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    Getting the Most Out Of Social Security

    The Boomer's guide to a key retirement income stream

    When Social Security was created in 1935, it was designed to be part of a three-tier retirement plan that would include Social Security benefits, income from a pension, and personal savings. Unfortunately, because of the recent economic downturn and high unemployment, especially among older workers, Social Security benefits are, for many, playing a greater financial role and, for some, it is the only retirement income they can count on.

    As tens of millions of Boomers enter those years in which we qualify for Social Security, it becomes increasingly important to understand how the program works, if for no other reason than to determine when you should apply in order to receive the greatest financial benefit.

    In a nutshell, to qualify for Social Security retirement benefits, you have to have worked for at least 10 years which is about the length of time it takes to accumulate the four credits a year or 40 credits that make you eligible.

    Social Security is funded by the Federal Insurance Contributions Act (FICA) or, for the self-employed, through SECA (Self-Employment Contributions Act) which is put into The Social Security Trust Funds which are the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund. The OASI Trust Fund began in 1937; the DI Trust Fund in 1957. These trust funds are managed by the Department of the Treasury. Basically, out of each dollar that is contributed from payroll or self-employment contributions, roughly 85 cents goes to Social Security and 15 cents goes to Medicare.

    Here are seven key factors you need to know about Social Security:

    1. When Should I Take it?

    This is the #1 Social Security question to consider.

    In general, the longer you wait to start your benefits, the larger the amount of monthly payouts you will receive (but over a shorter period of time). How do you know if you should start earlier or later? It depends on each individual and family and on a number of factors such as:

    • Your projected life expectancy based on your family history (how long did your parents live?)
    • Any pre-existing conditions that might shorten your life span?
    • Are you still working?
    • Do you need the income now or can you delay starting payments?

    What it means to take Social Security at 62

    If you start your Social Security benefits at age 62, you will permanently reduce the amount of money you will receive by as much as 30% than if you had waited just four more years till the normal or full retirement age for most Boomers.

    For example, lets say your monthly retirement benefit is $1,000 if you start taking it at 66, which is your full retirement age. However, if you begin to collect Social Security at 62, your monthly payment would be reduced to $750 for most Boomers or to just $700 if you were born in 1960 or later. Also, if you are still working, there is a cap on earnings of approximately $14,000. That means with any earnings over that amount there is a $1 reduction in monthly benefits for each $2 you earn until the year you reach your full retirement age. In that year, $1 in benefits will be deducted for each $3 you earn over $37,680. (However, once, you reach full retirement age, there is no longer any cap on earnings to be able to get your full benefits.)

    Keep in mind, however, that with each year between 62 and your full retirement age of 66 (or 67), the reduction in your benefits is not as great. Here is what those reductions will be if you retire at:

    63, it is about 25 percent
    64, it drops to 20 percent
    65, it is just 13.3 percent
    66, it is about 6.7 percent

    What it means to take Social Security at your full retirement age

    Year of Birth

    Full Retirement Age

    1946-54

    66

    1955

    66 years, 2 months

    1956

    66 years, 4 months

    1957

    66 years, 6 months

    1958

    66 years, 10 months

    1960+

    67

    (If you were born on January 1 in any year, refer to the previous year)

    When you reach what is called full retirement age (FRA), which is 66 for the majority of Boomers see the chart below for your exact age -- your benefits increase substantially compared to what they would have been at age 62. (What the Social Security Administration (SSA) considers full retirement age does increases by two months every year for anyone born in 1955 through 1959 and to age 67 for those Boomers born in 1960 and later.) Use the chart to determine your full or normal retirement age for applying for Social Security benefits.

    As noted above, if you want to continue working after youve reached your full retirement age, there is no cap on earnings as a factor in what your Social Security payments will be. (But it might impact on whether or not you have to pay taxes on your Social Security benefits.)

    If you wait until 70

    The benefit of waiting until age 70 to start your Social Security benefits is that you will get delayed retirement credits of 8%, every year, from your full retirement age until age 70. If you also continue working, and contribute more through FICA or SECA, the amount you will get monthly when you do start collecting may get even higher.

    There is a catch, however. Financial advisor Julie Jason says that by waiting, Youre betting on longevity. But you may get as much as 76% more each month by waiting until age 70 than if you began getting payments at age 62. So if you can afford to wait, most experts agree you should try to go for starting your benefits at age 70.

    2. How much money can I expect?

    Financial advisor Robert J. DiQuollo suggests that Boomers put some time into carefully reading their annual statement from the Social Security administration. Thats the four-page statement you get every year, four months before your birthday. DiQuollo says, Many clients dont realize how much their benefit actually is until they apply. I think thats because people dont pay attention to Social Security or read their statement. Here it is, right on your own statement but they never focused on it.

    So look at your statement to see what you are projected to get if you apply for benefits at ages 62, 66, or 70. But consider this fact as well: In 2010, the maximum monthly Social Security payment to someone retiring at age 66 is $2,346 (and the average payment is around $1,000 a month).

    3. Social security also includes a spousal benefit

    As long as you have been married for 10 years, once your spouse is eligible for Social Security benefits, you are eligible for a spousal benefit, which is half of your spouses monthly payout. However, if your own Social Security payment is higher, based on your own work history, you can get your own benefit rather than your spousal benefit.

    4. Social security also includes divorced spouse benefits

    You are entitled to a divorced spouse's insurance benefits on your exs Social Security record if:

    • Your ex is entitled to Social Security benefits;
    • You have filed an application for divorced spouse's benefits (it doesnt matter if your ex has filed for benefits);
    • You are not entitled to a retirement benefit based on a primary insurance amount which equals or exceeds one-half the worker's primary insurance amount;
    • You are age 62 or over;
    • You have not remarried;
    • You were married for at least 10 years before the date the divorce became final.
    • You have been divorced for 2 or more years.

    5. Getting benefits is not automatic; you need to apply

    It is recommended that you apply for benefits about three months before the date you want your benefits to start. You can apply for benefits right on the SSA website: www.socialsecurity.gov/applyforbenefits. At that website, you can get a quick benefit estimate based on your actual Social Security earnings record at www.socialsecurity.gov/estimator. You also can get more detailed benefit calculations at www.socialsecurity.gov/planners.

    Here are the documents you need to apply:

    • Your Social Security card (or a record of your number);
    • Your birth certificate;
    • Proof of U.S. citizenship or lawful immigration status if you (or a child) were not born in the United States;
    • Your spouses birth certificate and Social Security number if he or she is applying for benefits based on your earnings;
    • Marriage certificate (if signing up on a spouses earnings or if your spouse is signing up on your earnings);
    • Your military discharge papers if you had military service; and
    • Your most recent W-2 form, or your tax return, if you are self-employed.

    Whether you are going to apply at 62, 66, or 70, you are going to need a certified birth certificate (or, for spousal benefits, a marriage certificate). Make sure you have one on hand rather than waiting until the last minute and trying to rush the process of requesting a replacement certificate, which might take one or more months.

    6. You may have to pay income tax on your Social Security benefits

    SSA notes that about one-third of people who get Social Security have to pay income taxes on their benefits. Check with your accountant to find out what taxes you and your spouse can expect to have to pay on your benefits, if anything, based on what benefits you are receiving, any other earned income, and other factors.

    7. You can do a do over if you want to restart your start date.

    What if you realize you made a mistake about when you take your benefits? Well, you can actually pay back the money that you received and reset your benefits without penalty.

    Michael B. Friedman, Chair of the Geriatric Mental Health Alliance of New York and an Adjunct Associate Professor at Columbia University School of Social Work, started taking his Social Security benefits last year, when he was 66, and his earnings projection was also quite low. But then it turned out that he earned far more than he anticipated; his financial planner suggested to him that he repay the monthly income that he received from Social Security and re-apply so he would get a higher monthly payment, which he did.

    Remember, Social Security was never intended to be your complete retirement income. It was set up to replace just some of your earnings when you or your spouse retire.

    As Charles Farrell, investment advisor with Northstar Investment Advisors in Denver and author of Your Money Ratios (Avery, 2010) points out, For most people, Social Security will be somewhere between twenty to forty percent of their retirement income. However, according to an AARP Public Policy Institute report, Older Americans in Poverty: A Snapshot, for older adults who are in poverty, 59% depend on Social Security for all or nearly all of their family income.

    To avoid finding yourself in such a situation, dont just count on Social Security to fill your retirement income needs. Boomers in our 60s (and certainly those in their late 40s and 50s) are still young enough to work harder to put more money into our retirement savings account, pay down any debt without incurring more debt, downsize and lower our overhead as we save or safely invest any additional income from the sale of our homes or goods.

    Contact the local Social Security office for help in determining the ideal time for you to apply to begin collecting your Social Security benefits. But before you decide to put in for Social Security benefits, if you have a financial advisor, make sure you discuss Social Security as part of your retirement planning strategy. Your family is depending on you to make the best decision for your particular economic situation.

    Finally, as time goes by, make sure you reevaluate your time frame for applying if your work and retirement goals change because of health or other factors which might alter your initial plan about when to apply for your Social Security benefits.

    Resources

    Government

    Associations and Research Centers

    • AARP
    • Center for Retirement Research (CRR) at Boston College. Started in 1998, research and training center focusing on such key retirement issues as Social Security, pension plans, and older worker labor market trends.
    • Employee Benefit Research Institute Membership association that conducts research on employee benefit issues including their annual Retirement Confidence Survey

    Articles, press releases, or reports

    It becomes increasingly important to understand how the program works to determine when you should apply in order to receive the greatest financial benefit...

    BP Facing Nearly 100 Suits

    Once again, bayou denizens, chefs and tourism promoters fear the worst

    The pipe threaded inside the leaking oil pipe a mile under the surface of the Gulf of Mexico did not work. It was hoped it would save some of the oil spewing like a volcano from BP's hole in the bottom of the sea and pump it aboard a waiting ship sitting overhead. It didn't work. We heard the news from Fox on Sunday morning.

    There was both good and bad news later Sunday. The good news is BP is taking oil up the mile-long pipe to the mother ship hovering above the gushing volcano, according to BP spokesman Mark Proegler. The bad news is Proegler can not say how much of the oil is being captured or what percentage of the discharge is being diverted to the holding ship above.

    Kent Wells, BP's senior vice president for exploration and production, said during a news conference that the amount being drawn was gradually increasing, but it would take several days to measure it.

    Proegler had indicated earlier, at the Joint Spill Command Center in Louisiana, that the tube was capturing most of the oil coming from the broken pipe. This particular break is thought to be contributing about 85 percent of the crude in the overall leak. But estimates of the size of the leak vary wildly.

    Potentially worse news is that computer models show the oil either already in the Gulf Stream or within three miles. Which means the U. S. Eastern Seaboard is at risk. And possibly the United Kingdom, where BP has home offices in London.

    How much?

    The oil is leaking at least 210,000 gallons a day, according to BP and the U. S. government. It is ten times that amount, say other scientists.

    "When you hear officials disagreeing like that you wonder if they know how to handle this." We are listening to a table of local oystermen at Shukes, a popular oyster house in Abbeville, home of the first commercial oyster fishery in Louisiana..

    "Wonder, my ass!" responded a frustrated oysterman. "I know, they do not."

    The only good news today: Shukes has just announced they have a two-week supply of oysters on ice.

    We have spent the week in Acadiana, the French-Canadian, Creole region of Louisiana. This is Cajun Country. It is home to the University of Louisiana at Lafayette and their football team, the Ragin Cajuns, and also home to Louisiana's oil industry.

    "America does run on oil," retired U. L. marine biologist Mark Konikoff, a vocal supporter of the oil industry, reminded us.

    Indeed, it does. But California Governor Arnold Schwarzenegger announced last week that all oil drilling would be banned from California's golden shores, causing local Lafayette radio talk-show host, Ken Romero, to say in a recorded radio spot that California should be barred from receiving Louisiana oil. Not likely given the fluidity of the product, but indicative of the faith many here place in Big Oil.

    Of course, Big Oil has made the region rich. It may be asking too much to grasp how it may now make its culture non-existent if, in fact, the Gulf becomes a dead sea. But the truth is that -- as always -- no one knows what is going to happen. Think how much wealthier Rupert Murdoch would be if The Wall Street Journal printed tomorrow's stock prices.

    New way'a doin'

    At a Native American Pow Wow this weekend at the Tunica-Biloxi Reservation and Paragon Casino Resort, at Marksville, it was not hard to find people who have seen total cultural and economic change. "We will just find a new way'a doing," was pretty much the consensus among Pow Wow attendees.

    All around us is the prosperity of Louisiana's first land-based gambling casino sitting on the edge of where recently there was an longtime air of hopelessness, we heard a feathered dancer telling the audience, "Our people are survivors."

    In New Orleans, the smell of oil is noticeable even to those most resistant to noticing. At Pascal's Manale, the Napoleon Avenue restaurant that invented New Orleans Barbecued Shrimp -- a succulent dish far removed from simply tossing some shrimps on the BBQ -- our waiter placed steaming bowels before us and tied bibs around our necks.

    The shrimp were as fine as Judy Sherrod remembered from her youth. Sherrod was in New Orleans for a photography workshop. She drinks two beers with her shrimp, and wears a safari jacket of the type you associate with a world adventurer.

    "I've recently returned to New Orleans, after many years." During those years she has been busy compiling a body of work titled: "Exploring the Mystery of Easter Island."

    Neither of us could smell oil in the air that day. Nor taste it in our food. However, a few days later the smell was very noticeable.

    "The feeling I get in the pit of my stomach is like the feeling I got when all those generals and politicians and industrialists kept assuring us about the war in Vietnam," said French Quarter resident L. A. Norma.

    "Now, after Katrina and Rita, we finally got our tourist industry back. Now this!" Norma sighed.

    And, perhaps most frightening, we still do not know what "this" is going to end up being, as we enter the fourth week of BP's big oil volcano at the bottom of the sea.

    ---

    Leonard Earl Johnson is a former cook, merchant seaman, photographer and columnist for Les Amis de Marigny, a New Orleans monthly magazine. Post-Katrina, he has decamped to Lafayette, La. Columns past, present and future are at www.lej.org.

    BP Facing Nearly 100 Suits...

    Controversy Surrounds Tests of Nutro Dry Cat Food

    Company denies its product contains 'worrisome' levels of Vitamin D3

    Controversy is swirling around recent tests on a sample of Nutro dry cat food, which detected what two leading veterinarians consider worrisome levels vitamin D3.

    The veterinarians recommended additional testing to confirm the finding, but also told ConsumerAffairs.com the blood work performed on the sick feline that ate the food is not consistent with vitamin D toxicity. The non-profit group that hired a private lab to test the food disagrees and calls the Nutro sample one of the most deadly pet foods we've tested to date.

    Nutro disputes that assessment and the labs findings, saying tests it performed on the same lot of cat food revealed the product is safe.

    An analysis performed earlier this month on a sample of Nutro Chicken Meal and Rice cat food -- identified as lot number 09 01 10 11:03 and purchased in February 2010 -- revealed the product contained 197 IU/g of vitamin D3, according to the Pet Food Products Safety Alliance (PFPSA).

    I was shocked by these results, said Don Earl, founder of PFPSA. The vitamin D was so high in this sample that I called the lab to see if that was really what they meant. That level is off the chart.

    Earl said he hired NPA Laboratories in California to analyze the sample for vitamin D when he learned a healthy, one-year-old, indoor male cat was on deaths door after eating the Nutro food for five days. He suspected high levels of vitamin D might be the culprit for the felines illness, which he said included vomiting, diarrhea, weakness to the point of being unable to stand and considerable pain.

    I look at things that should be in the food to see if they are in the wrong amounts and if the ingredients and supplements are formulated correctly, Earl said, adding that previous tests on this sample of Nutro food detected what he called high levels of calcium. Vitamin D is an essential vitamin in the right amount, but its toxic in the wrong amount. And this is a huge amount.

    More evidence needed

    Two veterinarians contacted by ConsumerAffairs.com about the test results agreed the levels of vitamin D3 in the sample are concerning and should be further investigated. But they cautioned Earl and worried pet owners not to jump to conclusions based on one test.

    I appreciate what he (Earl) is doing, said Dr. Justine Lee, emergency critical care veterinary specialist and associate director of veterinary services for the Pet Poison Helpline (PPH). I commend him for advocating for healthy pet food. But it needs to be done in a way that is accurate and we have to make sure the information is medically and scientifically accurate.

    Dr. Lee and her colleague, Dr. Lynn Hovda, director of Veterinary Services and toxicologist with PPH, said another sample of this Nutro cat food should be tested by a certified lab to verify NPA Laboratories results.

    A single sample submitted at a single point in time is certainly cause for concern, but it needs to be scientifically verified, the veterinarians said, adding whatever lab tests the food should sign and notarize a statement that confirms its analyzing the sample for Vitamin D3.

    On its Certificate of Analysis, NPA Laboratories stated it tested the Nutro cat food for Vitamin D. ConsumerAffairs.com contacted the lab, which confirmed it tested the sample for vitamin D3. And the levels of vitamin D3 the lab reported in the Nutro sample are troublesome, Drs. Lee and Hovda said.

    The fact that cholecalciferol (Vitamin D3) is the Vitamin D source in the sample is worrisome as D3 is generally associated with a higher incidence of toxicity than ergocalciferol (Vitamin D2), they told us. In the world of toxicology, Vitamin D3 toxicity is associated with a total amount ingested based on the animals body weight (IU ingested/kg body weight).

    ConsumerAffairs.com learned the cat that ate the Nutro food tested weighs 12 pounds -- or 5.45 kilograms (kg).

    Assuming the cat ate 2 ounces of food (56 grams which is a fairly normal amount) and that the cholecalciferol level is 197/gram of food, (the) total amount ingested would be 11032 IU /5.45 kg or 2024 IU cholecalciferol/kg BW, Drs. Hovda and Lee wrote in response to our questions. If you assume the cat ate 4 ounces of food and that the cholecalciferol level is 197 IU/gram of food, the total amount ingested would be 22064 IU/5.45 kg or 4048 IU cholecalciferol/kg BW.

    High doses of vitamin D3 can cause various health problems in cats and dogs, the veterinarians said.

    Ingested doses of 4000 to 5000 IU/kg body weight of D3 are associated with mild clinical signs such as anorexia, lethargy, and vomiting, they said. Blood work changes (serum chemistry) occur but become very striking when the ingested amount is 15,000 to 20,000 IU/kg body weight.

    At this level, the calcium level becomes very elevated and severe and may be irreversible or non-responsive to treatment, they added. The likelihood of depositing calcium in various body organs (kidney, heart, etc.) increases, resulting in severe, acute kidney failure which often times can result in chronic kidney changes. This would be the same for both dogs and cats.

    But the blood work performed on the cat that ate this sample of Nutro food does not indicate any type of vitamin D toxicity, Drs. Hovda and Lee told us.

    This cat has a high white blood cell count, Dr. Lee said. This type of count is almost always seen with feline leukemia. Any veterinarian looking at this blood work would agree that its not consistent with vitamin D3 toxicity.

    She added: Weve been contacted by veterinarians reading various pet food forums about this (test result) and weve told them that the blood work is not consistent with vitamin D toxicity.

    Earl disagrees

    Earl, who is not a veterinarian but has done considerable research on this issue, respectfully disagrees.

    The information that I found in the Hazardous Substances Data Bank had clinical information on vitamin D toxicity that was an across-the-board match for what was found in the vets lab work, he told us.

    On his organizations Web site, Earl cites various studies and reports that support his contention. And he doesnt mince any words about a link between Nutros cat food, the felines illness, and vitamin D toxicity.

    The pet owner's cat nearly died after eating the food for 5 days and the symptoms appeared to be consistent with toxic levels of Vitamin D, he states, adding the cats condition gradually improved after it stopped eating the Nutro food. Based on the above, unbiased, peer reviewed, independent research, this food is one of the most deadly pfpsa.org has tested to date. No reasonable person, of average intelligence, could view the research, data, circumstances and symptoms, without reaching the inevitable conclusion this food was the sole cause of this pet's near death experience.

    Asked what action Nutro should take in response to these latest test results, Earl said: They need to recall this food. Its deadly.

    Drs. Hovda and Lee arent convinced that Nutro needs to take such drastic measures. But they encouraged the pet food giant to address this issue.

    We are neither opposed to nor in favor of Nutro pet foods, but hope that the company responds in a professional and courteous manner, they said. Mistakes can be made, as we have learned before, and this may be due to calculation errors or mixing errors; if this occurs, obviously we feel that the company should thoroughly investigate this and take responsibility to evaluate this.

    Nutro: It's safe

    In a written statement, Nutro told us it investigated this matter and determined the cat food is safe.

    As a result of a consumer inquiry regarding possible elevated levels of Vitamin D in one lot of NUTRO NATURAL CHOICE Chicken Meal and Rice cat food, we sent a retained sample -- taken at our factory from this specific lot -- for independent testing, the company wrote. The test results confirm our previous analysis that the Vitamin D levels are well within AAFCO (Association of American Feed Control Officials) requirements and achieve the target Vitamin D level designed for this food.

    NUTRO NATURAL CHOICE cat food does not contain elevated levels of Vitamin D, the statement added.

    Nutro told us today that it sent its retained sample of cat food to a company called Covance, which it claims has expertise in Vitamin D analysis.

    They performed testing for Vitamin D3 and found the level to be 566 IU/kg, which is 628 IU/kg for dry matter, said the companys Corporate Communications Manager, Julie Lawless. The AAFCO minimum for cat adult maintenance is 500 IU/kg and the maximum is 10,000 IU/kg for dry matter.

    Lawless also told us the company ran routine tests on the food the cats owner submitted to Nutro. That sample, however, was not analyzed for vitamin D because the cats blood work -- and conversations with the owners veterinarian -- did not indicate the feline had a vitamin D toxicity problem, Lawless said.

    Asked if the company would post its test results, Lawless said: We have provided the lab results directly to the consumer.

    In its written statement, Nutro disputed Earls findings and the conclusions he reached about the companys food.

    Claims of elevated levels of Vitamin D are being reported on the website of the Pet Food Product Safety Alliance (PFPSA), the company said. Our test results clearly indicate that PFPSAs information is incorrect. In addition to the test results, a number of facts question the validity of the PFPSA claims. Conversations with the consumers own veterinarian did not indicate that food was the cause of the cats illness.

    Nutro also said the cats blood work did not show the feline had vitamin D toxicity.

    Blood test results presented on the PFPSA.org website are not consistent with a diagnosis of a cat that has been consuming elevated levels of Vitamin D, the company said.

    Nutro also claims its food is safe and did not play a role in the cats illness.

    At Nutro, quality and safety are our most important priorities. We stand by the safety of our food. The consumers cat is now in good health and we are gratified that our food did not contribute to its recent illness.

    ConsumerAffairs.com attempted to interview the cats owner for this story, but she declined.

    We also contacted the U.S. Food and Drug Administration about these latest test results on Nutros cat food. Earl told us he reported the findings to the agency, but said the FDA didnt seem interested because he didnt have the bag the food came in.

    A spokeswoman for the FDAs Center for Veterinary Medicine said she couldnt discuss an individual's FDA consumer complaint with us. Thats private, confidential information, said spokeswoman Laura Alvey.

    Meanwhile, Earl said he still has some of the Nutro cat food his organization tested and is willing to share it with anyone who wants to run another independent analysis.

    What I'd rather see, though, is if someone could find unopened bags close to that lot date and test those instead, he said. Unfortunately, opened bags always seem to generate unclean hands arguments.

    If pfpsa.org had suites of chrome and glass offices, and a 7-figure budget, we could do things I only wish we could do now, he added. As things are, about the best we can do is put the puzzle pieces together and hope someone with better resources will take it to the next level. I'm always glad to work with fellow travelers.

    Controversy is swirling around recent tests on a sample of Nutro dry cat food, which detected what two leading veterinarians consider worrisome levels vita...

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      'Tax Resolution' Firm Charged With Misleading Customers

      Texas AG cites nearly 1,000 complaints about defendants' conduct and business practices

      May 14, 2010
      A company that purports to help consumers who are having tax problems has problems of its own in Texas.

      Houston-based TaxMasters, Inc., and its chief executive officer, Patrick Cox, are facing multiple violations of the state's Deceptive Trade Practices Act and Debt Collection Act.

      According to the enforcement action filed by Attorney General Greg Abbott, the defendants unlawfully misled customers about their service contract terms, failed to disclose its no-refunds policy, and falsely claimed that the firm's employees would immediately begin work on a case -- despite the fact that TaxMasters did not actually start to work on a case until its customers paid in full for services, even if that delayed response meant taxpayers missed significant IRS deadlines.

      "In the midst of a national economic downturn, TaxMasters used a nationwide marketing campaign to offer services for distressed taxpayers who needed help dealing with the IRS," Abbott said. "A state investigation and nearly 1,000 customer complaints indicate that the defendants routinely misled customers about the nature of their tax resolution service agreements -- and worse, attempted to enforce those improper agreements through unlawful debt collection tactics. The state's enforcement action seeks to prohibit the defendants from continuing to violate the law and seeks restitution for the financially struggling taxpayers who were harmed by the defendants' unlawful conduct."

      TaxMasters advertises a tax resolution service for federal taxpayers who have received notice from the IRS of an audit, garnishment, lien, levy or tax deficiency. Citing a self-styled "national advertising campaign" and high-profile "endorsements," the company claims to have "one of the most effective tax relief teams in the tax representation business."

      However, a state investigation -- and nearly 1,000 complaints submitted to the Office of the Attorney General and the Better Business Bureau of Houston -- indicate the defendants have unlawfully misled their customers and failed to disclose material facts about their service agreements.

      'Free' coonsultation

      TaxMasters' ads encourage taxpayers to call its toll-free number for a "free consultation" with a "tax consultant." Court documents indicate callers are not connected to an employee qualified to give tax advice, but rather with a TaxMasters sales representative who recommends a "solution" for between $1,500 and $9,000 or more.

      According to court documents, many callers were offered an installment plan so that they could pay the defendants' fee over a specified period of time. However, callers who asked to see written terms and conditions prior to making a payment were informed that a credit card or bank account number is necessary to generate a written TaxMasters service contract.

      As a result, TaxMasters customers were unaware -- and the defendants' personnel did not have a practice of disclosing -- multiple aspects of the TaxMasters service agreement that were harmful to taxpayers.

      For example, the company did not disclose that all customer payments submitted to TaxMasters are non-refundable. Because customers were not provided written contracts and sales personnel did not reveal the no-refunds policy, customers did not know that they would not be able to recover any installment payments they submitted to TaxMasters -- even if they ultimately decide to cancel before TaxMasters actually did any work on their tax case.

      The state's enforcement action also cites TaxMasters for failing to reveal that it would not begin work on a case until all installment payments had been remitted and the entire fee was paid. Multiple complaints indicate that customers entered into an installment agreement with the understanding that TaxMasters would immediately begin work on their case -- only to discover later that no action was taken.

      Customers often learned there was a problem when they received a notice from the IRS indicating that an important deadline had been missed or that additional fees and penalties had accrued.

      Court documents also indicate the defendants failed to disclose TaxMasters' requirement that customers pay the entire service fee -- even if they opt to cancel their contract. Because customers are not provided a written contract, they were not properly informed that agreeing to make a single payment over the telephone obligated them to pay the entire fee quoted by sales personnel.

      Further, not only did TaxMasters attempt to obligate its customers to a fee in the absence of a signed contract, the defendants used unlawful debt collection tactics to enforce the unauthorized obligation.

      Failure to disclose

      According to the state's enforcement action, the defendants not only failed to disclose material terms and conditions governing its services, but also failed to properly provide the "tax resolution" services that were advertised.

      Customer complaints obtained by the AG's office cite TaxMasters for failing to contact and consult with the IRS on the client's behalf; failing to appear on the client's behalf at an IRS audit or hearing; failing to postpone or stop a wage or bank account garnishment; and failing to stop a levy or lien against a client's property.

      When customers who were unhappy with the defendants' services sought refunds, TaxMasters refused to return the customers' money. Court documents indicate TaxMasters not only refused to honor refund requests, it also pursued debt collection efforts against clients who cancelled their contracts.

      The state's enforcement action also charges TaxMasters with unlawfully threatening to pursue customers in Harris County courts, even if those customers did not reside in the county. Under Texas law, entities seeking to enforce a consumer contract can only do so in a county where the agreement was executed or where the consumer resides.

      The AG is seeking restitution for each TaxMasters customer who was financially harmed by the defendants' unlawful conduct. In addition, it is asking for civil penalties of up to $20,000 for each violation of the Texas Deceptive Trade Practices Act.

      'Tax Resolution' Firm Charged With Misleading Customers...

      Ford Windstar Axles Falling Apart, Suit Charges

      Class action says Ford ignored widespread problem

      By Jon Hood
      ConsumerAffairs.com

      May 14, 2010
      A group of Ford Windstar owners has filed a class action lawsuit in federal court in Pennsylvania, alleging that their vans' rear axles are rusting out, rendering the cars unfit, unsafe, and unmerchantable.

      The plaintiffs say that a design defect collects and traps water [in the axle], causing it to rust from the inside out. Specifically, the suit alleges that the cylinder is hollow and unsealed, making it easy for liquid to enter, and lacks drainage ports, meaning that the water then gets stuck inside the cylinders and has no way of getting out.

      Inevitably, the suit says, this combination leads to rust which weakens these axles, which bear significant loads while the vehicle is being operated, and renders the vehicle's axle susceptible to failing while the vehicle is being operated. The suit says that the defect is present in all Windstars for model years 1999 through 2003.

      The suit contends that the defect is well-known to both Ford and others in the automotive community, but that the company has failed to take any action to address the problem.

      This design flaw has resulted in documented failures of the axle assembly, some of which have been reported to have occurred during highway, high speed travel, the suit alleges. Despite knowing of the problem, the plaintiffs say that Ford has failed to remedy the defects or offer replacements for their defective, unfit and potentially dangerous products.

      The plaintiffs note that the flaw has never been the subject of a recall or service bulletin, and say that Ford has never warned consumers in any fashion that their vehicles might be prone to sudden failure during operation.

      Lead plaintiff Aaron Martin, of Avondale, Pennsylvania, learned the hard way that his rear axle was in less than prime condition. According to the suit, Martin's axle cracked and completely failed while he was driving the van shortly after buying it earlier this month.

      The suit comes two weeks after a New York Times article revealed that the National Highway Traffic Safety Administration (NHTSA) has received over 200 complaints about Windstar axle failures, but has never opened an investigation. The article cited a Ford spokesman's contention that [m]ost of the axle failures occurred after 100,000 to 150,000 miles, well beyond the factory warranty.

      A NHTSA spokeswoman quoted in the article seemed equally unconcerned, saying only that each complaint is read as it is received and reviewed for a potential defect trend. As a result, were more interested in the content of the complaints than categorization.

      The Windstar, which debuted in 1994 and was discontinued in 2004, has had its share of problems. Earlier models were well known for their failing head gaskets and tendency to roll over.

      The plaintiffs are mainly seeking injunctive relief compelling the defendant to refund the total value of the vehicles owned by the plaintiff and the class members, or institute a recall program during which the vehicles will be repaired at no cost to the owners. The suit, which is brought on behalf of anyone who bought or leased a subject Windstar and still owns the van, alleges breach of implied and express warranties.

      A group of Ford Windstar owners has filed a class action lawsuit, alleging that their vans' rear axles are rusting out, rendering the cars unfit, unsafe, a...

      J.D. Power: Consumers More Picky When Shopping for Lawn Mowers

      Honda ranks highest in customer satisfaction with walk-behind lawn mowers for second straight year

      By James Limbach
      ConsumerAffairs.com

      May 13, 2010
      If the grass-cutting season hasn't arrived yet where you are, you can be sure that it'll be there before long. That means shopping for a lawn mower, if you don't already have one, or replacing that workhorse you've been using for the last umpteen years.

      People seem to be taking that chore seriously. According to the J.D. Power and Associates 2010 Walk-Behind Lawn Mower Study, a larger proportion of buyers are considering more than one lawn mower brand, compared with 2009.

      The study measures customer satisfaction with walk-behind lawn mowers by examining six key factors: durability; ease of use; maintenance; performance; price; and warranty. The study is designed to provide information that helps customers with purchase decisions, as well as to assist lawn mower manufacturers in their efforts to improve customer satisfaction and brand loyalty.

      Honda ranks highest in satisfying customers with walk-behind lawn mowers for a second consecutive year, achieving a score of 766 on a 1,000-point scale. Honda performs particularly well in three of six factors: ease of use, durability and performance. John Deere (760) and Toro (742) follow Honda in the ranking.

      Robert of Wesley Chapel, FL, bought a Honda, but isn't particularly happy with it."I carried it in for broken throttle -- this was the second time I have had to carry it in for the same problem within eight months of purchase," he tells ConsumerAffairs.com. He says the manager of the store where he bought the mower told him he should have purchased extra warranty coverage. "I told her I didn't think I would need extra coverage on a $693.99 lawnmower -- especially in a eight month span of owning it."

      Michael of Audubon, PA, says he thought he was buying a Toro mower, but " you are not buying a Toro just the name.Toro had a great reputation and you get these companies buying just the name and well it is crap. The mower since the first week I got was trouble. The push handle would not lock in place so the handle would be useless and would not allow you to mow. I found out that TORO was made by Murray and Murray was made by MTD. You do not know this when you buy it,they just use the TORO name to sucker people in."

      The study also finds that this year, nearly 70 percent of walk-behind lawn mower owners say that they considered more than one brand while shopping, compared with 62 percent in 2009. In addition, since only approximately one-third of lawn mower shoppers selected the brand they wanted to purchase prior to visiting a retailer, there is ample opportunity for lawn mower manufacturers to influence decisions at the point of purchase.

      "Most walk-behind lawn mower shoppers go to a retailer without doing much research beforehand and primarily rely on in-store displays to educate themselves about the different brands and models available," said Christina Cooley, senior manager of the real estate and construction industries practice at J.D. Power and Associates. "Without spending much time up front investigating what lawn mower best meets their needs, the shopper is likely to base their decision mainly on price."

      J.D. Power and Associates offers the following tips to consumers who are shopping for a walk-behind lawn mower:

      • The lifespan of a lawn mower averages between seven to 10 years, and consumers typically spend approximately $300 on their walk-behind mower, on average. Therefore, it pays to research several brands and models to determine the best lawn mower for your needs before making the investment. Without performing this research, the lawn mower may fall short of your expectations.

      • In conducting your research, seek out the following: manufacturer and retailer websites; recommendations from friends and family; in-store product displays; and retail staff.

      • Visit multiple retailers. Many lawn mower owners choose a store at which to shop first, and then select a lawn mower from the brands that are available there. Going to more than one retailer may present you with more options from which to choose.

      In addition, it's a good idea to look at lawn mower ads carefully to make sure the machine you think you're buying is the one you get.

      The 2010 Walk-Behind Lawn Mower Study is based on responses from more than 2,900 owners who purchased a new lawn mower within the past 24 months and who have used their lawn mower a minimum of four times.



      J.D. Power: Consumers More Picky When Shopping for Lawn Mowers...

      Michigan Files Charges in $2 Million Ponzi Scheme

      Broker accused of selling bogus securities to senior citizens

      May 13, 2010

      Another securities broker stands accused of running a Ponzi scheme, this time in Michigan, where Attorney General Mike Cox says investors were fleeced of $2 million.

      Scott Pionk, 42, of Clinton Township, formerly employed as a securities broker with Michigan Securities, Inc., is accused of using fraudulent practices to sell unregistered securities not related to his employment.

      Between 2003 and April 2010, Pionk sold $2,088,960 of Select Financial Securities to at least 14 different investors. He allegedly told the investors that Select Financial Securities were backed by government owned or leased buildings, which would pay approximately seven or eight percent and were very low risk.

      However, Cox says Select Financial Securities were not registered with the Office of Financial and Insurance Regulation and none of the money was used to purchase any other legitimate security. Several of the victims were senior citizens.

      "During these difficult economic times, there are individuals who are preying on their fellow citizens and trying to make a fast buck at the expense of others," said Cox. "Financial scams are devastating to the honest, hardworking victims, and my office will not tolerate it."

      The complaint alleges that Pionk pocketed the money he received from the investments by writing checks out to himself and withdrawing money from ATM machines in casinos. He stands charged with nine felony counts of selling unregistered securities, nine felony counts of selling nonexistent securities and converting the money to his own use, and other charges.

      Another securities broker stands accused of running a Ponzi scheme, this time in Michigan, where Attorney General Mike Cox says investors were fleeced of $...

      Sunrise Herbal to Pay Restitution to Conn. Consumers

      Consumers complained of unauthorized charges and shipments

      May 12, 2010

      Sunrise Herbal Remedies, Inc. and its owner Valerie Hawk-Hoffman will make full refunds to Coninecticut consumers -- a total of $88,000 -- settling a state lawsuit alleging unwanted deliveries and abusive collection practices.

      Connecticut Attorney Genral Richard Blumenthal sued the company and Hawk-Hoffman in 2007 on behalf of Department of Consumer Protection (DCP) Commissioner Jerry Farrell, Jr. More than 370 consumers have filed complaints about Sunrise Herbal -- also known as Sage Advice, Inc. and Herbs and Teas -- with Blumenthals office and DCP.

      Hawk-Hoffman and her company agreed to a settlement ensuring full restitution to all consumers who complained to DCP and Blumenthals office. She and her company denied any wrongdoing in the settlement.

      This settlement guarantees full restitution -- 100 cents on the dollar -- for as many as 400 consumers who allege Ms. Hawk-Hoffman and her company sent and billed them for products they never ordered, Blumenthal said. Some consumers who placed a single order alleged they instead received monthly shipments. Others complained of signing up for once monthly deliveries only to be sent products two or three times a month. Still others complained of difficulties in canceling orders, as well as allegedly abusive collection practices for moneys they said they did not owe.

      Sunrise Herbal and Hawk-Hoffman sold herbal products at seminars, over the phone and on the Internet, saying the items provided a wide range of benefits, including increased energy, stress relief and an improved love life.

      The herbal packages cost $40 to $129 each. A majority of consumers told Blumenthals office and DCP they believed they were buying one order, only to be signed up for regular shipments. The average consumer estimated their loss at about $200.

      Sunrise Herbal to Pay Restitution to Conn. Consumers...

      Colorado Bars Firm From Selling Immigration Forms

      Business accused of defrauding people trying to become U.S. citizens

      May 12, 2010

      Colorado Attorney General John Suthers says he's obtained a court order barring a business from engaging in fraud in the sale of services to consumers seeking immigration assistance.

      The Colorado Springs business, called the Immigration Center, and its owners and operators, Charles Doucette, Deborah Stilson and Alfred Boyce, are accused of defrauding consumers in search of assistance in obtaining or completing federal immigration forms.

      The Office of the Attorney General filed a lawsuit against Doucette and the Immigration Center in August 2009 and alleged that the business had engaged in deceptive trade practices, including posing as or claiming an affiliation with the federal government.

      According to the complaint, Doucettes business advertised itself as being able to help immigrants obtain and complete various immigration forms in exchange for fees ranging from $300 to $700. The Immigration Centers non-refundable fees were for filing the forms, which were available free of charge from the federal government. The Immigration Center also did not provide consumers with assistance from attorneys or anyone with expertise in immigration law.

      Under the courts order against the Immigration Center, the business will be barred from engaging in immigration-assistance services and will be required to pay the state a total of $2.5 million in restitution and civil penalties. The court also approved a settlement between the state and Doucette. Under the settlement Doucette and Stilson will pay $85,000 in fines and restitution and will not be allowed to engage in the business of selling government forms or assistance with those forms.

      Doucette and Stilson also will be required to desist any marketing associated with any immigration-assistance business, including taking down any Web sites associated with their businesses.

      The Immigration Center also did business under the names U.S. Immigration Center, ImmigrationHelpLine.org, U.S. Government Help Line, Liberty Legal Services, Maydene Media, Immigration Forms & Services, and Immigration Forms & Documents.

      Colorado Bars Firm From Selling Immigration Forms...

      White House Wants Fewer Food Ads Directed At Kids

      Task force says one in three children obese or overweight

      May 12, 2010

      A White House report on childhood obesity calls the condition an "epidemic" and a "national health crises," saying one of every three children is overweight or obese.

      The Task Force on Childhood Obesity, which issued the report, is a key part of First Lady Michelle Obama's campaign to reduce the problem of obesity in America.

      "We have a roadmap for implementing our plan across our government and across the country," Michelle Obama told reporters Tuesday.

      The White House said the campaign would rely on persuasion and education rather than new federal laws. That said, the task force said food marketers -- especially food targeted at children -- should reduce their advertising. It said cartoon characters should only be used to promote healthy foods.

      The report includes a total of 70 recommendations for specific action steps, many of which can be implemented right away and are minimal or no-cost.

      "By looking across both the private and public sector and various government entities, these recommendations articulate a comprehensive approach to combating childhood obesity," said Jeffrey Levi, Ph.D., Executive Director of Trust for America's Health. "The Childhood Obesity Task Force should be commended for setting such specific goals that will help direct the action needed to address this national epidemic."

      Looking for action

      But Levi suggests more than persuasion is needed.

      "It is now the responsibility of the administration and Congress to ensure that sufficient resources are provided so that each recommendation can be realized," he said. "Each agency must develop implementation plans for those recommendations for which it is responsible."

      Among the recommendations for federal action are:

      • Increase resources for school meals.

      • A multi-year Healthy Food Financing Initiative should be created to leverage private funds to address the problem of food deserts.

      • The FDA and USDA's Food Safety and Inspection Service should collaborate with the food and beverage industry to develop and implement a standard system of nutritional labeling for the front of packages.

      • If voluntary efforts to limit marketing of less healthy foods and beverages to kids do not achieve substantial success, the Federal Communications Commission should consider new rules regarding commercials during children's programming.

      • Federal policies should promote more physical activity by updating the President's Challenge, reauthorizing the Surface Transportation Act to enhance livability and physical activity, having the EPA assist school districts with setting guidelines for new schools to consider promotion of physical activity, and enhancement of the Federal Safe Routes to Schools Program.

      • The Federal government should provide guidance on how to increase physical activity, improve nutrition, and reduce screen time in early child care settings.



      White House Wants Fewer Food Ads Directed At Kids...

      2005 Toyota Recall Under Federal Review

      Did the carmaker report problem within five days, as required by law?

      In September 2005, Toyota announced what, at the time, was its largest ever recall. The carmaker pulled in 978,000 pickup trucks and sport utility vehicles sold in the U.S. because a steering relay rod on the vehicles may fracture, causing a loss of control.

      The recall included the 1989-1996 model years and included power-steering equipped 4Runner sport utility vehicles and compact pickups and T-100 pickups.

      Now, nearly five years later, the National Highway Traffic Safety Administration (NHTSA) is investigating that recall, suggesting Toyota might have violated rules for informing safety regulators about vehicle problems.

      Specifically, NHTSA wants to know if Toyota reported the steering defect within five days of discovering it, as it is required to do by law. The agency might be a little suspicious, since Toyota has agreed to pay a record $16.4 million fine for not reporting what it knew about its sudden acceleration problems for four months.

      In 2004, Toyota conducted a recall in Japan for Hilux trucks with steering relay rods prone to fatiguing, cracking and possibly breaking, causing the vehicle to lose steering control. At that time, Toyota informed NHTSA that the safety defect was isolated to vehicles in Japan and that the company had not received similar field information within the U.S.

      In 2005, however, Toyota informed NHTSA that the steering relay rod defect was present in several models sold in the U.S. and conducted a recall.

      Pre-2004 complaints

      Late last week, NHTSA said it was alerted to a number of complaints filed with Toyota by U.S. consumers prior to the 2004 Hilux recall in Japan. As a result, NHTSA has decided to open an investigation into whether Toyota met its legal obligation to conduct a timely recall of vehicles with the defect in the United States.

      "Safety is our number one priority and we take our responsibility to protect U.S. consumers seriously," said U.S. Transportation Secretary Ray LaHood. "With new assurances from Toyota about their efforts to improve safety, I hope for their cooperation in getting to the bottom of what happened."

      NHTSA Administrator David Strickland said, "NHTSA has taken swift action since first receiving copies of these complaints on Friday. Our team is now working to obtain documents and information from Toyota to find out whether the manufacturer notified NHTSA within five business days of discovering a safety defect in U.S. vehicles."

      2005 Toyota Recall Under Federal Review...

      Avoid Moving Scams This Summer

      Doing a little homework can keep you from becoming a victim

      By James Limbach
      ConsumerAffairs.com

      May 11, 2010
      We're entering the time of year when a lot of people pickup up everything and move --across town, across the country or, perhaps, to the other side of the world.

      In fact, more than 37 million Americans -- or about 13 percent -- move to a different home every year, according to the latest U.S. Census Bureau statistics.

      Following a few simple rules when looking for a mover will go a long way toward protecting you from being victimized by scammers, advises Better Business Bureau (BBB) and the American Moving & Storage Association (AMSA).

      Complaints galore

      Unfortunately, every year, BBB receives extremely serious complaints from consumers who have fallen prey to dishonest and sometimes unlicensed moving companies.

      BBB received more than 8,400 complaints against movers in 2009. Complaints to BBB about movers are primarily about damaged or lost goods and final prices in excess of original estimates. In a common worst-case scenario, the moving company will essentially hold the customer's belongings hostage and require potentially thousands of dollars to unload the truck.

      ConsumerAffairs.com receives its share of complaints about movers.

      Diana of Klamath Falls OR, says that during a move from Temple TX, North American van lines "dropped and broke some of our things, lost nine boxes and someone broke into our file cabinet and stole four years of tax papers. As result of this our identity was stolen. I have had credit used by our people, and our bank account was used by someone."

      "A nightmare," is the way Elizabeth of Picayune, MS describes her move from Iowa to Mississippi by Atlas Van Lines. "They damaged most of my new furniture," she tells ConsumerAffairs.com and "are now saying that it was damaged before the move! What can I do they aren't willing to pay! I have had many sleepless nights." Worse yet, she says she was quoted a moving price of $16,000 and that "was raised to $40,000 due to overweight."

      "Virtually anyone with a truck and a Web site can claim to be a mover and they can't all be trusted to adhere to standards for honesty and ethical conduct," said AMSA President and CEO Linda Bauer Darr. "When it comes to such an important decision, you can save a lot of heartache by doing just a little homework to track down the companies that put customer service and integrity first. For interstate moves, that means an AMSA certified ProMover."

      "Checking a mover's credentials is critical and easy. Last year alone, consumers relied on BBB more than 1 million times for finding a trustworthy mover," said Stephen A. Cox, President and CEO of the Council of Better Business Bureaus. "When making the final choice, go with a BBB Accredited Businesses or, at the very least, choose a business that has a good rating with BBB."

      Avoiding the scam artists

      BBB and AMSA offer the following checklist for finding a trustworthy moving company:

      • Research the Company Thoroughly. While state regulations vary, all interstate movers must, at minimum, be licensed by the Federal Motor Carrier Safety Administration and are assigned a motor carrier number you can verify. Also check the company's rating with your BBB, which maintains more than 17,000 reliability reports on movers across North America. Having at least a satisfactory BBB rating is one of seven screenings that AMSA relies on when authorizing its interstate mover members to display the ProMover logo, the sign of a quality, professional mover that has pledged to abide by the organization's Code of Ethics.

      • Get at Least Three In-Home Estimates. No legitimate mover will offer to give you a firm estimate on-line or over the phone. Also keep in mind that the lowest estimate can sometimes be an unrealistic low-ball offer that can cost you more in the end.

      • Know Your Rights. Research your rights as a consumer with both the state you currently reside in and the location to which you are moving. Also enlist the help of BBB or local law enforcement if the moving company fails to live up to its promises or decides to hold your belongings hostage.

      More tips and information on how to choose a mover and plan your move are available at AMSA and your Better Business Bureau.

      Avoid Moving Scams This Summer...

      USDA Proposes New Food Safety Rules

      Aimed at reducing foodborne illness from chicken and turkey products

      The U.S. Department of Agriculture (USDA) has unveiled new chicken and turkey safety regulations that is says will reduce the number of Salmonella and Campylobacter illnesses each year.

      USDA's Food Safety and Inspection Service (FSIS) also released a compliance guide to help the poultry industry address Salmonella and Campylobacter and a compliance guide on known practices for pre-harvest management to reduce E. coli O157:H7 contamination in cattle.

      "There is no more important mission at USDA than ensuring the safety of our food, and we are working every day as part of the President's Food Safety Working Group to lower the danger of foodborne illness," said Agriculture Secretary Tom Vilsack. "The new standards mark an important step in our efforts to protect consumers by further reducing the incidence of Salmonella and opening a new front in the fight against Campylobacter."

      After two years under the new standards, FSIS estimates that 39,000 illnesses will be avoided each year under the new Campylobacter standards, and 26,000 fewer illnesses each year under the revised Salmonella standards.

      The standards are the first-ever for Campylobacter, and mark the first revision to the Salmonella standards for chicken since 1996 and for turkeys since the first standards were set in 2005. The performance standards set a level in percentage of samples testing positive for a given pathogen an establishment must achieve, and play a key role in reducing the prevalence of foodborne pathogens and preventing harm to consumers.

      Long overdue

      Caroline Smith DeWaal, food safety director for the Center for Science in the Public Interest (CSPI), says the changes will have a big impact on food safety and are long overdue.

      "USDA promised it would continuously update its performance standards, but the agency never delivered on this promise, until now," DeWaal said. "Performance standards are the metric for measuring whether a company is maintaining control over the pathogens that are often present on poultry, and which cause millions of illnesses each year."

      The President's Food Safety Working Group has set a goal of having 90 percent of all poultry establishments meet the revised Salmonella standard by the end of 2010.

      By revising current performance standards and setting new ones, FSIS said it is encouraging establishments to make continued improvement in the occurrence and level of pathogens in the products they produce. FSIS developed the stricter performance standards using recently completed studies that measure the baseline prevalence of Salmonella and Campylobacter in young chicken (broiler) and turkey carcasses nationwide.

      FSIS is seeking comment on the performance standards and two compliance guides announced in the Federal Register Notice. FSIS expects to begin using the standards after analyzing the comments and, if necessary, making any adjustments.



      The USDA has unveiled new chicken and turkey safety regulations that is says will reduce the number of Salmonella and Campylobacter illnesses each year....

      States Target Abusive Debt Settlement Firms

      New laws prohibit advance fees for little or no service

      Responding to escalating consumer complaints, more and more states are beginning to get tough with debt settlement firms.

      Many of these companies promise desperate consumers they can help them reduce their credit card and other debt, but often charge hefty up-front fees and offer little in the way of help.

      In Illinois last week the General Assembly gave final passage to a bill to prohibit debt settlement firms from engaging in unfair and abusive practices. The measure now moves to the Governor's desk for his signature.

      "Debt settlement operators target hardworking people with crushing credit card balances. They claim they're able to pay off your debt for a fraction of what's owed, but most times, this turns out to be a scam," said Illinois Attorney General Lisa Madigan. "They take your money and almost never reduce your debt. This legislation provides Illinois consumers with the strongest protection in the nation by stopping debt settlement operators from getting paid without providing a legitimate service. This law will allow them to collect a fee only when they settle your debt."

      The bill prohibits debt settlement companies from charging upfront fees, except for a one-time $50 enrollment fee. Instead, debt settlement companies can collect a fee only when they settle a debt, and even then they can charge no more than 15 percent of the savings achieved.

      Madigan said the legislation was crafted in response to the sharp rise in complaints against deceptive debt settlement operators. The complaints led Madigan to investigate and file seven lawsuits beginning in 2009 against debt settlement companies targeting Illinois consumers.

      Oregon settlement

      In Oregon, meanwhile, Attorney General John Kroger has announced an agreement with Credit Solutions of America (CSA) that cracks down on the Texas-based debt settlement company's alleged practice of charging high upfront fees and encouraging consumers to quit paying their creditors.

      "CSA's existing Oregon customers may be entitled to a partial refund if they are not satisfied with the service they get," Kroger said.

      CSA is the largest debt settlement company in the country and has a national client base. Oregon consumers complained that CSA charged very high up-front fees and encouraged clients to stop paying their creditors. There were frequent allegations that a lack of effort on behalf of CSA resulted in litigation and costs levied against consumers.

      Kroger says Oregon's new law prohibiting such up-front fees was a very important tool in obtaining a resolution to this case. House Bill 2191 protects consumers by limiting fees the companies can charge, preventing misleading advertising, and requiring better disclosures, among other things. The law also requires debt management companies to register with the Department of Consumer and Business Services.

      As a result of this settlement, four Oregon consumers will receive a total of about $2,600 in restitution. In addition, 800 Oregon consumers who are current clients of CSA are promised a refund of pre-paid fees proportional to any success the company had in resolving their debt if they are not fully satisfied with services rendered by CSA.

      Earlier this year Minnesota sued American Debt Settlement Solutions, Inc. of Boca Raton, Florida; Debt Rex USA, LLC of Dallas, Texas; FH Financial Service, Inc. of Dallas, Texas; Morgan Drexen, Inc. of Anaheim, California; Pathway Financial Management, Inc. of Garden Grove, California; and State Capital Financial, Inc. of Hallandale Beach, Florida, claiming the six companies violated the state's new debt settlement law.

      States Target Abusive Debt Settlement Firms...

      Pampers Parents Irritated at P&G; Push-Back

      Company has known of problem for months, it tells trade journal

      By Mark Huffman
      ConsumerAffairs.com

      May 10, 2010
      Proctor and Gamble, maker of Pampers disposable diapers, let it be known last week that it had had just about enough of parents blaming it for their babies' diaper rash.

      Jodi Allen, P&G's Vice President for Pampers, issued a statement saying parents have been using social media to spread "completely false rumors" that the newly introduced Pampers Dry Max diapers are causing unusually severe rashes, even chemical burns.

      "These rumors are being perpetuated by a small number of parents, some of whom are unhappy that we replaced our older Cruisers and Swaddlers products while others support competitive products and the use of cloth diapers. Some have specifically sought to promote the myth that our product causes 'chemical burns.'"

      What do parents who have reported these incidents think about the P&G response? Candice, of Smithton, Ill., called it "irresponsible."

      "How dare they make a comment that parents are making "false accusations" about the health of their children," she asked ConsumerAffairs.com. "I would never make a claim against a person or organization/company that degraded their credibility without a full investigation of the facts."

      Proctor and Gamble says it has investigated, and turned over its evidence to the Consumer Product Safety Commission and selected news media outlets. Reuters reports that it received a copy of a statement from a pediatric dermatologist, obtained by the company, that suggests there's nothing in the diaper to cause a rash.

      "I have seen absolutely no increase in rashes since the introduction of the newer model," Dr. Loraine Stern, Clinical Professor of Pediatrics at the UCLA School of Medicine, wrote in a statement provided to Reuters by Pampers. "The pictures on the Internet show what looks like classical rashes, not chemical burns. I have full confidence in recommending that my patients continue to use Pampers with Dry Max."

      A pediatrician interviewed by KIRO-TV in Seattle said he has seen nothing in the new Pampers Dry Max that would cause a severe rash. But he says that doesn't mean a small group of children with hyper-sensitive skin couldn't have severe reactions.

      "And I'm not sure in their studies if Proctor and Gamble actually studied that sub-group of kids which is called atopic dermatitis because these kids cannot tolerate exposure to very common materials such as water for a very long period of time and they do get blistering rashes," Dr. Patrick Colletti told the TV station.

      No surprise

      What P&G fails to add in its hard-nosed statements is that it has been monitoring the diaper rash issue since late last year.

      In an interview with Advertising Age, Ms. Allen said she has been having daily conference calls about the problem for months. Four P&G employees are stationed in a "listening post" monitoring press and social media reports and Ms. Allen said she reads transcripts from the company's call center daily.

      The company claims that it conducts "extensive follow-up calls" when it gets complaints and invites parents to visit a pediatrician at the company's expense, but claims no one has yet done so.

      Mystified

      Complaining parents say they're mystified at P&G's response. Stacy, of Greenfield, Ohio, told ConsumerAffairs.com that she's a loyal Pampers customer.

      "I had always been a Pampers user for both my children so when the new Dry Max came out I couldn't wait to try them," she said. "I bought a box and the next morning my son woke up not only with a horrible burn marks on his bottom but he had a severe allergic reaction all over his entire body!"

      Stacy says her pediatrician specifically asked her if she had recently changed diapers, saying he had heard other reports connected to Pampers.



      Pampers Parents Irritated at P&G Push-Back...

      Maryland Orders Halt to 'Free Rent' Pyramid Scheme

      Scheme made 'employees' out of investors

      Maryland's Securities Division has issued a cease and desist order against a firm authorities say was operating a pyramid scheme that dangled a rent-free apartment as a lure.

      The order names Diversified Marketing Consultants, Inc., d/b/a DMC and ShopD2Z, Lamondes D. Williams, and related entities Digital Zone Electronics Warehouse and Mainline Properties LLC, operating in the metro-Baltimore area.

      The company is accused of violating Maryland's securities laws by operating a fraudulent investment scheme that offered "employment" in a venture to recruit others, with the promise of profit and the use of an apartment for a year.

      Maryland Attorney General Douglas F. Gansler says the investigation revealed that DMC was soliciting investments into a supposed down-line program that would make "employees" out of investors, and promised commissions and use of an apartment or car.

      At meetings held in area hotels, Williams and others allegedly raised over $800,000 by offering the opportunity to invest in DMC for as little as an initial $100 followed by monthly payments of $100. In exchange, investors acquired the right to receive income based on the investor's recruiting other "employees." More than 115 investors/employees also took advantage of an offer, for the advance payment of a few thousand dollars, to receive use of an apartment for a year. They all now face eviction, Gansler said.

      According to the order, DMC and its agents failed to disclose to potential investors that no one was selling products but that the DMC income was based on recruiting other individuals, that commissions and rent would come from payments made by subsequent investors, and that DMC did not have sufficient funds to pay everyone's rent.

      "This has all the earmarks of a pyramid or ponzi scheme," said Gansler. "When there is no identified source of income except other investors, the risk of loss increases sharply. In addition, neither the company nor its promoters are registered with the Securities Division as required by Maryland law to sell securities."

      The Securities Division brought the action not only to halt the registration violations, but also because of the material misrepresentations and omissions made in connection with the DMC investment program, including not disclosing the fact that Williams had been previously convicted in a Maryland court for promoting a similar pyramid investment scam, and ordered in that case to pay $146,000 in restitution.

      "The law requires that investors be given material facts that could affect their investment decision," said Gansler. "This case emphasizes the need to verify with the Securities Division - before you invest -- that any investment opportunity is registered and is free of complaints."

      Maryland Orders Halt to 'Free Rent' Pyramid Scheme...

      New Law Helps Credit Card Holders Pay Down Balance Faster

      CARD Act can also help lower interest paid and improve credit scores

      By James Limbach
      ConsumerAffairs.com

      May 10. 2010
      Credit card borrowers who pay more than the minimum payment each month can reap big savings under the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, a Center for Responsible Lending (CRL) analysis finds.

      Under the new law, borrowers can pay down existing credit card debt sooner by paying less interest than under the old rules, all the while improving their credit score. The CRL analysis estimates that for each dollar above the minimum that a customer pays, he or she may save two dollars in interest.

      Interest rates have been a sore point with credit card holders.

      "In February 2010 I paid $20.00 less than the full balance on my credit card. This resulted in an 'interest' charge of $49.14 on my next statement," says Jerry of Brenham, TX. He tells ConsumerAffairs.com that the complete balance on that statement was paid in full and on time including the $49.14 charge. The following month another "interest" charge of 33.47 was added to the balance. "When I spoke with the customer service rep, he explained that the balance shown on my statement was not the amount the bank claimed was owed. And even if I paid the new balance due, there would be additional 'interest' charges added to my next bill, because I would have not paid the secret amount the bank wanted me to pay."

      This kind of thing, Jerry claims, "constitutes a deceptive trade practice. How can I guess the true balance due if the bank sends a false bill and then claims a failure to pay some concealed amount?"

      "We want Americans to know that the new law's changes to credit card practices can work for them," says Joshua Frank, CRL's senior researcher on the credit card industry. "We urge credit card customers to make the most of this new law by paying as much as possible above the minimum."

      While paying more than the minimum has always been a good idea, the new law allows the strategy to earn even greater benefits. Under the law, any amount that customers pay above the required minimum must be applied to the balance in their credit card account carrying the highest interest rate. That's the opposite of what credit card issuers had been doing for years, when they applied payments to the lowest-rate balances first -- maximizing interest charges.

      The technique worked for credit card issuers because most people were unaware of the practice and, even if they knew, could have done little about it. Frank says the new law puts borrowers in the driver's seat. But, he cautions, to benefit they have to take control and pay more than the minimum.

      The CRL analysis, "Capitalizing on New Consumer Protections: Four Tips to Rid Yourself of Credit Card Debt Sooner and Save Money," advises credit card holders to:

      • Pay more than the minimum amount due each month.

      • Watch out for hair-trigger interest rate hikes. While rates on existing balances can be raised only if a borrower falls behind by two months, the new law still allows issuers to raise rates on new purchases or cash advances for any reason.

      • Decline offers to opt-in for over-the-credit-limit coverage because this lets the issuer extend additional credit at exorbitant cost.

      • Avoid credit cards requiring grievances be settled through mandatory arbitration rather than in the courts. CRL research has found mandatory arbitration favors issuers over consumers

      For its new analysis, CRL studied several scenarios with different types of balances and interest rates. One that is common in the market featured a borrower whose credit card had one balance for purchases and another balance for cash advances, which carry a higher interest rate. By paying an extra $100 above the minimum in one month, this borrower saved $224 in interest expenses over the life of the loan.

      New Law Helps Credit Card Holders Pay Down Balance Faster...

      Social Security Changes Keep Men Working Longer

      Trend of earlier retirement ended with 1980s changes to Social Security

      The decline in the generosity of Social Security benefits for workers who recently reached their 60s has been the leading cause of a trend toward delayed retirement of older men, a new national study suggests.

      Between the periods of 1988-1992 and 2001-2005, there was a 4.7 percentage point increase in the number of men aged 55 to 69 in the workforce. The new study found that between 25 and 50 percent of that increase can be explained by declining Social Security benefits, according to David Blau, co-author of the study and professor of economics at Ohio State University.

      "Older individuals don't get the same level of Social Security benefits when they retire as they once did, and that has been one reason why a significant number of men continue to work longer than they otherwise might have," Blau said.

      These results give a glimpse of what may happen if the federal government opts to further decrease benefits to shore up Social Security's bottom line, as many experts expect.

      "This issue is very important because Social Security is in financial imbalance, and one way to correct that imbalance is for people to work longer and delay receiving their benefits," Blau said. "These results suggest that less generous benefits have the desired effect of inducing people to work longer."

      Blau conducted the study with Ryan Goodstein of the Federal Deposit Insurance Corporation (FDIC). Their study appears in a recent issue of The Journal of Human Resources.

      The researchers use data from a variety of sources, including the Social Security Administration, the Current Population Survey and the Survey of Income and Program Participation. With these data, they were able to look at labor force participation of men aged 55 to 69 between the years of 1962 and 2005.

      Trend reverses

      One contribution of this study is that it looks at labor force participation rates for more than 40 years, so that long-term trends can be identified and explained, according to Blau. In addition, the study looked at a wide range of factors, in addition to Social Security benefits, that could explain why older men leave or stay in the labor force, such as changes in company pensions, retiree health insurance, and the large increase in employment of older women.

      The average age of retirement declined during most of the period of the study, from the early 1960s to the late 80s. This was a continuation of a trend that dates back at least to 1900.

      This research, like many previous studies, could not identify the major reasons for this decline, Blau said. Results suggest that rising generosity of Social Security benefits offered during this time played a role in men retiring early, but it was not the main story.

      However, experts speculate that a general rise in living standards and well-being led people to value leisure more and gave them the opportunity to retire earlier, he said.

      While the main reasons for the declining retirement age from the 60s to the 80s remain unknown, Blau said the results are clear that new Social Security rules put in place in the 1980s have pushed men to stay in the workforce longer -- even after changes in workplace pensions, retiree health benefits and other factors are taken into account.

      "Average retirement ages had been declining in the United States for decades, so a turnaround like we saw beginning in the late 80s is a significant change," Blau said. "It's clear that changes in Social Security benefits played a major role in that turnaround."

      The study, supported by a grant from the National Institute on Aging, identified two Social Security changes in particular that have led older men to work longer: the increase in the full retirement age beyond age 65, and the financial incentives offered to older workers to delay retirement even beyond the full retirement age.

      "These two features of Social Security that were changed in 1983 played a substantial role in persuading men to work longer," Blau said.

      But while changes in benefits played the largest role in leading men to delay retirement, the study found these changes weren't the only reasons.

      One important factor identified by the study was the increasing number of older married women in the workforce. In the early 1960s, there weren't many older women working outside the home, but that number has increased substantially over time.

      The marriage factor

      How does that affect men's retirement? Blau noted that men tend to be a few years older than their wives, and if couples want to retire at the same time, husbands often have to work a few years longer than they otherwise might.

      The final important factor in later retirement ages was the increasing education levels of older men. In the early 1960s, the period first covered by this study, the majority of older men in the workforce were high school dropouts. But by the 2000s, dropouts were a small minority.

      Other studies have shown that more highly educated people tend to retire later than those with less education, so it is no surprise that more people are retiring later these days.

      Blau noted that the United States is not alone in seeing these changes in retirement patterns. Western European countries and Japan also saw the drop in retirement ages until the late 80s and early 90s, and then a steady increase since then.

      Nearly all these countries have experienced the same demographic trends and Social Security trends that encouraged workers to retire earlier, at least up to the late 80s, according to Blau. Now, a decline in fertility rates in advanced economies has left fewer younger workers to support retirees, and has resulted in reduced benefits in government programs like Social Security and workers staying on the job longer.

      The big question is whether the trend toward later retirement will continue, Blau said. The education effects found in this study are unlikely to play a major role in the future, and the effects of older married women in the work force may continue to push men's retirement back further, but only marginally. The biggest impact will continue to be changes in Social Security benefits, he said.

      The full retirement age for Social Security will increase from 66 to 67 for workers born in 1960 and later, so that may induce older workers to remain employed longer. After that, no major changes are in store for Social Security benefits -- at least for now.

      "Most experts think it is inevitable that there will be further reductions in Social Security benefits to keep the program financially balanced," Blau said. "Those changes may very well lead to even later retirements."

      Social Security Changes Keep Men Working Longer...