Current Events in August 2010

The recalled models are:

HONDA / ACCORD 2003
HONDA / CIVIC 2003
HONDA / ELEMENT 2003-2004

Dealers will remove the original interlock pin and lever and replace them with redesigned components when the recall begins in late September 2010.

Owners may contact Honda at 1-800-999-1009.

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

The "debt indicator" acts as a form of credit check, telling tax preparers whether a taxpayer's refund will be paid or will be intercepted for government debts.

"As we prepare for tax season every year, we look at past practices and consider whether they still make sense. We no longer see a need for the debt indicator in a world where we can process a tax return and deliver a refund in 10 days," IRS Commissioner Doug Shulman said. "We encourage taxpayers to use e-file with direct deposit so they can get their refunds in just a few days."

So far this year, more than 95 million tax returns have been e-filed, representing more than 70 percent of tax returns.

"Refund Anticipation Loans are often targeted at lower-income taxpayers," Shulman said. "With e-file and direct deposit, these taxpayers now have other ways to quickly access their cash."

"We are pleased that IRS has decided to stop aiding and abetting high cost RALs that siphon off hundreds of millions in taxpayers' hard-earned money and federal benefits meant to lift the working poor out of poverty," said Chi Wu, National Consumer Law Center (NCLC) staff attorney.

The IRS has been reviewing refund settlement products, such as RALs and Refund Anticipation Checks (RACs), as part of the Return Preparer Review released in January. Specifically, the IRS announced that it would study refund settlement products.

Secured loans

RALs are loans secured by a taxpayer's anticipated tax refund. Currently, tax preparers who electronically submit a client's tax return receive in the acknowledgment file an indication of whether an individual taxpayer will have any portion of the refund offset for delinquent tax or other debts, such as unpaid child support or delinquent federally funded student loans. This acknowledgment is known as the debt indicator, and is used as an underwriting tool for RALs.

"The federal government should not be sharing taxpayers' personal information for the profit of banks and tax preparers by operating what is essentially a free credit reporting service for them," said Jean Ann Fox, director of financial services for Consumer Federation of America (CFA). "We are glad the IRS finally stopped letting tax preparers and banks pry into taxpayers' records about what they owe the government."

The IRS announcement would remove the debt indicator starting with the upcoming 2011 tax-filing season. The agency that taxpayers will continue to have access to information about their tax refunds and any offsets through the "Where's My Refund?" service.

RACs are temporary bank accounts established on behalf of a taxpayer into which a direct deposit refund can be received and out of which a bank typically issues a payment to the taxpayer.

With both RALs and RACs, tax preparation and product fees are subtracted directly from the refund, and the taxpayer does not make any "out-of-pocket" payments. They are frequently marketed to taxpayers who do not have cash to pay for professional tax preparation services.

The NCLC and CFA have been urging the IRS to end the debt indicator since 2005, when they published a report entitled "Corporate Welfare for the RAL Industry: The Debt Indicator, IRS Subsidy, And Tax Fraud."

Their most recent criticism of the debt indicator was during the IRS Commissioner's Return Preparer Review Forum in August 2009, in which they again urged the IRS to discontinue the program.

In a related effort, the IRS plans to explore the possibility of providing a new tool for the 2012 tax filing season to give taxpayers a mechanism to use an appropriate portion of their tax refund to pay for the services of a professional tax return preparer.

The IRS plans to engage with taxpayers, consumer advocates and the tax return preparer community to consider whether providing this option would be a cost-effective way for consumers to pay for tax return preparation services.

How much? Perhaps as much as one percent, if the house happens to be within 250 feet of the foreclosed property. As for the foreclosed home, it's value could plummet an average of 27 percent.

Those are the findings of economists at Harvard University and the Massachusetts Institute of Technology (MIT) who scoured records pertaining to 1.83 million Massachusetts home sales from 1987 to 2009. Their research, forthcoming in the journal American Economic Review, is one of the most rigorous and comprehensive analyses to date of the losses sustained on foreclosed properties.

"The losses on foreclosed homes proved to be much larger than we had expected," said lead author John Y. Campbell, the Morton L. and Carole S. Olshan Professor of Economics at Harvard. "If anything, these results may underestimate losses on foreclosed properties nationwide, since Massachusetts has not experienced a housing boom and bust as pronounced as that seen in many other parts of the country in recent years."

Campbell and his co-authors, Harvard's Stefano Giglio and MIT's Parag Pathak, found that other types of forced sales also reduce home prices, but by smaller amounts. When a house is sold after the death of an owner, they found, the price sinks five to seven percent on average. When an owner declares bankruptcy, the value falls by an average three percent.

Death discount

The researchers write that death-related discounts may result from poor home maintenance by older sellers, while foreclosure discounts appear rooted in the greater likelihood of deterioration among foreclosed homes, and specifically the threat of vandalism. They note that the percentage loss on foreclosed properties is greater, on average, in less safe neighborhoods, where risks of damage to vacant homes may be higher.

"Banks know it's bad to hold an asset that's susceptible to damage, and want to unload such assets quickly," Campbell said. "Also, the costs to maintain a house are fixed, but those fixed costs eat up more of the price of a cheap house -- making lenders even more eager to dispose of foreclosed cheaper homes."

Campbell and his colleagues found that prices of other homes fall by about one percent if within roughly 250 feet of a foreclosed property -- an effect that fades away for homes 500 or more feet from a foreclosure. What's more, these "contagion" effects appear to be cumulative, meaning that multiple foreclosed homes in close proximity can depress the value of other nearby properties by several percentage points.

The researchers say their results indicate that public policy should aim to minimize foreclosures, which appear broadly harmful.

"Our work provides evidence of genuine social harm arising from foreclosures," Campbell says. "Public policy should discourage reliance on foreclosure as a means of protecting lenders. While foreclosure may rescue lenders, it damages the rest of society."

Data from 13 states surveyed indicate that polytobacco use -- the use of cigarettes in combination with other forms of tobacco (including cigars; pipes; bidis, a South Asian cigarette wrapped in a leaf; kreteks, a cigarette made with tobacco, cloves and other flavors; and others) -- is most common among men (4.4 percent), people who were single (4.8 percent), young adults ages 18-24 years (5.7 percent), and those with household incomes less than $35,000 (9.8 percent).

The report, "Any Tobacco Use in 13 States -- Behavioral Risk Factor Surveillance System, 2008," provides statistics about polytobacco use among adults over the age of 18. The report also finds that one in four adults in these states use at least one form of tobacco, such as cigarettes, cigars, or smokeless tobacco.

"Every day smoking kills more than 1,000 people and is the leading preventable cause of death," said CDC Director Thomas R. Frieden, M.D., M.P.H. "The more types of tobacco products people use, the greater their risk for many diseases caused by tobacco, such as cancer and heart disease."

Other findings

The report also found:

• Use of any tobacco ranged from 18.4 percent in New Jersey to 35 percent in West Virginia.

• Use of any tobacco was higher among non-Hispanic whites (26.2 percent) and non-Hispanic blacks (24.4 percent) than among Hispanics (19.7 percent).

• Use of any tobacco was higher among members of an unmarried couple (36.3 percent), single (30.3 percent), or widowed/divorced (29.1 percent) than among married people (21.2 percent).

• Use of any tobacco was higher among those who had less than a high school education (33.1 percent) when compared with those with some college or more (20.5 percent).

• Polytobacco use ranged from 1.0 percent in New Jersey to 3.7 percent in West Virginia.

A class action lawsuit filed in California says that T-Mobile markets certain phone plans as offering unlimited data, but then caps data use once consumers are locked into a contract.

The suit, brought in Superior Court in Yolo County, says that advertisements for T-Mobile's Unlimited Web & E-mail plans, offered for both Blackberry and other brands of smartphones, promise the consumer access to an unlimited amount of data. The plans offer a discount on new phones if consumers agree to sign a contract.

Trent Alvarez, the suit's lead plaintiff, bought two smartphones last year, and signed a two-year contract for each. The sales representative who sold the plans to him expressly represented that the data plan [Alvarez] was to receive would be 'unlimited,' according to the suit.

But in May 2010, Alvarez received a text message informing him that, Your data usage in this billing cycle has exceeded 10GB; Data throughput [speed] for the remainder of the cycle may be reduced to 50kbps or less. Alvarez called T-Mobile to have the volume and speed limits removed, but a representative refused his request.

According to the suit, the limits render Alvarez's phones essentially useless for anything other than making or receiving phone calls and text messages.

Little warning to consumers

Alvarez's experience is typical, the suit says, of consumers who are likely to be mislead by T-Mobile's promise of 'unlimited' data.

The only warning given to consumers, according to the suit, is a statement on the very last page of [a T-Mobile] brochure, buried in minuscule type barely readable, [that] 'Your data session may be slowed, suspended, terminated, or restricted if you use your service in a way that interferes with or impacts our network or ability to provide quality service to other users '

T-Mobile isn't the first carrier to be accused of falsely advertising data plans as unlimited. In 2007, Verizon settled a suit brought by New York Attorney General Andrew Cuomo alleging that that carrier placed invisible limits on its plans that purported to offer unlimited data capabilities.

This settlement sends a message to companies large and small answering the growing consumer demand for wireless services. When consumers are promised an unlimited service, they do not expect the promise to be broken by hidden limitations, Cuomo said of the settlement, which required Verizon to pay $1 million to consumers whose accounts were terminated after they exceeded the undisclosed limits.

If Alvarez's suit is to be believed, T-Mobile's line was busy when that message came through.

The suit requests restitution for money consumers spent on smartphones and the accompanying plans and an injunction prohibiting further misleading advertising.

By Jon Hood
ConsumerAffairs.Com

August 8, 2010 8
Has your olive oil been lying to you all these years?

That's the allegation made in a lawsuit filed by prominent chefs and restaurants, who claim that a number of companies are mixing their olive oil with cheaper alternatives while still branding it as extra virgin.

Specifically, Daniel Callahan, who is representing the plaintiffs, alleges that the the product does not meet [the extra virgin] standard and is of inferior quality often adulterated with cheaper refined oils such as hazelnut oil or lesser olive oils. Callahan says that the defendant companies have been knowingly misleading and defrauding California consumers for years, and that their blatant misrepresentations allow them to charge a hefty premium for the product.

The suit draws its findings from a study conducted by University of California at Davis's Olive Center, part of the school's Robert Mondavi Institute for Wine and Food Science. The report, released last month, concluded that 10 percent of olive oil made in California -- and an eye-popping 69 percent of imported olive oil -- fails to measure up to standards set by the Department of Agriculture.

Callahan says that the study confirmed the suspicions of top chefs, who [f]or years have shared anecdotal tales of extra virgin olive oil that just did not taste right.

The suit also says that the defendants have long been aware of the problem, and points out that The New Yorker, USA Today, and National Public Radio have all done segments on the issue within the past four years.

Despite this information, these retailers continued to sell the product and progressively increase the prices, according to Callahan.

The defendants include household names like Bertolli, Filippo Berio, Mazola, Pompeian, and Rachael Ray.

The suit also names top retailers like Wal-Mart, Target, and Kmart -- and a laundry list of smaller stores -- who allegedly sold the fouled oil. Notably, Callahan says that Costco and Trader Joe's are among the stores that have been upfront with their oil.

The plaintiffs are no slouches either. They include David Martin, a fixture on Bravo's hit show Top Chef; Michael Owings, Culinary Director for Dink's Restaurant in Palm Springs, Calif.; and Antonello's Ristorante, a Costa Mesa, Calif., restaurant described as one of the finest Italian Restaurants in the country. All of them are offended by the fraudulent actions taken by these Defendants, according to Callahan.

The plaintiffs are seeking an injunction ordering the manufacturers to stop distributing the fraudulent oil, and hundreds of millions of dollars in fraudulently obtained profits. Callahan says that consumers spend an amazing $700 million a year on olive oil.

Prosecutors say Karen Washam-Hawkins, 48, of Carson, California, and Gerald William Bartlett, 38, of Tampa, Florida, supplied phony Social Security numbers and other false information that allowed their "customers" to create fake credit histories used to buy expensive houses in Lee's Summit, Missouri.

"This federal indictment marks the first time nationwide that the suppliers have been charged in a credit history fraud case, and signals our determination to prevent such schemes from proliferating," said Beth Phillips, U.S. Attorney for the Western District of Missouri.

Credit history fraud is a new and worrisome trend prosecutors are seeing nationwide, Phillips said. "By supplying false credit information, they (criminals) artificially boost credit scores and create a fraudulent credit history that enables their customers to commit financial fraud," she said.

According to the six-count indictment, Washam-Hawkins and Bartlett operated their fraudulent credit history scheme from late 2004 through August 2006. Several of their customers "benefited" from the sham and fraudulently purchased six residential properties totaling $2,717,420, the indictment states.

The scam

The indictment details how the scheme worked:

• Washam-Hawkins, a real estate agent, allegedly obtained and sold fake Social Security numbers to several individuals. Those phony Social Security numbers allowed her customers to create false credit histories, which were used to deceive lenders and obtain loans;

• Bartlett, who operated three businesses in Tampa, allegedly provided false account and payment information to a credit bureau -- action that falsely boosted his customers' creditworthiness and allowed them to dupe lenders and obtain loans.

The indictment also details how three other individuals used the fraudulent information to enhance their credit and purchase homes.

According the indictment, Washam-Hawkins allegedly supplied an Anaheim, California, man named Shade Jerome Howard with false Social Security numbers.

"Washam-Hawkins agreed to supply Howard with false Social Security numbers, referred to as 'news,' for clients of Howard," the indictment states.

Howard then gave Bartlett those false Social Security numbers and additional information and requested "positive credit information" for himself and others so they could obtain loans to buy homes in the Kansas City, Missouri, area, the indictment charges.

Bartlett, using the names South Florida Management Group and Consumer Financial Group, allegedly reported false account and payment information to a credit bureau.

The indictment states this scheme allowed Howard and two other men --- Ronald E. Brown, Jr., of Gladstone, Missouri, and Daryle A. Edwards of Overland Park, Kansas -- to improve their credit "in order to deceive lenders and obtain mortgage loans for residential properties in Lee's Summit."

According to the indictment, Howard purchased two houses totaling $1,201,000, Brown bought three house totaling $1,339,700, and Edwards purchased one house for $418,500.

The indictment also charges Washam-Hawkins and Bartlett with three counts of transferring funds obtained by fraud across state lines. Washam-Hawkins is also charged with two counts of wire fraud.

Phillips said the charges outlined in the indictment are "simply accusations" and not evidence of guilt.

Cuomo says his office is investigating what he calls "predatory" health care lending where consumers, especially seniors and vulnerable patients, are misled about financing, causing them to be pushed into debt.

Cuomo says some health care providers pressure consumers into using GE Money's CareCredit, a health care credit card, through fast-talking sales pitches and deceit. He says the investigation also found CareCredit often pays kickbacks in the form of rebates to the providers based on how much business they charge consumers on CareCredit cards.

The investigation was based in part on hundreds of consumer complaints received by the attorney general's office. Consumers reported that health care providers promised that the credit card had "no interest," when it often carried retroactive interest of over 25 percent if not paid in full during a promotional period. Consumers were also unknowingly charged up front for services they never received, and their attempts to obtain refunds were often thwarted or ignored. Meanwhile, CareCredit pays the health care providers in-full within 48 hours of the charge.

The investigation also found that CareCredit charges the providers a fee for the right to offer the cards, and then rebates part of the fee based on the amount of money the providers generated through CareCredit sales. Cuomo said this kickback arrangement, plus CareCredit's payment in full to providers within two days of the charge, creates an incentive for providers to push consumers to use CareCredit rather than other methods of payment. In fact, he says providers pushed CareCredit over cash.

Bankruptcy

"Health care debt is the number one cause of individual bankruptcy, and this scheme is contributing to the economic burden being felt by consumers," Cuomo said. "People are being tricked by misleading offers that have them paying for services they never received as well as interest charges they never knew about -- and they are ignored and given the runaround when they try to get their money back."

Cuomo issued subpoenas to 10 providers that promote CareCredit, as well as to the companies that manage CareCredit, Chase Health Advance, Visa Health Benefits, and Citibank Health Card. The subpoenas seek marketing materials, applications, terms of credit, contracts and rebate agreements, policies and procedures, consumer complaints, and regulatory inquiries. The investigation is continuing.

In addition, Cuomo is asking several nationwide and state-based medical associations, including the American Dental Association and the New York State Dental Association, to explain why they endorsed CareCredit and whether they received compensation for doing so.

CareCredit is accepted by more than 125,000 health care practices nationwide. The New York State Dental Association asserts that more than eight million dental patients and 80,000 dental practices use CareCredit nationwide. The credit card is advertised as a way to pay for services often not covered by insurance.

In recent years, Cuomo says, his office has received hundreds of complaints from consumers indicating that they were lured and misled by providers into applying for, accepting, and using CareCredit. Among the complaints received by the AG's office regarding what he terms a scam.

"Attorney General Cuomo's investigation shines a badly-needed spotlight on deceptive practices used to market health care credit cards to elderly and low-income consumers,"said Chuck Bell, Programs Director for Consumers Union, nonprofit publisher of Consumer Reports. "We are concerned that some health care providers are aggressively marketing these high-interest credit cards to patients, without providing appropriate disclosures, protections, or refunds. Consumers Union strongly supports the attorney general's investigation, and applauds his ongoing efforts to protect consumers across the nation."

"Thompson" disappeared in June amid a growing number of state investigations into the organization's fundraising and spending, including revelations that the man who appears to have orchestrated this sham charity made hundreds of thousands of dollars in political contributions to candidates throughout the United States and in Ohio.

"Bobby Thompson"       Photos: Ohio Attorney General

"Our investigators have determined that this individual stole the identity of someone else and used that as the centerpiece of an apparent scam that has continued for seven years and involved tens of millions of dollars," Ohio Attorney General Richard Cordray said. "The real Bobby Thompson, whose identity was stolen, including his Social Security number and date of birth, has absolutely no connection to the U.S. Navy Veterans Association. We don't know who this individual is yet, but we do know that he is not Bobby Thompson."

The Hamilton County arrest warrant is based on evidence that the individual claiming to be Thompson used a false identity in the process of renting a UPS mailbox in Cincinnati in 2003. The mailbox was used as a collection point for donations to the charity. Since 2003, Ohioans have contributed close to $1.9 million to the U.S. Navy Veterans Association. Nationwide contributions could be many times that amount.

On May 28, Cordray ordered the USNVA to stop contacting Ohio residents for contributions after determining that the group's registration documents were plagued with irregularities. Those documents contain false and misleading information, including the names of association officers who also appear to be fictional.

In recent weeks, the Charitable Law section of the Ohio Attorney General's Office has obtained court orders freezing the Ohio bank accounts of the USNVA as well as the organization's UPS mailboxes in Hamilton and Fairfield counties.

There appears to be very little evidence that the organization spent money actually helping veterans or their families, Cordray said. Yet public records do show hundreds of thousands of dollars in political contributions to various candidates made by "Bobby Thompson" personally or through the political action committee he created and to which he was the sole contributor, NAVPAC.

Anyone with information about this individual or his whereabouts is asked to contact the Ohio Bureau of Criminal Identification and Investigation at (740) 845-2224 or (800) 282-3784.

Cordray said that if "Thompson" is located and arrested outside of Ohio, his office will pursue extradition proceedings to have this individual returned to Ohio. Copies of the arrest warrant, photos of "Bobby Thompson" and additional background materials are available at www.OhioAttorneyGeneral.gov/USNavyVetsMaterials.

The nation's second largest mortgage finance company reports that in the last week, the average rate on all four mortgage types fell to the lowest level since it started keeping records in 1971.

Prospective homebuyers and refinancers can thank the stock market's lackluster performance this spring, which has contributed to a stronger Treasury bond performance. The more money flowing into bonds, the less the government has to pay in interest. Since mortgage rates are keyed to Treasury rates, mortgages have continued to become more affordable.

The 30-year fixed-rate mortgage averaged 4.49 percent for the week ended August 5, compared with the previous week's 4.54 percent average and 5.22 percent a year ago.

Rates on 15-year fixed-rate mortgages were even lower, 3.95 percent, versus 4.00 percent in the previous week and 4.63 percent a year earlier. It's also at a record low.

Five-year Treasury-indexed hybrid adjustable-rate mortgages dropped to an average 3.63 percent from the previous week's 3.76 percent and 4.73 percent a year earlier. One-year Treasury-indexed ARMs were 3.55 percent, down from 3.64 percent and 4.78 percent, respectively.

The record low rates were obtained with payment of anywhere from .06 to .07 of a point of pre-paid interest.

It may be a good reason for consumers to display a certain amount of wariness in their dealing with credit card companies.

Last year some predicted that the CARD Act, a new law curbing some of the industry's worst abuses, would lead to shrinking credit for consumers and smaller profits for banks. So far, neither of those predictions have actually occurred.

A new study by the Pew Charitable Trusts found that there has been minimal change in the number of cards that include an annual fee, actually declining one percentage point from July 2009 to March 2010. During that period, the median size of these fees increased from $50 to $59 for banks and from $15 to $25 for credit unions.

"Although we applaud changes by the card industry to create a fairer and more transparent marketplace, our research shows that some challenges remain," said Nick Bourke, director of Pew's Safe Credit Cards Project and report co-author. "For the first time, we have seen credit card disclosures warning consumers that interest rates could go up as a penalty for certain actions, but not stating how high those rates could go. Federal regulators should pay attention to this problematic new trend. When issuers withhold vital pricing information, it leaves cardholders in the dark and puts their financial security at risk, which is why federal regulations have long required issuers to disclose their rates and fees up front."

Looking for loopholes

Other consumer groups are worried that banks are finding clever ways around new regulations designed to protect consumers. Last month three groups -- the National Consumer Law Center, Consumer Federation of America and Consumer Action -- warned federal regulators of what they called "potential violations of the CARD Act."

Meanwhile, credit card lenders are once again actively marketing to consumers. During 2009, the worst recession seen in years, the economy and legislative pressure caused issuers to dramatically pull back on offers, and annual mail volume from credit card issuers dropped to its lowest levels since 1993.

However, during the first quarter of 2010 U.S. households received 481.3 million credit card offers -- a 29 percent increase versus the 372.4 million offers mailed during the same time a year ago, according to Synovate Mail Monitor, the direct mail tracking service from global market research firm Synovate.

"In Q4 2009 we began to see issuers release the pause button and mail more, and in Q1 2010 that trend continues. Throughout the remainder of the year we expect to see mail volume continue its slow climb upward," said Anuj Shahani, Director of Competitive Tracking Services for Synovate's Financial Services group.

Diving into subprime

Capital One was one of the largest mailers for the quarter, second only to Chase. In its first quarter earnings statement, Capital One announced its intention to re-enter the subprime market after an almost 100 percent pullback in the third quarter of 2009. True to that commitment, Capital One more than doubled their mailed card offers versus the prior quarter.

However, this wasn't the only surprise. HSBC, which had briefly considered leaving the US credit card industry behind, doubled its mail volume in the first quarter of 2010 versus the fourth quarter of 2009 and more than tripled its mailings versus one year ago.

"This is a massive commitment in terms of expenditure for the issuers as direct mail is one of the most expensive channels to acquire new cardholders. This tells us that the issuers are not just dipping their toes in the water, they are diving in head first," Shahani said.

This is reason for consumers to show caution when these offers arrive in the mail, consumer advocates warn. Banks do not offer deals that hurt their profits and what's good for banks is not always good for consumers.

The Wall Street Journal notes that some banks are now pushing "professional" cards. Much like a business credit card, professional cards' terms and services are very similar to consumer cards. Yet the Journal notes that professional cards, for some reason, are not covered by the rules of the CARD Act.

Even so, Claire Braverman, Senior Vice President of Synovate's Financial Services, believes the industry's creativity in producing new services and offers will ultimately be good for consumers. However, consumers should go into any new credit card relationship with their eyes wide open.

But things are different now. Since the 1980's, children in the U.S. have been issued Social Security numbers (SSN) at birth. Since they don't use them until for credit purposes until they are at least 18, the number lies dormant for 18 years. That's plenty of time for an identity thief to steal it.

Unfortunately, credit issuers do not currently have the ability to verify if a SSN belongs to an adult or a minor. If they knew that the SSN presented belonged to a minor they would automatically deny opening a credit account.

Years ago, the Identity Theft Resource Center (ITRC) envisioned a simple solution to this problem. Its called the Minors 17-10 Database and ITRC has been talking with various government entities and legislators about this concept since July 2005.

With the growing popularity of so-called "credit protection numbers" -- credit privacy numbers (CPN) -- and now "secondary credit numbers" being sold online, this issue has become more urgent, the group says. These dormant Social Security numbers, being sold as CPNs, frequently were issued to children. The crime, identity theft, most likely will not be discovered until the teen reaches adulthood.

The creation of a Minors 17-10 Database would provide credit issuers the tool to verify if the SSN provided belongs to a child, ITRC says. This proposed SSA record file would selectively extract the name, month of birth, year of birth, and SSN of every minor from birth to the age of 17 years and 10 months.

This record file, maintained by SSA, would be provided monthly to approved credit reporting agencies. When credit issuers call about the creditworthiness of a SSN, if the number is on the Minors 17-10 Database, they would be told that the SSN belongs to a minor.

This, ITRC argues, would effectively deny obtaining credit using a minor's SSN. It would reduce business fraud loss as well as protecting children from abuse of their SSNs for illegal financial purposes.

Reports of Toyota's problems with sudden acceleration in some of its cars burst into the headlines late last year, but a class action suit claims the carmaker was aware of the problem at least six years earlier.

Lawyers handling a class action lawsuit against the Japanese carmaker say they have found documents showing Toyota was investigating at least one report of unintended acceleration as early as 2003. In a filing in federal court in California, the attorneys cite a 2003 field report a Toyota technician wrote in response to a driver's complaint of unintended acceleration.

In the filing, the lawyers say the technician urged immediate action on the part of the carmaker, calling the problem "extremely dangerous" and expressing the fear that it could start happening more frequently in the future.

By 2004, more than 20,000 drivers had complained to the National Highway Traffic Safety Administration (NHTSA) of sudden acceleration incidents. These cases involved a number of different brands, not just Toyota, and began in the late 1980s.

Terrifying experience

In 2007 ConsumerAffairs.com reported a Washington state consumers' detailed description of an uncontrolled acceleration incident involving her new Toyota Prius.

"As I attempted to merge into heavy traffic," Tina told us, "I accelerated up the on ramp and was attempting to place the car between two vehicles going at a rate of approximately 50 miles per hour. The car lunged forward and would not slow down without repeated pumping of the brakes."

Tina said she left the freeway as soon as she could weave her way through heavy traffic, still unable to disengage the Prius throttle. After turning off the power, she made her way to a Toyota dealer, noting on the way a "foul odor" and a malfunctioning computer display. But the Toyota service department diagnosed the problem with the runaway Prius as nothing more than a carpet jamming the accelerator pedal or driver error.

Floor mats

A month later Toyota and NHTSA agreed that faulty floor mats are the cause of runaway acceleration in the Toyota Prius hybrid as well as several other Toyota vehicles. Toyota then recalled 55,000 floor mats which are used in the 2007/2008 Lexus ES 350 as well as the 2007/2008 Camry.

However, the reports continued for another two years. Last November Toyota said it would replace or reshape accelerator pedals on 3.8 million vehicles in an attempt to deal with an unintended acceleration problem that has resulted in at least one fatal accident. The recall was expanded in January.

By Leonard Earl Johnson
ConsumerAffairs.com

August 3, 2010
We sat along banks of small but comfortable modern chairs in front of floor-to-ceiling windows gazing out at the passing Louisiana countryside.

We are on the second level of the observation car of Amtraks Sunset Limited, bound for Los Angeles. This is the train Dick Powell and Myrna Loy rode in the movie version of Dashiell Hammetts The Thin Man. It connects Americas West Coast to her lesser known Third Coast.

We are bound for Lafayette, the heart of French Louisianas colorful Acadiana. Lafayettes motto is "The Hub City," a title derived from being at the convergence of waterways, railroads and highways. Since the 1950's it has also been the hub of Louisianas offshore oil and gas service industries.

Acadians build even sometimes design the devices that keep deep-water oil drilling the safe and profitable industry that it is normally. Safe? Well, truthfully it has always been a risky business, but an acceptable one.

Lafayettes relatively new train depot belongs to the city, not Amtrak. It is in the process of being joined to an under-construction Rosa Parks Transportation Center and United States Post Office. "Under construction with Obama stimulus money," locals sometimes say with a sneer.

The depot is located downtown one block from the musically historic Grant Street Dance Hall. Two blocks further away is the Evangeline Expressway, the demarcation line dividing old and new Lafayette.

East, past the city airport, the Evangeline Expressway is lined with businesses with internationally known names like Haliburton, KBR, Transocean, and Franks Casing Crew & Rental Tools.

Also found there are the food services, and the transport services for the offshore rigs. And, yes, the pipes, gears, and even the safety valves on most of the rigs out in the Gulf of Mexico came from, or passed through the designing rooms of thousands of shops and offices situated along this corridor.

Lafayette is a clean oil town, a town more populated with engineers than roughnecks. And politically more like Texas than any other city in coastal Louisiana.

Anyone here will readily point out how the Horizon Deepwater explosion, sinking and resulting oil spill was a Gulf Coast anomaly. Many here have told me that there has never been a serious Gulf oil spill before Horizon. This, of course, is not true.

The IXTOC I rig exploded and sank off the coast of Mexico in 1979. At 140 million gallons, it was not as large a spill as Horizon, now estimated to exceed 205 million gallons, but it was big. And it spewed oil for ten months in much shallower waters.

140 million gallons spilled in the IXTOC I well blowout in 1979. NOAA photo

Poor memories

We live in an era when few of us even remember the names of the wars we have fought since 1945, let alone a thirty-one-year-old oil spill far away in Mexican waters. So, IXTOC is nearly forgotten. Besides, its damage seems to have been incorporated into the ecosystem of the region without anyone finding oil in their oysters today. True, but their shrimp and oyster industries were devastated for years after the spill.

Everyone here hopes most expect quicker recovery from the Horizon Deepwater spill. Because? Well, because it is now, and we are us, and Moon Graffon tells us so, for two hours every weekday on KPEL radio, the voice of Abbeville/Lafayette. Graffons show is followed daily by three hours of Rush Lumbaughs comparatively calming commentary.

New Orleans radio commentators might never be thought to be pro-Obama, but the charming and popular print-and-radio food critic, Tom Fitzmorris, e-mailed this when asked about the Mexican shrimp and oyster industries' recovery time and how it might be a guide to ours: "I expect that by Thanksgiving we will have oysters nearly as normal. You can quote me on that."

Out of sight, out of our minds

Computerized graphics move us forward from April 20, when the Horizon Oil Rig exploded killing 11, 50 miles south of the mouth of the Mississippi River. We see the resulting gusher become a volcano. It spews out plumes of oil dispersed by chemicals far beneath the sea. The plums grow, contract, curl and break off little loops that are left to dance their separate way east towards the Gulf Stream. Or at least somebodys beach.

Oil will likely plop up on Gulf maybe Atlantic beaches for some time to come. Future beachcombers may harvest little hardened tar balls as souvenirs. Shopkeepers might even sell them.

After Hurricane Alex swelled the sea, and the threat of Tropical Storm Bonnie passed, the underwater oil plum drew itself into a smaller glob and headed back west towards Louisiana.

We do not see any tar balls from our trains windows as we roll along the coastal side of the great Atchafalia Basin. The Atchafalia is the last remnant of a once huge continental drainage system that spread swampy wetlands all the way from New Orleans to above St. Louis, Missouri. The Mississippi River is the central force of this system. It is also the continents major migratory bird flyway. Now the Mississippi River is canalized and the swamps have been drained to make way for roads, and towns, and farms, and strip malls.

If you recall, earlier in the disaster, there were plans to pay farmers along this stretch of former wetlands to flood some of their reclaimed land in hopes of luring migrating birds away from the oily fate befalling waterfowl such as Louisianas state bird, the Brown Pelican. The plan has been shelved following the wells temporary capping, and in light of the oils questionable disappearing act.

We have taken this train countless times since the spill began, and we have yet to spot a tar ball not on a computer screen. The computer graphics we have been looking at are on a laptop belonging to a bright blue-eyed English film student. He told us he had worked for two years to launch himself on this, his first world tour.

Vatican Rag

"New York, Memphis, New Orleans," he says, as we rock over the Atchafalia River bridge at Morgan City. The Atchafalia River is near its mouth here, and the bridges crossing it are large things with powerful superstructures. Our bright-eyed Brit eyes them in a way that makes me wish I were younger, so I could see the films he might some day make. He is headed to Houston. "Then San Francesco, China, Australia and South Africa, where I have family."

We are joined by another youth who recently graduated high school in New Orleans. He joined his schools ROTC program, he tells us, and expects to ship out soon.

"My grandmother lives in Lafayette," he says. "Im going to see her before I go to Iraq or Afghanistan."

He has been drawn to our conversation not by the beer, but by the film students British accent and its promise of news from the great outer world.

They talk of Internet sites. humorous ones mostly unknown to me. I recite for them the lyrics to Tom Lears Vatican Rag, which they liked. Neither of them had ever heard it before. Surprisingly I remembered it all. They write down notable web sites for me to look up later. I thanked them, and launched into a shameless three-beer interpretation of Tom Lears Balled of Wernher von Braun. They both liked it, but only the Brit knew who von Braun was. Even though the American might likely soon be loosing descendants of Brauns rockets on the world.

The Cajundome is smaller than New Orleans Superdome. What isnt? But the building is graced with elegant architectural detail. It has lines connecting related buildings and rooms that flow like flying buttresses on European cathedrals. And it sits majestically under a broad sky on a sweeping expanse of what is known in Acadiana as "Cajun prairie." Its beauty causes a Cajun friend of mine to never pass without a sigh and exclamation tinged with both hyperbole and pride: "Behold, the Dome of The Cajuns!"

Not just music

Today, inside the Dome there is more to behold than mere football, or big-name music acts. Today, there is politics, the true sport and music of Louisiana. It is a horn kissed by new lips, to be sure, but the notes were blown over an old dance floor worn smooth by generations of masters.

In fact, New Orleans Saints football champion Drew Brees, musicians Lenny Kravitz, Rockin Doopsy, Jr., and actor John Goodman all made their appearance to an audience of 11,000 workers and assorted politicians led by Louisiana Governor and presidential hopeful Bobby Jendal.

Franks Casing Crew & Rental Tools paid 1,000 of its employees to attend, but there is every reason to believe that though they were happy to take the money they were enthusiastically present of their own accord.

The Louisiana Oil and Gas Association, the industry lobbying arm, paid to rent the dome for the Rally for Economic Survival. The rallying point is: Barack HUSSEIN Obama, lift the offshore drilling moratorium. With Obamas name not spoken without strong emphases on the Middle Eastern middle name, HUSSEIN. Though the rally was billed as nonpartisan, it clearly was anything but.

It seems unlikely this president, or any other, would negotiate policy under such public partisan pressure. This rally was made from the stuff of campaigns and elections, and not designed to garner influence. It was designed to do two things: tar Obama and get the publics mind off BP.

Obamas administration claims the offshore drilling leases given out during the most recent Bush Presidency and the past year of their own did not take safety sufficiently into account. The moratorium is intended to give time for needed new oversight of those leases, they say. Given the magnitude of the Horizon Deepwater disaster one might reasonably see some validity to that point of view. But no one was seeing it that way in the Cajundome.

Following the wells temporary capping, BP began speaking of removing oil collecting devices and workers. Billy Nungesser said, "Are they that stupid? It took weeks for the oil to reach our coast and now they say a week after the cap it is over!"

Today, an attempt at permanently capping the well is to begin. We all wish it great success, no matter who the next president may be.

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.

But this oil spill is not a case of "out of sight, out of mind," health officials say.

Experts continue working to anticipate, outline and minimize the disaster's potential health risks, according to a University of Alabama at Birmingham School of Public Health researcher actively involved in helping the federal government deal with repercussions from the April 20 accident.

Nalini Sathiakumar, M.D., Dr.P.H., an associate professor in UAB's Department of Epidemiology and a pediatric nephrologist, is part of a U.S. Centers for Disease Control and Prevention (CDC) ad-hoc team formed in July that is in discussions to plan and execute research strategies surrounding health outcomes due to the oil spill.

The Gulf leak was the equivalent of a supertanker spill every week, says Sathiakumar, who was part of an Institute of Medicine panel of health experts who met in New Orleans in June to discuss repercussions from the oil-rig accident.

"This already is an unprecedented tragedy," she said. "We need to move quickly to monitor and study the physical and psychological impacts in the short term and long term among clean-up workers, volunteers and in adults and children, and we need to follow these with long-term studies."

While some of the short-term health effects are known -- watery and irritated eyes, skin itching and redness, coughing and shortness or breath or wheezing -- there also are many unknown health effects, says Sathiakumar, who has researched a prior oil spill. Even tourists, beach-goers and seafood lovers will face some risks in the future, she says.

CDC reviewing data

The CDC is reviewing the sampling of data to determine whether exposure to oil, oil constituents and/or dispersants might cause short-term or long-term health effects. These data include sampling results for air, water, soil, sediment and oil material reaching beaches and marshes.

About 400 tanker spills have occurred since the 1960s, and 38 of them involved supertankers, including the Exxon Valdez spill off the coast of Alaska. But only seven of those supertanker spills have been studied, and those examined the short-term toxic and psychological effects with limited analysis of the long-term effects.

Sathiakumar investigated a large spill, the one that resulted when a Greek supertanker ran aground in 2003 off the coast of Karachi, Pakistan. An investigation of the Karachi incident found commonly reported symptoms were temporary eye, throat or skin irritation, headaches or general malaise.

Sathiakumar says these health effects showed a clear sign of decreasing in number as people moved further away from the oil-spill site.

Mortgage lender W.R. Starkey Mortgage, L.L.P. of Plano, Texas, provided home loans for North Carolina consumers who bought homes from Phoenix Housing Group, Inc. between January 2007 and September 2008.

"A family should have the opportunity to buy a home without inflated prices and questionable financing," Attorney General Roy Cooper said. "I'm pleased that consumers who fell victim to this scheme now have a chance to get money back."

Homeowners 'under water'

Cooper claimed Starkey worked with Phoenix to qualify borrowers for loans improperly and finance the sales of manufactured homes and land at inflated prices. As a result, consumers wound up with loans that exceeded the actual value of the homes they purchased.

Specifically, the allegations contend that Starkey employees and agents failed to verify financial information provided about borrowers by Phoenix, disguised the source of the information, placed inaccurate information on consumers' credit reports to boost their ability to qualify for loans, made loans without regard to borrowers' ability to repay, and added discount points to mortgages without reducing the interest rate as required by law.

After Starkey officials were notified of the fraud, they quickly agreed to corrective actions and consumer refunds. Under a consent judgment between Starkey and the Attorney General's Office, Starkey will:

• Pay $4,446,000 to 171 families who purchased mobile or manufactured homes from Phoenix, a refund of $26,000 per family;

• Pay $125,000 for consumer education and to cover the costs of the enforcement action; and

• Pay $25,000 to the Western Piedmont Council of Government to help provide financial counseling to consumers who receive refunds under the settlements.

Additional sanctions

In addition, Starkey is permanently barred from making loans when a manufactured housing dealer is a party to the deal, collecting financial information about prospective borrowers from anyone other than the borrowers, and charging discount points unless requested and paid by a borrower to reduce the interest rate. Starkey must also make sure that its underwriters comply with all rules.

Letters will go out this week to all consumers who are eligible for refunds from Starkey. Cooper's office will send the letters to consumers at their last known addresses. Any consumer who believes he or she is eligible for a refund who does not receive a letter is encouraged to call the Consumer Protection Division at 1-877-5-NO-SCAM toll-free within North Carolina or (919) 716-6000 out of state.

Cooper filed suit in November 2009 against Starkey, Phoenix, and a third company, K&B Homebuilders, as well as several individuals connected with the companies. The case against Phoenix and K&B remains active, and the AG is asking the court to ban them permanently from engaging in deceptive activities and to order refunds and civil penalties. A preliminary injunction remains in place against K&B, its owners and other employees.

Other judgments

The court has also approved a consent judgment against one former Phoenix and K&B employee, George William Varsamis, for his role in the scheme to put consumers in overvalued homes. Varsamis is banned permanently from engaging in any unfair or deceptive practices related to housing or land sales in North Carolina and must pay $500 for investigative costs. If he is found to violate the judgment, he will also owe the state $100,000 in civil penalties.

Phoenix is headquartered in Greensboro but also does business as HomesAmerica and Southern Showcase Housing. Phoenix has multiple offices across the state and at one time operated in Asheboro, Asheville, Burlington, Granite Falls, Greensboro, Hendersonville and Winston-Salem. K&B was founded by a former Phoenix employee and sold stick-built homes, modular home/land packages, and foreclosed homes in Catawba, Burke and Caldwell counties.