Current Events in May 2011

Everyone, it seems, loves Apple – including scammers. One of the latest scams to gain traction on the Internet is aimed at Apple App Store customers.

Scammers are reportedly sending out messages telling consumers that a recent order at Apple's App Store has been canceled. The message appears to be going to email recipients at random.

Those who aren't App Store customers will instantly recognize it for what it is and delete it. But the actual Apple App Store customers who get the email might fall for it.

Bogus link

The email contains a link that is supposed to take you to the Apple App Store to review your order information. However, if you click it you will end up at an online drugstore. An earlier incarnation of the ploy instructed recipients to click on a link to learn details about the iPhone 5, Apple's presumed next-generation smartphone which has yet to be released.

Aside from the inconvenience, it isn't clear if the scam is any more sinister than that. The security software firm F-Secure, which initially highlighted the scam, said the diversion does not seem to infect computers or download any malware.

Scammers increasingly have turned to advertising programs that pay them a small amount for every visit to a certain site, or for every survey they get Internet users to fill-out. Many fake emails and Facebook postings now appear to have that as the ultimate objective.

Slow to update

Meanwhile, Graham Cluley, Senior Technology Consultant at Sophos Security, passes along a warning from security researcher Joshua Long, who says the App Store has not published the latest versions of many apps, even though the updates address critical security issues.

For years, Apple users have not had to deal with the scams and malware issues that have always plagued Windows users. With Apple's new higher profile and popularity, that may be changing.

eDebitPay LLC has been found in contempt of court and fined $3.7 million. A federal judge found that the company had violated the terms of a 2008 court order.

The 2008 order prohibited eDebitPay and its officers from making any misrepresentations or unauthorized debits and required them to pay more than $2.2 million to settle deceptive marketing charges.

The Federal Trade Commission (FTC) alleged that the defendants targeted consumers who were unemployed or had poor credit, selling a bogus “$10,000 credit line” that was really an online shopping club membership and a “no cost” prepaid debit card with hidden fees.

But in marketing the “$10,000 credit line,” the FTC alleged that the defendants violated the order and misrepresented that they were offering a general line of credit, when they were actually offering a shopping club membership with a credit line that could be used only to buy merchandise from the club.

Instead of clearly disclosing what they were actually selling, the defendants buried the truth in fine print, the FTC said. The FTC also charged the defendants with marketing a “no cost” prepaid debt card that carried a variety of fees they failed to disclose.

The court held the defendants in contempt of the 2008 order and imposed a $3.7 million judgment. The defendants have filed a notice of appeal of the order.

Want to drink like a millionaire? No problem. Just make your way to the nearest Trader Joe's, Whole Foods, Costco or just about any other large retailer and pick up a bottle of one of their house wines, preferably in the $10 to $20 range. Even Dollar General now has its own house wine.

When times get tight, those who get tight by consuming the grape tend to shift down a little. Oenophiles and just plain wine lovers who would normally be guzzling $30 or $40 wines move downscale to the $20 neighborhood.

And what happens then? The wine starts to come back on the top-notch vineyards who normally command a good price for their product. Hey, the stuff is heavy and it takes up a lot of room so you can't let too much of it sit around for too long.

But the snooty vineyards have a problem: they can't suddenly cut their prices. What would happen to their cachet? You think Audi cuts its prices when sales get slow? Nope, they just make more Volkswagens.

Same thing in the wine business. The stuff that normally gets bottled and crated up with the vineyard's oh-so-prestigious name instead gets pumped into tankers and trucked off to an anonymous bottler who slaps on a house label – Kirkland for Costco, 365 Everyday for Whole Foods and so forth.

Trader Joe's seems to make up names at random. Imbibers find wines on the Trader's shelf with names they have never seen before – and most likely will never see again.

The upshot is that you can uncork just about any of these house brands in the $10 to $20 range and be drinking the same dreck that just a few years ago would have cost you big bucks.

We're not recommending you start drinking but if you occasionally have a glass or two of wine, it may be some comfort to know that with the price of everything else going up, the price of a decent bottle of wine has actually come down. And that ought to go down really nicely.

Elizabeth Warren and the fledgling Consumer Financial Protection Bureau endured a day of tough questioning and rude insinuations on Capitol Hill yesterday as GOP House members sought to discredit Warren and hamstring the new agency before it even begins operations.

Consumer advocates were not amused.

David Arkush, director of Public Citizen’s Congress Watch Division, said Rep. Patrick McHenry (R-N.C.) “waste[d] taxpayer money on a hearing that apparently has no purpose but to harass professor Elizabeth Warren and hamper the Consumer Financial Protection Bureau’s (CFPB) efforts to protect Americans from abuses in the financial sector.”

“These attacks on the CFPB may be good for Wall Street, but they are certainly bad for consumers,” said U.S. PIRG Consumer Program Director Ed Mierzwinski.

Show trial

Mierzwinski said the Congressional show trial was motivated by the success of the CARD Act, which studies say has been successful in reducing interest rates and fees paid by credit-card users. He said the CARD Act “shows that consumer protection works when it's not diluted or defanged by the banks.”

At yesterday's contentious Oversight and Government Reform Committee meeting, McHenry accused Warren of lying to Congress and of drafting a “superclass of administrative elites” to run the agency she helped create.

McHenry claimed Warren had misled the committee in her last appearance in March. He claimed she had not fully disclosed her role in providing advice to the state attorneys general who are negotiating a settlement with mortgage servicers.

Not one to be intimidated, Warren responded forcefully that, “I have been told that if you say anything in Washington often enough, it is eventually treated as fact — regardless of whether it is true or false.

“Shrewd tactics”

“While making baseless claims might be shrewd tactics for those who want to undermine the bureau’s work, they are flatly wrong,” she said.

Public Citizen's Arkush said it is McHenry who is being untruthful.

“[His] opening statement includes falsehoods about the CFPB,” Arkush said. “He writes, for example, that the bureau will have 'virtually unchecked discretion' to identify products and services that are unfair, deceptive or abusive. But in addition to Congress’ 'check' on the CFPB – Congress can pass legislation altering or even abolishing the agency at any time – the bureau suffers from an unprecedented lack of discretion: It can be overruled by other financial regulators,” Arkush said..

“Rep. McHenry also says that the CFPB’s 'budgetary authority' is 'unparalleled' because the agency’s budget derives from the Federal Reserve rather than congressional appropriations. It is comically false to call the absence of annual appropriations 'unparalleled' when the Federal Reserve’s budget isn’t appropriated by Congress either,” Arkush added.

An apology

The relentless attacks on Warren led one committee member, Rep. John Yarmuth (D-KY), to apologize to her.

“I apologize to the witness, Dr. Warren, for the rude and disrespectful behavior of the chair,” Yarmuth said. “The snarky comments about a Senate race, and the questioning of your veracity when there is documented evidence that you are being totally truthful indicates to me that this hearing is all about impugning you because people are afraid of you and your ability to communicate in very clear terms the threats to our consumers and the threats to our constituents and possibly very, very effective ways to combat them.”

“I congratulate you for instilling such fear in the committee,” Yarmuth said.

Book retailer Barnes & Noble has introduced a new, lighter version of its Nook e-reader, at a lower price.

The new Nook will have a price tag of $139 and will be available next month. It features a six-inch touchscreen display, weighs just 7.5 ounces and has a reported two-month battery life. For readers who prefer large-print books, the font size can be adjusted.

Barnes & Noble said its new Nook will be able to hold up to 1,000 books.

The company first unveiled the Nook in 2009 as part of its strategy to transition itself as a digital book seller. The results with consumers have been uneven.

Complaints

“I ordered the Nook e-book and was unhappy immediately, as the screen display was garbled and unreadable,” Gloria, of Las Vegas, Nev., told ConsumerAffairs.com. “I called Nook customer service, and they sent me a new Nook. This second Nook also experienced problems with freezing up.”

“The Nook and Nook Color e-readers work great except for network access,” said Mike, of Tumwater, Wash. “They claim that the device will 'completely connect' to any 801 b/g/n wifi. However, it only works with certain routers and networks. Support will put you through a series of resetting and power on and off. Then, they want me to reset the router. I informed them that I am unable to reset the routers at my favorite coffee joint or the Free Berkeley Wifi at the public library.”

The current Nook models have a 2 GB hard drive and both Wi-Fi and 3G connectivity. It debuted at a price of $259.

Competition

The new Nook will have even more competition than when it was introduced less than two years ago. Then, only the Amazon Kindle provided real competition. Now, it will be up against Apple's iPad and other tablets, not to mention smartphones.

Playing in the background of the new Nook roll-out is a takeover battle for ownership of Barnes & Noble. Liberty Media has offered to buy the company for $1 billion, motivated some observers say, by getting its hands on the company's e-reader.

In theory, a secured credit card should be ideal for a person with limited credit. The consumer deposits several hundred dollars into an account that is used to secure the credit line. The bank has no risk because the consumer is borrowing their own money. Unfortunately, these arrangements hardly ever work out to the consumer's benefit.

“I opened up a $300.00 New Millennium credit card with my own money, paid off the balance and contacted them to see when I would receive my initial deposit,” Genna, of Phoenix, Ariz., told ConsumerAffairs.com. “I was told that they had closed my account back in October on their own accord.”

Genna said she has no idea why New Millennium Bank closed her account or why she's not getting her $300 back. She should certainly demand some answers. Our guess is that along the way, the bank assessed a number of hefty fees that eventually added up to $300. That, in a nutshell, is the problem with most of these secured credit cards.

It's interesting to note that, according to USA Tolday, last year the Federal Deposit Insurance Corporation forced New Millennium to suspend its credit card activities because of its consumer disclosure and compliance program. If Genna doesn't get satisfactory answers, we suggest she lodge a complaint with FDIC.

Slight disconnect

Jennifer, of Bishop, Calif., was a happy Alltel customer required to switch over to AT&T last year. She says she and her family were very unhappy with AT&T, especially since she asked for, but did not receive, a replacement phone for her daughter. So, she switched to Verizon Wireless.

“On December 24th, after making the switch, FedEx shows up at my door with my daughter's new phone from AT&T,” Jennifer said. “Mind you, I had left them and taken my numbers with me, so they knew I was gone. I returned that phone and all other equipment that belonged to them as I no longer needed it. I have now received a collections statement due to Alltel stating that I owe them $530, and three months of billing from AT&T.

We're assuming that Jennifer went through the process of canceling her AT&T account. If so, there should be a record. It's not enough, however, to simply open an account with another carrier and move numbers.

A year is actually 10 months

Travel sites don't allow many cancellations, but nearly all make an allowance for a medical emergency. Azalia, of New York, says just such an emergency prevented her from using airline tickets she purchased through CheapTickets.

“I provided two documents from two different doctors stating I was not able to fly,” Azalia told ConsumerAffairs.com. “I was told I could not receive a refund, however, I had a year to use the credit.”

Now, two months shy of what she thought was the deadline, she learns the credit is no longer valid. What happened?

“I was informed the credit deadline is based on the time of booking, not travel date.”

Azalia thinks the policy is unfair, and we agree that it seems a bit arbitrary. But it underscores the need to carefully read terms and conditions with things like this, especially with a company that has the word “cheap” in its name.

Disposable lawnmowers?

Lawnmowing season is in full swing, but D., of Walnut Grove, N.C., is watching his grass grow these days.

“My John Deere L120 has less than 300 hours on it and has been serviced regularly, D. said. “Every time I mow it throws off the drive belt. I first thought it was the PTO so I quit going in reverse at all...now it ONLY goes in reverse.”

D. took the mower to a repair shop and was told it was leaking transmission fluid. Not an easy fix, as it turns out.

“James River Equipment, where I purchased the mower, informed me today the transmission is a 'sealed, non-repairable' part costing $750, not including labor,” he said.

D. says he can't justify spending that on a repair and will simply buy a new one. He's not alone in experiencing these kinds of problems.

The lethal and destructive tornado that flattened a good part of Joplin, Mo., this week has brought out the best in people, who want to support relief efforts for the devastated community.  Meanwhile federal officials have declared a public health emergency in the state.

At the same time, it has also brought out the worst in people who want to exploit that good will with phony relief scams. Missouri Attorney General Chris Koster is warning consumers to be aware of these scams and to avoid them.

“Unfortunately, there are people who see opportunity in disaster,” Koster said. “Scam artists will show up, pose as charities, and fraudulently solicit donations from people who are anxious to help those in need.”

No on-the-spot donations

Koster advises potential donors to be cautious of anyone wanting on-the-spot donations or refusing to provide written, verifiable information about the charitable organization represented.  He also said to use a credit card or check for donating so that you have a record of the expense.

Anyone considering a donation to a relief effort can use Check-a-Charity on the Attorney General’s website to make sure the charity uses donations wisely.  The site lists viable charities and provides information about how much of a charity’s donated money actually goes to the cause as opposed to administrative expenses. 

Koster said those wishing to make donations to help the Joplin relief effort can feel safe doing so through established charitable organizations that are already working on the ground in Joplin such as: American Red Cross, Salvation Army and Southern Baptist Disaster Relief.

In the meantime, if you encounter a solicitation you believe to be a scam, Koster said he would like to hear about it. You can call his Hotline at 1-800-392-8222 or file a consumer complaint online at online.

Public health emergency

U.S Department of Health and Human Services Secretary Kathleen Sebelius has declared a public health emergency for Missouri in the aftermath of severe storms and tornadoes which struck the state Sunday night. The action will enable the Secretary to ensure that beneficiaries of the Medicare, Medicaid, and Children’s Health Insurance Program (CHIP), continue to receive services during this emergency.

“Our hearts go out to the people of Joplin and the surrounding communities affected by last night’s tornadoes,” said Secretary Sebelius. “We are working closely with our state partners and community organizations to provide the support needed to respond to this disaster and in the ongoing flood recovery in the region.”

 The public health emergency is declared under section 319 of the Public Health Service Act and is necessary so that HHS may waive or modify certain Medicare, Medicaid and CHIP requirements under section 1135 of the Social Security Act. The state can submit waiver requests through Centers for Medicare & Medicaid Services (CMS) Regional Office.

Under section 1135, HHS may permit affected health care facilities in Missouri to relax certain operating procedures temporarily so health care services can be delivered, such as allowing critical access hospitals to take more than the statutorily mandated limit of 25 patients and not count the expected longer lengths of stay for evacuated patients against the 96-hour average.

HHS agencies are working with state agencies and regional networks to respond to public health and medical needs of impacted communities. The HHS Assistant Secretary for Preparedness and Response is providing National Disaster Medical System assets to support the state and local health agencies in responding to the disaster.

A Disaster Mortuary Operational Response Assessment Team has deployed to Missouri to work with the state and local coroners and medical examiners in determining the full extent of federal mortuary resources that may be needed. A Disaster Mortuary Operational Response Team and a Family Assistance Center Team will provide assistance to coroners, medical examiners and families in identifying victims and returning remains to their loved ones. In addition, ASPR will provide a Disaster Portable Morgue Unit to support local mortuary operations.

An incident management team from the U.S. Food and Drug Administration (FDA) is working with state and local health departments to assist with inspections of FDA-regulated industries, such as food processing facilities and pharmaceutical and medical device manufacturers, impacted by the tornadoes to ensure the safety of FDA-regulated products.

An Incident Response Coordination Team will make sure federal public health and medical teams have what they need to assist the state at this critical time. This team is the “on the ground” command-and-control for federal public health and medical assets.

Information on steps to protect health immediately after a tornado or to prepare for disasters is available at http://www.phe.gov.

Porsche owners fumed when Porsche A.G. began churning out the big Cayenne SUV. Heresy, they harrumphed. Now, of course, the Cayenne is Porsche's biggest seller in the United States, followed by the equally gargantuan Panamera four-door sedan.

Since Prius is to greenies as Porsche is to those locked perennially in mid-life crisis mode, might we expect a similar reaction to the introduction of the Prius V, a tall hybrid hatchback with more cargo space than most crossovers and compact SUVs?

The V adds about 230 pounds of weight as well as six inches of length and three inches of height to the diminutive dimensions of the original, and that equates to a fuel economy loss of about 16 percent, for an overall 42 mpg rating.

That still puts it well ahead of nearly any of its gas-powered competitors, which would have to strain some to hit 30 mpg. Despite the bigger bulk, Toyota promises the V will display acceleration equal to a standard Prius.

The "V?" It stands for "versalitility," Toyota tells us.

“The Prius v brings leading-edge hybrid technology to customers who need more room and provides more cargo space than 80 percent of all small SUVs,” said Toyota Division Group Vice President and General Manager Bob Carter. “And because it’s a Prius, it produces 66 percent fewer smog-forming emissions than the average new vehicle and will have the best mileage ratings of any SUV, crossover, or wagon sold in America. We think that’s a win-win for everybody.”

Of course, it comes with an AM/FM/CD audio system with Bluetooth, USB and iPod connectivity. It will also feature the optional EnTune "telematics" system, which means it can connect to Bing, pandora, OpenTable and so forth, just in case the driving gets too dull.

Speaking of sound, the Prius V automatically generates what Toyota calls a "low whirring noise" at around-town speeds, alerting pedestrians and wandering hounds to its approach.

If that's not enough, the car features what Toyota calls "anti-porpoise" technology. It is said to modulate the throttle to keep the car from undulating over those pesky freeway expansion joints. Reviews who've driven the car give it overall high marks but warn that the extra height and a 60-40 front-to-rear weight balance make it ill-suited to any funny stuff in the curves.

The Prius V is expected to make its debut in American showrooms this fall.

Google has made some pretty big acquisitions in its day, but that doesn't mean it can't make a little one now and then.

Thus, the search giant announced the purchase of a search lilliputian – Sparkbuy.com, a year-old comparison shopping site that specialized in laptops.

What's unusual about the deal, aside from its presumably small size, is that Google bought the company and immediately closed it down, saying that its three-member staff would be joining Google's Kirkland, Wash., office.

What's this all about? Is Google pulling the old newspaper industry trick of buying the competition and closing it down?

Not likely, say industry observers, who speculate that the gods of the Googleplex were taken with the elegant design and user-friendly nature of the site and will be putting the three Sparkbuy creators to work improving Google Product Search.

Of course, no one is saying anything for the record.

In a "swansong" posted on its home page, the Sparkbuy trio said it was "pleased as punch" to be joining the Big G.

"When we built Sparkbuy way back in the waning days of 2010, we wanted to make it really easy to find the gadget that's perfect for your needs," a task the crew admitted could be "crazy hard."

"But when people started actually using Sparkbuy, we started to see that the opportunity was bigger," they said, adding, "We're stoked about the opportunity to share our vision for search with a broader audience."

The credit card marketplace is constantly changing, especially in the wake of Congress's recent credit card reform legislation, that has forced lenders to be more creative to make up lost revenue.

This can be a problem for many consumers, who admit to having little financial knowledge to begin with. The National Foundation for Credit Counseling’s 2011 Financial Literacy Survey found that 69 percent of U.S. consumers who use credit cards fail to keep all the credit card offers straight. Forty-one percent of consumers gave their personal finance knowledge a grade of C or worse.

In an effort to offer some guidance, the financial website CardHub.com has published a list of what it calls “the worst credit cards on the market.” The cards on the list were singled out for their high annual fees and interest rates. Some were described as having no redeeming qualities whatsoever.

According to CardHub.com, consumers should avoid these credit cards:

The Visa Black Card

This product has a $495 annual fee and a 14.99% APR, and the only benefits it provides are 1% cash back on all purchases, airport lounge access, and the vague promise of “luxury gifts.” Needless to say, says CardHub.com, it doesn’t even compare to the famous American Express “black card.”

The Wells Fargo Business Platinum Credit Card

This is unquestionably the worst business credit card on the market, according to the site. Not only does it come from one of the least transparent business credit card issuers, but it also has an interest rate between 9.24% and 18.24% and does not provide rewards or protect users from arbitrary interest rate increases.

The First PREMIER Bank Credit Card

This partially-secured credit card requires that you place a $95 security deposit to get a $300 credit line, and has a 49.9% APR, a $75 first-year annual fee, and $120 in membership fees each year thereafter.

Over the years, ConsumerAffairs.com has received hundreds of complaints about this particular card. Most recently, consumers have complained the company makes it impossible to make payments.

“First Premier Bank stopped sending me statements, cut off my online services, and effectively made it impossible to pay on 2 accounts,” Roxanne, of Apache Junction, Ariz., told ConsumerAffairs.com. “For two years, I have tried to contact this credit card company to get a statement, get online services back or the name of a collection company to clear this debt. All this while, the amount of the debt is rising.”

Barclaycard Visa

This card is simply mediocre across the board, says CardHub.  While it doesn’t have an annual fee, it also doesn’t offer any rewards or a traditional introductory interest rate.  Instead, it has a 22.99% regular APR and a curious deferred-interest feature, which gives you a chance to get no interest for 6-12 months on your first Apple purchase.  If you miss a payment or fail to pay down your balance in full before the introductory period concludes, however, interest is retroactively applied from the time of purchase.

How do you find a good credit card? According to the U.S. Federal Reserve, make sure you read and fully understand the credit card offer before applying. Understand the terms and what fees apply.

Shop around. Don't just take the first offer that comes in the mail. Also, be leery of credit cards that offer triple miles and other extravagant rewards. They have to pay for those perks somehow.

Since last fall's elections, there's been a big change in the news flowing out of state attorneys general offices. States where the AGs cast themselves as consumer crusaders and responded with ferocity and speed to consumer complaints suddenly seem more like Tea Party outposts, with the AGs suing to block the Affordable Care Act, pontificating on private morality and having their pictures taken with a wide assortment of law enforcement officers.

But in the nation's two largest states, it's business as usual, even though the players have changed.

In California, Attorney General Kamala Harris is launching a crackdown on mortgage fraud, scams and fraudulent lending practices. Harris, the former San Francisco District Attorney who succeeded Gov. Gerald Brown in the AG's office, says she is assembling a 25-person task force that will tackle mortgage fraud ranging from small operators who preyed on individuals and giant corporations that bundled and sold risky loans as safe investments.

Harris said the mortgage fraud that led to the housing crash is still echoing through California's economy, causing foreclosures, job loss and lagging tax revenues.

"We are looking at a situation of up to $640 billion in wealth having been lost because of this wave of foreclosures that has hit the state," Harris told the Los Angeles Times.

She and Los Angeles Mayor Antonio Villaraigosa were holding a press conference this afternoon to officially announce creation of the Mortgage Fraud Strike Force.

In New York, Attorney General Erich Schneiderman, occupying the office once held by fallen consumer hero Elliot Spitzer, is going after three large Wall Street banks as part of a wide-ranging probe of the mortgage crisis.

Not content to pursue corporate evil-doers Schneiderman today announced he is forming a "sweeping new initiative" to crack down on public corruption, a commodity of which there is no shortage in the Empire State.

“As stewards of the public trust, we are all responsible for doing our part to crack down on public corruption with every tool at our disposal. We need to be smarter, faster and more efficient than what current law allows,” said Schneiderman. “That is why it is critical we close every loophole that exists in current law as part of comprehensive ethics legislation."

The new initiative will also expand the Attorney General’s jurisdiction to the state’s public authorities – agencies like the Port Authority of New York and New Jersey. Schneiderman called such agencies "a shadow government that operates out of the public eye and often without accountability."

New York and California are certainly not the only states where aggressive consumer protection is on the agenda.

Perhaps the "dean" of Attorneys General is West Virginia's Darrell McGraw, whose website slogan says it all: "Targeting consumer fraud by educating West Virginians." Hardly a week goes by that McGraw does not sue the stuffing out one or more scam artists, effectively running them out of the state.

Illinois, Iowa, Texas and Oregon also continue to regularly take on crooked contractors, loan sharks, deceptive web merchants and other evil-doers.

A new study finds what many of us have known for quite some time: the American middle class is in guarded condition, just one paycheck or unexpected expense away from disaster.

The survey on which the study is based asked respondents a simple question – if they had an unexpected $2,000 expense in the next month, would they be able to get the funds?

Nearly half said they "definitely" or "probably" would not be able to come up with the money.

While it's not news that chronically low-income consumers are short of financial resources, the researchers said they were surprised to learn that a large subset of middle-class families judged themselves to be financially fragile.

As for how the respondents would go about raising that hypothetical $2,000, the researchers said nearly 20% would resort to "what might be seen as extreme measures," including taking out a payday loan, pawning their possessions or selling their home.

The $2,000 figure was chosen because it is approximately what it might take to replace a transmission, meet a large copayment on a medical expense or unexpected home repair.

The researchers found that, all things considered, 46.5% – nearly half – of all respondents "are living very close to the financial edge."

The study, published by the National Bureau of Economic Research, was based on the 2009 TNS Global Economic Crisis survey.

The U.S. was not the only developed nation with a large number of financially embattled citizens. In both the U.K. and Germany, 50% of households said they would probably or certainly be unable to come up with the emergency funds. The countries with the healthiest middle class were Canada, Netherlands and Italy. In all three countries, fewer than one-third of households said they would have trouble raising the money.

Little noticed in last week's media frenzy over the private life of a certain former governor was the introduction of new regulations to protect consumer against large increases in their health insurance premiums.

Effective Sept. 1, premium increases of 10 percent or more in individual and small-group health plans must be reviewed by state officials. If they are unwilling or unable to do so, the Department of Health and Human Services (HHS) will step in.

 “For too long, insurers have been able to hit consumers with double-digit premium increases, with no guarantee that the hikes were justified. By giving consumers more information about what’s behind premium hikes and requiring insurers to justify rate increases, these new rules will help protect consumers from rising costs," said U.S. PIRG Health Care Advocate Larry McNeely.

“With premiums continuing to rise, consumers deserve to know if their insurer is ripping them off. Strong rules in states like Oregon have already saved consumers millions of dollars. With these new rules in place, it’s time that other states follow Oregon’s example.”

The regulation is part of the Affordable Care Act, popularly known as Obamacare.

HHS has awarded $44 million in Affordable Care Act grants to states to help strengthen their oversight capabilities. An additional $200 million will continue to be available to states under the Act.

Starting September 2012, the 10-percent threshold will be replaced by state-specific thresholds that reflect the insurance and health care cost trends in each state. The final rule clarifies that HHS will work with states in developing these thresholds.

“Effective rate review works – it does so by protecting consumers from unreasonable rate increases and bringing needed transparency to the marketplace,” said HHS Secretary Kathleen Sebelius. “During the past year we have worked closely with states to strengthen their ability to review, revise or reject unreasonable rate hikes. This final rule helps build on that partnership to protect consumers.”

Publication of the final rule comes as health insurance companies have reported some of their highest profits in years. One cause for these profits is that actual medical costs are growing more slowly than what insurance companies projected when they set their 2011 rates last year. However, many of the rates consumers and small employers pay today don’t reflect these lower costs, HHS said.

The rule requires insurance companies to provide consumers with easy to understand information about the reasons for unreasonable rate increases and post the justification for those hikes on their website as well as on the HHS Affordable Care Act website, www.healthcare.gov .

“Strong and transparent rate review processes are necessary to help bring down costs for consumers,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight. “Rate review will ensure that increases are based on reasonable estimates and real-time data on medical cost trends and health care utilization.”

The regulation finalizes proposed rules issued in December 2010. It has several additions to the proposed rule, including a requirement that states provide an opportunity for public input in the evaluation of rate increases subject to review. This will strengthen the consumer transparency aspects of the new rule. HHS is also requesting comment from the public on applying the rule to individual and small group coverage sold through associations, which is sometimes exempt from state oversight.

Anti-trust lawyers at the U.S. Justice Department have filed suit in federal court to block H&R Block from purchasing a company that makes TaxACT, a popular tax-preparation software.

In a conference call with journalists today, Assistant Attorney General Christine Varney said there is not enough competition in the tax preparation field to allow the merger to go forward. H&R Block is the nation's largest tax preparer.

Making the case

Varney said H&R Block, in its public comments on the proposed deal, actually makes the government's case. She notes that Block said one of the primary reasons for the acquisition was to eliminate a competitor.

“In discussing the acquisition, H&R Block noted that one of the 'strategic opportunities' of the deal was to 'acquire TaxACT and eliminate the brand to regain control of industry pricing and further price erosion.'”, Varney said. “We believe that these statements clearly reveal that TaxACT is a formidable competitor that is being acquired in order to thwart competition in the tax software market.”

Over the years, H&R Block has produced a number of complaints to ConsumerAffairs.com, including complaints about tax preparation fees. Barbara, of New York, said she got into a heated argument with the manager of one H&R Block store after she said she caught the store double-billing.

“The manager lowered the fee from $800 to $660. still almost $200 more than I paid last year,” Barbara told ConsumerAffairs.com. “I have a simple return.”

Millions use tax preparation software

An estimated 35 to 40 million taxpayers use software products to prepare and file their federal and state income taxes. Varney said three companies account for 90 percent of all sales of consumer tax software products. Combining H&R Block and TaxACT, she said, would destroy the head-to-head competition between these two companies, leaving only one other major competitor.

According to the government, TaxACT is known as a maverick in the industry.  Its conduct over the past several years has significantly disrupted the market and forced its competitors, including H&R Block, to lower prices, increase quality and continue to innovate.

In other words, it has been good for consumers. TaxACT was the first company to offer all taxpayers the ability to prepare and electronically file their federal individual tax returns for free directly from its website.  Due to that competition, H&R Block felt significant pressure to offer a free product to consumers, Varney said.

Also, TaxACT has benefited consumers in another significant way – it offered lower prices at retail stores. Its desktop software is offered through a major retailer at a lower price than the comparable products from H&R Block and Intuit Varney said TaxACT did not charge an additional fee to its customers to e-file their state returns and did not attempt to sell users additional features after purchase.

A panel of experts appointed by Toyota says the automaker hasn't done enough to address the safety problems that have plagued the company and its customers.

The panel headed by former U.S. Transportation Secretary Rodney Slater said the recalls of more than 10 million vehicles since 2009 were largely attributable to Toyota's centralized decision-making process and the company "skepticism and defensiveness" towards consumers, Automotive News reported.

But the panel said it is optimistic about Toyota's future, noting that a federal investigation found no electronic causes for instances of unintended acceleration and crediting the company with being "eager to implement positive changes."

In its 60-page report, the panel said Toyota still needs to give local managers more authority. The company has said it will establish regional advisory committees for North America, Europe and Asia, but the panel said it doubts that will be adequate.

"Toyota needs to continue to adjust its balance between global and local control, giving weight to local control in order to improve its communications and speed in responding to qualify and safety issues," the panel said.

Toyota paid nearly $50 million in fines in the U.S. last year and millions more conducting recalls and fighting lawsuits, most of them related to alleged incidents of unintended acceleration.

Some critics have claimed that Toyota's electronic acceleration system is to blame for the incidents but federal investigators found no evidence to support that. Instead, misplaced floor mats and other mechanical causes were blamed for most of the incidents in which a cause could be found.

Toyota has a pretty good reputation as a used car. However, the exception may be the poplar Prius. Apparently, the hybrid technology doesn't age all that well.

“My 2006 Prius was working fine,” Joan , of Rocky River, Ohio, told ConsumerAffairs.com. “The next morning, the hybrid drive started, but the car would not move. I tried it several times to go forward or to go backward with the same result. The wheels would not turn.”

Joan said she was told that the auxiliary battery was dead so the car would not move. In fact, the wheels wouldn't turn.

“There was no remedy except for the dealer to put in an expensive new battery, using an expensive installation process,” Joan said. “Toyota should have an easy power override for such times.”

That sounds like a good idea. In the meantime, with expensive gasoline prices, consumers should perhaps think twice about paying a lot for a used Prius. A used gasoline-powed Corolla might be a better buy when repairs are factored in.

Unauthorized charges

Trilegiant, infamous for placing unauthorized charges on credit cards, has begun using telemarketers instead of pop-up Internet ads. But sometimes the result is the same.

“I got a phone call from them after purchasing something on the Amazon web,” said Michael, of Koppel, Pa. “I told them I was not interested. Well, ever since then they been taking $19.99 out of my account.

Michael said he had to close his credit card account to get rid of them. Actually, he didn't have to do that. He could have reported it as an unauthorized charge to his credit card company, which would then demand a proof of purchase from Trilegiant. They're probably very familiar with the drill by now.

Not talking to each other

Telephone systems are supposed to be fully compatible with one another. But William, of Las Vegas, Nev., says they aren't.

“My mother uses an AT&T cell phone and for the last two weeks she has not been able to call my phone, which uses Magic Jack,” Willian told ConsumerAffairs.com. “AT&T claims that it is a Magic Jack problem caused by a change Magic Jack made to their system. After my mother had no luck dealing with AT&T, I tried to work with Magic Jack using their online live help. That person ended up telling me it is AT&T's problem and Magic Jack would not get involved in trying to solve the issue.”

It seems William has a legitimate issue here. Perhaps he would lodge a complaint with the Federal Communications Commission and let the federal regulatory agency get to the bottom of it.

Lost points

Since the credit crisis three years ago, credit card companies have unilaterally closed customer's credit card accounts on a more frequent basis.

“Bank of America froze my account and when I called to inquire they told me my account had been closed, even though I had been a good customer and my account was in perfect standing,” Abbee, of Naples, Fla., said.

Annoyed, Abbee said she paid off the balance and figured she had only lost a credit card. But it turns out she had lost something more.

“Today I went to redeem my 110,000 WorldPoints and was told that my points have been 'forfeited' because THEY closed my account,” Abbee said. “I did nothing wrong and my account was in good standing when they closed it. How can they steal my points?”

Good question. For consumers who have rewards cards, it might be advisable to use the awards as you get them and not let them pile up. You never know when they'll just fly away.

Remember when cell phones became so popular that it was almost impossible to make a call? It took awhile for the carriers to build out their networks to provide at least minimal service some of the time.

One way they paid for that was to start charging by the minute. Family plans helped spread the pain and made the metered pay plan more palatable.

Then smartphones came along and started burning up wireless broadband as well as talk channels. This is all great when it works but as more people discover that, the carriers find themselves again facing demand that quickly exceeds supply.

One solution would be to be spend even more money building ever bigger networks but with only so much spectrum to work with, there are limits that eventually exert themselves.

Besides, the problem (as the carriers see it) is not the occasional user who sends in his money each month and goes online or makes a call a few times a day. No, the problem is what carriers and the editorial page editors at the Wall Street Journal are now calling bandwidth hogs – consumers who actually spend a lot of time consuming the product they're paying for.

After all, the carriers have been selling bandwidth by its speed rather than quantity, the clear implication being that customer can watch videos and cruise the Web 24/7.

So we're back where we were a few decades ago. The carriers have created another monster. They're spend big bucks promoting wireless data and they're been so successful that the next goal is to stop people from using quite so much of it.

Verizon Wireless is said to be steeling itself for the transition, preparing to announce this summer that it will eliminate smartphone plans that allow unlimited wireless data, replacing them with tiered pricing that will force heavy users to pay more.

To soften the blow, the company will offer options like family plans for data, a Verizon Wireless executive told the Reuters Global Technology Summit.

“We have individual minutes for individual users. Then we eventually got to what we call family share where everyone in the family shares the same minutes,” said Verizon Wireless Chief Financial Officer Fran Shammo.

Shammo said it would be a “logical progression” to have family plans that allow a family to share their bandwidth allocation among a number of devices – smartphones, tablets, laptops and so forth. But Shammo said there was no firm timetable for the transition.

Customers of Michaels say in a federal class action that their bank accounts were looted because the crafts retailer failed to safeguard against card skimming and then failed to give its customers timely notice.

In the suit filed in U.S. District Court in Chicago, Brandi F. Ramundo of West Chicago, Ill., charges that Michaels knowingly violated federal and state law by failing to take reasonable steps to safeguard its customers' personal financial data, including credit and debit card numbers and PINs.

“In essence, Michaels' security failure enabled cyber-pickpockets to steal customer financial data from within the retailer's stores and subsequently loot the customers' bank accounts from remote [ATMs],” the suit alleges.

The data thefts occurred between February 8 and May 6 and affected customers who shopped at 80 Michaels stores but the company did not alert any of its customers to the problem until May 5, when it sent an email alert saying Michaels “may have been” a victim of PIN-pad tampering and that some customer data “may have been” compromised, the suit charges.

The email alert advised customers to contact their banks and credit card companies and to seek advice on how to protect their account.

“Based on the email Alert, Michaels apparently expects its victimized consumers to bear the fallout form its security breach, thereby thrusting upon the consumers a continuous burden of monitoring their bank accounts and credit histories,” the suit charges.

Further, the suit alleges that Michaels failed to send the email alert to all of its customers, including Ramundo.

Ramundo says she used her Fifth Third Bank debit card to buy $19.35 worth of merchandise from a Michaels store on April 18. On May 3, her card when rejected when she tried to use it at a Costco store.

Ramundo telephone the bank and was told that the card had been suspended because of “suspicious activity,” specifically three withdrawls from the account to which the card was linked.

The first withdrawal, for $303, occurred on May 2 at an ATM in Los Angeles, the second, for $503 at an ATM in Woodland Hills, Calif., and the third from another ATM in Los Angeles for $503.

Ramundo contacted her local police precinct and learned that numerous other Michaels customers had filed similar complaints.

The class action seeks to represent all U.S. Residents who made an in-store purchase at Michaels and used a debit or credit card that was swiped through a PIN pad.

The suit accuses Michaels of negligence, violation of the Federal Stored Communications Act, the Illinois Consumer Fraud and Deceptive Practices Act and breach of contract.