Current Events in February 2011

ConsumerAffairs.com reported on Wednesday that football fans displaced from their Super Bowl seats were planning to file a class action lawsuit, despite repeated groveling and an offer of a triple refund from the NFL.

Those consumers have made good on their threat, filing suit in a federal court in Dallas. The suit demands compensatory and punitive damages, along with treble (or triple) damages under the Texas Deceptive Trade Practices Act.

The complaint, a copy of which was made available by USAToday, places much of the blame on Cowboys owner Jerry Jones, who it says “made it a goal for Super Bowl XLV to break attendance records and conducted himself accordingly.”

As a result, according to the suit, many fans “discover[ed] that Jones and the Cowboys ... assigned them to seats with obstructed views and temporary metal fold out chairs, which had been installed in an effort to meet Jones’ goal of breaking the attendance record.”

Pre-suit offer

The NFL, no doubt aware that litigation was at least a possibility, quickly issued a mea culpa and offered fans steep concessions. Commissioner Roger Goodell said there were “no excuses” for the mix-up, and the league quickly announced that displaced fans would be given triple the value of their ticket, along with a free seat to next year’s game.

Shortly afterwards, with the suit looming, the NFL expanded that offer to cover not only the 400 fans who were unable to sit for the game, but also an additional 2000 fans who were moved to different seats after their original area was deemed unsafe.

“We screwed it up”

NFL officials continued to express remorse after the suit was filed this week.

“We made the best of it. We screwed it up. I can't change that,” NFL executive vice president Eric Grubman said. “I'm a football fan and before I worked at the Super Bowl I took my young sons and my father ... to see the New York Giants and if that would have happened to me, I would be furious.”

But in an interview with NBC’s ProFootballTalk Live, Grubman had a few choice words for the lawyers that filed the suit.

“I wish they'd go off and work on something like world peace because I think we have to keep this in perspective,” Grubman said, as reported by USA Today. “We didn't provide a great experience to 100% of the fans. But keeping a little perspective is probably what I wish the lawyers would do.”

Lawyer cites out-of-pocket expenses

Michael J. Avenatti, a Los-Angeles based lawyer who is handling the suit, is himself a Cowboys season ticket holder. He said he filed the suit after the NFL expanded its offer to inconvenienced fans.

“A number of people approached me expressing disgust with the seating situation,” Avenatti told USA Today . He said the NFL's offer is “wholly insufficient,” but that the plaintiffs aren't looking to improperly gain from the mishap.

“Nobody is looking to get rich from this, nor should they be,” he said. “This is really simply all about the NFL and Jerry Jones being required to step up and do the right thing.”

A lawsuit seeks damages in the death of a 50-year-old California woman who died last July, five days after Lap Band surgery. Laura Faitro of Simi Valley died after undergoing surgery at Valley Surgical Center in West Hills, Calif.

Her husband, John, said Ms. Faitro became interested in the surgery after seeing television commercials for 1-800-GET-THIN. But a few days after the surgery, she was hospitalized with an infection and later died. (Read consumer complaints about weight loss companies).

She is the fourth Southern California patient to die following surgery related to the 1-800-GET-THIN advertising campaign, according to The Los Angeles Times.

Faitro's suit charges that there were three lacerations on her liver and her abdominal cavity was filled with bloody fluid, KABC-TV reported.  His suit claims that in 2009, California accused one of the surgeons who operated on his wife of "gross negligence arising from surgeries performed on three patients, two of whom died as a result of his gross negligence." 

Faitro claims surgeons discharged his wife despite her complaints of severe abdominal pain, and that the pain was so intense it forced her to seek help at the Simi Valley Hospital emergency room. She died on July 26 of "multi-organ failure and infarction due to shock, secondary to bleeding and sepsis in the abdominal cavity," according to the complaint.

But attorneys for 1-800-GET-THIN say the woman's death was caused by a heart attack, not by the surgery.

"Obesity leads to heart attacks so what you have here is the complication of the heart attack had little or nothing to do with the surgery," Oxman told KABC-TV.

The death certificate lists the primary cause of death as a cardiopulmonary arrest but also mentions the liver laceration as a significant condition contributing to death, KABC said.

The Lap-Band is a ring that is placed on the upper part of the stomach forming a small pouch. It is supposed to cause patients to experience a full feeling and restrict their dietary intake.

The suit names Valley Surgical Center, 1-800-GET-THIN LLC, Simi Valley Hospital and all the doctors who performed the surgery.

If you were to receive a notice in the mail informing you that you had won a prize, or were due some money in a class action settlement, you might be willing to pay $20 or more to get your money.

Maryland Attorney General Douglas Gansler says doing so would be a big mistake. He has filed charges against a Florida company called Synchronicity LLC and its owner, accusing them of deceptive trade practices in connection with their mailings to Maryland consumers.

According to the complaint, the company mailed tens of thousands of solicitations offering large cash prizes and other valuable items; however, consumers who responded to the mailings received little or nothing in return.

A company of many names

Synchronicity reportedly used various names, including Office of Financial Services Administration, Lynch Galbraith & Branley, Class Action Watchdog, and Prize Payment Administration Service, as if it were a government agency, a firm handling class actions, or a prize company, and represented that consumers were eligible to receive cash grants, awards, or prizes valued at millions of dollars.

A California attorney alerted ConsumerAffairs.com (an Authorized Partner) to this scheme 18 months ago.

Consumers receiving the letters were told that to collect the prize or money they were due, they must send what was called an "entitlement," "procurement," or "allocation" fee, usually of $20, but sometimes more, to a post office box in Hagerstown, Md.

Those $20 payments quickly added up. By the time the state stepped in, the Attorney General's Office alleges that consumers sent more than $2 million to the Hagerstown post office box. And what did the consumers get in return? Sometimes a check for $1, sometimes nothing of any value, Gansler says.

Deceptive mailings

The state contends that the mailings were deceptive and is seeking an order requiring the company and its owner to cease sending deceptive offers to Marylanders or using a Maryland address, to return the fees collected, and to pay penalties and costs.

"Consumers should always be wary of any offer that seems too good to be true," said Attorney General Gansler.  "You should not believe these types of promises of large awards, and never pay a fee to receive a prize." 

The U.S. Food and Drug Administration today approved the Selenia Dimensions System, the first X-ray mammography device that provides three-dimensional (3-D) images of the breast for breast cancer screening and diagnosis.

The 3-D images may help physicians more accurately detect and diagnose breast cancer.

Currently, mammograms take safe, low-dose, two dimensional (2-D) X-ray images of the breast and is the best tool for early detection of breast cancer because it can reveal tumors even when the patient has no symptoms.

However, with the limitations of conventional 2-D imaging, about 10 percent of women undergo additional testing after the initial screening exam for abnormalities that are later determined to be noncancerous.

The Selenia Dimensions System, an upgrade to Hologic’s existing FDA-approved 2-D system, can provide both 2-D and 3-D X-ray images of the breasts.

“Physicians can now access this unique and innovative 3-D technology that could significantly enhance existing diagnosis and treatment approaches,” said Jeffrey Shuren, M.D., J.D., director of the FDA’s Center for Devices and Radiological Health.

40 million  

The National Cancer Institute recommends women ages 40 and older have a mammogram every one to two years. Nearly 40 million mammograms are performed each year in the United States.

As part of the approval process, the FDA reviewed results from two studies where board-certified radiologists were asked to review 2-D and 3-D images from more than 300 mammography exams.

In both studies, radiologists viewing both the 2-D and 3-D images obtained a 7 percent improvement in their ability to distinguish between cancerous and non-cancerous cases as compared to viewing 2-D images alone.

While the combination of the Selenia’s 2-D and 3-D images approximately doubled the radiation dose the patient received, it improved the accuracy with which radiologists detected cancers, decreasing the number of women recalled for a diagnostic workup.

There is uncertainty for radiation risk estimates; however, the increase in cancer risk from having both a 2-D and 3-D exam is expected to be less than 1.5 percent compared to the natural cancer incidence, and less than 1 percent compared to the risk from conventional 2-D mammography.

According to the NCI, nearly 200,000 women will be diagnosed with breast cancer this year. And 1 in 8 women will be diagnosed with breast cancer during their lifetime.

There is a 98 percent survival rate when breast cancer is detected early and still localized to the breast.

Nokia and Microsoft say they are forming a broad strategic partnership that would use their combined expertise to create what they called a new "global mobile ecosystem."

Nokia is the world's top provider of mobile phones, which has seen its market share shrink lately amid the growth in smartphone competition from Apple, HTC and Research In Motion (RIM). Microsoft is the software giant that has been seeking traction for its mobile OS platform, Windows Phone 7.

The two companies say they intend to jointly create market-leading mobile products and services designed to offer consumers, operators and developers unrivalled choice and opportunity. 

The two companies believe their dominance in their relative markets give them a distinct advantage. The partnership, they say, would create the opportunity for rapid time to market execution.  Additionally, Nokia and Microsoft say they plan to work together to integrate key assets and create completely new service offerings, while extending established products and services to new markets.

Under the proposed partnership:

• Nokia would adopt Windows Phone as its principal smartphone strategy, innovating on top of the platform in areas such as imaging, where Nokia is a market leader.

• Nokia would help drive the future of Windows Phone.  Nokia would contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments and geographies.

• Nokia and Microsoft would closely collaborate on joint marketing initiatives and a shared development roadmap to align on the future evolution of mobile products.

• Bing would power Nokia's search services across Nokia devices and services, giving customers access to Bing's next generation search capabilities.  Microsoft adCenter would provide search advertising services on Nokia's line of devices and services.

• Nokia Maps would be a core part of Microsoft's mapping services.   For example, Maps would be integrated with Microsoft's Bing search engine and adCenter advertising platform to form a unique local search and advertising experience

• Nokia's extensive operator billing agreements would make it easier for consumers to purchase Nokia Windows Phone services in countries where credit-card use is low.

• Microsoft development tools would be used to create applications to run on Nokia Windows Phones, allowing developers to easily leverage the ecosystem's global reach.

• Nokia's content and application store would be integrated with Microsoft Marketplace for a more compelling consumer experience.

 Three-horse race

"Today, developers, operators and consumers want  compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great  experience," Stephen Elop, Nokia President and CEO, said at a joint news conference in London. "Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale. It's now a three-horse race."

"I am excited about this partnership with Nokia," said Steven A. Ballmer, Microsoft CEO. "Ecosystems thrive when fueled by speed, innovation and scale. The partnership announced today provides incredible scale, vast expertise in hardware and software innovation and a proven ability to execute."

PC Magazine calls the move a big win for Microsoft, pointing out that Windows Phone 7 has gone from afterthought to the number one platform for the number one mobile device manufacturer. The big loser, it says, is Nokia.

"This is a humiliating climbdown for Nokia, which basically admitted that it's been wasting a huge software R&D budget and that its OS engineers are incompetent," the magazine said in an online posting.

Scams come and go, but home repair fraud remains a problem nationwide, in just about any season of the year. A fly-by-night contractor knocks on your door, makes all kinds of promises, collects a check, and then disappears.

Some actually make an attempt at the work but do a shoddy job, the quality of which isn't readily apparent until they've made a safe getaway. While consumer officials deal with all sorts of new, emerging consumer threats, they find home repair fraud always seems to be around.

Just recently, Illinois Attorney General Lisa Madigan filed a lawsuit against two Chicago area home repair contractors who solicited thousands of dollars in work under the false promise that repair service was guaranteed for a lifetime.

Guaranteed for life...not

Madigan's lawsuit, filed in Cook County Circuit Court, alleges Frank E. Edelmann and Lee Sobczak, both of La Grange Park, solicited consumers through deceptive advertisements in newspapers and on company websites that mislead consumers into believing they guaranteed certain repairs for life.

The lawsuit alleges the defendants operated Concrete Charlie Inc., Concrete Repair Center, Inc., and Ostarr Corporation of America, based in LaGrange, and lured consumers into contracts under this false premise violating the state's Consumer Fraud and Deceptive Business Practices Act and the Home Repair and Remodeling Act. Lifetime guarantees were made verbally or included in written work orders signed by the defendants and consumers.

Edelmann and Sobczak reportedly even gave consumers certificates to give the appearance their work was guaranteed, but the defendants never honored them and regularly avoided consumers who requested repairs through the lifetime guarantee.

Katrina fallout

In Mississippi, meanwhile, Attorney General Jim Hood this week reported a state court had sentenced a Gulf Coast contractor on felony home repair fraud charges. The contractor, Willian Wesley Mohr of Picayune, Miss., was arrested last year by investigators with the Mississippi Consumer Protection Division of the Attorney General's Office. He came to the Mississippi Gulf Coast from New York, after Hurricane Katrina, doing business under the name Mohr Construction, Hood said.

To avoid home repair scams:

• Get all estimates, guarantees and work dates in writing.
• Get a second opinion whenever possible.
• Avoid large payments up front.
• Be suspicious of door-to-door solicitors, especially those offering free inspections.
• Check ID before letting any worker into your home.
• Check the credentials of companies: check their references; verify their number and address in the phone book; check for county or other local permits; check for complaints with the Attorney General or the Better Business Bureau; check for business registration with the Secretary of State.
• Walk away from offers that are good "now or never."
• Make payment only when the work meets the terms of your contract.

Most professional tax preparers are honest and conscientious, trying to get the best results for their clients. If you have used the same preparer for several years, you probably have a degree of confidence in their ability and integrity.

Unfortunately, some tax preparers commit fraud, getting themselves and their clients in trouble. Even though you have paid a tax professional to prepare your return, you are ultimately responsible for its contents.

Possible penalties and prosecution

"In some situations, the client (taxpayer) may not have knowledge of the false expenses, deductions, exemptions and/or credits shown on their tax returns," the Internal Revenue Service (IRS) says on its website. "However, when the IRS detects the false return, the taxpayer must pay the additional taxes and interest and may be subject to penalties and criminal prosecution."

The point was made recently when the U.S. Justice Department filed six lawsuits against tax preparers in five states, charging them with fraudulently claim the first-time homebuyer tax credit and the Earned Income Tax Credit on returns. At the same time, a federal grand jury indicted a Philadelphia man on criminal charges for fraudulently claiming the first time homebuyer credit.

"We are working hard to ensure that those who try to cheat our country by filing phony claims for tax credits do not get away with it," said John A. DiCicco, Acting Assistant Attorney General of the Justice Department's Tax Division. "Honest taxpayers will be pleased to see the Internal Revenue Service and the Justice Department continuing to investigate, prevent, and prosecute these types of schemes during the 2011 tax filing season. False claim cases are certainly a nationwide priority for the Tax Division. This kind of tax fraud is an insult to hard-working Americans who legitimately qualify for these tax credits."

Clients get close scrutiny

A federal court in North Carolina, meanwhile, has permanently barred Jody S. Ball of Bryson City, N.C., from preparing federal income tax returns for others. And Ball's former clients may come under close scrutiny as a result. The order requires Ball to provide the government with a list of all persons for whom she prepared federal tax returns since January 2007 and to send each person a copy of the court's order.

According to the government's complaint, Ball, doing business as The Tax Lady Inc. and Jody Ball Accounting, included false claims for charitable donation deductions, business expense deductions and earned income tax credits on tax returns that she and her businesses prepared.

Even after the Internal Revenue Service (IRS) imposed penalties on Ball in 2004, she allegedly prepared more than 1,600 federal income tax returns during and after 2006. According to the complaint, of those returns that the IRS audited, approximately 80 percent understated customers' tax liabilities. 

All the more reason to check references, and maybe do a Google search, when using a tax preparer for the first time. How do you avoid a tax preparer who may not be on the up and up? The IRS offers these tips:

Advice

• Avoid tax preparers who claim they can obtain larger refunds than other preparers

• Avoid preparers who base their fee on a percentage of the amount of the refund.

• Use a reputable tax professional who signs your tax return and provides you with a copy for your records.

• Consider whether the individual or firm will be around to answer questions about the preparation of your tax return months, or even years, after the return has been filed.

• Review your return before you sign it and ask questions on entries you don't understand.

• No matter who prepares your tax return, you (the taxpayer) are ultimately responsible for all of the information on your tax return. Therefore, never sign a blank tax form.

• Find out the person's credentials. Only attorneys, CPAs and enrolled agents can represent taxpayers before the IRS in all matters including audits, collection and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared. (Additional text in italics added Feb. 4, 2005.)

• Find out if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.

• Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?

The IRS cautions taxpayers to be wary of claims by preparers offering larger refunds than other preparers. Check it out with a trusted tax professional or the IRS before getting involved.

The U.S. Treasury Department has laid out a plan it says will repair "fundamental flaws" in the nation's mortgage market by reducing the role of government sponsored enterprises (GSE) like Fannie Mae and Freddie Mac.

The two agencies purchase home mortgages and convert them into assets for sale to investors. The two GSEs had to be bailed out by the government after the housing collapse and the two firms suffered huge losses on bad loans.

The plan, advanced by Treasury Secretary Tim Geithner, is designed to increase consumer protection, improve transparency for investors, improve underwriting standards, and other critical measures.  Additionally, the government says it will help make it easier for people to buy homes.

Winding down Fannie and Freddie

"This is a plan for fundamental reform; to wind down the GSEs, strengthen consumer protection, and preserve access to affordable housing for people who need it," said Geithner. "We are going to start the process of reform now, but we are going to do it responsibly and carefully so that we support the recovery and the process of repair of the housing market."

Housing and Urban Development Secretary Shaun Donovan says the plan will also make renting a home more affordable. While home prices have fallen or remained stagnant, rents have risen sharply in some parts of the country.

The Obama administration says its reform plan will wind down Fannie Mae and Freddie Mac and help bring private capital back to the market.  In the wake of the financial meltdown, private capital retreated from the housing market and has not yet returned, leaving the government to guarantee more than nine out of every 10 new mortgages. 

That assistance has been essential to stabilizing the housing market.  However, the Obama administration believes that, under normal market conditions, the private sector -- subject to stronger oversight and standards for consumer and investor protection -- should be the primary source of mortgage credit and bear the burden for losses.

Unfair advantage

The administration recommends ending unfair capital advantages that Fannie and Freddie previously enjoyed by requiring them to price their guarantees as though they were held to the same capital standards as private banks or financial institutions.  This, the government says, will help level the playing field for the private sector to take back market share. 

Although the pace of these increases will depend significantly on market conditions, the administration recommends bringing Fannie Mae and Freddie Mac to a level even with the private market over the next several years.

As for private lenders, the initial reaction was positive.

"We are gratified to see that one of the concepts they articulate closely tracks MBA's proposal, released eighteen months ago, that visualizes a workable, commonsense system driven by private capital," said Michael D. Berman, Chairman of the Mortgage Bankers Association (MBA). "We look forward to working with legislators, the administration and other stakeholders to evaluate the different proposals on restructuring the market without dramatically increasing the cost of credit."

The good news is gasoline prices seem to have stopped going up. The bad news is, they are still at fairly lofty heights.

The national average price of self-serve regular today is $3.127 a gallon, virtually unchanged from the $3.123 recorded last Friday, according to AAA's Fuel Gauge Survey. The average price of diesel fuel is $3.516 a gallon, up from $3.471 last week.

International concerns

Analysts say uncertainty over events in Egypt have kept oil prices high in recent weeks, so gas prices are reflecting that.

"As the price of crude looked to Egypt for much of its direction last week, gasoline prices focused more fully on fundamental data here at home," said Andrew Delmege, AAA's manager of regulatory affairs. "While an early-week SpendingPulse report showed a third consecutive week of increasing demand in the U.S. and suggested stronger year-on-year growth in the market, supply data proved to be the market mover on the week."

The latest figures from the U.S. Energy Information Administration show supplies of crude oil and refined gasoline remain plentiful. Crude stockpiles total 345.1 million barrels, more than four percent higher than at this time last year. Supplies of gasoline rose for the sixth straight week, to 240.9 million barrels.

The states with the most expensive gasoline today are:

• Hawaii ($3.753)

• Alaska ($3.599)

• California ($3.426)

• New York ($3.381)

• Connecticut ($3.342)

• Washington ($3.276)

• Illinois ($3.257)

• Oregon ($3.256)

• Vermont ($3.238)

• Maine ($3.213)

The states with the least expensive gasoline today are:

• Wyoming ($2.913)

• Missouri ($2.947)

• South Carolina ($2.961)

• Texas ($2.979)

• Tennessee ($2.986)

• Mississippi ($2.988)

• Arkansas ($2.993)

• Colorado ($2.993)

• Oklahoma ($2.995)

• Alabama ($3.012)

Consumers have a guarded outlook of the coming months as stress levels rise, employment remains flat and financial difficulties increase according to the Consumer Reports (CR) Index for February. 

The CR Trouble Tracker Index is up for the third straight month (58.7), revealing increasing financial difficulty for consumers. The index, which tracks the depth and breadth of financial difficulties among households, has climbed from 54.2 last month and from 53.4 one year ago. 

The gains in retail activity coupled with increased financial difficulty may lead to a credit crunch for some consumers, especially as missing payments on major bills (9.7 percent) or missing a mortgage payment (3.2 percent) are up from a year ago. Also, compared with last month, the number of consumers facing negative changes to their credit card terms (e.g., interest rates, penalty fees, credit limit) was up. 

The Consumer Reports Employment Index shows no sign of improvement, as it was unchanged from the prior month at 49.2 and on par with a year prior (49.0). In the past 30 days, 6.7 percent of those surveyed have lost their jobs, but only 5.2 percent have found new positions. 

“February’s Employment Index is indicative of an economy shedding more jobs than it is creating and this kept sentiment in negative territory, despite other measures that have shown gains,” said Ed Farrell, a director of the Consumer Reports National Research Center.  “While the share of those starting a new job was up nominally from January, growth is insufficient to seriously address the expanding pool of unemployed or fresh job seekers.” 

Stress rising

The compounding of these various negative factors may be reason for the rise in the magazine's Stress Index -- a measure of the stress consumers feel in their everyday lives versus a year ago.  Despite a significant drop in January, in February the index is up to 59.3 from 55.4 the prior month and is on par with one year ago (59.9). 

Despite the negative factors, some green shoots remain particularly when it comes to retail. The retail outlook is improving as the CR Past 30-Day Retail Index is up to 11.6 from last year (10.9).  Similar signs of improvement are revealed in the Next 30-Day Retail Index, which rose to 8.3, from 6.9 a year ago. Major home electronics and personal electronics are helping to fuel the retail gains for both indexes. 

After reaching its highest level in two years at 48.7 in January, the Sentiment Index held steady, matching the highest level recorded since October 2008.  An index below 50 represents negative consumer sentiment. 

The Consumer Reports Index report is made up of five key indices: the Sentiment Index, the Trouble Tracker Index, the Stress Index, the Retail Index, and the Employment Index. Here are the key findings: 

Sentiment Index

Consumer sentiment held steady, maintaining its gain from last month and stands at 48.7 -- its highest level in two years.

The most optimistic consumers: Age 18-34 at 55.5 (versus 57.2 the prior month), and households with income of $100K or more at 61.5 (compared with 57.4 a month earlier). The most pessimistic consumers: Households with income less than $50,000 at 44.2 (it was 42.7 the prior month), and those age 65 and older at 41.9 (versus 44.1 a month earlier). 

The index captures respondents’ attitudes regarding their financial situation, asking them if they are feeling better or worse off than a year ago. When the index is greater than 50, more consumers are feeling positive about their situation. When it is below 50, more consumers are feeling worse. It can vary from a high of 100 to a low of 0. 

Trouble Tracker Index

Consumers faced more troubles this month than the month before. The index increased to 58.7 in February from January’s 54.2 as well as one year ago (53.4).

Negative developments were led by an increase in consumers that were unable to afford medical bills or medications in the past 30 days to 17.0 percent, from 15.6 percent in January and 14.7 percent one year ago; and an increase in those that have lost or face reduced health-care coverage (9.3 percent), compared with 8.6 percent last month and 7.5 percent the prior year.

Overall, the most prevalent consumer troubles include: Unable to afford medical bills or medications (17 percent); Missed payment on a major bill -- not mortgage (9.7 percent); Lost or reduced health-care coverage (9.3 percent).

Lower-income households, earning less than $50,000 a year, have been disproportionately affected. In the past 30 days: 26 percent unable to afford medical bills or medications; 14.1 percent missed payment on a major bill (not a mortgage); 12.9 percent Lost or reduced health-care coverage; and 11.7 percent lost job, versus 6.7 percent among all consumers. 

The Trouble Tracker focuses on both the proportion of consumers that have faced difficulties as well as the number of negative events they have encountered. The negative events include: the inability to pay medical bills or afford medication, missed mortgage payments, home foreclosure, interest-rate increase, penalty fees, reduced lines of credit or other changes in credit card terms, job loss or layoffs, reduced health-care coverage or the denial of personal loans. The index is then calculated as the proportion of consumers that have experienced at least one of the negative events comprising the index multiplied by the average number of events encountered. 

Retail Index

Retail continues its recovery. The Past 30-Day Retail Index (reflective of January activity) is 11.6, up from 10.9 last year. Similarly the Next 30-Day Retail Index, reflecting planned purchasing for February, is 8.3, up from 6.9 one year ago. 

Looking in detail at the categories in the Past 30-Day Retail Index (major appliances, small appliances, major home electronics, personal electronics, major yard/garden equipment), gains are attributable to several categories, including major appliances (7.1 percent, versus 6.3 percent a year ago), major home electronics (15.0 percent, compared with 13.9 percent last year), and personal electronics (25.5 percent as opposed to 23.6 percent last year).

The Next 30-Day Retail Index for February -- reflecting February activity -- is 8.3, compared with one year ago (6.9), with personal electronics (17.5 percent, versus 13.2 percent) and major home electronics (9.8 percent, compared with 6.8 percent) accounting for the gains. Planned purchasing for personal electronics is anticipated to be up in February versus the prior month as well (15.9 percent).

Among the non-index categories (new car, used car, home), past 30-day purchasing -- reflecting January activity -- was soft versus one year ago. Past 30-day purchasing for new cars was 1.8 percent, for used cars 4.3 percent, and 1.9 percent for homes. Planned purchasing in February reflects increasing confidence among consumers, with small gains versus one year ago for new cars 3.0 percent, up from 2.7 percent; used cars 5.1 percent, up from 3.7 percent; homes 2.2 percent, up from 1.7 percent. 

The Retail Index looks at consumer purchases in the past 30 days as well as the outlook for planned purchases in the next 30 days across several categories. It represents the proportion of respondents that made a purchase in the following categories: major home appliances, small home appliances, major home electronics, personal electronics, and major yard and garden equipment. The Retail Index is a weighted calculation. For example, a major appliance is of greater value than a small appliance. Because of their size and frequency, car and home purchases are tracked separately. 

Employment Index

The Consumer Reports Employment Index remains weak in February (49.2) and is unchanged from January. In the past 30 days, the proportion of consumers that have lost their job is 6.7 percent, virtually unchanged from a month earlier (6.5 percent). The share of those that have started a job in the past 30 days (5.2 percent) is comparable to a month earlier (4.9 percent), but is much improved from one year ago (3.8 percent). The Index points to two groups that have fared worst this month: adults 35 to 64 years of age (47.8), and those in households earning less than $50,000 (46.6). 

The Employment Index examines the change in employment of those that reported starting a new job versus those that have lost their job or were laid off in the past 30 days. An index below 50 indicates more jobs were lost than gained, while a score more than 50 indicates more jobs were gained than lost in the past 30 days. 

Stress Index

The level of stress consumers feel they are under is up to 59.3 from the prior month (55.4), but is on par with one year ago (59.9). 

The Stress Index captures attitudes regarding the amount of stress consumers feel compared to a year ago. It asks whether they are feeling more stressed or less stressed. When the index is more than 50, consumers are feeling more stress and when it is below 50 they are feeling less stress compared to a year ago. It can vary from 100 (Total Stress) to a low of 0 (No Stress).

This week, research findings between diet soda consumption and the risk of stroke were presented at the American Stroke Association’s annual International Stroke conference.

The researchers, using data from the Northern Manhattan Study (NOMAS) found the risk of stroke and other vascular issues rose to 61% for people who reported drinking more than one serving of diet soda every day.

The cause? Sodium, which many diet sodas contain.

Today, The Calorie Control Council, a non-profit association representing the low-calorie food and beverage industry, said claiming an associating between diet soda consumption and increased risk of stoke and heart attack is “critically flawed.”

"The findings are so speculative and preliminary at this point that they should be considered with extreme caution. In fact, the study has not been peer reviewed by any independent scientists and has not been published in a scientific journal," stated Beth Hubrich, a registered dietitian with the Council.

The research, as well as the publicity regarding the study abstract, is drawing a growing body of criticism and skepticism from experts in the field of nutrition and science.

'One of the worst'  

Dr. Richard Besser, Chief Health and Medical Editor at ABC News, said during a segment on "Good Morning America" on February 10 that the study was “one of the worst” he had seen in the headlines in a long time.

"It's bad because of the science, but it's also bad because of the behavior that it can induce and the fear that people have. I don't think people should change behavior based on this study," said Besser.

Pointing out some of the flaws in the study, Besser added, "They didn't look at how much salt they took in, they didn't look at what other foods they ate. Those things we know are associated with stroke and heart attack. They didn't even look at obesity over time. And so to conclude from this, that it's all from the diet soda, just makes no sense whatsoever."

Dr. Walter Willett, chair of the Department of Nutrition at Harvard School of Public Health, echoed this criticism in comments presented on ABCnews.com: "It's important to keep in mind that this was really a preliminary report. It's not even published yet, and the study was fairly small. I think we have to interpret the findings about diet soda very carefully, in almost any first report, we shouldn't really change our behavior, because it could easily have occurred by chance."

The poster presentation is also at odds with statements on the website of the American Heart Association, sponsor of the conference where this poster was presented.

Regarding the low-calorie sweeteners used in diet soft drinks, AHA states: "Try non-nutritive sweeteners such as aspartame, sucralose or saccharin in moderation. Non-nutritive sweeteners may be a way to satisfy your sweet tooth without adding more calories to your diet. The FDA has determined that non-nutritive sweeteners are safe."

Among the weaknesses and criticisms of the poster:

• The poster is not a published study and has not been peer-reviewed for a scientific journal. As a result, it has not been examined by experts as to design, reasonableness of conclusions, and other methodological issues. The academic standards for poster presentations are lower than for peer-reviewed scientific journals, calling the conclusions into greater question.

• The soda intake data used for this presentation are of questionable reliability. They are based on self-reported consumption figures, which are grouped into general categories, such as "moderate diet only" soda consumers. This imprecision makes it very difficult to draw any meaningful conclusions from the study.

• This study is observational and does not show cause and effect. As a result, the presenters' conclusion that diet soda "may be associated with a greater risk of stroke, MI or vascular death than regular soda" is not well founded. For example, the authors do not appear to have controlled for such critical factors as family history of heart disease or stroke, or for weight gain. Also, stroke is more common in men 55 years of age and older and women 65 years or older. The average age of those in the study was 69.

• The sample size of those who claimed they drank diet soda daily was small – only 4.5 percent of the total study sample.

• The overall study population was not representative of the U.S. population, either in age (average age was 69), or race (only 20 percent non-Hispanic white).

• Cardiovascular events are very complex statistically. Many people who have had a cardiovascular event (and therefore are a much higher risk for a second, statistically) are switched to a low calorie diet which will often include diet drinks as opposed to high calorie drinks.

• The authors offer no explanation or theories for why diet soft drinks might be related to an increased risk of vascular events.

According to The Calorie Control Council, low-calorie sweeteners are some of the most thoroughly studied food ingredients in the food supply and their safety has been reaffirmed time and again by leading health and regulatory groups worldwide.

Blockbuster, whose movie rental business is now rolling the final credits, has been in bankruptcy since September, hoping to work things out with its many creditors. But things haven't gone well, so now the chain is preparing to put itself up for sale, The Wall Street Journal reports.

Please, no jokes about renting "Blockbuster: The Business" for two nights.

The Journal said leading candidates to buy the chain out of bankruptcy are billionaire investor Carl Icahn and a consortium of creditors led by hedge fund Monarch Alternative Capital LP.

The creditors are said to fear the chain is drifting while it's in bankruptcy. Developing a new business plan and reaching agreement with its hordes of creditors could take many months, during which time Netflix, Amazon, Redbox and other red-hot rivals would be even more laps in the lead.

A sale could occur quickly and new management could make an aggressive effort to get back into the race.

Whatever happens, Blockbuster's future will likely not be in the bricks-and-mortar realm. The company, currently with about 5,000 outlets, has closed more than 1,000 stores over the last two years and has discussed closing another 1,000 or so as it tries to shift its operations online and into vending machines and mail.

Blockbuster managers might like to think that loyal customers are standing on the sidelines cheering them on, but that seems unlikely. Blockbuster made many enemies through its imposition of hefty late fees and other less-than-charitable practices, building an impressive collection of about 750 customer complaints to ConsumerAffairs.com.

“We were loyal and frequent customers of our local Blockbuster for years, and never had a problem until now,” said Ashley of Rio Rancho, NM. “My husband and I rented two movies and were almost two weeks late returning them. It was a very hectic time for us and it just slipped my mind. I understand that we deserved late fees for that. “

But instead of a late fee, Blockbuster turned the debt, a whopping $12.86, over to a collection agency, tarnishing Ashley's credit rating.

“Interestingly enough, the Blockbuster in question shut its doors for good two weeks ago, and I guess if that is how this company wants to treat its customers, then it's no surprise that they had to close. Good riddance.”

Nor did Blockbuster's new mail service satisfy Steven of Union, NJ.

“We joined Blockbuster By Mail to rent games and movies through the mail but soon found out the games rarely came unless we were willing to wait an extra week or more. … It took longer and longer for a dvd to arrive though they were being sent out immediately but seemingly from farther away hubs and the last two never arrived at all.”

Google has unveiled a new, two-step Google Account sign-in process intended to provide an extra, optional layer of security.

Users who enable it will have to enter their passwords as well as a separate code that will be sent to mobile devices before gaining access to products like Gmail or Google Docs.

Google added this for Google Apps customers several months ago, but is now extending it to all users.

"There are plenty of examples (like the classic 'Mugged in London' scam) that demonstrate why it's important to take steps to help secure your activities online," Nishit Shah, product manager for Google Security, wrote in a blog post.

"Your Gmail account, your photos, your private documents—if you reuse the same password on multiple sites and one of those sites gets hacked, or your password is conned out of you directly through a phishing scam, it can be used to access some of your most closely-held information."

Google users will shortly see a new link on the Account Settings page that includes the new option, “Using 2-step verification.” Shah said it will probably take about 15 minutes to complete the set-up process.

“It's an extra step, but it's one that significantly improves the security of your Google Account because it requires the powerful combination of both something you know—your username and password—and something that only you should have — your phone. A hacker would need access to both of these factors to gain access to your account,” Shah said.

If you like, you can always choose a "Remember verification for this computer for 30 days" option, and you won't need to re-enter a code for another 30 days. You can also set up one-time application-specific passwords to sign in to your account from non-browser based applications that are designed to only ask for a password, and cannot prompt for the code.

Homeowners facing foreclosure take note: It is now illegal for mortgage “rescue” companies to charge upfront fees for their services. The Federal Trade Commission's new Mortgage Assistant Relief Services (MARS) rule took effect Jan. 31.

“Banning the collection of up-front fees will protect homeowners from being victimized,” FTC Chairman Jon Leibowitz said. “This is especially important at a time when so many people are behind on their mortgages or facing foreclosure.”

Under the rule, a mortgage assistance relief company may not collect a fee until the consumer has signed a written agreement with the lender that includes the relief obtained by the company.

When the company presents the consumer with that relief, it must inform the consumer, in writing, that the consumer can reject the offer without obligation and, if the consumer accepts, the total fee due.

Before the consumer agrees to accept the mortgage relief, the company must also provide a written notice from the lender or servicer showing how the relief will change the terms of the consumer’s loan (including any limitations on a trial loan modification).

During the past three years, the FTC has filed 32 lawsuits against mortgage assistance relief companies for deception and abuse, and state law enforcers have filed hundreds of additional cases. The MARS Rule issued in November gives the FTC and the states an additional tool for combating deceptive and unfair acts or practices by these entities.

Attorney exemption

Attorneys are generally exempt from the rule if they provide mortgage assistance relief services as part of the practice of law, are licensed in the state where the consumer or dwelling is located, and comply with state laws and regulations governing attorney conduct related to the rule.

To be exempt from the advance fee ban, attorneys must also place any advance fees they collect in a client trust account and abide by state laws and regulations covering such accounts.

After trying for years to keep assets he acquired while deceiving consumers with false promotions and bogus business opportunity pitches, a repeat offender has agreed to turn over his Las Vegas home, valued at over $1 million, and give up his appeal of the Federal Trade Commission’s case against him.

The settlement announced today wraps up the FTC’s case against Richard C. Neiswonger, who twice has been held in contempt of court at the FTC’s request – first, for deceptively marketing business opportunities in violation of an earlier court order, and second, for failing to turn over assets to pay a multi-million-dollar judgment against him.

In April 2007, a federal district court held Neiswonger, his business partner William S. Reed, and their firm, Asset Protection Group, Inc., in civil contempt for violating a 1997 court order that prohibited them from deceptively promoting business opportunities and failing to disclose material facts to consumers.

The court banned Neiswonger from selling business opportunities to consumers and telemarketing. The court also entered a $3.2 million judgment against him – the amount of his ill-gotten gains – and required him to transfer the title of his Las Vegas home to a court-appointed receiver within 20 days if he failed to pay the judgment in full.

Neiswonger never made the payment, and in September 2009, at the FTC’s request, the district court held him in contempt for a second time and ordered him to turn over the title to the house or face jail time. The court found that he had failed to deliver a marketable title to his home.

Under the final settlement order, Neiswonger will surrender the house in Las Vegas, valued at more than $1 million. The order requires his wife, Shannon Neiswonger, and any other people living in the house to move out and turn it over for sale by a court-appointed receiver.

It also requires the Neiswongers to dismiss all related appeals and release any claims they may have against the receiver or the FTC, and it directs the receiver to sell the house to help pay the judgment.

The FTC previously obtained Neiswonger’s $379,000 retirement account to help pay the judgment as well. As part of the settlement, Shannon Neiswonger, who was not a defendant in the FTC action, will be paid $100,000 from the proceeds of the sale of the house, which she owned jointly with Richard Neiswonger.

American Indian tribes are tapping into a new revenue stream – payday loans, frustrating state efforts to curtail and even eradicate an industry widely seen as predatory and usurious, The Wall Street Journal reported today.

Because they are sovereign nations under their treaties with the U.S., Indian tribes are immune to state interest-rate caps and regulations imposed on the payday loan industry. They can even operate in the 12 states that have banned payday lenders outright.

It's not, of course, the Indian tribes themselves who are opening storefront and Internet loan operations. Instead, existing lenders “move” their headquarters to an Indian reservation,usually in name only,and share their revenue with tribal leaders.

The Journal reported that at least 35 of the 300 companies making payday loans via the Internet are owned by American Indian tribes.

Some observers think the number of tribes in the payday loan business will approach the 400 that now own casinos.

States are largely powerless to interfere. Colorado has sued lenders owned by the Miami Nation of Oklahoma and the Santee Sioux Nation in South Dakota but the Colorado Supreme Court ruled last year that the lenders were protected by their association with the sovereign tribes.

Congress has regulator power over Indian tribes but the likelihood of meaningful legislation in the near future is slim.

Last year's creation of theConsumer Financial Protection Bureau (CFPB) had been viewed as a deathblow against the industry and Wall Street analysts expected the agency would quickly regulate payday lenders out of business.

But that was while the Indian Connection was not yet on lenders' radar. Lawmakers leading the charge against payday loans may find that they have inadvertently followed General Custer's strategy. 

There's nothing wrong with catfish but it's not the most prized marine specimen around and is actively disliked by many seafood fanciers. Unfortunately, those with an untrained palate may be eating a lot more catfish than they realize.

The fishing industry trades are full of stories lately about Vietnamese catfish turning up with all kinds of inaccurate labels.

Among the most outrageous was a case in Mobile, Ala., recently. Two Arizona business executives pleaded guilty to conspiring to defraud consumers by selling more than 283,000 pounds of Vietnamese catfish as sole.

Karen L Blyth faces two years and nine months in prison and David H.M. Phelps two years, under the terms of a plea bargain that must still be approved by U.S. District Judge Ginny Granade.

“These prosecutions should send a clear message that instances of consumer fraud will be vigorously prosecuted and that this U.S. Attorney's office will continue to protect local seafood consumers and all components of the local seafood and industry,” said Kenyen Brown, U.S. Attorney for the Southern District of Alabama.

Prosecutors said that some of that fish had been found to contain malachite green, a chemical banned in the United States, plus a banned antibiotic called Enrofloxin. Authorities say another case involved 101,078 pounds of catfish being sold as grouper in Alabama, Florida and beyond.

British courts have also heard their share of whoppers lately. In one case, a fish-and-chips shop owner was heavily fined for selling catfish as cod, which is twice as expensive. He claimed he had forgotten to change his sign.

Bill Crook of England's National Federation Fish Friers, said fish from the Mekong River in Vietnam should be avoided: “We don’t like the fish and have said so. A lot of pub chains have started selling it as fish and chips without advertising what it really is,” according to FishUpdate, a trade publication.

The email describes a travel nightmare: "Help! I've been robbed at gunpoint while visiting Cairo and desperately need your assistance!" 

No money, no credit cards, no passport or cell phone - your friend is scared and stranded.  What they need you to do is wire them some money quickly. Your instinct is to help your friend. But don't because it's probably a scam.

Fake emergency emails are being sent by scammers posing as a friend or family member. The messages come from cyber-thieves who gather contact information by either hijacking someone's email or social networking account, or by collecting the names of people who are cc:'d on mass emails. The scam message may come from an email address that looks a lot like your friend's real one.

Protect yourself from the fake emergency email scam by taking the following precautions:

• Always be skeptical of emails that describe an urgent need for you to wire money no matter who it appears to be coming from. More often than not, if someone is requesting a money wire, it's a scam.

• If you're suspicious, try to contact your friend to verify the emergency. If it is a scam, encourage them to warn their contacts about the phony email.

• When sending group emails always "bcc:" (blind carbon copy) your recipients. That way their names and email addresses are not visible after the email is sent.

• Protect your email and social networking accounts by using unique passwords that include numbers and capital letters, advises Oregon Attorney General John Kroger.