Current Events in February 2010

So, where does Toyota go from here? How does the automaker gain back the confidence of its customers? In fact, can the company put things right?

It can, according to Clarence Ditlow of the Center for Auto Safety, but it won't be easy.

"For the next year they have to bat 1,000," he told ConsumerAffairs.com. "If they make a mistake they have to correct it almost overnight."

Analyst Jessica Caldwell at the automotive Web site Edmunds.com agrees that Toyota can bounce back, but says, "It's going to take some time."

Toyota attempted to get the healing process started during the past week.

Appearing before the House Energy and Commerce Committee, Jim Lentz, president and chief operating officer of Toyota Motor Sales, USA, confessed that the automaker has not "lived up to the high standards our customers and the public have come to expect." Lentz said he is "confident that no problems exist with the electronic throttle control" relating to the unintended acceleration problem, but noted that the investigation continues.

Lentz apologized for what he called the company's "mistakes," adding that the company "must think differently when investigating complaints and communicate faster, better and more effectively with our customers and our regulators."

At the same hearing, Rhonda Smith of Sevierville, TN, told of a harrowing experience she had while driving her new Lexus 350 ES on October 12, 2006.

Smith told the panel she "lost all control of the acceleration of the vehicle" and that the car eventually reached a speed of 100 mph. She says she had the emergency brake on "while frantically shifting between all the gears (besides park) but mainly had it in reverse." After about three miles had passed, Smith adds, "I thought it was my time to die."

After traveling six miles, Smith says, the car began to slow -- by itself -- and by the time it reached 33 mph, she was able to turn the engine off.

The vehicle was towed to the dealership in Kingsport, TN, which said it would thoroughly check the problem. After several weeks, Smith says, "we were advised they could find nothing wrong with the car."

The mea culpas from the automaker continued a day later when Toyota Motor Corporation President Akio Toyoda told the House Committee on Oversight and Government Reform that he takes "full responsibility" for the uncertainty about the safety of Toyota's vehicles that consumers are feeling.

In his prepared testimony, Toyoda said part of the problem is due to the fact that the company "pursued growth over the speed at which we were able to develop our people and our organization," -- in other words, the company grew too fast. He expressed regret "that this has resulted in the safety issues described in the recalls we face today," adding "I am deeply sorry for any accidents that Toyota drivers have experienced."

Ditlow says one way Toyota can help restore confidence is to meet its problems head on. "Every time they get a complaint of unintended acceleration, they need to have a team of engineers available to examine it, produce a written report, give it to NHTSA (National Highway Traffic Safety Administration), give it to the consumer."

According to Ditlow, the way Toyota handled - or failed to handle - the problem "did more damage" to the company's image than the problem itself. "No one expects a perfect vehicle," Ditlow concluded. "What you do expect is that when there is a problem, it will be fixed."

Edmunds.com's Caldwell tells ConsumerAffairs.com that Toyota can learn from its mistakes. "When you don't answer questions or have a press conference, people are left to their own devices and will make the story for Toyota."

She says if the company had taken a "firmer, more aggressive stance in the beginning, there wouldn't be just a complete witch hunt out there."

Picture this: You're a business owner let's say you run a restaurant hounded by several negative reviews on a popular consumer website. You fear that your fledging reputation will be torpedoed. It seems like there's nothing you can do. Then, one day, you hear from the site: they'll take the reviews down, but it's going to cost you.

Those are, essentially, the seedy allegations contained in a class action filed against Yelp on Wednesday. Lead plaintiff Gregory Perrault, owner of Cats & Dogs Animal Hospital in Long Beach, says that a Yelp sales person told him that, for a monthly fee, he could have more control over his company's page and the negative reviews posted there.

The saga began last September, when Perrault asked Yelp to remove a negative review written by Chris R., a customer complaining about an experience in 2007 (Yelp's policy limits reviews to those detailing occurrences within the past year). Yelp complied, and Perrault subsequently asked the company to take down a vague and threatening review posted by a Kay R.

That's when the Yelp representative threw out the alleged offer. For $300 a month, I'd have more control over my site and move things around and change the tagline on Google, Perrault told ABC News. He declined the offer, but Yelp was persistent; Perrault says he began receiving calls from the company at least once a week. Worse, the company re-posted Chris R's review, this time with a different last initial. The complaint came and went, popping back up whenever Perrault ignored Yelp's calls.

Perrault filed suit out of concern that the calls and the shady complaints weren't going to stop. My fear is that unless I took this step and I don't sign up for their plan, I'm going to continue to get harassment, he said. It's like they're holding me over a barrel here if I don't sign up.

Yelp co-founder and CEO Jeremy Stoppelman, for his part, called the lawsuit without merit and said that the company will fight it vigorously. In a blog entry denouncing Perrault's charges, Stoppelman wrote that [t]he entire value of the Yelp community to consumers and businesses hinges upon that trust and we would never do anything to jeopardize it.

Stoppelman acknowledged that the site has long faced charges of monkeying around with reviews in exchange for money, but pointed out that such allegations ignore empirical evidence in favor of conspiracy theories.

Despite counter-examples to the contrary (virtually no advertiser on Yelp has a perfect reputation), extensive media explorations that end inconclusively, and the absence of any actual evidence to support this theory, this unfortunate and untrue meme has taken on a life of its own, Stoppelman continued.

Simply put, Yelp does not remove or hide negative reviews in exchange for money and Yelp salespeople do not offer to do so. Additionally, Yelp treats review content equally for advertisers and non-advertisers alike.

Is it possible that Perrault fabricated the charges out of whole cloth, in an attempt to get negative reviews of his company taken off a popular website? Absolutely not, says Jared Beck, the lawyer handling the case.

We've been directly contacted by dozens of people. And in every location you can think of. Literally across the country, said Beck, a member of the Miami firm Beck & Lee Business Trial Lawyers. What we learned is that this isn't an isolated practice or a single event or a single sales representative run amok. This seems to be a regular business practice.

Indeed, the complaint cites several other business owners who allege similar conduct by Yelp, including a San Mateo furniture store owner who says she accepted Yelp's offer to remove negative comments for a six-month period in return for $350. After the six months were up, according to the complaint, the negative reviews returned.

The suit seeks an injunction and unspecified damages.

A Consumer Reports survey finds the intense publicity surrounding Toyota's recent recalls having a pronounced effect on the company's image among its current customers.

In a recent follow-up to the Consumer Reports 2010 Car Brand Perception Survey, among consumers who drive a Toyota regularly, 60 percent said they would most likely purchase a Toyota the next time they are in the market for a new car. That's down 10 percentage points from the December 2009 survey. As a result, Toyota slipped behind Honda, while loyalty for Chevrolet and Ford changed little among owners. The full report is available online.

To provide a snapshot of how public perceptions of Toyota are shifting in light of its cascading safety recalls, the Consumer Reports National Research Center repeated part of the 2010 Car Brand Perception Survey. For this follow up, a random, nationwide telephone survey was conducted over February 4-8 of 1,832 adults who said that their household owns a vehicle.

Despite the attention Toyota has received due to safety concerns, the overall impact on the brand integrity in the eyes of the consumer was less than one may have anticipated, though admittedly this is a developing situation. Among the top brands, purchase intent among all consumers changed by a notable amount between the two surveys for only one brand; Toyota registered a decline of nearly 4 percentage points. The change was similar between genders, but purchase intent declined more among respondents aged 18 to 44 years old than those aged 45 and over.

Even with this modest decline, Toyota purchase intent among all respondents remains greater than all brands except Ford (17 percent) and Chevrolet (14 percent).

While brand loyalty among current owners has declined, it remains greater than other popular makes, including Chevrolet (52 percent), Ford (51 percent), and Dodge (28 percent). Notably, Dodge owners are less likely to purchase another vehicle from that brand than in December, at 28 percent versus 32 percent.

Toyota entered its current crisis in a position of strength. It has led past Brand Perception Surveys by a significant margin, and in the latest full survey in December, at 196 points, it held a significant score advantage with over its closest competitor, Ford, at 141 points. The scores reflect consumers' total perception level of a brand across seven categories: Safety, quality, value, performance, design/style, technology/innovation, and environmentally friendly/green.

In ranking those factors, respondents considered Safety to be the most important, up slightly from the previous year. Quality ranked second. These attributes have historically been associated with Toyota, exposing vulnerability as these traits are drawn into question as the automaker manages its crisis.

ConsumerAffairs.com

However, as staff at the Kansas State University Financial Therapy Clinic are discovering, what may be just as trying for individuals is dealing with the financial situation a loved one leaves behind.

Since opening its doors in late January 2009, one of the primary functions of the Financial Therapy Clinic has been to help provide public outreach by assisting with financial dilemmas through a blend of financial planning, relationship therapy and psychological therapy. Despite a diverse group of clientele, though, clinic staff have recently seen a number of divorced or widowed women in their 50s and 60s, said Kristy Archuleta, co-director of K-State's Financial Therapy Clinic and assistant professor in the K-State School of Family Studies and Human Services.

"They've found themselves working with money for sometimes the very first time, since their husband might have handled the finances before his death," Archuleta said. "In some cases, they're just now finding out that they didn't plan well and they find themselves looking for help. Most of them are in a position where they cannot work for the rest of their lives, and we have to look at how to get them to the point at which they can retire."

Coupled with gathering information about their spouse's estate, Archuleta said the process is a mentally and emotionally grueling one since often emotions and relationships are intermingled with finances and feelings of how money should be handled.

"Not only are they dealing with the loss of a spouse, which can take one to two years, but they are also dealing with this overwhelming sense of anxiety from not knowing where things are financially. This can make it really difficult to make good financial decisions" she said.

Talking about finances with a spouse can be just as tough, though, Archuleta said. In many cases, especially with individuals who may not have been actively involved in the household's finances, talking about the subject with their partner may seem taboo.

If a couple has refrained from talking about money for a number of years, a relationship dynamic is formed between the individuals, and a spouse may therefore not feel comfortable approaching the subject of finances for a number of reasons, one of which may be fear, Archuleta said.

"But questions should be asked," she said. "The best way is to have an open conversation about the financial situation and where important documents are kept. It's really difficult for people to talk about issues, like estate planning, because it's inevitable that one spouse will pass on, so people skirt around it because it's painful. But by doing this, the surviving spouse is left in a worse position because they weren't involved in the day-to-day planning and do not understand their own financial situation."

Document locations

To help with the discussion, Archuleta said direct questions should be asked, and the location of important financial documents should be discussed. Archuleta also provided some financial tips for older individuals, including the following:

• Know where the important financial documents are kept, like bank funds, mutual funds and brokerage holdings, a safe deposit box, home mortgage, Social Security benefits, 401(k) and IRAs, life insurance policies, and retirement and annuity benefits.

• Ask questions. "And, ask lots of questions to lots of different people," Archuleta said. This includes your financial planner, your attorney, your accountant, your tax preparer, your friends and family. "Widows can make easy targets for scams, so it's important to talk to others and gather lots of information," she said.

• Research and read what financial terms and policies mean. The more you understand, the easier it will be to gain a grasp on the finances, Archuleta said.

• Know where the money is going. "If you go get a coffee with your friends, that's a couple of dollars there. If you go to a garage sale, that's a couple of dollars there; you may end up spending more than you think you are" Archuleta said. "You have to know where your money is going. It can be very tedious, but it's very eye-opening."

Finally, Archuleta said, it is never too early to start planning for the future death of a spouse.

According to a 2000 report by the U.S. Census Bureau, 32 percent of women aged 55 and older are widowed -- a greater percent than that of women who are married and living with their spouses. Among men in the same age group, only 9 percent are widowed. The report says nearly 700,000 women will lose their husbands each year, and will remain widows for an average of 14 years.

By Mark Huffman
ConsumerAffairs.com

February 25, 2010
It's a new day for credit card holders. A new law took effect this week giving card-holders new rights and reining in some of the industry's more abusive practices.

Yet consumers should expect their lender to try and recoup some lost avenues of revenue in other ways, in the form of new fees. As Congress wrangles over financial reform, consumer groups say a Consumer Financial Protection Agency, one of the more controversial parts of the current bill, is needed more than ever.

"The lesson of the CARD Act is clear: we need a Consumer Financial Protection Agency," said Heather McGhee, Director of the policy group Demos' Washington Office. "Banks have already found new ways to abuse consumers, and Congress can't meet every year to legislate against the newest credit card outrage."

McGhee said new credit card outrages include 79 percent interest rates and enormous establishment fees on so called "subprime" credit cards; hidden costs on pre-paid cards, and the marketing of specialty cards to cover medical costs.

"These kind of practices will continue until there is one agency charged with ensuring the safety of financial products used by American families and small business," she said.

Even so, it appears that Congressional leaders are placing the CFPA on the back burner in order to advance financial reform legislation in the Senate. Last week Sen. Chris Dodd (D-CT), Chairman of the Senate Banking Committee, agreed to suspend consideration of the CFPA until the end of negotiations, in order to win the support of Sen. Bob Corker (R-TN).

AGs support CFPA

Though Senate Republicans oppose the stand alone consumer protection agency, it enjoys bipartisan support among the various state attorneys general. Last October, a number of attorneys general signed a statement urging Congress to approve CFPA.

"Risky lending practices and a free-for-all in the financial services industry helped cause our current economic problems," said North Carolina Attorney General Roy Cooper at the time the statement was issued. "Smarter regulation and stronger enforcement, from federal and state authorities, are clearly needed to protect individual consumers and our entire economy."

Why would state officials be in favor of the agency? Cooper noted that strong North Carolina laws against predatory lending prevented a foreclosure problem in the Tar Heel state until federal regulators "pre-empted" those laws, allowing national banks to engage in subprime lending.

"Creation of a federal CFPA will be an important step toward a safer and sounder financial marketplace," he said.

The proposal would give state regulators, including state attorneys general, the authority to enforce their state consumer protection laws against federally-chartered institutions.

The Department of Transportation (DOT) has taken the wraps off sample legislation that could be used as a starting point for states crafting new laws to prohibit texting while behind-the-wheel.

The sample state law would authorize law enforcement officers to stop a vehicle and issue a citation to drivers who are texting while driving.

"Texting while driving, like talking on cell phones while driving, is an extremely dangerous and life-threatening practice," said Transportation Secretary Ray LaHood. "This language, which we created with a variety of safety organizations, is another powerful tool in our arsenal to help the states combat this serious threat."

There is heightened concern about the risks of texting while driving because texting combines three types of distraction: visual -- taking the eyes off the road; manual -- taking the hands off the wheel; and cognitive -- taking the mind off the road.

According to research by the National Highway Traffic Safety Administration (NHTSA), which crafted the bill, nearly 6,000 people died in 2008 in crashes involving a distracted or inattentive driver, and more than half a million were injured. Research also shows that the most frequent offenders are the youngest and least-experienced drivers, men and women under 20 years of age.

"Our top priority is safety and we are determined to help the states eradicate the dangerous practice of texting while driving," said NHTSA administrator David Strickland.

The sample state law is patterned on the executive order issued by President Obama on October 1, 2009, directing federal employees not to engage in text messaging while driving government-owned vehicles or with government-owned equipment. Federal employees were required to comply with the ban starting on December 30, 2009.

In addition, on January 26, Secretary LaHood announced federal guidance to prohibit texting by drivers of commercial vehicles such as large trucks and buses. Truck and bus drivers who text while driving commercial vehicles may be subject to civil or criminal penalties of up to $2,750.

Secretary LaHood announced the department's plan to pursue this regulatory action at the Distracted Driving Summit he convened in September 2009.

The department recently launched a federal website, distraction.gov , as a forum, information clearinghouse and source of information on distracted driving.

Currently, 19 states and the District of Columbia have texting laws covering all drivers. In 2009, more than 200 distracted driving bills were considered by State legislatures and legislative activity is expected to remain strong in 2010.

Does sticking a burning candle in your ear sound like a good way to remove ear wax or cleanse your blood of impurities?

Many consumers are apparently trying this procedure -- often called "ear candling" -- because of claims that it can do everything from remove toxins in the ear canal to cure cancer. But federal health officials warn consumers not to use these products, saying they can cause burns and other serious injuries.

The Food and Drug Administration (FDA) also said consumers shouldn't be swayed by claims that ear candling can improve hearing, relieve headaches, sinus and ear infections, purify blood, cure cancer, or improve brain functions.

"FDA has found no valid scientific evidence to support the safety or effectiveness of these devices for any medical claims or benefits," the agency said in a statement released on Saturday.

Ear candles are hollow cones about ten inches long made from a fabric tube soaked in beeswax, paraffin, or a mixture of the two. Companies that make these products claim that burning a candle in the ear creates a vacuum that draws wax and other debris from the ear canal.

But the FDA said consumers who have used ear candles have suffered burns and perforated eardrums that required outpatient surgery. These injuries happened even when consumers used the ear candles according to the manufacturer's direction, the FDA said.

Not for children

"FDA is especially concerned because some ear candles are being advertised for use in children," the agency said. "Children of any age, including babies, are likely at increased risk for injuries and complications if they are exposed to ear candles. Small children and infants may move during the use of the device, increasing the likelihood of wax burns and ear candle wax plugging up the ear canal. "Also, their smaller ear canal size may make children more susceptible than adults to injuries."

The American Academy of Otolaryngology-Head and Neck Surgery (AAO-HNS) also warns consumers about the risks associated with ear candling -- even for something as simple as removing wax from the ear canal. The organization represents specialists who treat the ears, nose, throat, head, and neck.

"Ear candles are not a safe option of wax removal as they may result in serious injury," the AAO-HNS states on its Web Site. "Since users are instructed to insert the 10" to 15"-long, cone-shaped, hollow candles, typically made of wax-impregnated cloth, into the ear canal and light the exposed end, some of the most common injuries are burns, obstruction of the ear canal with wax of the candle, or perforation of the membrane that separates the ear canal and the middle ear."

An international non-profit organization that exposes health-related frauds myths, and fallacies, has also investigated ear candling.

A report on the Web site Quackwatch, titled "Why Ear Candling Is Not a Good Idea," cited many injuries associated with the practice, including external burns, ear canal obstructions, and perforated eardrums.

The report by Dr. Lisa Roazen, who practices emergency medicine in New York City, also referred to a story in the Canadian newspaper, The London Free Press , regarding a woman who experienced stuffiness in her nose and ear pains while scuba diving.

The woman went to a local health-food store and was referred to a "qualified" ear candler. During the procedure, the woman felt intense burning in her ear. She later went to the emergency room, where doctors were unable to remove the wax that had dripped from the candle into her eardrum. The woman had to undergo surgery, the story stated.

During the operation, surgeons discovered a hole in the woman's eardrum. They suspected the ear candling caused that injury. The woman later recovered and did not lose her hearing. According to the story, the ear-candling practitioner apologized to the woman and stopped performing the procedure.

Dr. Roazen's Quackwatch report also cited two fires in Alaska linked to ear candling, including one that led to a woman's death.

"On January 27, 2005 a 59-year-old woman ignited her bedding when she dropped an ear candle that she was attempting to use in the ear without any assistance," the report stated. "The candle ignited the bedding and quickly spread to curtains and other combustibles in the room. The woman did escape but suffered an asthma attack and died in a hospital emergency room."

Widely promoted

Ear candles are sold and promoted in health food stores, flea markets, health spas and salons, and on commercial Web sites, including Amazon.com and other well-established, seemingly reputable sites.

ConsumerAffairs.com did a quick online search and found scores of companies selling ear candles. One company advertised a pack of "Earomatherapy" ear candles for $2.77; another sold a 12-pack of Beeswax ear candles for $28.85.

We also found a company selling ear candles that pointed out the procedure is not recommended for children under the age of 12. The company, however, didn't base that warning on the safety of ear candling itself. It based that warning on the fidgetiness of children.

"Children under 12 may not remain still while the procedure is being performed," the company states. "The procedure involves fire, therefore, extreme caution should be taken should you choose to ear candle a small child. Ear candling is not harmful to children, but fire is," the company added.

Red herrings

Another company selling ear candles attempted to refute doctors and others in the scientific community who criticize the safety and effectiveness of ear candling.

"In our modern day, we are governed by the 'scientific method,'" the company states on its Web site. "Anything that can't be studied by this method is considered a 'scam,' and great efforts are made to discredit it. Of course, the 'scientific method' can't explain why the bumble bee can fly!"

The company's Web site adds: "Generally speaking, natural remedies like EAR CANDLING, are inexpensive, so pharmaceuticals and Doctors won't make a fortune from prescribing ear candles, etc. It's easier for Doctors to call ear candles a scam, than lose patients to alternative remedies. Ear Candling Works!"

Dr. Roazen and others medical experts disagree. "Candling is both ineffective and dangerous," Roazen wrote in her Quackwatch report.

A recent report by the AAO-HNS Foundation echoed those concerns, saying studies have found that ear candling has caused burns, temporary hearing loss, and other serious injuries.

"These studies have shown that although ear candling is heavily promoted, the mechanism of action is implausible," the report stated. "Furthermore, it has no observable positive effects and ear candling use may be associated with considerable risks."

The report added: "The Food and Drug Administration (FDA) concluded that there is no validated scientific evidence to support the efficacy of the ear candles and warns against their use."

The FDA advises consumers and physicians to report any injuries linked with ear candles to the agency. Those reports can be filed online or by phone at 1-800-332-1088.

The manufacturer of Super PoliGrip announced last week that it is removing zinc from its denture cream formula, the latest and most dramatic response to criticism from consumer groups and an ever-growing list of lawsuits claiming health problems as a result of excessive zinc intake.

A press release by GlaxoSmithKline announced that the company is pulling three of its signature products Super PoliGrip Free, Super PoliGrip Comfort Seal Strips, and Super PoliGrip Powder while it works on a new zinc-free formula. The company maintained that PoliGrip is safe when used as directed, and that problems only arise when consumers apply more adhesive than directed [or] use it more than once per day. GSK says it is halting the manufacture, distribution, and advertising of the named products as a precautionary measure to minimize any potential risks to these consumers.

The company has faced growing concern over the danger of zinc poisoning. Last October, GSK announced that it was placing inserts in all denture packages, warning consumers that excessive zinc intake can lead to serious health effects.

That decision was prompted in part by a 2008 article in the medical journal Neurology, which profiled four people who used, on average, two tubes of denture cream per week and suffered varying levels of neurological damage as a result. GSK has stressed that a tube of denture cream should last a month or more, depending on its size.

Zinc is an essential element of a human diet, often grouped with other so-called good chemicals, but too much of it can cause anemia, pancreatic diseases, and decreased levels of HDL cholesterol. Additionally, excessive zinc intake can lead to neurological and nerve damage, which in turn can cause numbness, problems balancing or walking, and tingling or weakness in the extremities. In rare cases, users have ended up paralyzed.

An extreme case was Elizabeth Gilley, a 26-year-old woman profiled earlier this month in Time Magazine. Gilley has worn dentures and used denture cream on a daily basis since a genetic condition ate away at her teeth when she was a teenager. Gilley experienced numb extremities and heavy breathing, symptoms which got worse over a six-month period, and eventually caused her to collapse. She is now confined to a wheelchair, and is one of many American consumers who have filed suits against GSK.

Indeed, the company has been named in dozens of lawsuits over the past few years, as has Procter & Gamble, which manufactures rival denture cream Fixodent. Last June, a number of suits against the two companies were consolidated in the U.S. District Court for the Southern District of Florida.

The U.S. Drug Watchdog, a consumer advocacy group, has driven home the urgency of the situation, warning that zinc-laden denture cream could produce the worst case of zinc poisoning in U.S. history. The group pointed out that the Food & Drug Administration (FDA) doesn't require denture cream companies to disclose the danger posed by zinc poisoning.

GSKs statement urged consumers who have used denture cream for several years in greater amounts than directed on the package or more than once per day to stop using the product and talk to their doctor. Consumers who are experiencing signs of zinc poisoning should help seek immediately, and can also call the National Poison Control at 800-222-1222.

A U.S. District Court judge has given final approval to the $150 million dollar settlement between Bank of America and the U.S. Securities and Exchange Commission over the bank's lack of disclosures in its acquisition of Merrill Lynch a year ago.

Judge Jed S. Rakoff said he was approving the agreement, though he called it far from ideal, referring to it as paltry and half-baked justice. Rakoff rejected a proposed $33 million settlement last year as inadequate.

In approving this settlement, Rakoff ordered the $150 million to be distributed to shareholders who lost money on their Bank of America stock when it plunged in the wake of the Merrill Lynch merger.

Though the judge was not initially satisfied with the settlement, the SEC pushed hard for it. Ohio Attorney General Richard Cordray said he also favored the deal.

We welcome Judge Rakoffs ruling, which recognizes that Bank of America failed to adequately disclose to its shareholders material information related to the Banks acquisition of Merrill Lynch. Todays decision validates and reinforces the core allegations of our lawsuit against Bank of America, said Cordray.

Last September, Cordray, in concert with five public pension funds, filed a shareholder class action lawsuit alleging securities violations based on many of the same alleged facts at issue in this enforcement action brought by the SEC. The suit filed by Cordray and other public pension funds is pending before a different judge in the U.S. District Court for the Southern District of New York.

Although the SEC did not, we sued not only Bank of America, but also top executives who we believe were personally engaged in violations of the securities laws, Cordray said. We will continue to aggressively pursue claims against Bank of America and other individual defendants on behalf of shareholders. We will not rest until Bank of America is held accountable for its wrongs, and until the rights of investors and retirees are vindicated.

The lead plaintiffs group for the class action suit filed in September includes the State Teachers Retirement System of Ohio, the Ohio Public Employees Retirement System, and three other public pension funds.

Merrill Lynch paid $3.6 billion in employee bonuses just days before Bank of America completed its purchase of the investment firm on January 1, 2009.

Soon after, Merrill Lynch reported losses of more than $15 billion for the fourth quarter of 2008.

February 23, 2010 Pediatricians are issuing a warning about hot dogs, but it's not what you think. It has nothing to do with fat, sodium or the filler they use in the popular meat product. This time the physicians are worried about the hot dog's potential to choke youngsters.

The American Academy of Pediatricians has issued a call for food manufacturers to alter the design of the hot dog so that children are more likely to eat it in smaller bites. The group noted that choking is a leading cause of injury and death among children, especially children three years of age or younger.

Food, toys and coins account for most of the choking-related events in young children, who put objects in their mouths as they explore new environments. According to AAP, more than 10,000 children under age 14 choke on food each year, and up to 77 percent die.

In its new policy statement, Prevention of Choking Among Children, to be published in the March issue of Pediatrics, AAP offers recommendations for government agencies, manufacturers, parents, teachers, child care workers and health care professionals to help prevent choking among children.

Because the size, shape and consistency of certain toys and food increase the possibility of being a choking hazard, and because many of the prevention strategies currently in place to prevent choking on toys have not yet been implemented to prevent choking on food, the AAP recommends:

• Warning labels on foods that pose a high choking risk.

• A recall of food products that pose a significant choking hazard.

• The establishment of a nationwide food-related choking-incident surveillance and reporting system.

• Food manufacturers should design new food and redesign existing food to minimize choking risk.

• CPR and choking first aid should be taught to parents, teachers and child care providers.

Pediatricians should continue to provide guidance to parents on safe and appropriate food and toy choices, as recommended by the AAP, the group said in a statement.

Janet Riley, President of the National Hot Dog and Sausage Council, said she agrees that parents should be better educated about food choking hazards. However, she questioned whether warnings on package labels would be effective.

New research shows that educating students about the importance of sleep and offering feedback on sleep patterns can persuade them to catch some much-needed zzz's.

For the research -- the first large-scale study of sleep in college students to include both subjective and objective measures -- Cornell University psychology professor James Maas used the Zeo Personal Sleep Coach. The new technology records a sleeper's time in light, deep and REM sleep through a small, wireless headband sensor.

Maas distributed 300 devices to volunteers in his psychology class at the beginning of the fall 2009 semester. The students kept a written sleep log and recorded six nights of sleep data at each of three time points during weeks two, six, and 12 of the study.

Between the second and third time points, students heard Maas lecture on the importance of sleep and got personalized e-mail feedback based on their own sleep patterns.

Not surprisingly, says Maas, the students initially reported sleeping just an average of 7 hours 24 minutes a night -- much less than the 9 hours 15 minutes recommended for college students.

But in comparing the students' sleep logs with the Zeo measurements, he also found that the students overestimated their sleep time by 47 minutes -- meaning they were actually getting an average of 2 hours 28 minutes less sleep than they should.

The study also shows that the combination of sleep education and direct feedback from the Zeo motivated students to sleep better. By the end of the semester, students had increased their total nightly sleep time by an average of 15 minutes; and more than three out of five students had started sleeping almost an hour longer.

The percentage difference was most dramatic for the students who began the study in the bottom quartile for total hours of sleep. Those students increased their total nightly sleep time by an average of 51 minutes, or 15 percent.

And students with the best sleep scores -- those who spent the longest total time asleep and the most time in deep sleep -- were also the ones with the highest grades in the class.

"Students in the past have said, 'I'm not going to change my sleep-wake schedule unless you can prove to me that it's going to make a significant difference in my grades,'" Maas says. "Now we have very good evidence that if you want to improve your general well-being, this is the key; and it's the key that some Cornellians use, and they're the ones who are getting the high grades."

Dale Pescatore, an undergraduate student at Cornell, agrees. "I used to consider sleep a luxury, and it largely fell to the wayside when I was too busy balancing the other aspects of my life," Pescatore admits. "Since using the Zeo, I have realized that when sleep becomes a priority, everything else will fall into place."

Lack of sleep has been linked to a number of ailments, including excessive weight gain and heart ailments .

With many once-commonplace unfair credit card practices becoming illegal as of today, it's important for consumers to be aware of their new rights.

"The new law is a pretty big step forward for consumers in leveling the playing field against credit card companies," Ohio Attorney General Richard Cordray said. "The provisions offer new protections that will eliminate many of the sneaky, one-sided practices that made credit card transactions so confusing and unfair to consumers."

Treasury Secretary Tim Geithner calls the new law "a critical step forward in our effort to protect American families by prohibiting the use of unfair retroactive rate hikes and late fee and over-limit fee traps by credit card companies." But, he said, there is more to be done.

"As we work with Congress on broader reform to make our financial system safer and more stable, we are also working to consolidate the fragmented authority of seven separate agencies into a single, independent and accountable Consumer Financial Protection Agency," Geithner said.

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009:

• Prohibits unfair rate increases: In general, credit card providers can no longer increase interest rates within the first year after a consumer opens a new account. They also cannot increase the rate on an existing credit card balance. Since August 2009, credit card providers have been required to give consumers a 45-day notice before increasing interest rates.

• Bans universal default: Using a practice called universal default, credit card providers could increase a consumer's credit card interest rate if the consumer was delinquent on other payments, such as a cell phone or utility bill. The new rules prohibit this practice.

• Restricts over-the-limit fees: Credit card companies must obtain approval from the consumer before allowing the consumer to charge more than the card's limit and subsequently issuing an over-the-limit fee.

• Requires a co-signer for most consumers under 21 years old: Credit card providers cannot issue credit cards to consumers under 21 years old unless the consumer demonstrates the ability to pay or has a co-signer, such as a parent, guardian or spouse.

• Requires fair payment allocation: Credit card providers can impose interest charges only on balances in the current billing cycle, eliminating a practice known as "double billing," which generally affects individuals who pay off their balance every month. They also cannot allocate payments in order to maximize the interest a consumer must pay.

Problems not over

The new law doesn't necessarily mean consumers' credit card problems are over. The Center for Responsible Lending (CRL) notes that many issuers are finding ways to "dodge the reforms."

According to CRL, some are:

• adopting schemes to game interest rates, with the little known "pick-a-rate" practice gaining increasing momentum. Pick-a-rate costs U.S. consumers $720 million per year and it may reach $2.5 billion annually as the practice spreads;

• shifting penalty fee structures to charge nine out of ten people the highest fee possible if they pay late, while projecting the appearance of lower fees. The average late fee today is $39, while the typical past-due amount is about $50; and

• padding their miscellaneous fees since the announcement of new Federal Reserve rules and passage of the Credit CARD Act, disguising many of the charges.

While acknowledging that the CARD Act is a good thing, Brad Stroh, co-founder and CEO of Bills.com, acknowledges that "for many consumers it will likely mean more headaches in managing their credit card account, and at the end of the day these changes could actually lead to higher fees or reduced lines of credit."

The best way to avoid these fees, reductions in credit, or elimination of accounts, he says, is to carefully monitor communications with a credit card provider and understand the implications of their changes as well as your actions. This means taking the time to read mailings and speak with representatives when appropriate.

"The days of tossing letters from your credit card company into the trash are over," says Stroh. "These mailings will likely contain valuable information and offers that will demand your attention."

Management tips

Stroh offers these credit card management tips:

• Maintain prompt payment status with your credit card company. Demonstrating that you can responsibly meet your current credit obligations is the number one behavior that will impact your standing with the credit card company and your credit score. By missing or being late on a payment you will incur fees, potentially increase your interest rate, and lower your overall credit score.

• Pay down high balances to improve credit card utilization. This will show that you can responsibly manage your credit limit, minimizing the chance of higher tiers of interest rates or reductions in credit limit. Additionally, better credit utilization will help boost your credit score.

• Maintain activity on your credit card accounts. By using the revolving credit lines that you need or want to keep and promptly paying on them, you can help avoid cancellation of those credit card accounts. Additionally, some credit card companies are introducing inactivity fees. This behavior will avoid those fees and help boost your credit score, while having a long existing credit line closed could lower your score.

• Avoid fees through responsible spending habits. Credit card providers will likely look to recoup revenue by charging fees for extra services. New regulations prohibit over limit provisions unless consumers opt-in to the service. Card providers could then charge consumers for this right. By remaining aware of credit limits and balances, consumers can avoid a need for these fees altogether.

• Remember, new regulations do not apply to corporate or small business cards. This means some small business owners might consider using personal cards for business expenses because of fee and rate limitations. However, these owners should remain cautious because their personal credit scores could suffer in the event of missed payments or defaults.

"It is important to remember that these new regulations do not limit interest rates, they only make the communication with consumers more transparent," Stroh concludes. "The best approach then to these changes is to be proactive and adjust personal behavior to avoid negative implications."

Not everyone is happy with the way the CARD Act is being implemented. Consumer activists are critical of the pace of the Act's implementation. What do you think about it? Let us know.

Toyota may have some explaining to do. In an internal document obtained by Congressional investigators, company executives noted they had saved $100 million by persuading U.S. regulators that a sudden acceleration problem with 2007 Camry and Lexus models was caused by floor mats.

Citing it as a "win" for the company, the document said Toyota had been successful in negotiating with the National Highway Traffic Safety Administration to recall the floor mats rather than finding a defect in the cars that required a repair.

Toyota ultimately suspended US sales of eight of its models and recalled millions of vehicles to address the sudden acceleration problem.

In September 2007 Toyota announced a recall of 55,000 floor mats which were used in the 2007/2008 Lexus ES 350 as well as the 2007/2008 Camry. At the same time, NHTSA strongly urged owners to "make sure the driver-side, all weather floor mat is properly secured before driving the vehicles."

At the time, NHTSA and Toyota noted that, if unsecured, the mats could slip forward and trap the accelerator pedal, causing the vehicle to accelerate uncontrollably. Though the recall was limited to the Camry and Lexus, ConsumerAffairs.com had logged many complaints from Toyota Prius drivers about the sudden acceleration problem. And at the time, not all were buying Toyota and NHTSA's solution.

The Rub

"Here is the rub," one California reader told us in 2007. "If it truly were the mat catching the accelerator, why did turning the car off solve the problem? There is nothing with the power button that would do this. And yet each time when I restarted the Prius it was fine. If the accelerator were caught under the mat once the car was turned off the problem did not persist," she wrote.

Fast-forward two years and Toyota recalls more floor mats to deal with the same problem. In September 2009 Toyota announced a recall of 3.8 million Lexus and Toyota cars, again blaming the sliding floor mats. At the time, owners of the affected models were asked to remove the floor mats until they could be replaced with a safer version.

Then, just over a month later, NHTSA took the unusual step of correcting what it called "misleading" information from Toyota. In an early November 2009 statement, the National Highway Traffic Safety Administration said it was correcting what it called "inaccurate and misleading" information in a Toyota press release, concerning its recent recall of 3.8 million Toyota and Lexus models.

The release in question stated that NHTSA had reached a conclusion "that no defect exists in vehicles in which the driver's floor mat is compatible with the vehicle and properly secured." Not so, the agency said.

Must Address Design Flaw

"NHTSA has told Toyota and consumers that removing the recalled floor mats is the most immediate way to address the safety risk and avoid the possibility of the accelerator becoming stuck. But it is simply an interim measure," NHTSA said in a November 4 statement. "This remedy does not correct the underlying defect in the vehicles involving the potential for entrapment of the accelerator by floor mats, which is related to accelerator and floor pan design."

In other words, NHTSA said Toyota couldn't resolve the problem simply by removing the floor mats. They must address what safety researchers by then saw as a design flaw. Not long afterward, the carmaker capitulated, beginning what has turned into a financial and public relations nightmare.

Congress, meanwhile, wants to know what Toyota knew and when it knew it. The document citing the savings in limiting the 2007 recall to floor mats may take center stage as the House Committee on Oversight and Government Reform holds hearings on the subject. The Obama Administration is also looking closely.

"Unfortunately, this document is very telling," Olivia Alair, a spokeswoman for the Transportation Department, said. "We're going to hold Toyota's feet to the fire and make sure they do what's necessary."

More people fall into this category than you might think. According to the Tax Policy Center, more than half of the 65-plus age group isn't required to file.

Naturally, you should check carefully to make sure you're exempt before not filing a return, as the income threshold is subject to change from one year to the next. Also, your filing status, and other variables, can make a difference.

The income threshold is based on "gross income," meaning all the income you received during the year, unless it is specifically exempt from tax. You don't have to file a tax return this year if:

• You are single and your 2009 gross income was less than $9,350 ($10,750 if you're 65 or older).

• You are married filing jointly and your gross income was under $18,700. If you or your spouse is 65 or older, the limit increases to $19,800. And if you're both over 65, your income must be under $20,900 to not file.

• You are head of household and your gross income was below $12,000 ($13,400 if age 65 or older).

• You are married filing separately and your income was less than $3,650.

• You are a qualifying widow(er) with a dependent child and your gross income was less than $15,500 ($16,150 if age 65 or older).

Of course, there could be a very good reason to file a return, even if you aren't required to. If you had tax withheld from your income, you most likely are entitled to all of it back in a refund. However, you won't get a refund unless you file a return.

And keep in mind that your state may require you to file a return, even if the IRS doesn't. So don't discard your tax records.

Elderly Tax Credit

Depending on your income level, you may be eligible for a federal tax credit for the elderly, which can add up to as much as $750 for a single taxpayer and up to $1,125 for a couple.

To qualify, you must be 65 or older and a U.S. citizen. For a single filer, your adjusted gross income must be less than $17,500 and the nontaxable part of your Social Security or other nontaxable pensions, annuities or disability income must be less than $5,000.

If you are under age 65 at the end of 2009, you can qualify for the credit only if you are retired on permanent and total disability and have taxable disability, according to the IRS.

If you are married and are filing jointly, and both spouses qualify, your income will need to be less than $25,000, and your nontaxable Social Security or other nontaxable pensions must be under $7,500.

If your income falls below the filing threshold but you had taxes withheld last year, you may be able to stop the withholding. According to the IRS, If you have taxes withheld for wage or pension Income and have less than $300 of unearned income (e.g. interest, dividends, unemployment compensation), you can stop your withholding by filling out a new Form W-4, Withholding Certificate or a Form W-4P, Withholding Certificate for Pension or Annuity Payments. You may obtain the form you need from a tax preparer, or they can be downloaded from the IRS Website.

If you have any question at all whether you fall into the category of non-filers, consult a family member or tax professional.

What was the biggest complaint from Illinois consumers in 2009? According to state Attorney General Lisa Madigan, her constituents were most upset about rising foreclosures and debt.

Madigan says that 31,264 consumers filed complaints with her Consumer Protection Division last year. The consumer debt category topped the complaints filed by Illinois consumers, including a 65 percent increase in residential mortgage-related complaints.

In addition, an estimated 21,000 consumers have called the Attorney General's Homeowner Helpline for assistance since 2008, while the Attorney General's Consumer Fraud Bureau helped secure an estimated $23 million in mortgage-related savings, including loan modifications for at-risk borrowers, last year.

"These numbers demonstrate how this economic crisis is hitting home for tens of thousands of Illinois families," Madigan said. "Hardworking people are struggling to make their mortgage payments on time. They're fighting to cope with mounting debts, and they're being targeted by con artists looking to make a quick buck. This is a challenging time, and I urge anyone who is struggling to make ends meet to contact my office to make sure that they do not become victims of fraud."

Consumer Debt Complaints Rank First

Since 2008, complaints to Madigan's office about consumer debt grew nearly 16.5 percent, a reflection of the increasingly dire financial constraints people in Illinois are experiencing during the economic downturn. Complaints in this top category cover a wide range of consumer debt issues, such as residential mortgages, credit card debt, and installment loan debt.

Specifically, the highest reported debt-related complaints involved mortgage foreclosure. In 2009, nearly 4,000 homeowners filed residential mortgage complaints with Madigan's office, a 65 percent increase over the previous year. In addition to the significant increase, the types of complaints reported are also transforming.

In the first wave of the foreclosure, a majority of complaints reported to the Attorney General's office came from homeowners who were placed in risky home loans that they could never afford. As the foreclosure crisis continued, Madigan said that around 2008 her office began receiving more calls from homeowners who have lost their jobs and can no longer make their mortgage payments. Other debt-related complaints includes problems with collection agencies and credit card companies.

Identity Theft Complaints Rank Second

After calls to Madigan's office about consumer debt, identity theft remained high on the annual list of consumer complaints, coming in at the second most-reported issue. Madigan's office received 4,376 identity theft-related complaints in 2009. A significant number of the complaints involved people taking over victims' credit card and bank accounts.

Rounding out the top ten, consumers complained about home improvement fraud, problems with their wireless or phone company, phony sweepstakes scams, auto sales fraud, mail or Internet purchase snafus, fraud directed at small business, complaints about utility services and motor vehicle repair problems.

By Lisa Wade McCormick
ConsumerAffairs.com

February 20, 2010

Texas authorities are warning consumers to be wary of potential tax return scams.

But their advice doesn't apply just to consumers in the Lone Star State. It can also help keep taxpayers across the nation from being duped by unscrupulous tax preparers who may charge excessive fees or fail to file consumers' taxes on time.

According to the Internal Revenue Service (IRS), an estimated 1.2 million people earn fees for preparing Americans' tax returns.

But Texas authorities and others nationwide often receive complaints about tax preparers who don't file consumers' taxes on time, charge exorbitant fees, make errors on consumers' tax returns, disappear after returns are filed, or fail to return consumers' personal financial documents.

Authorities say consumers can protect themselves from crooked tax preparers by:

• Reviewing the tax preparer's credentials;

• Checking to see if there are any complaints about the tax preparer with the state's attorney general's office, district attorney's office, or other consumer protection groups. Consumers who hire certified public accountants can also check with their state's licensing board to see if there are complaints on file;

• Ensuring the business is open year-round in case you need to ask follow-up questions about your tax return;

• Demanding the tax preparer list all fees in writing;

• Making arrangements with the tax preparer to return your personal financial documents; and

• Confirming the basis for all tax deductions the tax preparer claims on your return.

"Taxpayers are ultimately subject to accuracy and fraud penalties, plus accrued interest, for any income tax underpayment caused by filing incorrect tax returns," warned Texas Attorney General Greg Abbott.

The IRS also advises taxpayers not to respond to any e-mails that appear to be from the agency. These fraudulent e-mails, which often increase during tax season, often direct consumers to links that request their Social Security, bank account, and credit card numbers.

The IRS emphasizes that it does use e-mail to solicit sensitive financial and personal information from taxpayers or discuss account information. The agency also said it does not request financial account security information, like PIN numbers, from taxpayers.

The IRS points out that phony e-mails that impersonate the agency often threaten consumers with additional taxes if they fail to respond, get the names of the Internal Revenue Service or other federal agencies wrong, have incorrect grammar or odd phrasing, or use long addresses in the links.

The actual address, or URL, for the Internal Revenue Service is www.irs.gov, which taxpayers are advised to consult to learn more about IRS-impersonation scams, identity theft, and suspicious e-mail.

Consumers who received suspicious e-mails that appear to be from the IRS should forward them to at phishing@irs.gov the IRS mailbox and then delete the messages from their inboxes.