Current Events in December 2008

And at least 20 percent of the toys tested by the Michigan-based Ecology Center contained lead — some with levels well about the 600 parts-per-million (ppm) federal recall standard used for lead paint.

Researchers at the non-profit Ecology Center tested the toys for such chemicals as lead, arsenic, and other harmful chemicals just in time for this year's holiday shopping season.

This is the second year in a row the center has tested toys for toxins that are associated with developmental and learning disabilities, reproductive problems, and cancer.

While these latest results may frighten parents — who haven't forgotten the millions of lead-tainted toys recalled last year — the tests actually show some signs of improvement.

"This is a good news, bad news story," the center's Jeff Gearhart told us today. "We did find 50 percent fewer toys (this year) with lead of over 600 ppm. Overall, we saw a reduction in the number of products of high concern.

"It's also good news that two-thirds of the products tested had lower or no detectable levels of chemicals," he added. "So we're trending in the right direction. But we're not ready to declare victory. There are still far too many toys out there with chemicals in them and this is still a significant issue."

Consider some of the center's findings:

• Lead is still a problem: Twenty-percent of the toys tested contained lead, including 54 products (3.5 percent) that exceeded the current 600 ppm recall threshold for lead-based paint. Disney's Hannah Montana "2 Hearts and HM graphic Necklace," for example, contained 406,510 ppm of lead. Lead level above 600 (ppm) will exceed the new legal limit set by the Consumer Product Safety Commission (CPSC), which take effect in February. That means some of the toys on the shelf this holiday season would be illegal to sell two months from now, the center said. Health experts say lead can cause irreversible developmental and nervous system problems. The American Academy of Pediatrics recommends 40 ppm of lead as the maximum allowed in children's products;

• China's not the only problem: The center's tests did not find a consistent link between the country where a toy was manufactured and the presence of toxic chemicals. Its tests revealed 21 percent of toys from China and 16 percent of toys from all other countries had detectable levels of lead. Seventeen toys made in the U.S. were tested and 35 percent of those had detectable levels of lead. Two of those toys had levels above 600 ppm. A US-made Halloween pumpkin pin contained 190,943 ppm of lead;

• Lead isn't the only chemical: A significant number of toys contained other chemicals, including cadmium, mercury, arsenic, and bromine. Forty-five (2.9 percent) products contained bromine at concentrations of 1,000 ppm or higher. "This indicates the likely use of brominated flame retardants — chemicals that may pose hazards to children's health," the center said. Tests also found arsenic at levels greater than 100 ppm in 22 (1.4 percent) toys; 289 (18.9 percent) toys contained detectable levels of arsenic. Cadmium was also detected in levels above 100ppm in 30 (1.9 percent) toys; 38 (2.4 percent) contained detectable levels of cadmium. And mercury was found in levels higher than 100 ppm in 14 (1 percent) toys; 62 (4.2%) contained detectable levels of mercury;

• Polyvinyl Chloride (PVC / Vinyl) in toys: Twenty-seven percent of the toys tested (excluding jewelry) were made with PVC. The center says PVC may contain additives, including phthalates, that may pose hazards;

• Jewelry Problems: Jewelry remains the most contaminated product category tested and tops the center's "worst" list. Children's jewelry is five-times more likely to contain lead above 600 ppm than other products, the center found. Fifteen percent of the jewelry tested (compared to 3 percent of other products) had lead levels above 600 ppm. "Overall, jewelry is twice as likely to contain detectable levels of lead as other products," the center said. "Numerous Hannah Montana brand jewelry items tested high for lead." The center now recommends that consumers avoid buying low cost children's jewelry.

Despite these grim findings, there is still some positive news for consumers.

The Center's tests, for example, found 62 percent (954) of the toys contained low levels of chemicals.

And 21 percent (324) of all products contained no chemicals of concern. Some of the center's "best toys" include the Autobot Classic Series: Red Alert and Hot Shot Transformers and Hasbro's Luke Skywalker & R2-D2 Star Wars figures.

"These products look and feel no different than other children's products on the shelf," the center said. "These findings show that manufacturers can and should make toys free of unnecessary toxic chemicals."

The Center used a portable X-Ray Fluorescence (XRF) analyzer to test the toys. This identifies the elemental composition of materials on or near the surface of the toys.

The Center's started testing toys last year in response to parents' overwhelming demand for information about toxic chemicals in toys.

Parents can now go to the center's Web site and find the test results on any of the toys tested.

"Our Web site is designed as a tool to get more information to parents who are looking at toys," said Gearhart, who spearheaded the project. "It's a way to give them a snapshot of what's in a product they're buying."

Besides educating parents, Gearhart said his organization also hopes to "fire up" consumers and get them interested in changing how these products are regulated.

"What consumers are finding out is that the regulatory structure now in place isn't adequate to assure that our products are safe."

"There is simply no place for toxic chemicals in children's toys," he added. Our hope is that by empowering consumers with this information, manufacturers and lawmakers will feel the pressure to start phasing out the most harmful substances immediately, and to change the nation's laws to protect children from highly toxic chemicals."

Some 10 million American households borrow money through payday loans each year, and payday lenders now have more storefronts than McDonald's and Starbucks combined. But those turned down by payday lenders may be better off than those who get a loan.

New research by Vanderbilt Law School Assistant Professor Paige Marta Skiba found that payday loan applicants who received the quick cash after their first application were significantly more likely to file for Chapter 13 bankruptcy than those whose initial application was denied.

The researchers found that first-time applicants who received a payday loan were almost twice as likely to file for bankruptcy within two years as those denied the first time. The interest from payday and pawn loans amounted to about 11 percent of the total liquid debt interest burden at the time of the bankruptcy filing.

"Our research finds that payday loans and their interest payments may be sufficient to tip the balance into bankruptcy for a population that is already severely financially stressed," said Skiba.

Skiba and her co-author, Jeremy Tobacman, looked at four years of data for the state of Texas from a prominent payday loan company. From 2000 to 2004, the company received more than a million applications. The average loan request was around $300. The median annual income on the applications was $20,000 with a median checking account balance of $66.

"Payday loans seem to be the straw that breaks the borrower's back because the loans are normally due every week or every other week, so other debts, like credit cards or mortgages tend to be ignored," said Skiba.

First-time borrowers tended to continue borrowing. The researchers found that first-time applicants who were approved applied for about five more loans within a year than rejected first-time applicants.

"Access to payday loan credit predicts roughly $2,300 of additional payday borrowing within two years," said Skiba. As for those who were denied their initial payday loan request, the researchers said their probability of taking out a pawn loan doubled."

Pulling up to the gasoline pump isn't nearly as painful as it once was. Fuel prices continued their downward trend this week, hitting a nationwide average price Friday of $1.773 a gallon for unleaded regular.

That's down from $2.365 30 days ago. One year ago this week motorists were paying $3.034 a gallon to fill up their vehicles.

Gasoline prices continue to fall, in part, because world oil prices continue their collapse. Crude oil dropped to its lowest level in almost four years Thursday, hitting $42 a barrel on the New York Mercantile Exchange. Analysts said they expected no upward movement in prices until world economies show some sign of improving.

Diesel fuel remains almost a dollar a gallon more expensive than regular gas, but at a national average $2.704 a gallon, is much less than the $4.845 a gallon diesel users paid on July 17, when prices peaked.

Once again the cheapest regular gas is found in Missouri, with a statewide average of $1.566 a gallon. Oklahoma is next with an average price of $1.629, followed by Kansas, at $1.631 a gallon.

The most expensive regular gasoline is once again in Alaska, at $2.763 a gallon.

Amazingly, only three states — Alaska, Hawaii and New York, now have average prices over $2 a gallon. Even in California, the statewide average has dropped to 1.875, down from $4.61, where it topped out on June 19.

The cheapest unleaded regular in California is found in the Stockton-Lodi metro, with an average price of $1.712 a gallon. The most expensive California metro is San Francisco, at $1.992.

New York drivers are paying a statewide average of $2.128 a gallon for unleaded regular, with the cheapest price in the Syracuse metro, at $1.986 and the most expensive in New York City metro, at $2.244 a gallon.

Got asbestos in your attic? Many homes do and, in a class action lawsuit tentative settlement, W.R. Grace & Co. has agreed to establish a $140 million fund to compensate homeowners who have been unknowingly exposed to the potentially deadly substance.

The settlement involves Zonolite, asbestos-based insulation that was sold as a "do-it-yourself" product over a 60-year period. During that time, Zonolite was installed in thousands and thousands of American homes, potentially putting the installer and the residents at risk.

One estimate has put the number of homes containing Zonolite at 35 million.

W.R. Grace had prepared a warning label for Zonolite in the 1970s, cautioning that it could cause including asbestosis, lung cancer and malignant mesothelioma. Those who are exposed to asbestos, even on just one occasion, incur a greater risk of developing one of the diseases. But the warning label was never released. The company stopped selling Zonolite in 1984.

The settlement provides that those who used the product can be paid 55 percent of the amount of damages that they claimed in the suit. However, no one filing a claim will be eligible to receive more than $4,125.

Asbestos is a naturally-occuring but highly toxic substance. It was widely used as building insulation and as a fire retardant for decades researchers established the dangers associated with its use.

Facing a staggering number of claims, W.R. Grace filed for bankruptcy protection in 2001 over hundreds of thousands of asbestos-related claims. In April 2008, the company announced a settlement that could be worth $3 billion, which would likely place an end to thousands of lawsuits by those affected with asbestos exposure.

In addition to the Zonolite settlement, Grace has agreed to pay $250 million to clean up contamination in Libby, Montana, former site of an asbestos mine that supplied most of the asbestos used in Zonolite. Residents there have experienced an epidemic of lung disease.

Criminal charges are pending against some current and former Grace executives allegedly involved in the Libby operation.

A Delaware bankruptcy court must give final approval to the settlement.

About abestos

Asbestos has been used in a wide variety of building materials, including insulation products, siding, cements, flooring, and roofing. Once installed, it is generally regarded as safe unless it is damaged or disturbed, which can release asbestos fibers into the air. Inhaling the microscopic fibers can cause several types of cancer and lung disease.

The Environmental Working Group reports that an estimated 10,000 Americans pass away each year from an asbestos-related cancer. Those most at risk include plumbers, joiners, electricians, construction workers, and other maintenance workers.

Mesothelioma, a deadly cancer that attacks the lining of the lungs, heart, or abdomen, is almost exclusively caused by asbestos exposure. But because of an exceptionally long latency period, symptoms may not appear for 20 years or more, delaying diagnosis and severely reducing the chance of survival.

This lawsuit follows a recent decision by the CPSC to create a loophole in the congressionally mandated ban that is effective Feb. 10, 2009. The loophole allows retailers to stockpile and continue selling dangerous products as long as they were manufactured before the ban date. NRDC and Public Citizen filed the suit against the CPSC in federal court in New York.

"The Consumer Product Safety Commission is ignoring the will of Congress and threatening our childrens health," said Dr. Sarah Janssen, NRDC scientist. "Overwhelming evidence led Congress to ban these toys, a ban that some retailers have already started to adopt. The CPSC decision completely undermines those efforts by allowing banned toys to sit on the same shelves as the safe ones."

"Parents want to know that the toys theyre purchasing are safe - its not too much to ask," Janssen said. "We cant allow CPSC to continue this confusion at the checkout aisle."

Phthalates are chemicals used to soften plastics in many common consumer products, including childrens toys. The chemicals are known to interfere with production of the hormone testosterone, and have been associated with reproductive abnormalities. Numerous animal studies have linked prenatal exposure to certain phthalates with decreases in testosterone, malformations of the genitalia, and reduced sperm production.

In response to heightened concern about risks to children from certain harmful phthalates and other chemicals in childrens products, Congress, by an overwhelming majority, passed the Consumer Product Safety Improvement Act (CPSIA), which was signed into law by President Bush on August 14, 2008. This Act permanently bans the sale, after February 10, 2009, of toys and child care products that contain certain phthalates and lead. The final Senate vote for this ban was 89-3, and the final House vote was 424-1.

The law passed in the U.S. bans the same six phthalates that have been banned in European toys for nearly 10 years. Other countries, including Argentina, Japan, Israel and Mexico have also banned phthalates from childrens toys. Several major retailers have previously announced that, by the end of 2008, they would remove phthalate-containing toys from their stores.

Fast action

In a letter dated November 13, 2008, the law firm Arent Fox, on behalf of unidentified clients, asked the CPSC to only apply the U.S. ban to the production — and not the sale — of toys with phthalates.

In a legal opinion published only two business days later, on November 17, 2008, the CPSC General Counsel agreed. As a result, manufacturers can stockpile toys and child care products with the banned phthalates right up to the date of the ban, and then sell them to consumers long after the ban was supposed to go into effect.

"Selling millions of toxic toys to kids is not the way to dispose of them, as the law clearly states," said David Arkush, director of Public Citizens Congress Watch division which, along with NRDC, was heavily involved in lobbying Congress for stronger product safety rules. "Its not only immoral - its illegal. It is horrifying that the federal agency charged with protecting consumers is telling the industry it can dump chemical waste on toy-store shelves."

"Its the job of the CPSC to protect us from harmful products, yet they have done the exact opposite in this case - creating legal loopholes where they did not exist," said Aaron Colangelo, NRDC attorney. "Theyve strayed from their basic mandate to protect consumers."

Capital One Financial Corp. is buying Chevy Chase Bank for $520 million, gaining the No. 1 position in the Washington, D.C., market and — not coincidentally — giving it control of Chevy Chase's $11 billion in deposits.

Capital One said Chevy Chase's cash cache will help it ride out the deepening recession, along with the $3.6 billion Capital One expects to get from the taxpayer-financed bank rescue program. CitiGroup had also been bidding on Chevy Chase.

While it's not the Washington Monument, Chevy Chase is regarded as a monument in the Washington area. Founded 39 years ago by B.F. Saul, Chevy Chase is still controlled by Saul's family. The Saul family has turned aside would-be buyers for years but the bank now faces massive losses on its portfolio of risky home loans made to borrowers during the housing bubble, making Capital One's offer hard to pass up.

Chevy Chase is based in — no, not Chevy Chase — Bethesda, Md. It has been one of the leading mortgage lenders in the always-hot Washington area real estate market, pumping billions of dollars into suburbs that have spread their tentacles through the rolling hills of Virginia and Maryland, fueled by the growth of the federal government and its high-tech contractors.

In 1994, the federal government accused Chevy Chase of redlining inner-city D.C. neighborhoods. The bank denied any wrongdoing but paid $11 million to settle the charges.

Chevy Chase has nearly identical white-columned bank branches in just about every shopping center in D.C. and its Maryland and Virginia suburbs and in many supermarkets in the region. Newcomers complain they can't find their way around because every corner has a Chevy Chase bank or two, making it look like every other corner.

The acquisition gives Capital One, based in McLean, Va., the largest network of branches and ATMs in the Washington area. Most of its current branches are in New York, New Jersey, Texas and Louisiana.

"Chevy Chase is a great strategic fit for Capital One, and the combination of our two banks is economically compelling," Richard D. Fairbank, chairman and chief executive of Capital One, said in a statement. "Chevy Chase provides an opportunity to acquire a well-run retail bank with local scale in one of the best local banking markets in the U.S."

More about ...

• Capital One

The Do Not Call list has been effective in blocking most annoying telemarketing calls, but charitable groups are exempted. Now, new rules give consumers an option of opting out of future calls, even when they're recorded and placed by a machine.

The new federal rule requires that the opt-out must work both for consumers who answer these calls in person and for those whose answering machines or voicemail services receive the calls.

Under Do Not Call amendments adopted by the Federal Trade Commission (FTC)in August, any permitted recorded message must provide the called consumer with an interactive means to opt out of receiving future calls from the seller or fundraiser using the message. Moreover, the consumer must be able to opt out at any time while the message is playing by pressing a particular number or speaking a particular word.

Once the consumer has opted out, his or her phone number must be automatically added to the in-house Do Not Call list of the calling seller or fundraiser. Then the call immediately must be disconnected so that the consumer's line is cleared.

If the recorded telemarketing message is left on an answering machine or voicemail service, it must include a toll-free opt-out number that, when called, also connects to an automated voice or key-press opt-out mechanism. This will let consumers opt out at any hour of the day or night when they retrieve the message, without having to wait until the next business day to call.

All recorded telemarketing calls subject to the Commission's Telemarketing Sales Rule (TSR) must comply with the new requirements, including calls to solicit sales of goods or services and calls placed by telemarketers to solicit charitable donations.

Some calls delivering recorded messages, such as political calls, bona fide market survey calls, and calls made in-house by banks or telephone companies, are not covered by the new requirement, however, because the Commission lacks the legal authority to regulate them. Recorded healthcare messages covered by the Health Insurance Portability and Accountability Act of 1996 also are exempt from the new requirement.

The automated opt-out requirement is the first of two measures provided by the recent TSR amendment to protect consumers' privacy at home. The second measure prohibits telemarketing calls that deliver recorded messages to anyone who has not agreed in advance to receive such calls.

But until September 1, 2009, sellers may continue to use recorded messages in calling consumers with whom they have an established business relationship. After that date, sellers may use these messages only in calls to consumers who have expressly agreed in advance to receive them.

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An inoperative water heater means cold showers until you can get it repaired or replaced. Often it can be a frustrating experience.

Emily, a consumer in San Dimas, California, said she bought a 50 gal, nine-year warranty, Whirlpool Ultra Low Nox Gas Water Heater from Lowes in November 2007. On November 22 this year, she said the control valve failed.

"We returned to Lowes and were told they could do absolutely nothing for us, that we needed to contact Whirlpool and be without hot water for who knows how long in the process," she told ConsumerAffairs.com. "This morning I contacted Whirlpool and after being placed on hold for nearly 15 minutes they hung up on me. I then decided to take a look at Lowes' website and saw that it was riddled with comments from unhappy customers who purchased these hot water heaters. It is obvious to me that Lowes knows that these products are defective yet they continue to sell them to unsuspecting customers such as myself."

The Whirlpool water heater has drawn hundreds of complaints from consumers over the years, and the company settled a class action lawsuit earlier this year, but it is by no means the only water heating device giving consumers a case of heartburn.

Ludwig, of Palmdale, California, bought a GE water heater at Home Depot last June. He said it worked fine for about a week.

"Suddenly the water heater burner was smothering. After carefully following the troubleshooting instructions it said that if the water heater kept on turning off, then I had to call the gas company for inspection," he told ConsumerAffairs.com.

Ludwig said the gas company inspected his water heater and told him it was defective. Not only that, it was not to be turned on again, the technician said, because it was dangerous.

What followed, Ludwig says, was an excruciating and frustrating run-around by GE.

Other brands have also caused consumer headaches. Two years ago Delta Combination Water Heaters were recalled because the burner plate and flue hood seal on the water heaters could fail due to an improper seal causing a leak of flue gases and carbon monoxide.

Most water heaters are powered by either electricity or gas, which is used to heat metal elements in a tank of water. It's a fairly simple device, but in recent years seems to have become more troublesome for some reason.

Though no scientific studies have been done on the subject, it seems from complaints received at ConsumerAffairs.com that gas heaters have more problems than electric ones. That may have to do with gas heaters' venting requirements and other safety features.

Now, GE is turning to the sun to provide hot water. The company last month announced it is developing a line of solar water heaters.

"GE re-entered the water heating business about ten years ago," said Kevin Nolan, Vice President Technology for GE Consumer & Industrial. "GE has recently driven changes in water heating technology by developing both tankless gas and hybrid electric water heater products the first to meet newly established Energy Star standards. Using solar energy to heat water for the home is the logical next step in the evolution of waters heaters."

The solar water heating industry is currently very small. Total deliveries in 2007 were only 12,000 units as compared with 9,000,000 of other types of water heaters, according to statistics from the Solar Rating & Certification Corporation, Rheem, and the Gas Appliance Manufacturer's Association. There are estimates that 17,000 solar water-heating units will be sold in 2008.

Solar water heaters typically consume between 50-70 percent less energy than a standard gas or electric tank water heater, according to GE, and are on average three times more efficient than comparable electric tank water heaters.

But are they more reliable and trouble free than their traditional counterparts? We'll see.

A caller tells you you're part of a class-action lawsuit settlement that entitles you to hundreds, even thousands, of dollars. All you need to do, the caller says, is pay a few hundred dollars to cover part of the legal fees and the taxes on your share of the supposed settlement.

Especially in this day and age, when the economy is bad, consumers are going to, you know, race for any kind of golden rainbow that they can find. And this is no different. Its also dangerous because class action lawsuit is something we are familiar with, said Alice Brooks of the South Carolina Department of Consumer Affairs.

For example, there have been legitimate class action lawsuits against credit card companies over interest rates, and its possible you could be a part of that class and know nothing about it or any settlement. The key difference is that any settlement money would likely be just a few dollars and it would be credited to your credit card account.

The Department of Consumer Affairs say there are two main things you should know to avoid this scam: no legitimate class action suit will have someone contact you by phone; and you would never have to pay money upfront in order to receive money from a lawsuit settlement or lottery winnings.

Another red flag in this scam is that the person making the phone call sometimes asks that the fees should be mailed to a postal box in Canada or sent by wire transfer.

The scam was first reported by NewsChannel 7's Robert Kittle.

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If you're shopping online instead of at the malls this holiday season, the Federal Bureau of Investigation (FBI) warns you to be wary of cybercriminals.

FBI officials say these online crooks will aggressively try to steal your money and personal information during this busy shopping season.

Cybercriminals use several methods to dupe consumers, including sending electronic greeting cards that contain malware (malicious software), setting up spoof Web sites that look like legitimate ones, and unleashing phishing and vishing attacks where unsuspecting shoppers receive e-mails that ask for personal data.

"These cyber scammers will do whatever they can to steal your money and personal information this holiday season and are trying many different ways to commit these crimes," said Shawn Henry, Assistant Director, FBI Cyber Division in Washington, D.C. "The best way to protect yourself is to report these scams to law enforcement or the Internet Crime Complaint Center (IC3)."

Here's how the various schemes work:

• The Greeting Card Scam -- Consumers receive an e-mail about a card from a friend or family member. In most cases, the e-mail directs consumers to click on a link to view the e-card. Once consumers do that, they are unknowingly taken to a malicious Web page;

• Spoofing Scams -- In these schemes, criminals create a false or shadow copy of a real Web site or e-mail that misleads consumers. All network traffic between the consumer's browser and the shadow page are sent through the spoofer's machine. This gives the spoofer access to the consumer's personal information, such as passwords, credit card numbers, and account numbers. FBI officials warn these e-mails look authentic. So do the spoof Web sites. In some instances, spoofers direct consumers to authentic Web sites and then pop up a window over the site that captures personal information. That information will likely be sold to criminals, who will use it to ruin consumers' credit and drain their accounts;

• Phishing and Vishing Attacks -- In these scams, consumers often receive e-mails or text messages about a problem with their account. They are told to follow the link in the message and update their account. But that link takes unsuspecting consumers to a fraudulent Web site that looks legitimate. Consumers' personal information, such as account number and PIN, is then compromised. Some consumers say they have also received e-mails asking them to take an online survey. Once they finish, consumers are asked for personal account information supposedly so they can receive money for taking the survey. But sharing that information gives criminals access to their accounts.

Consumers can protect themselves from getting taken by cybercriminals by:

• Not responding to unsolicited (spam) e-mail;

• Not clicking on links in unsolicited e-mail;

• Being cautious of e-mails that contain pictures in attached files. Those files may contain viruses. Only open attachments from known senders;

• Using caution when filling out forms in e-mail messages that ask for personal information;

• Always comparing the link in the e-mail to the one you are directed to;

• Logging on to the official Web site instead of "linking" to it from an unsolicited e-mail;

• Contacting the business that supposedly sent the e-mail. This way you can verify if the e-mail is legitimate.

Consumers who've lost money in a cyber scam--or received a suspicious e-mail--can file a complaint on the Internet Crime Complaint Center's Web site.

The number of infants in China who have died from melamine-tainted milk powder has now climbed to six, according to news reports.

China's Health Ministry is also reporting that nearly 300,000 infants in the country have battled urinary problems after drinking tainted milk formula -- a nearly six-fold increase from figures Chinese officials quoted when the milk scandal broke in September.

Previously, officials said the contaminated formula has sickened 50,000 infants in that country.

"Most of the sickened children received outpatient treatment only for small amounts of sand-like kidney stones found in their urinary systems, while some patients had to be hospitalized for the illness," China's Health Ministry said in a written statement.

Four of the six infants who died after drinking the tainted formula lived in the providences of Jiangxi, Zhejiang, Guizhou and Shaanxi, officials said. The other two infants lived in the Gansu providence.

Officials say 861 infants continue to receive treatment for the kidney problems caused by melamine-tainted formula.

China's milk scandal is the worst food safety crisis the country has faced in years. It surfaced three months ago when officials discovered melamine -- a chemical used to make plastic and fertilizer -- in the powdered infant formula made in that country.

Authorities learned some Chinese dairy plants intentionally added melamine to milk products to make them appear to have higher protein levels.

Since then, scores of other dairy products sold around the world -- and in the U.S. -- have tested positive for melamine. Those products include eggs, chocolates, yogurt, and liquid milk.

Just a few days ago, the Food and Drug Administration (FDA) confirmed it found traces of melamine in Good Start Supreme Infant Formula and traces of cyanuric acid in Enfamil LIPIL with iron.

The FDA, however, said the formulas were safe because of the low levels of those chemicals.

That announcement reversed the position the agency took less than two months ago when it said it would not allow any melamine in infant formula.

The FDA now says it will not allow both melamine and cyanuric acid--used to chlorinate pools--in infant formula.

Melamine and cyanuric acid became feared household words last year after the FDA discovered them in the Chinese-imported wheat gluten used to make pet food.

Thousands of pets in the United States became sick or died after eating the tainted pet food. Veterinarians say those chemicals can combine and form crystals in the animals' bodies, and those crystals can impair the animals' kidney function.

Doctors say melamine in humans can cause kidney stones and lead to kidney failure.

The economic downturn may be providing a break from high gasoline prices, but consumers are not benefiting in another transportation area -- air travel.

After being buffeted by sky-high fuel prices earlier this year, airlines are now struggling to fill passenger cabins because of a declining economy. As a result, Delta Airlines is making dramatic cuts in service.

Delta President Ed Bastian outlined the reductions in capacity in a memo to Delta employees Tuesday.

"System-wide 2009 capacity will be down six to eight percent year over year, Bastian said. "Domestic capacity will be down eight to ten percent and international capacity will be down approximately three to five percent. These numbers include the full impact of previously announced 2008 capacity reductions."

Speaking later at a conference in New York, Bastian noted that Delta is already cutting domestic flights by 12 percent this year. That means, over a two year period Delta will have reduced its domestic capacity by 20 percent.

Even with the economic recession, Bastian said Delta is achieving significant benefits from its recent merger with Northwest Airlines. Among those benefits is Northwest's large number of international routes, which are more profitable for airlines than domestic flights. Bastian says Delta must "take the necessary steps" to adjust to shifting demand in a harsh business climate.

"These economic hurdles are difficult, and we remain committed to building our company on a durable financial foundation with industry-leading liquidity," Bastian said.

There are many variations of the counterfeit check scam, as criminals continually use trends and fads to trick victims into cashing phony checks.

As the economy has contracted and education expenses have soared, a new counterfeit check scam is targeting college students and their parents.

"We just received a copy of a letter and a check sent to an Iowa college student in a scam that could have cheated the student out of more than four thousand dollars," said Iowa Attorney General Tom Miller.

The letter claimed to be from "Grant Prospect, Inc.," of Orlando, Florida, and it said the student had been approved for a grant of $50,000. "This Grant is not a loan and you are not expected to pay it back," the letter said, indicating the grant could be used "to pay tuition fees" or other expenses such as a down-payment on a home or medical expenses.

The letter also enclosed a check for $4,420.62 to be cashed and used "to pay for your Federal and State processing fees." The letter said a $40,000 certified check would be delivered to the student one to two days after the required fees had been paid.

"It's a very nasty scam," Miller said. "The student goes to the bank and cashes the check. The bank accepts the check and provides the cash, since it's such a good counterfeit. The student wires the money to the scammer. The counterfeit check bounces in a few days, but the money is already gone -- and the student is liable for it. And the scammer disappears," Miller said.

And, of course, the student gets no grant worth tens of thousands of dollars.

The counterfeit check scam is fairly common. Its purpose is to trick victims into cashing a counterfeit cashier's or corporate check, and wiring thousands of dollars to scammers -- never to be recovered.

Thousands of people have received counterfeit bank cashier's checks, corporate checks and even U.S. Postal money orders with some explanation for them receiving the check and needing to wire the money -- phony sweepstakes schemes, people selling products on-line, even an photographer being 'paid in advance' for doing wedding photography.

The "grant" letter to an Iowa student actually came from Montreal, Canada, according to its envelope, even though the letter itself said it was from Florida. Miller said scores of telemarketing and counterfeit check schemes have migrated to Canada; con-artists located there work their schemes in the U.S. The purported check was made to appear to be issued by Old World Industries, Inc., of Northbrook, IL.

The letter explained that the grants are sponsored by various corporate companies. The sponsors undertake to pay processing fees for winners in return for advertising space.

"There is always a story as to why they are sending you a check -- and asking you to wire money back to them," Miller said. "Wiring money is extremely dangerous. It usually can't be traced, perpetrators can't be caught, and victims are held liable for the money they received and sent away."

More Scam Alerts ...

Within days of disclosing that it had found the chemical melamine in some U.S. infant formula, the Food and Drug Administration said trace amounts of the substance in baby food is acceptable.

That's at odds with the agency's declaration less than two months ago that it would allow no melamine in infant formula. All other food, it said, could have up to 2.5 parts per million of the substance without causing harm.

The FDA now says it has concluded that "levels of melamine alone, or cyanuric acid alone, at or below one part per million in infant formula, do not raise public health concerns."

Last week the agency said it had found trace amounts of the substance in Good Start Supreme Infant Formula with iron, made by Nestle. Trace amounts of cyanuric acid were found in Infant Formula Powder, Enfamil LIPIL with Iron, from Mead Johnson Nutritionals, a subsidiary of Bristol-Myers Squibb.

Melamine is a chemical approved for use in production of some plastics in the U.S., but is not approved for use in food. It has shown up in food products imported from China with some frequency, causing numerous pet injuries and deaths in 2007, and prompting recalls of some milk products this year. Over the summer a number of Chinese babies were killed or injured after drinking infant formula containing melamine, but the affected brands were not imported into the U.S.

The FDA's Stephen Sundlof, head of the food safety division, says the agency draws a distinction between food products containing trace amounts of melamine and products containing trace amounts of cyanuric acid, a melamine by-product.

Separately, he says, trace amounts of the chemicals cause no harm. However, when the two chemicals are combined they cause crystals that can lead to kidney damage. No amounts of the two chemicals together, he said, will be allowed in infant formula.

A Western New York travel company owner is under arrest for allegedly selling more than $90,000 in cruise packages to non-profits and other organizations and then never booking their trips.

Joseph Ehrenreich, owner of Destination Management Group of Buffalo, allegedly stole more than $90,000 in payments from more than 20 consumers, businesses and non-profits for cruises he never booked.

He was arrested and charged with one count of scheme to defraud in the first degree, 10 counts of grand larceny in the third degree and 10 counts of grand larceny in the fourth degree. The top charge carries a maximum penalty of seven years in prison.

Many of the victims of Ehrenreich's alleged scam were volunteers, employees, and supporters of area non-profits, including the Hospice and Palliative Care Group of Niagara County, the Meals on Wheels Foundation of Western New York and the Beechwood/Blocher Foundation.

"Non-profit organizations that provide essential services to our communities have to scrape for every dollar -- especially in these tough economic times," said New York Attorney General Andrew M. Cuomo. "This individual allegedly preyed upon these organizations and their generous donors with fraudulent offers -- any such conduct would be an affront to the unsparing manner in which kind-hearted individuals give to worthwhile causes every day."

According to the felony complaint, Destination Management Group offered businesses and other organizations a program where they could pay to have unlimited access to cruise vouchers. The client organizations- many of them cash-strapped non-profits -- would then distribute the vouchers as fundraising tools, marketing incentives or employee rewards.

Ehrenreich allegedly claimed he would handle all the travel arrangements for the vouchers, citing his extensive relationships with major cruise lines and his memberships with the International Airlines Travel Agents Network and the Cruise Lines International Association. In fact, he was not affiliated with ether association.

Popular cruise lines, including Royal Caribbean, Norwegian, Holland and Carnival, all deny having any relationship with DMG or Ehrenreich and indicated that the invoice confirmation numbers he used were fictitious. IATAN also confirmed that neither Ehrenreich nor DMG were accredited by them.

According to the complaint, those who received the vouchers from the client organizations would contact and/or meet with Ehrenreich to discuss the logistics of the cruise of choice. He often persuaded the consumers to upgrade their vouchers, costing thousands of dollars more in additional charges. Ehrenreich would allegedly require consumers to make immediate payment by check or cash to "hold" the reservation -- he would not accept credit card payments. After receiving payment, Ehrenreich would issue an invoice with phony cruise line confirmation and IATAN accreditation codes.

However, the complaint alleges that consumers who called the cruise lines to confirm their reservations or check the status of the cruises then found out that Ehrenreich never booked any of the cruises and kept the payments. Cuomo said many learned that their cruises were never booked when Ehrenreich filed for bankruptcy. In some cases, when consumers became suspicious, Ehrenreich attempted to conceal his theft by obtaining their credit card information and then using it to purchase trips for which they had already paid.

More Scam Alerts ...

What do 1,000 yellow-bellied sliders and Mississippi map turtles have to do with public health? They can make people very sick.

Strictly Reptiles Inc., a wildlife dealer in Hollywood, Fla., sold 1,000 baby yellow-bellied sliders and Mississippi map turtles to a souvenir shop in Panama City, Fla., violating a Food and Drug Administration ban on small pet turtles designed to protect the public from the disease-causing bacteria Salmonella, the agency says.

Turtles often carry Salmonella on their outer skin and shell surfaces, and people can get Salmonella infection by coming in contact with turtles or their habitats.

"The illegal sale of these pet turtles put one of our most vulnerable populations -- children -- at risk for becoming very sick," said Philip Walsky, assistant special agent in charge in FDA's the Office of Criminal Investigations headquarters office.

Salmonella infection can cause illness

All reptiles (turtles, lizards, snakes) and amphibians (frogs, salamanders) are commonly contaminated with Salmonella. The bacteria do not make these animals sick, but they can make people ill and even be life-threatening to children, elderly people, and others with weakened immune systems.

Small pet turtles are of particular concern because children are more prone to handling the turtles without washing their hands afterwards, and even putting the turtles in their mouths.

In 1975, FDA banned the sale of small pet turtles -- those with shells less than four inches long. Infectious disease specialists estimate that banning small turtles prevents 100,000 Salmonella infections in children each year in the United States. The ban excludes small turtles when they are used for educational, exhibitional, or scientific purposes -- not as pets.

Despite the ban several widespread outbreaks of Salmonella infection related to undersized turtles have been reported to the Centers for Disease Control and Prevention (CDC) in recent years.

In 2007, two teenaged girls in South Carolina became very ill with bloody diarrhea, cramps, fever, and vomiting after they swam in an unchlorinated, in-ground pool where the family's pet turtles had also been allowed to swim.

The same strain of Salmonella found in the teenaged girls was also found in 101 other people in 32 states who were reported ill between early May 2007 and mid-January 2008, according to CDC. When 80 of these people were questioned, 47 of them confirmed that they had been exposed to a turtle during the seven days before they got sick.

In February 2007, the tragic death of a four-week-old baby in Florida was linked to Salmonella from a small pet turtle.

Criminal conviction

The owner of Strictly Reptiles admitted to OCI agents that he intentionally did not ask customers their purpose for purchasing the turtles in order not to lose sales.

On March 3, 2008, Strictly Reptiles sold about 1,000 undersized turtles to a souvenir business for $2.75 to $3.00 each. The souvenir business, in turn, sold the undersized turtles for $14.99 each.

At sentencing, the court ordered a criminal fine of $5,000, the forfeiture of more than 6,300 turtles, and two years' probation that allows federal agents to inspect sales records of all Strictly Reptiles' live turtles.

The court further ordered Strictly Reptiles to obtain a signed document from every buyer of undersized turtles that indicates the buyer is aware of the legal restrictions placed on the sale, or holding for sale, of these turtles.

Tips for Consumers

• Don't buy small turtles for pets or as gifts.

• If your family is expecting a child, remove any pet turtle (or other reptile or amphibian) from the home before the infant arrives.

• Keep turtles out of homes with children under five years old, elderly people, or others with weakened immune systems.

• Do not allow turtles to roam freely through the house, especially in food preparation areas.

• Do not clean turtle tanks or other supplies in the kitchen sink. Use bleach to disinfect a tub or other place where turtle habitats are cleaned.

• Always wash hands thoroughly with soap and water after touching a turtle, its food or housing, or anything else that comes in contact with a turtle or its habitat.

• Be aware that Salmonella infection can be caused by contact with turtles in petting zoos, parks, child day care facilities, or other locations.

• Watch for symptoms of Salmonella infection, such as diarrhea, stomach pain, nausea, vomiting, fever, and headache. Call your doctor if you or your family have any of these symptoms.

Credit cards have become as synonymous with America as baseball and apple pie--but those days may be coming to an end. According to one industry analyst, the financial industry may cut as much as $2 trillion in credit card account lines over the next 18 months in order to reduce risk of damage from increasing delinquencies and defaults.

"[W]e expect available consumer liquidity in the form of credit-card lines to decline by 45 percent," Oppenheimer & Co analyst Meredith Whitney told Reuters news service.

Whitney reported that all three of the remaining major banks--Bank of America, Citigroup, and JP Morgan Chase were planning or considering reducing credit lines across the board.

Whitney said that credit cards were the second source of liquidity available to consumers, behind wages from work. She criticized the banking industry for offering ever fewer choices at a time when consumers would need credit more than ever.

"Pulling credit when job losses are increasing by over 50 percent year-over-year in most key states is a dangerous and unprecedented combination, in our view," Whitney said.

A contraction in available consumer credit has been predicted for several months since the scope of the economic crisis became apparent. Banks and lenders, exposed to enormous potential defaults from the slumping housing market, began cutting back on credit card account lines while simultaneously raising interest rates, even for the best customers who paid on time and exhibited no risky behavior.

Banks and lenders' ability to change the terms of credit card agreements for any reason has shocked many cardholders, who saw their interest rates double or even triple in recent months despite good payment behavior.

Although the credit pullback has had the welcome side effect of reducing the number of credit card solicitations people get in their mailboxes, it still represents a potentially dangerous economic shock that could rival--or surpass--the slump born from the housing market.

Several studies have confirmed that Americans are cutting back on buying luxuries with credit cards, using them to buy necessities instead--and that more cardholders are having trouble keeping up with their payments.

Whitney recommended several solutions for the lending crisis, including a return to local lending and knowing customers' business histories, rather than relying on automated credit scoring systems.

The House of Representatives also passed a "Credit Cardholder's Bill of Rights" that would restrict particularly egregious billing and penalty traps last year in the waning days of Congress. The bill was put aside to focus on negotiations for the financial industry bailout, and no word has emerged as to when it will be taken up again.