Current Events in November 2010

The rate of home-ownership in this country is at a ten-year low according to the Census Bureau, primarily due to a rise in the rate of foreclosures. And now the fading dream of owning a home may have to be put on hold a little longer, at least for some Americans, as two of the nation's largest lenders tighten their standards on loans insured by the Federal Housing Administration (FHA).

According to Bloomberg, Wells Fargo and Bank of America have raised the minimum required credit score on FHA-insured loans that they will buy to 640 from 620, which is far beyond what the FHA requires. That may not seem like such a big deal but it is for the 6.3 million Americans whose FICO scores just so happen to fall within that range.

FHA loans account for one in five of all home purchases and recently imposed minimum credit score requirement of 500 for most loans and 580 for loans that had smaller down payments of between 3.5% and 10%. Before then there was no minimum credit score for an FHA loan, but it was just that sort of lax oversight that contributed to the sub-prime mortgage mess.

As you may or may not know, credit scores as configured by FICO, range from 300 to 850. They're based on data such as whether borrowers have missed debt payments, balances on their credit cards relative to borrowing limits, and the length of their credit history.

Requiring a 640 credit score will eliminate as many as 15% of all FHA borrowers. FHA commissioner David Stevens says the hardest hit will be "minorities and any borrowers in communities hardest hit by the recession. In an interview with Bloomberg, Stevens said "we need to find a better way to provide access to these families who are being cut out simply because lenders are putting arbitrary overlays on top of our requirements.”

The increase in minimum credit scores by Bank of America and Wells Fargo have prompted smaller lenders to follow suit. Quicken Loans, which is the ninth-largest lender, has ended most of its FHA lending to borrowers with scores below 640. JPMorgan Chase, the third-largest lender, had already been generally requiring credit scores of at least 640 on FHA loans even before Wells Fargo and Bank of America raised their minimums.

If you receive an email claiming to be from Facebook Support, telling you your password has been changed and the only way to see your new one is to download an attached .zip file, DO NOT download the file. It's yet another Facebook phishing scam.

The email has been arriving in Facebook users' inboxes this week. The subject line and content of the email vary slightly, perhaps in the hopes of throwing off as many unsuspecting users as possible.

The subject line reads: "Facebook Service. Your password is changed. ID510"

The body of the email reads:

"Dear client!
A spam is sent from your Facebook account. Your password has been changed for safety.

Information regarding your account and a new password is attached to the letter.

Read this information thoroughly and change the password to a complicated one.

Thank you for your attention,
Facebook Service."

In our email, the .zip file is called "Facebook_document_Nr0845.zip" although it could be named something slightly different in other emails.

But whatever it's called, that attachment is not your new password. It's a Trojan horse virus.

Graham Cluley of Sophos Security thinks hackers could be taking advantage of a recent Facebook bug that inadvertently disabled hundreds of valid accounts earlier this week.

"Reportedly many of the complaints against Facebook users were that they were using an 'inauthentic' name, and they were asked to upload a government-issued ID (such as a passport), ensuring that their full name, date of birth, and photograph were clear," said Cluley.

"You can understand why many Facebook users would be nervous at the prospect of doing such a thing, especially when their Facebook account had not committed any breach of the social networking site's terms and conditions."

The gaffe, according to Facebook was an attempt to weed out spambot profiles. Since most spambot profiles typically contain pictures of sexy women and are "friends" with mostly men, many real women with valid profiles got locked out, too.

Facebook claims to have fixed the problem, but as late as yesterday evening, complaints about being locked out of the social networking site were coming in to ConsumerAffairs.com.

This is not the first password phishing scam showing up in Facebook users' emails.

Earlier this year, CNET.com reported of a similar scam email making the rounds, also containing a .zip file the user was urged to download.

The attachment contained a password stealing virus that targeted Windows computers and had the ability to access any username and password combination used on the computer, not just the login credentials for Facebook.

Loyalty programs are powerful marketing tools for credit card companies, supermarkets and restaurants, but how do consumers choose one program over another?

Mintel Compermedia, a provider of direct marketing information, did a little research on that topic. It found that instant redemption opportunities -- like cash back at the register -- were an incentive cited by almost half (47 percent) of consumers that could potentially entice them to use a particular loyalty program more than others.

Consumers are similarly attracted to relatively generous cash back opportunities -- an option that would be the deciding factor for 36 percent of respondents. On the other hand, consumers are somewhat disenchanted with airline miles. Only seven percent of those surveyed say a program that offers airline miles would be an effective incentive to choose one over another. These consumers tend to be in the higher income groups.

"In any sector that utilizes loyalty marketing, loyalty programs are fast becoming a very important part of the relationship with the customer," says Susan Menke, vice president and behavioral economist at Mintel. "It seems that now is the time to focus on adding or improving loyalty programs to help engage customers and maintain and even grow their relationship with the post-recession consumer."

What next?

So, once they've chosen a rewards program, what do consumers want to see more of? Sixty-one percent of respondents say lower overall costs for merchandise they would have purchased anyway is an important attribute of a loyalty or rewards program. Getting merchandise or taking trips that they wouldn't normally be able to take was deemed important by 25 percent of consumers.

"Loyalty program members are quite often the most profitable customers for marketers, and those who use loyalty programs tend to be more brand-loyal," adds Menke. "By personalizing redemption opportunities and offering easy to redeem savings, companies can lure and retain more customers."

Twenty-four percent of those surveyed say they actively examine credit card offers in order to compare rewards programs, while 10 percent have switched to a different primary credit card in the past because of a better rewards program.

Caveat

It is important to keep in mind that playing on a consumer's loyalty or affinity is a favorite tactic of scam artists.

In Kentucky, a trusted Bible teacher allegedly bilked the faithful out of hundreds of thousands of dollars.

In a recent column, ConsumerAffairs.com's Jan Yager quoted pointers from Tom Ajami, co-author with Bruce Kelly, of "The Financial Serial Killers," cautioning potential investors to be leery of finding an investment adviser through an affinity group -- your church, synagogue, or other house of worship, your country club, or some other shared association.

Ajami noted because that financial adviser is part of your affinity group, you are more likely to let your guard down. You do not scrutinize this new person as much as you should or need to.

At first the foreclosure wave was made up of subprime mortgages. People who couldn't really afford houses were given mortgages with very low introductory rates that adjusted several points higher a couple of years later.

If foreclosures were limited to that group, the crisis might not be as big as it is. But unfortunately, the foreclosure tsunami has rolled on to engulf a lot of homeowners with prime mortgages.

The evidence is contained in the latest mortgage delinquency report from the Mortgage Bankers Association (MBA). In many respects, the report is encouraging. The percentage of loans on which foreclosure actions were started during the third quarter was 1.34 percent, up from the previous quarter but lower than the third quarter of 2009.

The percentage of loans in the foreclosure process at the end of the third quarter was 4.39 percent, down from both the previous quarter and the same period a year ago. The seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 8.70 percent, again, a decrease from both the previous quarter and the third quarter of 2009.

Mixed signals

That suggests that things are improving. However, the report also reveals that the foreclosure starts rate increased for all loan types and the foreclosure starts rate for prime fixed loans in particular set a new record high in the survey, as more loans entered the foreclosure process.

"Most often, homeowners fall behind on their mortgages because their income has dropped due to unemployment or other causes,” said Michael Fratantoni, MBA's Vice President of Research and Economics.

Although the employment report for October was relatively positive, the job market improved only marginally through the third quarter. While there was a small improvement in the delinquency rate, the level of that rate remains quite high, according to Fratantoni. 

"As we anticipate that the unemployment rate will be little changed over the next year, we also expect only modest improvements in the delinquency rate,” he said.

Foreclosure paperwork mess

Fratantoni said the foreclosure paperwork issues announced by several large servicers in late September and early October are unlikely to have had a large impact on the third quarter numbers, but may well increase the foreclosure inventory numbers in the fourth quarter of 2010 and in early 2011.  The foreclosure inventory rate captures loans from the point of the foreclosure referral to exit from the foreclosure process, either through a cure like a modification, a short sale or deed in lieu, or through a foreclosure sale. 

The servicers that halted foreclosure sales temporarily may show higher foreclosure inventory numbers in the fourth quarter of 2010 and in early next year than would otherwise have been the case.  Any drop in foreclosure sales over the next few quarters may actually reduce the inventory of homes on the market, with almost four million properties currently listed.  However, these foreclosed homes are likely to come on the market in the medium term, so it is only a delay rather than a change in the underlying economics.

Timing is everything. College grads entering the job market in 1999 often found a multitude of offers from businesses flush with cash and rapidly growing. Needless to say, that's not so much the case these days.

But there may be hope for the current crop of college seniors. The Michigan State University's 2010-11 Recruiting Trends report projects a slightly better job market next year. Many large corporations are expected to end hiring freezes and small, fast-growth companies continue helping reshape the economy, researchers say.

Overall hiring is expected to increase three percent, with bachelor's-level and MBA-level hiring both surging 10 percent, said Phil Gardner, director of MSU's Collegiate Employment Research Institute, which conducted the survey of some 4,600 employers.

Geographically, the Great Lakes region, which took the brunt of the recession, will see a robust 13 percent increase in bachelor's-level hiring, which is tops in the nation, Gardner predicts. The region consists of Illinois, Indiana, Michigan, Ohio and Wisconsin.

But the good news should be taken with a word of caution, Gardner adds. An up-tick in job growth is simply the first step out of a very deep hole, and hardly represents a return to the heady economic days of the late 1990s and early 2000s.

"The national economy is certainly not returning to its previous high production base,” Gardner said. "And even though the economy has shown early signs of sustained recovery, the overall job market has remained relatively anemic.”

Who's doing the hiring?

From an industry perspective, hiring will be driven by a core group of employers in manufacturing, professional services, large commercial banking and the federal government, the annual survey found.

Gardner said smaller banks that didn't receive federal bailout money will continue closing their doors and slashing positions. And unlike the projected growth in federal government hiring, state governments and colleges and universities could see a drastic reduction in hiring, he said.

While mid-size companies, with 500 to 3,999 employees, will continue shedding positions, Gardner said large companies plan to hire 114 bachelor-level employers per company next year.

That's good news for graduates - but only if they are prepared and start working toward a position early in their college careers, said Kelley Bishop, MSU's career services director. That means making inroads with a potential employer while still in school.

Typically, Bishop said, large corporations now hire about 50 percent to 75 percent of new employees from their own intern pool.

Among the fast-growth companies (nine to 100 employees), hiring is expected to increase 19 percent, the survey said.

The new economy

"These fast-growth companies in many ways represent the new economy - that bold employer that can adjust quickly, that sees a niche and runs with it,” Bishop said. "This is an important group for our students getting jobs.”

Other details of the report:

• Hiring is expected to decline for those with associate, master and professional degrees, with professional-degree hiring seeing the biggest drop at 13 percent. The professional category includes law, medical and veterinary degrees.
  
• Ph.D.-level hiring, on the other hand, is expected to increase 5 percent.
  
• Hiring of engineering majors appears sluggish, with the exception of computer science and information technology students. Demand should be very strong for IT workers.
  
• The Northeast, Southeast and Pacific Northwest could see a much weaker expansion of jobs than the Midwest.
  
• For the past two years, starting salaries have remained stagnant for college graduates.

"Remember the words 'signing bonus?'” Gardner asked. "Don't expect to hear them again anytime soon.”

Some 36 percent of all companies said they'd consider any major for a position - an all-time high.

Caffeinated alcoholic beverages may be going the way of Joe Camel. The U.S. Food and Drug Administration has warned four companies that make malt liquors containing caffeine that it considers the caffeine to be "an unsafe food additive."

The letters went to four companies: Charge Beverages Corp., New Century Brewing Co. LLC, Phusion Projects LLC (which does business as the Drink Four Brewing Co.), and United Brands.

The caffeinated malt beverages referenced in these warning letters are

• Core High Gravity HG Green

• Core High Gravity HG Orange

• Four Loko

• Joose

• Lemon Lime Core Spiked

• Moonshot  (This product is labeled as "premium beer with caffeine")

• Max

The FDA said the manufacturers have failed to show that the direct addition of caffeine to their malt beverages is "generally recognized as safe" by qualified experts.  Rather, there is evidence that the combinations of caffeine and alcohol in these products pose a public health concern.

"Consumers should avoid these caffeinated alcoholic beverages, which do not meet the FDA's standards for safety," says Joshua M. Sharfstein, M.D., FDA's principal deputy commissioner. 

The agency has given the firms 15 days to respond to the warning letters and then may proceed to court to stop their sale. In addition, other alcoholic beverages containing added caffeine may be subject to agency action in the future if scientific data indicate that the use of caffeine in those products does not meet safety standards.

A troubling mix

The FDA said that the problem with the drinks is that caffeine can mask sensory cues that people may rely on to determine how intoxicated they are. This means that individuals drinking these beverages may consume more alcohol -- and become more intoxicated -- than they realize. 

At the same time, caffeine does not change blood alcohol content levels, and thus does not reduce the risk of harm associated with drinking alcohol. 

Studies suggest that drinking caffeine and alcohol together may lead to hazardous and life-threatening behaviors.  For example, serious concerns are raised about whether the combination of alcohol and caffeine is associated with an increased risk of alcohol-related consequences, including alcohol poisoning, sexual assault, and riding with a driver who is under the influence of alcohol.

Malt versions of premixed alcoholic beverages come in containers holding between 12 and 32 liquid ounces. Some may also contain stimulant ingredients in addition to caffeine.  Their advertised alcohol-by-volume value is as high as 12 percent, compared to standard beer's usual value of 4 to 5 percent.

These alcoholic beverages are available in many states in convenience stores and other outlets. They often come in large, boldly colored cans comparable in size to "tall" cans of beer -- or in containers resembling regular beer bottles.

States approve

Idaho Attorney General Lawrence Wasden called the FDA's action "a significant and necessary step forward in removing these dangerous products from the market."  Wasden was one of several state attorneys general who urged the FDA to take action against the drinks.

As a result of action by the state AGs, MillerCoors and Anheuser-Busch have agreed to stop producing caffeinated alcohol beverages but smaller manufacturers have stepped in to fill the gap, producing drinks with alcohol contents as high as 12 percent. 

Four Loko was blamed for the hospitalization of 23 students at Ramapo College in New Jersey and to the hospitalization of nine students after a party Central Washington University.  Both incidents happened in October and the drink was subsequently banned from both campuses.

The Michigan Liquor Control Commission banned all alcohol-infused energy drinks earlier this month.

Thorough investigation

FDA's action follows an examination of the published peer-reviewed literature on the co-consumption of caffeine and alcohol, consultation with experts in the fields of toxicology, neuropharmacology, emergency medicine, and epidemiology, and a review of information provided by product manufacturers. FDA also performed its own independent laboratory analysis of these products.

"FDA does not find support for the claim that the addition of caffeine to these alcoholic beverages is 'generally recognized as safe,' which is the legal standard," said Dr. Joshua M. Sharfstein, Principal Deputy Commissioner. "To the contrary, there is evidence that the combinations of caffeine and alcohol in these products pose a public health concern."

Dangerous drinks

Experts have raised concerns that caffeine can mask some of the sensory cues individuals might normally rely on to determine their level of intoxication. The FDA said peer-reviewed studies suggest that the consumption of beverages containing added caffeine and alcohol is associated with risky behaviors that may lead to hazardous and life-threatening situations.

The agency said the products named in the warning letters are being marketed in violation of the Federal Food, Drug, and Cosmetic Act (FFDCA). Each warning letter requests that the recipient inform the FDA in writing within 15 days of the specific steps that will be taken to remedy the violation and prevent its recurrence.

If a company does not believe its products are in violation of the FFDCA, it may present its reasoning and any supporting information as well.

If the FDA believes that the violation continues to exist, the agency may pursue an enforcement action that could include seizure of the products or an injunction to prevent the firm from continuing to produce the product until the violation has been corrected.

The agency's action follows a November 2009 request to manufacturers to provide information on the safety of adding caffeine to their products.

Positive step

FDA says it is aware that on November 16, Phusion Projects, LLC -- the maker of Four Loko -- announced its intention to remove caffeine and other stimulants from its drinks, and calls the announcement "a positive step."

But the agency notes that it has not yet heard officially from the company about this announcement, including how quickly it will remove present product from circulation and how quickly it will reformulate its product.

Says it will work with Phusion the other manufacturers to assure their products meet safety standards.

---

This story includes reporting by James Limbach.

Due to the recession, consumer credit scores are declining, and since April 2008, approximately 1.2 million people have fallen out of the top credit-scoring tier of 800-850.

Continuing unemployment, falling home values, shrunken investment portfolios, and excess borrowing have made debt repayment more difficult for many consumers.

"Banks tie borrowers loan qualifications and interest rates to credit scores, and many have reset their 'subprime' score thresholds to 660 from 600 before the recession," said Noreen Perrotta, editor, Consumer Reports Money Adviser (CRMA).  "Declining scores are an unpleasant fact of life for many in this recession."

Consumer Reports Money Adviser offers the following three strategies to help consumers fight back:

Shop harder for credit

One thing the recession hasn't changed is consumer choice. You're likely to find that your credit score will have a varying impact on the rates that different lenders might charge you, so it's worth it to do some work to find the best deal.

Big savings can be found by shopping around for the best rate on an auto loan. Car loans can be all over the board for the same credit score. Diligent shoppers can knock two to four percentage posts off the cost of an auto loan. That can be worth $890 to $1,780 over the 48-month term of a $20,000 loan.

Shopping might also save you as much as one percentage point on an adjustable-rate or jumbo mortgage. That can be worth $113,000 over the 30-year life of a $500,000 mortgage.

Find cheaper insurance

Another possible cost of a declining credit score is higher auto and home insurance premiums. Most insurers now base a major part of their premium calculations on a consumer's credit-based insurance score, a close cousin of the credit score. Almost all states allow that use.

The impact of a reduced insurance score varies because different insurers use different methods to calculate scores and convert them into premiums -- all of which are kept secret from consumers. If your insurer hiked your rate because of your score, CRMA's experts advise shopping for a lower premium somewhere else. Start by checking if your state insurance department provides rate comparisons here to find a link to your state's agency. Also consider forming a relationship with an independent insurance agent, who can periodically check rates for a range of carriers.

Improve your score

There are steps you can take to improve your credit score and keep it from moving in the wrong direction including:

• Fix errors. Your score can be hurt by inaccurate information on your credit reports. So regularly check them by requesting a free copy each year from each credit-reporting bureau.
• De-leverage. If you can manage it, paying down your credit balances is one of the most effective ways to improve your score. The reason is that less debt owed reduces your credit utilization -- the amount of your total debt as a percentage of your available credit lines. The closer your revolving debt gets to your credit limits, the more your credit score suffers. So try to keep your credit card balances low.
• Don't close old credit accounts. It might be tempting to dump your credit-card company if it reduced your borrowing limit or slapped you with sky-high interest rates or unfair penalty fees. But closing a card account reduces your total credit line while the total debt on all your cards might remain the same. That increases your credit-utilization level, which depresses your score. If the account is old, closing it will also affect your score because a long credit history is a plus.
• Get help sooner rather than later. If you're struggling to keep your head above water, the sooner you get things back in order, the better. Your score will probably take a negative hit, but it will be temporary, and each passing month after that your score will gradually recover if you stay on the right track. A credit counselor can set you up with a five-year repayment plan with more favorable terms than you might be able to arrange on your own.  Seek out reputable, nonprofit agencies that employ trained and certified counselors and members of the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling.

Late last week, a swath of AT&T smartphone customers received text messages letting them know that a recent class action settlement may put some extra money in their pockets.

The settlement applies to AT&T customers who bought smartphones or mobile data services between November 1, 2005 and September 7, 2010. Users who were charged taxes, fees, or surcharges for internet access are eligible to receive a refund after March 2011, when the settlement is slated for final approval.

The lawsuit was filed as a nationwide class action, with one plaintiff representing each state, as well as Washington, D.C. and Puerto Rico. The complaint alleged that, while AT&T's customer agreement authorizes the company to charge customers for internet access -- as well as state and federal taxes applicable to the agreement -- the contract "does not permit AT&T to charge Plaintiffs for 'taxes' that are not due under law, including taxes for access to the internet."

Despite the agreement's terms, the suit said, AT&T imposed taxes on consumers' internet use in direct violation of a federal statute -- the Internet Tax Freedom Act -- that makes such taxes illegal.

Busy year for iPhone lawyers

The iPhone has been the subject of a good amount of litigation in just the past year alone. Earlier this month, a class action lawsuit filed in San Diego alleged that a subpar software upgrade turned the class members' iPhones into "vitrually useless iBricks."

In July, two class actions were filed over the disastrous antenna problem that has plagued the iPhone 4 since its summer rollout.

And, also in July, a class of consumers took to the courts to protest the exclusivity agreement between Apple and AT&T that keeps the iPhone out of Verizon, Sprint, and TMobile stores. That lawsuit might prove moot if Apple teams up with Verizon in the near future, a move that is increasingly widely expected.

According to a statement posted to AT&T's website, the parties to the tax suit disagree about "whether AT&T Mobility's charging of Internet Taxes was proper, and if it was improper, how much the plaintiffs would have been entitled to."

The settlement money could take a while to reach consumers; AT&T has to first request a refund from state governments, and then disburse the funds to class members.

First it took our children, and we had to join just to find out what they were up to and now Facebook is about to take on the app that made the Internet the communications behemoth that it is today - email.

Email has been on the ropes for some time now, what with kids turning first to instant messaging and then text while others tweet and Skype. There just doesn't seem to be as much reason to check your emails on a minute by minute basis the way we Internet junkies used to.

The final nail in email's coffin arrived this week when Facebook-founder Mark Zuckerberg rolled out his company's new messaging service proclaiming it will add "a lot of friction and cognitive load" to communications whatever that means.

Zuckerberg seems to think his new service which he affectionately refers to as that "Gmail killer" will help us older folks wean ourselves off email entirely. There are a quite a few folks who would disagree.

As far as AOL is concerned, email is making a comeback even if it is a bit old-fashioned. Besides, even Facebook's new messaging system is just another form of email that includes chat, text messaging, and status updates.

Zuckerberg says it's really a way of bringing various messaging systems together in one place, so you don't have to remember and separately track how each of your friends prefers to be contacted. He also promised that Facebook's system will be in real time -- no delayed e-mails about conference calls or meetings you've already missed. But of course, the biggest draw will be that users get their own @facebook.com e-mail address. So much for the end of email.

As for AOL, its new messaging service, called Project Phoenix, won't integrate everything into one stream of messages. AOL's new web based e-mail program will focus on keeping things separate but equal within the same screen, under different headings for text and chat messages. It will, however, gather all your e-mail from various accounts, public, private, and professional, into one e-mail in-box. More importantly, AOL promises that unlike other services, it would be easy for non-technical users to make it work.

AOL's Phoenix is due to arrive early next year and will also have a few convenience features. A "quick bar" allows you to send responses, whether the original message was an IM, text or e-mail. Attachments (up to 25 MB and unlimited storage) will also appear as thumbnails in a right-hand preview window and an address in a message invokes MapQuest directions. For security, you can set it to only preview attachments from friends in your contact list.

Stepping back, I'm starting to think that having a service that throws everything at me in one place, could be a little overwhelming. In fact, I'm starting to get nostalgic over another old-fashioned communications device that lets you interact with people in real time. I think it was called the telephone. Maybe it's time to dust it off and give someone a call. The thought just gave me a chill.

Illinois is set to become one of the first states to take up legislation designed to reform the foreclosure process to protect homeowners.

Illinois Attorney General Lisa Madigan, who drafted the bill, says the legislation is the first of its kind in the country to address revelations that major banks and mortgage giants recklessly "robo-signed” foreclosure fillings across the country. The bill would significantly tighten the requirements for affidavits filed in foreclosure proceedings to ensure their accuracy.

The measure, introduced this week, drew sponsorship from state Sen. Jacqueline Collins, and state Reps. Marlow H. Colvin and Mary Flowers, all of whom have worked closely with Madigan's office in recent years to increase the protections for Illinois families facing foreclosure.

"Too often, Illinois families are struggling to pay their mortgages because banks put them into risky loans that they did not understand and could never afford. Now, we must make Madigan said. "This legislation is designed to ensure that banks and loan servicers cannot cut corners or ignore homeowners' rights in the foreclosure process.”

The legislation was prompted after major loan servicers across the country, namely GMAC/Ally, Bank of America and JP Morgan Chase, admitted their employees signed inaccurate foreclosure documents in court. These employees may have approved thousands of foreclosures without personal knowledge of the facts involved and without verifying underlying loan information, Madigan said.

 Putting law on the side of homeowners

"As Illinoisans lose their homes, we have to continue to fight to put the law on their side so they don't once again become the victims of fiscal gluttony,” said Collins.

The bill is aimed at ensuring the integrity of foreclosure documents filed and that lenders are complying with the requirements of federal loan modification programs. It would also make sure each homeowner knows the amount they owe, who owns their loan, the terms of their original loan and whom they can contact. Specifically, the proposed legislation would:

• Ensure affidavits filed as part of the foreclosure process contain a detailed description of how the person who signed the affidavit has personal knowledge of the facts, including what he or she did to verify that the amount owed is accurate.
  
• Require that banks verify in writing all efforts they have undertaken to keep the homeowner in the home, including loan modification efforts.
  
• Require that banks provide a detailed summary of the borrowers' payments to ensure the borrowers know why the foreclosure is happening and can contest the foreclosure if the banks' payment history is inaccurate.
  
• Require that a bank prove that it holds the loan and has the right to foreclose.
  

"This legislation continues our aggressive work to implement laws that provide homeowners with assistance while holding lenders accountable,” Colvin.

"If banks and mortgage companies cannot produce the proper paperwork to verify a foreclosure needs to take place, they shouldn't be kicking Illinois homeowners out of their homes in the first place,” said Flowers. "It is up to the state, with this legislation, to step in to protect these vulnerable residents.”

The legislation is part of the Attorney General's response to the recent foreclosure document scandal. Madigan also has asked Washington lawmakers to support the re-introduction of legislation drafted by U.S. Sen. Richard Durbin, D-Ill., to permit bankruptcy court judges to reduce principal amounts on mortgages and thereby save homes.

Madigan, along with the 49 other state attorneys general and 37 state bank and mortgage regulators, is also continuing a multi-state probe into the servicers and foreclosures filed in courts across the country. In Illinois, the filing of false court documents could be a violation of the state's Consumer Fraud Act and other laws.

Manufacturer recalls of toys, promotional drinking glasses, and other children's products constitute an ongoing "toxic toys crisis" that requires banning potentially harmful ingredients in these products and other changes in policy and practices.

That's the conclusion of a new analysis in ACS' Environmental Science & Technology, a semi-monthly journal.

Monica Becker, Sally Edwards and Rachel Massey note that in June 2010,  12 million promotional drinking glasses, sold at McDonald's, were recalled because the painted coating contained cadmium, chemical element that is a known carcinogen.  

The glasses were voluntarily recalled by McDonald's but only after an anonymous tipster alerted the Office of Rep. Jackie Speier (D-CA), who in turn alerted the Consumer Product Safety Commission (CPSC).

"Our children's health should not depend on the consciences of anonymous sources," Speier said. "Although McDonalds did the right thing by recalling these products, we need stronger testing standards to ensure that all children's products are proven safe before they hit the shelves."

Since 2007, the government has recalled more than 17 million toys due to high levels of lead.

The report says that these and other incidents have raised concern about the problem of toxic substances in toys and other children's products, many of which are made overseas. The substances include ingredients either suspected or recognized as potentially damaging to children's health.

Although government, industry, and advocacy groups have taken significant actions to solve the problem, including restricting the use of certain substances, that response remains inadequate, the scientists say.

Many toy companies and retailers have been slow to move.

In October 2010, a coalition of investors put the heat on Toys 'R' Us as they prepared a public stock offering, demanding that the toy store chain live up to its promise to reduce polyvinyl chloride (PVC) plastic, phthalates, and lead in children's and infant toys.

Chemicals associated with PVC can cause health problems including cancer, neurological, and immune system damage, critics have charged.

Sr. Mary Ellen Gondeck of the Congregation of St. Joseph said recent testing found Toys "R” Us had "failed to fully implement" the commitment it made in 2008 to reduce and clearly label potentially toxic substances in toys. Of the toys that still contained PVC were figurines from kid-favorite brands like Barbie and Toy Story 3.

The study authors recommend several actions for the government, including banning or restricting the use of all substances with well-documented toxicity in toys and other children's products.

They also offer recommendations for how the toy industry can be proactive, including establishing an industry-wide list of toxic substances to avoid.

"Until significant changes in policy and practice occur, consumers cannot be confident that products they purchase for children are safe, healthy, and environmentally sustainable," the report states.

A Beverly Hills man has been hit with a $2.4 million judgment in a suit alleging that he negligently infected his soon-to-be-ex wife with genital herpes.

The suit highlights the unsettling prevalence of sexually transmitted diseases (STDs) and the ease with which they can be spread.

The unfortunate transmission occurred after the defendant and his wife reconciled following a month-long split in mid-2007, according to the complaint. Not long after they kissed and made up, the plaintiff began experiencing "severe burning, itching and swelling," and was diagnosed with genital herpes shortly thereafter.

It was only after this diagnosis that the plaintiff learned that her husband engaged in unprotected sex with several women outside their marriage, behavior that the complaint described as "high-risk.”

The award, which was handed down by a Los Angeles jury, gave the wife $500,000 for past pain and suffering, $1.63 million for future pain and suffering, $250,000 for future medical damages, and $62,000 in punitive damages.

Disease surprisingly prevalent

Herpes litigation is surprisingly common, although less so when one takes a look at the prevalence of the disease itself. According to statistics compiled by the Centers for Disease Control and Prevention (CDC), over 16 percent of Americans are infected with HSV-2, the strain most commonly associated with genital herpes. The disease is much more prevalent among African-Americans, with more than 39 percent of all blacks -- and a stunning 48 percent of black women -- carrying the disease.

HSV-1, which is the main cause of oral herpes, or "cold sores,” is more prevalent, affecting somewhere between 50 and 90 percent of the public.

The disease's prevalence also varies by geographic region. A 2008 study, for example, found that fully one in four people living in New York City are infected with genital herpes.

The amount awarded in the aforementioned case may seem large, but it pales in comparison to awards that have been handed down in similar cases. Just last year, another California jury awarded $6.7 million to a woman who said she contracted herpes after sleeping with a wealthy businessman. That award broke down to $1.5 million for pain and suffering, $2.5 million in compensatory damages, and $2.75 million in punitive damages.

The plaintiff's attorney in that case said the eye-popping verdict was "a clear message to all persons infected with a sexually transmitted disease that this type of behavior simply will not be tolerated."

High-profile cases

Several well known celebrities have been accused of infecting their sexual partners with herpes in recent years. Most memorably, in 2006, then Atlanta Falcons (and now Philadelphia Eagles) quarterback Michael Vick settled a lawsuit brought by a woman who claimed that Vick gave her herpes after they had unprotected sex in April 2003. The lawsuit claimed that Vick secretly sought treatment at herpes clinics using the alias "Ron Mexico."

Herpes is an especially insidious disease; 80 percent of individuals carrying the virus never experience outbreaks or even know that they are infected. But these individuals can still pass the disease on to others, who may or may not themselves experience symptoms. Anyone who is sexually active should always use protection, and regularly be tested for herpes, along with other relatively common STD's such as chlamydia, gonorrhea, syphilis, HPV (which can cause genital warts), and, of course, HIV.

A new survey shows that U.S. consumers seeking medical advice are more likely to turn to medical, informational and social media sites and online communities than pharmaceutical company websites.

According to the survey conducted by Accenture, of the more than two thirds (68%) who go online for health information, nine out of ten (92%) preferred other online resources to a pharmaceutical company's website when seeking information about an illness or medical condition.

The survey of more than 850 consumers suggests that consumers may not believe what pharmaceutical companies have to tell them as much as other sites and that the drug companies are missing a real opportunity to address the online audience.

It also demonstrates that there's a fundamental shift from a predominantly company-to-patient dialogue to patient-to-patient through the evolution of social networks and online communities.

Tom Schwenger, global managing director for Accenture's Life Sciences Sales & Marketing practice, says that pharmaceutical companies should embrace social networking and communications via mobile devices and integrate and align their communication strategy across multiple channels. He says if they do that they'll "have a much greater influence on their patients' choices and consequently, realize significant increases in revenue, profitability and sustained competitive advantage.”

According to the survey, 69% of respondents expect pharmaceutical companies to provide information about the medical condition or illness for which they are taking drugs.

To address that expectation, Accenture believes pharmaceutical companies must not only provide the right information, but upgrade their websites to create a more dynamic, interactive experience, demonstrate an understanding of their patients' needs, provide holistic solutions and clearly reinforce their brand identity in a two-way dialogue.

New research shows consumers feel as deeply hurt over a bad transaction with a company they love as they would if jilted by a lover. They feel betrayed and sometimes want to get revenge.

The study, authored by Allison R. Johnson of the University of Western Ontario; Maggie Matear of the Queens University, in Kingston, Ontario; and Matthew Thomson of the University of Western Ontario, and featured in the Journal of Consumer Research, examines why.

What happens when people turn their backs on the brands they once loved?

First up: revenge.

"Customers who were once enthusiastic about a brand may represent a headache for the associated firm beyond the lost revenue of foregone sales because they sometimes become committed to harming the firm," the study authors wrote.

A quick glance at the complaints on ConsumerAffairs.com will show angry consumers who were once staunchly loyal to a brand, but now want nothing to do with them. And want everyone to know about it.

Lisa Spieker of North Mankato, MN bought a Maytag Neptune washing machine in 2005 that needed servicing six months later, only to find the problem continues to persist, even today, despite numerous visits from the repairman.

"We have been brand loyal and have owned Maytag appliances of all different types, but this experience has changed our mind," said Speiker. "We will never buy a Maytag washing machine again!"

Brandi McFarland of Roy, UT was double-charged at a local Target store and claims the manager not only refused to credit the second charge, but was rude to her as well. She vows never to go back.

"I will actually go out of my way to make my business and personal purchases anywhere except Target," said McFarland.

Why do these people feel so strongly about brands they once favored? According to the study authors, some people identify so strongly with brands that they become relevant to their identity and self-concept. Thus, when people feel betrayed by brands, they experience shame and insecurity.

"As in human relationships, this loss of identity can manifest itself in negative feelings, and subsequent actions may (by design) be unconstructive, malicious, and expressly aimed at hurting the former relationship partner," the authors write.

What to do?

What's a company to do to prevent such heightened emotions? "Rather than trying simply to win customers back, which may only exacerbate the situation, companies may want to explore responses that promote forgiveness, indifference, or effective disengagement," the authors suggest.

This may explain why so many consumers report the company they're upset with refuses to work with them or ignores them. Like an ex-boyfriend or -girlfriend who won't return your calls.

Sometimes a company may want to help embarrassed customers move on—even if it means directing them to a competitor.

"The sooner the customers are happily involved with a new brand, the faster one might expect damage to their self-concept to be repaired and the faster the motive to harm the offending firm might dissipate," the authors conclude.

Economists say the American economy is recovering at a rate of around 2 to 2.5% whilel some Chief Executive Officers at the largest U.S. public companies received huge pay raises for the last fiscal that were more than five times that rate, according to the consulting firm Hay Group.

In an article in Monday's Wall Street Journal, the average CEO pay at the largest 456 companies in the U.S. has risen to $7.23 million and the average pay hike for CEOs whose company's fiscal year ended January 3 was 13%.

The highest paid CEO was Gregory Maffei of Liberty Media who took home a whopping $87.1 million last year, which was four times what he made the year before.

With the economy still in tatters and most Americans living check to check, one wonders how a company can justify such a high pay raise to someone who was already earning over $20 million a year. Some will say he earned it because Liberty's total shareholder return last year was 247%, but chances are other employees helped out as well. Did their pay raises go up four times? Not likely.

Other CEOs receiving enormous pay hikes included Larry Ellison of Oracle who took home $68 million and Ray R. Irani at Occidental Petroleum, who received $52.2 million. Of the finance companies on the list, Blackrock paid out the biggest package, $22.65 million to CEO Laurence Fink, while Jay Fishman, at Travelers received $19.5 million. John Stumpf, CEO at Wells Fargo, and American Express CEO Kenneth Chenault weren't far behind, each with $18.6 million.

In contrast, there were a few leaders who were sensitive the nation's financial woes. Warren Buffett, CEO of Berkshire Hathaway took home just $100,000 and Vikram Pandit of Citigroup had a slightly better package of $125,000.Meanwhile, the CEOs of Google, Whole Foods, Apple, and Bank of America went even further. They didn't take any salary last year.

The Hay Group, which conducted its study of proxy filings for the Journal says one reason some CEOs took home such hefty pay hikes was because many boards had apparently lowered the bar and set "easier targets on bonuses and more reliance on restricted stock" that was not tied to performance goals. 

According to the Journal, annual bonuses rose nearly 11% in the latest study to a median of $1.67 million and more than half (53%) of the CEOs got restricted-stock grants. When you total the salaries of these corporate leaders it is in the billions of dollars. Can you imagine how many jobs that could create or the number of layoffs it could have avoided? That would have shown true leadership at a time when America needs it the most.

There's some good news and some bad news once the new Medicare rules go into effect January 1. The changes will benefit some recipients but it will also make coverage more expensive for people with incomes over $85,000 or $170,000 for couples.

It's all part of the health-care reform and while premiums for most beneficiaries will remain relatively stable in 2011, those who already pay higher premiums for doctor's visits and other "Part B" coverage will also pay more for "Part D" prescription drug coverage starting January 1.

Medicare's annual open-enrollment period starts this week so it's important to know what's in store for you next year. It could impact your decision as to whether to change your current plans or if you're just starting out what to begin with. During the annual open-enrollment period, anyone in the federal health insurance program for people 65 and older — and their caregivers — can make changes to their coverage by December 31.

Moreover, many insurers are eliminating or consolidating hundreds of Medicare-related plans to comply with recent regulations aimed at reducing duplicative plans. As a result, according to the AARP, as many as one million Medicare recipients will have to choose new coverage.

How the changes being instituted might impact you will depend on whether you have plain-vanilla Medicare or a federally subsidized private Medicare Advantage plan. That works like a conventional insurance plan and often includes prescription-drug coverage.

Many who choose the traditional fee-for-service Medicare also buy a "Medigap" policy, as well as a separate prescription-drug policy, to cover gaps in their coverage.

For those with traditional Medicare, the biggest change on the horizon is an expansion of benefits. Starting January 1, Medicare will completely cover the cost of many preventative services, including mammograms, Pap tests and screenings for prostrate and colorectal cancer, as well as one annual physical examination.

Benefits will also grow richer under the Part D prescription-drug program. Currently, privately managed plans cover 75% of a participant's drug costs up to a limit that will rise to $2,840 in 2011. After that, participants fall into a "doughnut hole" gap where they are required to pay 100% of their drug costs until expenditures reach $6,440. Then catastrophic coverage kicks in, capping outlays at 5%.

Under the health-care overhaul, the estimated 14% of Part D participants who fall into this coverage gap will start to receive discounts that will reduce the amount they pay—from 100% in 2010 to 50% for brand-name drugs and 93% for generics in 2011. As a result, those who have "enhanced" Part D plans, which provide some coverage in the doughnut hole, should consider whether it makes sense to pay the extra premiums.

For single participants who have a modified adjusted gross income of more than $85,000 a year—and couples who exceed $170,000—will pay between $12 and $69.10 more in monthly premiums for Part D than other beneficiaries.

Partial solution

According to the Wall Street Journal, there is a way to get around the increase: Move into a Medicare Advantage plan. They offer medical and drug benefits with lower monthly premiums than what's charged for original Medicare plus supplementary policies. But some of these plans change their benefits or fees from year to year, and some restrict where policyholders can seek care.

Participants will also enjoy some new protections. Advantage plans must cap — at $6,700 — recipients' annual out-of-pocket expenditures for Medicare-covered services within their networks. The plans will also be barred from charging higher copayments or coinsurance rates for some services, including chemotherapy, than patients would pay under traditional Medicare — although the plans can charge higher deductibles and copayments for other services.

Starting in 2011, Advantage participants who wish to switch to another Advantage plan will no longer be allowed to do so between January 1 and March 31. Instead, they must make such a move by December 31. From January 1 to February 14, participants can still drop an Advantage plan, but they'll have to switch to traditional Medicare. 

With Black Friday and Cyber Monday just around the corner, consumers are urged to beware of the most commons scams of the season.

To help you do that, McAfee, the Internet security firm, is revealing its "Twelve Scams of Christmas" -- the 12 most dangerous online scams that computer users should be cautious of this holiday season.

"Scams continue to be big business for cybercriminals who have their sights set on capitalizing on open hearts and wallets this holiday season," said Dave Marcus, director of security research for McAfee Labs. "As people jump online to look for deals on gifts and travel, it's important to recognize common scams to safeguard against theft during the busy season ahead."

Here, then, are McAfees's Twelve Scams of Christmas:

1) iPad offer scams

With Apple products topping most shopping lists this holiday season, scammers are busy distributing bogus offers for free iPads. McAfee Labs found that in the spam version of the scam, consumers are asked to purchase other products and provide their credit card number to get the free iPad. Of course, victims never receive the iPad or the other items -- just the headache of reporting a stolen credit card number.

In the social media version of the scam, users take a quiz to win a free iPad and must supply their cell phone number to receive the results. In actuality they are signed up for a cell phone scam that costs $10 a week.

2) 'Help! I've been robbed' scam

This travel scam sends phony distress messages to family and friends requesting that money be wired or transferred so that they can get home. McAfee Labs says there's been an increase in this scam and predicts its rise during the busy travel season.

3) Fake gift cards

Cybercrooks use social media to promote fake gift card offers with the goal of stealing consumers' information and money, which is then sold to marketers or used for ID theft.

One recent Facebook scam offered a "free $1,000 Best Buy gift card" to the first 20,000 people who signed up for a Best Buy fan page, which was a look-a-like. To apply for the gift card they had to provide personal information and take a series of quizzes.

4) Holiday job offers

As people seek extra cash for gifts this holiday season, Twitter scams offer dangerous links to high-paying, work-at-home jobs that ask for your personal information, such as your email address, home address and Social Security number to apply for the fake job.

5) 'Smishing'

Cybercrooks are now "smishing," or sending phishing SMS texts. These texts appear to come from your bank or an online retailer saying that there is something wrong with an account and you have to call a number to verify your account information. In reality, these efforts are merely a ruse to extract valuable personal information from the targets.

Cybercrooks know that people are more vulnerable to this scam during the holiday season when consumers are doing more online shopping and checking bank balances frequently.

6) Suspicious holiday rentals

During peak travel times when consumers often look online for affordable holiday rentals, cybercrooks post fake holiday rental sites that ask for down payments on properties by credit card or wire transfer.

7) Recession scams continue

Scammers target vulnerable consumers with recession related scams such as pay-in-advance credit schemes. McAfee Labs has seen a significant number of spam emails advertising pre-qualified, low-interest loans and credit cards if the recipient pays a processing fee, which goes directly into the scammer's pocket.

8) Grinch-like greetings

E-cards are a convenient and earth-friendly way to send greetings to friends and family, but cybercriminals load fake versions with links to computer viruses and other malware instead of cheer. According to McAfee Labs, computers may start displaying obscene images, pop-up ads, or even start sending cards to contacts that appear to come from you.

9) Low price traps

Shoppers should be cautious of products offered at prices far below competitors. Cyber scammers use auction sites and fake websites to offer too-good-to-be-true deals with the goal of stealing your money and information.

10) Charity scams

The holidays have historically been a prime time for charity scams since it's a traditional time for giving, and this year is likely to be no exception. Common ploys include phone calls and spam e-mails asking you to donate to veterans' charities, children's causes and relief funds for the latest catastrophe.

11) Dangerous holiday downloads

Holiday-themed screensavers, jingles and animations are an easy way for scammers to spread viruses and other computer threats especially when links come from an email or IM that appears to be from a friend.

12) Hotel and airport wi-fi

During the holidays many people travel and use free wi-fi in places like hotels and airports. This is a tempting time for thieves to hack into networks hoping to find opportunities for theft.

McAfee advises Internet users to follow these five tips to protect their computers and personal information:

• Stick to well-established and trusted sites that include trust marks (icons or seals from third parties verifying that the site is safe), user reviews and customer support. A reputable trust mark provider will have a live link attached to its trust mark icon, which will take visitors to a verification Web site of the trust mark provider.
• Do not respond to offers that arrive in a spam email, text or instant message.
• Preview a link's web address before you click on it to make sure it is going to an established site. Never download or click anything from an unknown source.
• Stay away from vendors that offer prices well below the norm. Don't believe anything that sounds too good to be true.
• Make sure to use trusted wi-fi networks. Don't check bank accounts or shop online if you're not sure the network is safe.

Snack foods are a big business in this country and for good reason. Americans love to snack. And to compete with our desire to cut down on unsaturated fats while we do, some snack foods bearing the word "light” on their packaging include the fat substitute olestra.

You may not know this but olestra has been banned in Canada and the United Kingdom. According to Smart Money, it's still legal here and used by companies like Proctor & Gamble for its low or non-fat chips, crackers and cookies.

This is the same ingredient that Smart Money says caused a Manhattan dermatologist to become so sick with abdominal cramps that she had to cancel her appointments. The advocacy organization Center for Science in the Public Interest (CSPI) says no one should eat olestra, even though P&G says 6.5 million servings of food containing its version olestra, Olean, have been consumed since 1996. That's when the FDA approved olestra.

Olestra isn't the only banned substance we're snacking on. Recombinant Bovine Growth Hormone, or rBGH (sold under the name Posilac) is a synthetic hormone injected into cows to stimulate milk production. Smart Money says it appears in many dairy-based snacks like ice cream, but not in Europe or Canada, where it has been banned.

There are fears that a hormone associated with cancer might be higher in people who drink milk treated with rBGH. Eli Lilly, the company that manufacturers Posilac, denies these claims. A division of Eli Lilly bought Posilac for more than $300 million in 2008 and studies show it can increase milk production in a cow by 15% or more, meaning more milk to sell.

Beetle bits

Why stop here? Would you like some pulverized insects in your snack? Smart Money says beetles are often boiled and ground up and used in snack foods to create shades of red, purple and pink in everything from fruit juice to ice cream and candy.

Reading the labels might not even spare you from eating an insect. According to Smart Money, you won't find the word "beetle” anywhere on food labels. Instead, you'll likely see the less cringe-worthy "carmine,” "carminic acid” or "cochineal extract" which is basically, beetle remains.

Questionable ingredients aren't the only things snack food companies don't want you to know. Smart Money says expiration dates on highly-processed foods can be significantly longer than the date on the package. Karen Duester, MS, RD is president of the Food Consulting Company, which advises companies on food labels and FDA regulations. She says that if the product is well-sealed, kept away from light, and has a low fat and dairy content, it could last for years. That's particularly true for canned snacks like maraschino cherries.

These "use by” dates are provided voluntarily by the manufacturer even though the products could be safe to eat after their expiration. Duester says the reason they do it is because it encourages retailers to restock - and reorder - the product more often. Plus, she adds, an expiration date of 2015 isn't that appealing.

What about those energy and power bars? Smart Money says that if you look closely, you'll see that their ingredients look a lot like what you'd find in a candy bar. They are basically concentrated doses of sugar that provide an immediate burst of energy from the sugar rush but then you crash and feel even more tired than if you hadn't eaten the bar.

Authors Rey Junco of Lock Haven University, Greg Heiberger of South Dakota State University and Eric Loken of The Pennsylvania State University carried out the research, published Nov. 12, 2010, in the Journal of Computer Assisted Learning.

The fieldwork used a group of 125 students -- 70 in the experimental group that used Twitter and 55 in a control group -- taking a first-year seminar course for pre-health professional majors.

"The idea that student engagement can be increased outside of the classroom in a low-credit course through the use of technology is one of the key findings. Students are able to engage with faculty regularly in short exchanges," said Heiberger, coordinator of pre-health professional programs in SDSU's Department of Biology and Microbiology.

"It was a one-credit course and the contact we had with students was daily. That's not common with many one-credit courses," said Heiberger.

In the experimental group, instructors and students used Twitter for various academic discussions. Researchers measured engagement by using a 19-item scale based on the National Survey of Student Engagement.

Results showed that the experimental group had a significantly greater increase in engagement than the control group, as well as higher overall grade point averages for the entire semester.

Analysis of Twitter communications showed that students and faculty were both highly engaged in the learning process in ways that transcended traditional classroom activities.

This study provides experimental evidence that Twitter can be used as an educational tool to help engage students and to mobilize faculty into a more active and participatory role.

"It was clear that students were highly engaged with us and with each other on Twitter and that had a significant effect on their overall academic success," said Junco.

"To some extent, it does add to the faculty member's level of commitment but it allows for them to leverage technology to directly connect with students throughout the day," Heiberger said. "Faculty could Tweet five minutes after dinner and answer a couple of quick questions. Communications outside of class, such as these, are important factors in student engagement and success."

Heiberger said Twitter not only increased students' contact with instructors, but also their contact with each other. That made it made it possible for students to support each other in a vibrant virtual learning community.

Such social networking technologies raise new possibilities for cooperative/collaborative learning, learning communities, media in education, post-secondary education, and teaching/learning strategies, Heiberger said.

Heiberger and his colleagues are currently conducting follow-up studies on the impact of social media on retention of college students in their first and second years.

The foodservice industry demands change as often as the limited-time offers (LTO) at your favorite restaurant, and this year has been no exception.

In light of the new healthcare law that requires restaurants with 20 or more units to list calorie counts on the menu, operators now face the task of balancing federal regulations with the differing demands ahd whims of their customers.

Restaurant patrons value menu transparency, but still want the occasional indulgent dining experience. The forecast of foodservice trends for 2011 from Mintel Menu Insight, a supplier of consumer, product and media, is all about walking that fine line between open disclosure and customer satisfaction.

"Both the government and consumers want healthier menu options, but restaurant-goers are also very concerned about value and how their food tastes," according to Eric Giandelone, director of foodservice research at Mintel. "Keeping both parties satisfied might be a challenge as we move into 2011."

Trend #1: Healthy by association

Sixty-two percent of consumers say they plan to eat healthier in the upcoming year, but many complain that healthier food doesn't taste as good without the added sugar, sodium and fat. Restaurants will address this problem by swapping in "healthier" ingredients to their patrons' favorite dishes, and positioning them to appear better for you.

For instance, Taco Bell has quietly reduced sodium at 150 stores in the Dallas market, while Jason's Deli promotes its food as being free from high-fructose corn syrup (HFCS), trans fats or pesticides. Consumers enjoy visiting restaurants that are perceived as healthy because these venues make them feel good about themselves and their meal choices. They might opt to visit the "healthy" restaurant, but be wooed by the not-so-healthy LTOs offered at these places (see Trend #5).

Trend #2: Automated Menus

Convenience and technology will form the perfect union this year, as restaurant-goers will see an increase in automated menus at their favorite establishments. These electronic order-takers will provide customers with the opportunity to order food to their specifications in do-it-yourself style, thus reducing the restaurant's reliance on front-of-house staff, as well as full-time employees. Automated menus, in addition to mobile applications, will help restaurants reach a younger, more mobile consumer.

Trend #3: Transparency

Consumers want to know what they're eating, and the new healthcare call mandates such disclosure. Restaurants with 20+ units are now required to list calorie counts on their menus. Consumers seem happy with the impending disclosure, as 61 percent agree that restaurants should post nutritional information, like calorie counts and fat grams, on menus. More cities will start forcing restaurants to display their letter grades from local health departments, further increasing menu transparency.

Trend #4: Indigenous Ingredients

While the local food movement continues to grow, the push toward indigenous ingredients takes that trend a step further. Mintel expects that in 2011 restaurants will incorporate more traditional or authentic ingredients into their ethnic or globally-positioned entrees.

One example of this trend is Frontera Grill's Panucho Yacateco, an entree that boasts a traditional Yucatan crispy tortilla filled with black beans and hard-boiled egg with shredded chicken in tangy escabeche. "Local" as an ingredient marketing claim has grown by 15 percent from the second quarter of 2009 to the second quarter of this year, according to Mintel Menu Insights -- and it's likely that number will increase in the coming year.

Trend #5: Exemptions to the Rule

A vast majority of restaurants will have to disclose calorie counts on their menus, but that rule doesn't apply to LTOs. Operators will take advantage of this loophole by offering less-than-healthy novelty or seasonal menu items, allowing customers to indulge in a guilty treat, without feeling pressured to make a healthier menu choice.

As it stands, 43 percent of consumers say they're likely to change what they order when calorie counts are listed on the menu. LTOs give consumers the occasional opportunity to indulge in a meal out.