Cost Time and Money .

More Scam Alerts ...

It's not only Congress and the American taxpayer coming to the aid of ailing U.S. automakers. A group of Midwest credit unions are pledging $10 billion in low-cost financing for the purchase of General Motors vehicles.

The plan is called Invest in America, according to a news release posted on the Michigan Credit Union League's Web site. The release said the credit union league is talking to Ford Motor Co. and Chrysler LLC about similar programs.

The league claims a membership of aboutg 12 million consumers. The program will be tested in the four states, possibly going nationwide early next year, the release said.

The program is effective immediately and will run through June 30. It offers eligible vehicles at a price discount to credit union members and their households. Members who buy cars under the program also are eligible to get an additional $250 bonus cash between now and Jan. 5.

"This new arrangement with Midwest credit unions creates a tremendous value for GM and for thousands of credit union members," said Mark LaNeve, GM vice president of vehicle sales, service and marketing. "We appreciate the credit unions' promotional support and are pleased to make this offer."

"Credit unions have a long history of helping hard-working Americans in troubled times," said Daniel Mica, CEO of the Credit Union National Association.

Credit union members can find details on the discounts at www.lovemycreditunion.org and obtain an authorization number to take to any GM dealership. The price discount applies to purchases of eligible new Buick, Cadillac, Hummer, Saab, Chevrolet, GMC, Saturn and Pontiac vehicles.

In Washington, Congress and the White House have tentatively agreed on a plan to pump $15 billion into the U.S. auto industry. An industry czar appointed by President Bush would oversee the companies' use of the funds.

The House has scheduled a test vote on the measure.

If you received a letter saying you'd won a big prize in the Acme Lottery, you might be more likely to ignore the letter, correctly thinking that it was a scam. But if you got a letter saying you'd won the Reader's Digest Lottery, you might be more likely to bite.

Scammers, it seems, have figured that out. More and more, they are using the names of well known and trusted companies in their fraudulent schemes, according to Kansas Attorney General Steve Six.

Six says consumers in central Kansas have received notifications of prizes accompanied by documents that appear to be checks. The consumer is asked to deposit the check in their bank account, then wire money using Western Union or MoneyGram back to the issuer of the check to pay "clearance or processing fees."

The consumer is directed to call a number from an area code in Quebec, Canada to "release winnings and validate [the] check" that was enclosed. The letter also contains a seal similar to the official seal for the United States Department of Justice, and claims it is "Approved by the Attorney General."

In reality, those rare legitimate sweepstakes winnings do not require advance payment of fees or taxes. Taxes are collected by government agencies, not by a company that provides the sweepstakes winnings.

Many scam artists will issue a check to a consumer, then ask the recipient to deposit the check, and before the check has time to clear the issuing bank request the consumer wire money from their account back the scam artist. These requests are usually accompanied with a sense of urgency, that the prize must be claimed by a certain date, and waiting for the check to clear the issuing bank would allow the prize to expire.

A similar type of scam includes information that the consumer has won a foreign lottery, but that certain fees must be paid before the check can be issued. Six says U.S. consumers are ineligible for foreign lottery winnings.

December 10, 2008
Dill Air Control Products is recalling snap-in rubber tire valve stems sold between November 2006 and July 2007.

If you purchased tires between November 2006 and July 2007, and if the valve stems in your wheel contain the unique Dill cap (shown below), you should have the valve stems inspected for cracks in the rubber.

These valves may lack the required additive to protect the rubber against deterioration from ozone exposure. As a result, affected valve stems, when subject to high levels of ozone, may weather and crack earlier than normal for this product. Over time, such a crack could progress to the point that it leaks air resulting in a loss of tire pressure. Loss of tire pressure can result in a flat tire and/or loss of vehicle control, which could cause a crash without warning.

The recall is for models APC TR413, TR414, and TR418.

Tire dealers will inspect your Dill ACP valve stems and replace them if cracked at no charge to the consumer. The tire dealer will then file a claim with Dill.

For more information, see www.tirevalverecall.net or call 1-888-364-2982.

Consumers may contact the National Highway Traffic Safety Administration (NHTSA) at 1-888-327-4236 (TTY: 1-800-424-9153) or at www.safercar.gov.

Mortgage interest rates are down to their lowest level in nearly a year, likely to get lower, but just as likely to reverse course at any time.

However, with a rate lock, you could freeze out higher rates or take a gamble on a lower, even more affordable rate.

Here's the scoop.

Just a week after the Federal Reserve unveiled a $600 billion plan to reduce mortgage interest rates to 4.5 percent for home buyers, the federal gambit appeared to be paying off.

Fixed interest rates (FRMs) on 30-year conforming mortgages dropped nearly a half percentage point to 5.53 percent by Dec. 4, according to Freddie Mac's weekly survey. The 30-year FRM has not been lower since Jan. 24, 2008, when it was 5.48 percent. The FRM rate last week was also down more than a full percentage point from the 2008 high of 6.63 percent in July.

Even if the Fed's effort peters out, squeezed by an economy that appears to be resisting jump starts, rates could get lower because the U.S. Treasury Department is weighing in with its own efforts to push rates even lower than 4.5 percent. Unlike the Fed's program, which targets only homebuyers, the Treasury's program would include lower interest rates for homeowners who want to refinance.

Still more downward pressure on rates comes from President-elect Barack Obama who has repeated his desire to see more of the existing $700 billion bailout and other funds funneled directly to struggling homeowners.

Lower interest rates can make housing or a refinance more affordable.

A 6 percent interest rate on a $250,000 mortgage costs about $1,500 month in principal and interest; about $1,400 at 5.5 percent and $1,270 at 4.5 percent.

When rates get as low as you need them to go, they could just as quickly reverse course and leave you twisting in the wind -- unless you've got a contracted mortgage rate lock in your pocket.

Rate locks avoid higher costs

A written and signed mortgage rate lock contract can be your ticket to ride.

Rate locks are typically designed to protect homebuyers from rising rates, but those refinancing for lower rates can also benefit.

A traditional mortgage rate lock is a lender's guarantee that your mortgage will come with a specific interest rate, points, other costs and terms.

A rate lock's terms also include a specified period for the lock. The benefits of the lock are only good for as long as the term of the rate lock.

If you fail to complete your home purchase or don't refinance before the clock runs out, and interest rates rise, you could have to pay any higher costs.

Higher costs can include a higher mortgage rate, more points, and even more up front cash down. More cash down may be necessary to keep the actual amount financed low enough so your monthly payments remain in line with what you can afford or what the lender will allow.

Likewise, if you are refinancing to stave off foreclosure and miss the deadline, you could lose your home if the lender won't approve you for a higher rate.

In a refinance where your home is not at stake, you've got some wiggle room. You can take out less cash, wait out the market or otherwise cope.

Locks can also push costs down

You can also benefit from a rate lock when interest rates are falling.

If interest rates fall during the lock period, you can't take advantage of the lower rate unless you rewrite the lock at additional cost or initially include a "float down" provision in the original lock.

The "float down" option grants you a lower rate if rates fall within a given window of time. Again, unless otherwise contracted, float down rate locks stick you with the higher rate if rates rise during the lock period.

You may be able to negotiate for a float down that also has a specific rate lock so you don't pay a higher rate, but you'll pay through the nose for the lock because the lender is taking on greater risk.

Solid contract necessary to lock or float

Myriad rate lock variations underscore the importance of being sure the language of the lock contract gives you the specific options you need for a sufficient term.

Getting it in all writing removes the potential of trying to enforce a verbal agreement should a dispute arise.

The contract should lock in the interest rate, points and other costs, whenever possible. The agreement should include your name; the lock's effective date; lock cost; what terms are locked; the lock's expiration date and time; and any post-lock options.

Lock as soon as you see the desired rate or "on application" -- when you first apply for the mortgage -- so that your rate is locked as you spend time getting the application approved. That's particularly important if you barely qualify at today's rates, and an increase would make buying unaffordable.

Of course, you can choose to set the lock "on approval," especially in markets where loan application checks are prolonged due to heavy demand for housing or in markets like today's market of heavily scrutinized applications.

In any event, the lock period should be long enough to allow for settlement, contingencies, and other potential delays. Locks average 30 days, but can range from 15 to 60 days. Obviously, the longer the better, but the longer the more expensive the lock can be.

Devil in the details

• Locks can cost money. Shop around for both the terms of the lock contract and its cost, which varies from lender to lender. Some lenders want up-front lock fees. Others take them at settlement. There are non-refundable fees, flat fees, and fees based on a percentage of the mortgage, and a host of variations.

• Before settling on a lock-in period, determine the average time for loan processing in your market. Ask your lender to estimate the time necessary to process your loan. Verify the information with other realty and mortgage professionals. If the loan doesn't close on time, lenders can extend your lock for free or charge more.

• Once you lock-in a rate, if you haven't already, quickly submit the application and other required documents. You should have previously checked your credit report, prepared income, job, debt, asset and other documents to back up your application information. You should also stay in close contact with the lender to be sure the application is progressing quickly.

• Verify the rate lock is from the bank, mortgage lender, credit union or other entity actually writing the loan, not a broker, loan officer or go between. A broker can obtain a rate lock from the lender, but he or she can't actually write the lock.

• If you have a floater, keep an eye on the market to determine when to grab a rate.

• The Federal Reserve's"A Consumer's Guide To Mortgage Lock Ins" offers extensive rate lock information and your local or state mortgage regulatory agency may offer specific rules lenders must follow when granting rate locks.

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Broderick Perkins parlayed 30 years of old-school journalism into a digital real estate news service, the DeadlineNews Group, offering "News that really hits home!"™. The Silicon Valley bootstrap includes the Web site DeadlineNews.Com and the back shop Deadline Newsroom. Contact him at news@deadlinenews.com.

December 9, 2008
Graco is recalling nearly 44,000 Comfortsport convertible car seats, in the Frazier Fashion line.

These seats were equipped with a large sized, supplemental pad or "body pillow" that partially obscures the child airbag warning label which is on the seat pad, a violation of federal safety standards. Serious injury could occur to the child should the seat be improperly placed in the vehicle.

Owners may contact Graco at 1-800-345-4109 or by e-mail at consumerservices@gracobaby.com.

The recalled seats were manufactured from November 1, 2006 through October 8, 2007.

An operation that lured consumers with promises that they could earn big money as trained and certified "mystery shoppers " has agreed to pay $850,000 to settle charges of deceptive marketing and contempt.

Mystery shoppers are paid to shop or dine out and then provide reports about the experience. In March 2007, the Federal Trade Commission (FTC) Feds Charge Mystery Shopping Promoters — the three companies Mystery Shop Link, LLC; Tangent Group, LLC; Harp Marketing Services, Inc.; and five individuals — with violating the FTC Act in connection with a nationwide mystery shopping employment scam.

According to the FTC, the defendants claimed that MysteryShopLink.com was hiring mystery shoppers in local areas nationwide. The company ran help wanted ads in newspapers, and on radio and TV.

Consumers who responded to the ads reached the defendants' telemarketers, who represented that MysteryShopLink.com had large numbers of available jobs and not enough shoppers to fill them. In exchange for a $99 fee, consumers were promised enough work to earn a steady full-time or part-time income as mystery shoppers.

Instead, consumers received a worthless certification and access to postings for mystery shopping jobs controlled by other companies. Consumers had to apply for these mostly low-paying jobs, and had no advantage over anyone else who found the postings elsewhere on the Internet for free. Most consumers got no jobs and earned no money.

The FTC also charged five of the eight defendants — Mystery Shop Link, LLC, Tangent Group, LLC, and Robin Larry Murphy, Andrew Holman, and Kenneth Johnson — with contempt. That charge contended that Murphy violated the terms of a consent judgment in a prior telemarketing fraud case involving false promises of government jobs. The 1997 consent judgment barred Murphy from making material misrepresentations of fact while telemarketing, and required him to post a $100,000 bond.

In addition to seeking coempt sanctions against Murphy, the FTC also claimed that Mystery Shop Link, LLC, Tangent Group, LLC, Andrew Holman, and Kenneth Johnson were in contempt of the previous order because they all participated in running MysteryShopLink.com despite knowing about the prior consent judgment against Murphy.

The settlements were reached with two separate groups of defendants. The first includes defendants Mystery Shop Link, LLC, Tangent Group, LLC, and their principals, Robin Larry Murphy, Andrew Holman, and Kenneth Johnson. It resolves both the new case filed in 2007 and the contempt action.

Under the settlement, the FTC will collect the proceeds of Murphy's $100,000 bond. The settlement also includes a $17.8 million judgment, which is suspended based on the defendants' inability to pay. The settlement prohibits all the defendants from making misrepresentations in the future. As a repeat offender, Murphy is permanently banned from telemarketing, except for non-deceptive sales to businesses of telecommunications equipment.

The second settlement includes defendants Harp Marketing Services, Inc., and its principals, Aiden Reddin and Marc Gurney. Harp Marketing was the primary outside telemarketing firm that handled consumer calls, and thus sales, for Mystery Shop Link.

This settlement requires Harp and its owners to pay $750,000 in redress and prohibits them from making misrepresentations in the future. The Harp settlement also includes a suspended judgment of $6.8 million, the total amount of Mystery Shop Link sales made by Harp's telemarketers.

Both settlements prohibit the defendants from collecting payments from Mystery Shop Link customers, and from transferring or benefiting from information about those customers. Both also contain record-keeping and reporting provisions to assist the FTC in monitoring the defendants' compliance.

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U.S. automakers, reeling from the credit crisis and sudden drop in sales, appears likely to get some help from the U.S. government to stave off bankruptcy. After initially declining to offer help to Detroit in its last two months on duty, the Bush Administration now appears willing to go along with a $15 billion bridge loan.

But as two days of hearings before the House and Senate made clear last week, Washington will not be writing a check without attaching some hefty strings. As a result, cars produced by a "bailed out" Detroit are likely to be a different breed than what's being offered today.

The incoming Obama administration supports federal help for the automakers, but has made clear that it expects a major restructuring in the way the companies do business and in the kinds of cars they made and sell.

"What we can't give is a blank check for an industry that isn't prepared to reform itself, to rationalize itself, and to retool for the markets of today and tomorrow," said David Axelrod, who as Obama's senior advisor has the president-elect's ear.

Obama, appearing on NBC's Meet The Press Sunday, suggested some auto executives should lose their jobs and also said government aid to the automakers would be contingent of big changes in Detroit.

"They're going to have to restructure," the president-elect said. "If they expect taxpayers to help in that adjustment process, they can't keep putting off the kinds of changes that they, frankly, should have made 20 or 30 years ago."

Part of that restructuring could potentially turn the "big three" automakers into the big two. Some members of Congress — in particular Sen. Robert Bennett (R-UT) and Sen. Bob Corker (R-TN) pressed executives for GM and Chrysler to renew merger talks.

"Our country can't really deal with three separate automakers," Corker told the executives.

The Chrysler brand might survive a merger with GM, but it's likely many current models would not. Congress appears likely to press the carmakers to get rid of the least-profitable lines.

There will be changes to GM as well. In its recovery plan delivered to Congress last week, the nation's most cash-strapped automaker said it would reduce name plates and slash dealerships by 1,750 within three years. It said it would concentrate on core brands like Chevrolet, Cadillac, Buick and GMC, and might spin off or close down its Saab, Hummer, Saturn and Pontiac brands.

One plan being floated in Congress late last week included the creation of a special government "oversight board" made up of five U.S. cabinet secretaries and the administrator of the Environmental Protection Agency (EPA). The board would be led by a "car czar" appointed by the president. Presumably, this board could have a large saw in the kinds of products Detroit produces.

With Democrats controlling both the White House and Congress next year, an automotive bailout might also require U.S. carmakers to turn out fewer trucks and SUVs and more fuel efficient vehicles. And U.S. carmakers might not balk at that.

James Malackowski, president and CEO of Ocean Tomo LLC, a Chicago bank, says Detroit automakers are already well ahead of their international counterparts in that regard. Writing in the Detroit News, Malackowski says Ford and GM hold about one-third of all "green technology" patents.

So, even with gasoline prices at 2005 levels, carmakers are still on course to phase out gas guzzlers and produce vehicles that will dramatically reduce U.S. energy demand in the future.

In fact, Malackowski argues that allowing the car makers to fail could serve as a significant setback for future development of green technologies. Even though polls show Americans are overwhelmingly opposed to spending more tax dollars to "bail out" another industry, Congress — led by the Ohio and Michigan delegations — appears determined not to let that happen.

"I think it's a good investment because it's not taxpayer money for the automobile industry, it's taxpayer money for America, it's for the working families," said Rep. Charles Wilson (D-OH).

President-elect Barack Obama pledged to expand Americans' access to broadband Internet as part of a massive new public works program designed to generate jobs and improve the economy, he said in his weekly video/radio address.

"As we renew our schools and highways, we'll also renew our information superhighway," Obama said. "It is unacceptable that the United States ranks 15th in the world in broadband adoption. Here, in the country that invented the Internet, every child should have the chance to get online, and they'll get that chance when I'm President — because that's how we'll strengthen America's competitiveness in the world."

Obama said that broadband investment could also help modernize health care systems, through sharing and storing medical information and health records online, enabling doctors to offer care more efficiently.

"We will make sure that every doctor's office and hospital in this country is using cutting edge technology and electronic medical records so that we can cut red tape, prevent medical mistakes, and help save billions of dollars each year," Obama said.

Media action groups such as Free Press commended Obama's proposals, but said more work needed to be done to bridge "the digital divide."

"In our 21st-century society, having a connection to a fast and affordable Internet is no longer a luxury — it's a public necessity," said Free Press' executive director Josh Silver. "Obama's broadband stimulus must deliver Americans the infrastructure they need for economic growth and social opportunity."

Advocates have been pushing broadband investment not only as an economic driver in its own right, but as a means to aiding other crises. App-Rising.com's Geoff Daily urged the Obama administration to pursue an aggressive strategy of broadband investment and expansion, especially for rural communities that lack high-speed Internet access.

"If we don't step up and do something big, we may not have a rural America in 10 or 20 years," Daily said. "If we take the initiative to wire them for the 21st century infrastructure, they can not only survive, they can thrive."

Many groups have been offering policy papers and plans for how best to implement a nationwide broadband investment program. Free Press' "2009 Media & Tech Priorities" plan emphasizes reform of the government agencies tasked to handle Internet issues, including the Federal Communications Commission (FCC) and the National Telecommunication & Information Administration (NTIA).

Free Press also recommended reforming the Universal Service Fund to subsidize broadband access in rural areas.

The Benton Foundation offered "A Broadband Action Plan for America" on December 1. The Foundation advocates implementing plans to get every American access to "affordable, robust broadband" by 2010, through tactics such as funding or co-funding state and local initiatives, better broadband data mapping, and opening unused wireless spectrum for use by communications companies to create new paths to Internet access.

"Unless our nation quickly answers this serious challenge, America will continue to export economic growth and good-paying 'knowledge worker' jobs overseas to its better-connected, lower-wage competitors," said foundation head Charles Benton. "Our citizens will continue to be denied the benefits of broadband already being enjoyed by citizens of other nations in job creation and economic development, in health care and education, in public safety and security, energy conservation and reduced greenhouse gas emissions, and more."

Obama did not specify the cost of the public works program, but various analysts' costs estimates place it from $400 to $700 billion, and possibly higher.

But broadband advocates such as Daily say plans such as his "Rural Fiber Fund" would enable expansion of broadband Internet access for a small fraction of the total cost.

"$30 billion should get the whole job done," Daily said. "But $10 billion is enough to be a game-changer and set the wheels in motion."

The price of laptops has come down a lot in the last few years, and with the advent of mini-notebooks (also known as netbooks) a notebook computer has never been more affordable. Unfortunately, many people who do not know a lot about computers still end up paying more than they need to for a laptop, or else pay good money for a notebook that will not satisfy their needs.

When purchasing a laptop there are a few things you should consider to make sure you get the optimal bang for your buck.

Know what your needs are

This might be the hardest part for some people, but it is also the most important. You need to know what youre going to be using the laptop for and if you find you cant answer the question, you probably shouldnt be getting a laptop at all. Do you need something portable, or will something more stationary do? Do you want to play games on it? Do you want to watch movies on it? Do you only want it for simple tasks like word processing or checking your email?

Answering these and other questions will help you make sure you get a laptop thats right for you, minimizing frustration down the road.

Focus on a form factor

Form factor is a fancy term for size, and it is a key component determining the usability and just as importantly, the price of a notebook. Laptops with large screens and heavy weights are considered desktop replacements. On the other extreme, laptops with moderate-sized screens and minimal weights are considered ultra-thin or thin and light. Then there are the netbooks, with small screens, light weights, and low prices, and also standard laptops, with moderate marks all around.

Based on your assessments of your needs, determine which form factor is right for you. This will narrow down your search and help you focus on picking the perfect fit within the size category.

Choose an operating system

The operating system, or OS, is the interface which greets you as you run your computer every day, and is also extremely important in determining both usability and price. There are three major OSs and each has its pros and cons. The most expensive is Mac OSX, the most recent version of which is called Leopard.

OSX has been praised for its intuitive interface and has many fans, but youll only find it on Apple notebooks and it is invariably more expensive than an equivalent machine with a different OS. On the other extreme is Linux, which is free, and you may have heard of the popular version called Ubuntu. Linux has a very simple interface but sometimes it can be hard to navigate if youre not savvy with Linux or computers in general.

Spanning the gap is Microsoft, makers of Windows XP and Windows Vista. Windows is the most common OS on the planet, and its usability as well as price falls somewhere in between OSX and Linux.

All of these OSs work and will run your laptop just fine, but determining which OS suits your style and capabilities (and budget) is important. If youre buying at a store, be sure to ask someone if you can try out a computer with each OS if youre not familiar with the differences.

Decide what hardware you really need

Now that youve got a form factor and your OS, its time to get into the nitty gritty of the laptop, which is the hardware. Hardware is a physical component that makes your computer run, such as the processor or the memory. Different hardware can result in vastly different computer performance, so its important to purchase hardware that will meet your needs.

If battery life is important, spring for the more expensive but more energy efficient processor. If graphical performance is important, make sure you have a dedicated graphics card and plenty of RAM. If youre planning on storing a lot of files, make sure you have a large enough hard drive.

Alternatively, if something isnt important to you, make sure youre not paying for hardware that isnt necessary to do the things youre going to be doing. For example, dont shell out for that Blu-ray drive if you only plan to own DVDs. Choosing the right hardware means youre only paying for the power that you specifically need, maximizing the cost effectiveness of your notebook.

Make sure youre not paying for software you dont want

Many laptops will come bundled with software packages, advertised at large discounts off their retail price. Sometimes this will be the perfect combination of software for you, but most of the time you end up paying for things you will either uninstall or simply forget about as they bog down your computer in the background. Take care to make sure youre not paying an extra couple hundred dollars for software that you never asked for.

Its also important to understand that much of the discounted software can be matched for free via open source solutions, as long as you are willing to take the time to download and install them yourself. One example is Open Office, which performs the same tasks as Microsoft Office but can be downloaded for free online. If you understand your own needs from the get-go, you wont be fooled by a salesman into buying a package you dont need.

Shop around, including online

Where you buy your laptop is important, and in many cases deals can be found online that are a better value than the deals at a retail store. Its important to look around in as many places as you can to make sure you get the best deal that matches your needs. If youre not comfortable buying from an unknown source online or are simply lost without a salesman to help you, try going to the store first and talking to someone. Once youre convinced which laptop is for you, return home and look at other sources.

Often there are online only deals for the brick and mortar store you were just shopping at, and you can find a better deal just buy going home and buying it there instead. Some stores also offer to match any competitors price, meaning that if you find a deal online but would prefer to deal with people you can see, you can still get your price. Shopping around makes sure youre not paying more for your laptop than you have to.

Get something upgradeable

Upgrading a laptop is a cheap and effective way to add years onto your laptops life. Initially laptops were nearly impossible to upgrade, but now many notebooks come with extra slots for additional RAM or convenient access to the hard drive, allowing you to replace it with a larger drive down the road. While certain components are still difficult to upgrade, changing just these components can convert a notebook from obsolete to something quite usable again.

If you plan on using your laptop for a long time, make sure you buy one that is convenient to upgrade and that you understand how to do it.

There is a lot that goes into a computer, and most people end up spending at least some time in front of their computer every day. And although prices have come down over the years, it is still an expensive investment. When buying a laptop, it is important to consider as many aspects as possible to ensure that you meet all your needs while still getting bang for your buck. If you dont you may end up frustrated trying to play games on a netbook, or wasting money when you idly surf the web on your top-of-the-line gaming notebook. Understanding your own needs and how they relate to the above categories will help you get just the laptop youre looking for.

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Daniel Shain reviews laptops for LaptopLogic.com, an established laptop resource with an extensive library of laptop reviews, news and articles for both beginners and experts.