Current Events in May 2011

Summer's nearly here and consumers are cleaning off their grills for a new season of barbecuing. Some are in for an unpleasant surprise.

“I bought a Charmglow from Home Depot two years ago and spent over $500 for it,Tara, of Coventry, R.I., told ConsumerAffairs.com. “I thought I was buying a quality product and chose to buy stainless steel to prevent rusting. I went to start up the grill and found out it was completely rusted out! There is absolutely no reason for this to have happened. I take very good care of the product and thought it would last us a long time.”

Tara is not the first consumer to lodge such a complaint about rust. In 2005 the parent company, Nexgrill, recalled Charmglow grills because of a design flaw that allowed the gas hose to overheat.

Losing control

Some owners of mid-2000 Chevy Malibus have begun to report problems with the power steering in their cars. Michael, of Bellville, Mich., is one of them.

“I have a 2004 Chevy Malibu Maxx with 105k miles and it is experiencing steering problems,” Michael said. “It is the same locking up issues as countless other Malibu owners have complained against. While driving for no reason it locks up at any speed, and almost crashes the car!”

Michael says his dealer won't touch it and his wife won't drive it. He wants to know why there hasn't been a recall. We can't answer that, but it does sound like something the National Highway Traffic Safety Administration should be looking into, if it isn't already.

A suspicious request

Traci, of East Orange, N.J., is concerned that an identity thief may have intercepted her communication with Equifax.

“I went to the FreeCreditReport.com site to get my report,” Traci told ConsumerAffairs.com. “On May 14, 2011 I received a letter from Equifax requesting that I send in proof of address, with photocopies of any of the following 2 pieces of info: Social Security number, W-2, utility bill, driver's license, pay stub or lease. No fax, but they want this info sent to a P.O. box. I have great security concerns with this method and believe this could be a form of identity theft.”

This does, in fact, seem strange and Traci is correct in being suspicious. However, she has another, better alternative that using Equfax's FreeCreditReport.com site, which requires enrolled in a credit monitoring service. Instead, she can go to www.annualcreditreport.com once each year and get a free credit report from each of the three credit reporting agencies.

Unlimited, but...

You can access the Internet all you want with your smartphone and with most carriers, there's no overage fee. But if you have a plan that connects your computer using your cell phone – usually marketed as “mobile broadband” - there are limits on how much bandwidth you can use in a billing cycle.

“I recently ordered T-Mobile's Web Connect 2.0 stick for mobile broadband,” Migna, of North Bergen, N.J., said. I was told that I get 5GB in the plan with unlimited use and that there is no overage fee. The problem is that when I go over the 5GB my Internet access becomes extremely slow and I am not able to listen to music or do anything on the Internet without an excruciating headache.”

Migna thinks she was deceived about the limitations of the plan but, when we checked the T-Mobile website, it clearly states that “after 5GB, data speeds may be reduced.” Migna's options are to ride out her two year contract by carefully limiting her data use, or paying the early termination fee and going to another provider. Verizon Wireless, for example, provides a 5B data package but charges extra when you go over. However, Verizon charges $20 a month for the service while T-Mobile charges nearly $50.

Pfizer has faced hundreds of complaints that its anti-smoking drug Chantix caused suicidal ideation and suicide attempts. Now a federal lawsuit claims the drug is responsible for a murder-suicide that left four children orphans.  

On May 17, 2009, a Beaver County, Pa., man and his wife were found dead by a newspaper delivery woman in the front yard of their home. Police said Sean Wain, 34, shot and killed his wife, Natalie, 33, before shooting himself.

Sean Wain was found lying on his shotgun, police said. Three of the couple's four children, then aged 10-14, were home at the time.

A suit filed this month in U.S. District Court in Pittsburgh alleges that Sean Wain was prescribed Chantix in October 2007 and had been using it for only a few weeks before his death. It was not until after the deaths of the Wains that Pfizer began including “black box” warnings that Chantix could cause violent behavior, rage, suicidal ideation and death.

The Wains are survived by four children: Zachary, Cassidy, Amy and Melissa. The suit, filed on behalf of the children, seeks damages to provide for their financial loss, emotional suffering and legal expenses.

Chantix (varenicline) was approved by the U.S. Food and Drug Administration (FDA) in May 2006 and quickly became Pfizer's fastest-growing product, with sales of more than $60 million in 2008.

Consumer watchdog groups have criticized Pfizer's aggressive promotion of the drug, which included a “consumer education” effort called mytimetoquit.com.

The company also launched a widespread program promoting Chantix to doctors while downplaying or omitting information about the drug's potential side effects, the suit charges.

The suit also alleges that several clinical trials demonstrated the increased risk of serious injury and death among Chantix users. In the fourth quarter of 2007, the drug accounted for 988 serious injuries reported to the FDA, more than any other drug during that time period.

By July 2009, the FDA had reports of 4,762 reports of serious psychiatric events, including 98 suicides, among patients taking Chantix.

The suit charges Pfizer was negligent in its design, testing and promotion of the drug.

Karen of Okemos, Mich., was puzzled a few weeks ago to find two charges on her telephone bill that made no sense to her. The charges were identified only as “Totaltel Media Monthly Service Fee” and were placed there by something called ILD Teleservices.

“ILD said they would issue me a check, but I had to pay my phone bill. There is also taxes charged, but I don't know how that will be reimbursed. I'd like to know how in the world did this happen?” she asked in a complaint to ConsumerAffairs.com.

The short answer is that what happened to Karen happens millions of times a year, usually to consumers who, just like Karen, are baffled by what the charges may be, if they notice them at all.

The problem is not a new one. Back in 2006, ConsumerAffairs.com published a lengthy report titled “Congress, Feds Sleep While Cramming Charges Afflict Thousands: Congress Created the Problem, Won't Life a Finger to Solve It.”

Not much has changed since then, although a federal class action filed yesrterday claims ILD Teleservices "and hundreds of third-party service providers" conspired to bill nearly one million Indiana telephone customers falsely, using "intentionally false affidavits and other documents." 

The suit was filed in U.S. District Court in Indianapolis on behalf of all Indiana residents who have been wrongfully billed by ILD.

It relies on an Indiana law which requires that ILD have five pieces of information about a customer before submitting a payment request to the local telephone companies which then include the charge on the customer's monthly bill.

The law requires that ILD possess the following information for every charge it submits to local telephone companies:

• The name of the customer requesting the service;

• A description of the service rendered;

• The date on which the customer requested the service;

• The means by which the customer requested the service;

• The name, address and telephone number of all sales agents involved in the transaction.

The suit claims that ILD submitted fraudulent affidavits to the local telephone companies claiming that it had the required information for each transaction, and charges that the actions violated the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO.

ILD, based in Ponte Vedra Beach, Fla., is what is known as a “billing aggregator.” Third-party vendors contract with ILD to handle the billing for their services and ILD, in turn, submits the billing information and supporting affidavits to local telephone companies.

Billing aggregators were created as part of the Telecommunications Act of 1980, which broke up AT&T and established local exchange carriers (“LECs”).

The theory was that hundreds of innovative service providers would compete to offer low-cost services to consumers, who would be billed by the LECs. No one quite knew what those innovative services might be but assumed they would be long-distance plans, voice-mail and message-forwarding services and other communications-related products.

Instead, the Indiana class action alleges, the charges that appear on consumers' bills often have little or nothing to do with legitimate telephone services. And it charges that ILD “never” has the information required by Indiana law, because it allows the third-party providers to retain the information.

The suit states that the only information ILD receives from the service providers is a data string that contains the consumer's telephone number, the amount to be billed and a brief description of the service provided.

ILD billed Indiana consumers more than $50 million between 2003 and 2009, the suit states.

The named plaintiff in the case is the Gold Seal Termite and Pest Control Company. In February, March, May and June of 2009, Gold Seal's monthly AT&T bills included a charge of $49.97 described as an Online Yellow Pages charge. Gold Seal, like many other customers, paid the charges even though, the suit alleges, neither ILD nor AT&T had any of the required five pieces of information to confirm that the charges were valid.

The suit accuses ILD of operating a “common and uniform scheme to defraud” and asks the court to award customers their actual damages, legal expenses and punitive damages.

The suit was filed on behalf on Indiana consumers by Cohen & Malad, LLP, an Indianapolis law firm.

Toyota and Nissan are trying to get back into the game after suffering sharp drops in sales attributed to inventory shortages resulting from the Japan earthquake and tsunami. Both companies are restoring regional sales incentives as the Memorial Day weekend approaches.

Both companies will be rolling out cash-back, cut-rate interest and special leasing deals on a regional basis.

This is good news for consumers, who for the last few months have been largely at dealers' mercy. With demand for new cars exceeding the supply, manufacturers have cut incentives and dealers have stopped sharpening their pencils, putting consumers in a weak bargaining position.

Demand for new cars is strong, with overall sales up 20% over the last month but Toyota turned in a weak 9% while Nissan sales were up 22%.

Many automakers, not just the Japanese, have cut back on sales incentives as parts shortages caused production delays that have left many dealers with fewer cars than usual on their lots.

But with Hyundai-Kia, Volkswagen and many American brands running at full production, the Asian carmakers fear they're being left in the dust.  Hyundai sales were up a stunning 37%, many of them coming at the expense of Toyota and Honda.

Toyota has also said it is battling back to full production more quickly than it expected and hopes to be at nearly full capacity over the next 30 days.

Nissan claims to be in better shape than its Asian competitors and has been telling its dealers to “rev the Nissan engine and grow market share” through Memorial Day tent sales and cut-rate lease days on Altimas and Maximas.

MacLaren USA is repeating a recall of about one million strollers sold prior to November 2009.  The stroller's hinge mechanism poses a fingertip amputation and laceration hazard to the child when the consumer is unfolding/opening the stroller.

Maclaren has received a total of 149 reported incidents with the strollers, including 37 reported injuries that occurred after the stroller was recalled in November 2009. These reported injuries include five additional fingertip amputations, 16 additional lacerations and 16 additional fingertip entrapments/bruising. At the time of the original recall, there were 15 incidents, including 12 reports of fingertip amputations in the United States.

This reannouncement involves all Maclaren single and double umbrella strollers sold prior to November 2009. The word "Maclaren" is printed on the stroller. Maclaren strollers sold after May 2010 have a different hinge design and are not affected by this announcement.

Juvenile product and mass merchandise retailers sold the strollers nationwide from 1999 through November 2009 for between $100 and $360. They were made in China.

Consumers who have not installed the hinge covers should immediately contact Maclaren USA to receive the free repair kit.

Consumers who have not received or installed the hinge covers should contact Maclaren USA at hingecovers@maclaren-usa.com to obtain the free repair kit. Consumers also can call Maclaren toll-free at (877) 688-2326 between 8 a.m. and 5 p.m. ET Monday through Friday.

Everyone knows healthcare costs have been going up, but a new study adds some specifics – finding that healthcare costs for a typical American family of four have doubled in less than nine years and that employees are carrying a largerr share of the costs than in previous years.

The Milliman Medical Index finds the total cost of healthcare for a family of four in 2011 is $19,393, an increase of 7.3% over 2010.

That's the lowest annual rate of increase in more than a decade but it is the highest increase in total dollars – $1,319 in 2011 – in the history of the study, which is conducted annually by Millman, Inc., a consulting and actuarial firm.

“In 2002, American families had healthcare costs of $9,235 and those costs have now doubled in fewer than nine years,” said Lorraine Mayne, Milliman principal and consulting actuary. “As costs continue to grow – and even as the cost trend decelerates – the total cost of care for American families constitutes a larger and larger portion of the household budget.”

Employees paying more

The study also found that American workers are paying a larger share of the cost. Of the $1,319 total cost increase, employers bore $641 while employees shouldered the rest – $403 in payroll contributions and $275 in additioanl cost sharing.

“As has been the case in four of the last five years, employees are paying a larger share of the increase than their employers,” said Scott Weltz, consulting actuary at Millman. “That said, in absolute dollars, both employers and employees have shouldered approximately the same amount of additional costs since 2006, with employers absorbing $3,023 and employees absorbing $2,988.

The study also looked at geographic differences. Six of the 14 cities studied exceeded $20,000 in total costs while several others, including Phoenix, Atlanta and Seattle, had less than $19,000 in total costs for the typical family.

The cost differences result from variations in local practice patterns and from differing costs for healthcare goods and services, the Milliman report said.

Foreclosure filings — default notices, scheduled auctions and bank repossessions — fell nine percent from March and were down 34 percent from April 2010, according to RealtyTrac, a foreclosure marketing firm.

But that doesn't mean the housing market is recovering or that fewer homeowners are in trouble. Other evidence suggests otherwise. Instead, says RealtryTrac, it means the process has simply slowed down.

“Foreclosure activity decreased on an annual basis for the seventh straight month in April, bringing foreclosure activity to a 40-month low,” said James J. Saccacio, chief executive officer of RealtyTrac. “This slowdown continues to be largely the result of massive delays in processing foreclosures rather than the result of a housing recovery that is lifting people out of foreclosure.”

Delays

The first delay occurs between delinquency and foreclosure, when lenders and services are no longer automatically pushing loans that are more than 90 days delinquent into foreclosure but are waiting longer to allow for loan modifications, short sales and possibly other disposition alternatives. Data from the Mortgage Bankers Association shows that about 3.7 million properties are in this seriously delinquent stage.

The second delay occurs after foreclosure has started, when lenders are taking much longer than they were just a few years ago to complete the foreclosure process. According to RealtyTrac, foreclosure actions were reported on 219,258 U.S. properties in April, with one in every 593 U.S. housing units receiving a foreclosure filing during April.

In 2007, it took an average of only 151 days for a foreclosure process to be completed and a repossessed home to be placed back on the market. In April, the average time lengthened to 400 days.

Mortgage servicers have slowed the process in the wake of last year's “robo-signing” scandal, when several big firms were caught taking illegal short-cuts. Not only are they now being more deliberate, they are slowing the number of distressed properties coming on the market, which may prove to be helpful in stabilizing the housing market.

Nevada, Arizona, California still the hardest hit

Though the process has slowed, the states with the highest number of foreclosures remains pretty much the same. Nevada posted the nation’s highest state foreclosure rate for the 52nd straight month in April, with one in every 97 housing units receiving a foreclosure filing during the month. Overall foreclosure activity in Nevada decreased nine percent from the previous month and was down 27 percent from April 2010.

Arizona repossessions decreased three percent from March but were still up 22 percent from April 2010, helping the state maintain the nation’s second highest foreclosure rate for the fifth consecutive month. One in every 205 Arizona housing units received a foreclosure filing during the month, and overall foreclosure activity decreased 15 percent from March and was down 17 percent from April 2010 despite the year-over-year jump in REOs.

Overall, foreclosure activity in California was down monthly and annually in April, but a 22 percent month-over-month jump in REOs helped keep the state’s foreclosure rate at the third highest among all states for the sixth consecutive month. One in every 240 California properties received a foreclosure filing in April.

Michaels, a chain of craft stores, reports the debit card readers at 80 of its stores in 20 states show signs of tampering. That means consumers who used debit cards in those stores may have exposed their bank information to criminals.

Michaels said the 80 stores are located in Colorado, Delaware, Georgia, Illinois, Iowa, Massachusetts, Maryland, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Utah, Virginia and Washington.

The company said the compromised swipe pads have been removed and it will replace all 7,200 of its debit card key pads at all its stores. While the transition is taking place over the next two weeks, stores will accept only cash, credit cards orsignature-based debit cards.

Allowing criminals access to debit card data is much more dangerous than giving them access to credit cards. With information from debit cards, crooks can empty a bank account. With credit card data, they can only make purchases, which the credit card company can disallow once they are shown to be fraudulent.

Electronic transactions have raised potential fraud to a whole new level in recent years. Key pad “skimmers” have become more common at gas pumps and ATMs. A “skimmer” is a keypad device that is placed over the real keypad by a scammer. The device captures the consumer's debit card information and PIN when they enter it.

It's not clear how the Michaels keypads were compromised, because neither the store nor the police are providing any details.

Security experts say keypads could have been replaced with “skimmers” by criminals posing as repair personnel. It's also possible the pads weren't replaced at all, but the network that linked them together was infected by malware, allowing the thieves to effectively take control of the devices.

Consumers who have recently used debit cards at a Michaels store in the above states should immediately contact their bank's fraud department and report it. By issuing a new card and PIN, the bank may be able to thwart attempts to break into consumers' bank accounts.

On Mothers Day Karen, of Hebron, Ky., was delighted to receive two Paula Deen copper-bottom two-quart sauce pans as a gift.

“I decided to warm a can of green beans in one of the saucepans,” Karen told ConsumerAffairs.com. “When the green beans were hot, I went to remove the pan from the stove burner and the copper bottom disintegrated into molten metal and flew all over the stove, kitchen counter, floor and floor mat. I also was struck by a piece of the metal and suffered a burn on my right hand when lifting the pan.”

As a result, Karen says she is having to replace, at her expense, the entire kitchen counter top as well as the kitchen floor and the stove's drip pan and burner in her rented condo. She should try to return the pan because copper-bottom pans aren't supposed to melt. It sounds like a manufacturing defect. And, oh by the way, just because a celebrity slaps her name on a product doesn't necessarily mean it's of high quality.

Another flaming TV

We've had a few reports lately of flat screen TVs catching fire. Here's another one.

“I have had my 42" Vizio LCD flat screen for about three years,” said Kellie, of Stockton, Utah. “Monday May 9, 2011 we were watching TV when all of a sudden there was a loud pop and the screen went black. We unplugged the TV and plugged it back in turned it on and it started shooting flames out the back.”

Kellie said she's just glad someone was home when it happened. We've had similar reports of Polaroid and Phlilps TVs catching fire. Seems to us the Consumer Product Safety Commission ought to be looking into this.

Getting the message

With most cell phone plans you pay for individual text messages that are sent and received, so getting unsolicited texts isn't just annoying, it can also be expensive. Amy, of San Francisco, says she is getting unwanted text messages from MediaSolutions.com, despite having asked them to stop.

“Just today they texted me eight times after asking them to stop,” Amy said. “I have a limited number of text messages that I can use each month and they are taking away texts that I use. I get charged extra when I go over.”

If she hasn't already, Amy should complain to her cellphone provider. Verizon, for example, recently sued a company it said was defrauding its customers be sending spam texts. She should also contact California Attorney General Kamala Harris' office. 

Disappearing money

It's always distressing to hear from consumers who think they have been scammed, especially if their life savings is at stake.

“On april 10, 2008 I invested my personal money into Genesis Onnovation,” Terry, of San Francisco, told ConsumerAffairs.com. “I took a $25,000.00 cashiers check and handed over to the manager of the company.”

Terry had a financial setback recently and wrote a letter asking for his money back. He said he got no response and is now worried.

Unfortunately, he should be. According to news reports, the owner and manager of Genesis Innovations was arrested in Sacramento, Calif., last fall and charged with running a Ponzi scheme. Terry should immediately contact the Sacramento district attorney's office to find out the status of the investigation. In fact, the office may want Terry's testimony. As the Bernie Madoff case has shown, there may be assets that can be recovered, so all may not be lost.

We know childhood obesity is a problem. But do we know the answer? Or more importantly, what the answer isn't.

First Lady Michelle Obama has an exercise program for kids. So does the National Football League, and other organizations. But some children are opting for a more direct route to weight loss -- bariatric, or “gastric bypass,” surgery.

While a growing number of adults are undergoing this procedure, it remains controversial for children. A new poll by C.S. Mott Children’s Hospital shows most parents believe it should not be available to children under 18.

Just as cases of childhood obesity have skyrocketed in number over the last 40 years, so has children’s risk for obesity-related illness such as diabetes, high blood pressure, liver disease and other illnesses. Research shows a multitude of issues that contribute to the problem, but no single solution is clear.

Physicians tend to agree. They say that despite its benefits, bariatric surgery carries potential risks, which are not fully defined for adolescent patients. There is no standard age at which bariatric surgery is presented as an option for severely obese adolescents.

Minority parents more receptive

Overall, fewer than one-third of parents thought bariatric surgery should be an option for adolescents younger than 18. Black and Hispanic parents were more likely than white parents to consider bariatric surgery for younger adolescents.

In contrast, 13 percent of parents felt bariatric surgery should not be an option at any age – including one in five African-American parents. Among all groups, the most common viewpoint was that bariatric surgery should be delayed until the adolescent is 18 or older.

“Further research is required to explore why low-income and non-white parents were more accepting of bariatric surgery for adolescents, but it might be because these populations are disproportionately affected by obesity and are more familiar with the challenges faced by the severely obese,” said Susan J. Woolford, M.D., M.P.H., medical director of the Pediatric Comprehensive Weight Management Center at the University of Michigan Health System.

Longer pre-surgery weight loss period

The poll also showed that for parents who believe bariatric surgery should be reserved for those over 18, most also prefer that adolescents participate in a weight loss program for at least one year before considering bariatric surgery – six months longer than the minimum time generally required by doctors.

“Pediatric guidelines say bariatric surgery should be performed on adolescents only after at least six months of participation in an intensive weight-loss program," Woolford said.

The waiting period patients and their parents have the opportunity to implement lifestyle changes that are important for success after surgery.

“But parents in this study suggest a longer period,” said Woolford, who is also a clinical assistant professor with the Child Health Evaluation and Research unit in the Division of General Pediatrics.

Guidelines include adopting a low-fat, low-calorie diet, and implementing a regular exercise routine. Continuing these behaviors and taking regular supplemental vitamins and proteins following surgery are required to avoid serious complications.

The U.S. Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission has left many congressional staffers fearing retaliation against their bosses if they displease lobbyists,  an informal study by Public Citizen finds.

Public Citizen asked 3,401 congressional chiefs of staff, legislative directors and legislative assistants who work on Capitol Hill if they believe that Citizens United, which permitted corporations to spend unlimited sums to influence elections, has strengthened the influence of lobbyists in the policymaking process and if they personally feel a need to respond differently to lobbyists in the wake of the opinion.

Eighty staffers responded. Forty-one percent said Citizens United has “strengthened the influence of lobbyists in the policymaking process.”

There was a stark contrast between the responses of Democrats and Republicans. Of Democratic respondents, nearly three in five (57 percent) said Citizens United has strengthened the influence of lobbyists, while 16 percent said they feel “a need to respond differently to lobbyists’ requests.” None of the Republican staffers said they believed that Citizens United has strengthened lobbyists’ influence or that they personally feel a need to respond differently to lobbyists.

“The results of this survey are concerning, although not surprising,” said Taylor Lincoln, research director of Public Citizen’s Congress Watch division. “The notion that unlimited outside expenditures would not corrupt the policymaking process was fanciful from the start. This is not a scientific survey, but it shows that outside spending does in fact intimidate congressional staff – and that’s very troubling.”

Of the staffers who reported a need to respond differently to lobbyists, most chose the explanation that they “worry about preventing electioneering expenditures against the member for whom I work.”

Chilling effect

One Democratic legislative director, in response to the survey’s open-ended question, wrote, “The prospect of a massive donation to an outside organization that would run ads against my boss and not have any identifying information about who is behind them has a chilling effect on our decision-making.”

In Public Citizen’s analysis, the survey results undercut a key rationale underlying Citizens United: The court dismissed the prospect that expenditures by outside organizations would have a corrupting effect on the policymaking process. But the court also said there would be “cause for concern” if lawmakers put “expediency before principle,” and the court acknowledged its obligation to give weight to “the appearance or the reality” of improper influences of independent expenditures.

“The survey puts the lie to current arguments against disclosure of political spending by government contractors,” said David Arkush, director of Public Citizen’s Congress Watch division, referring to a proposed executive order to require disclosure of campaign spending by corporations that accept government contracts.

“Groups like the U.S. Chamber of Commerce claim that disclosure of political contributions would intimidate government contractors. What’s really going on is that big businesses want to be able to bribe and intimidate government officials who grant lucrative contracts, without the public knowing about it. Americans deserve to know who’s underwriting our elections, and who’s potentially buying off and intimidating public officials,” he said.

A report finds that many of the 13 million Americans who are unemployed are getting stung with unnecessary and poorly disclosed fees in the 40 states that use prepaid cards for unemployment compensation.

At the same time, the best cards may benefit “unbanked” consumers – those who don't have banking accounts -- and save states money, according to the survey conducted by the National Consumer Law Center.

“Prepaid cards can help states eliminate the costs of paper checks and help unbanked workers avoid check cashing fees and the risks of carrying cash,” said Lauren Saunders, managing attorney of the center and the primary author of the report. “Yet prepaid card junk fees stack the deck against jobless Americans who need every dollar during a financially stressful time.”

The center's report analyzes the payment options, fees, and access to account information available to workers in every state that uses the prepaid cards. It also surveys the laws that do (or do not) protect workers and offers recommendations for how states can design a card that works well for both the state and its unemployed workers.

The report singles out as especially problematic the $10 to $20 overdraft fees that U.S. Bank has on prepaid cards in five states: Arkansas, Idaho, Nebraska, Ohio, and Oregon. No other bank’s prepaid card charges overdraft fees, which the U.S. Department of Labor (DOL) has found are “inconsistent with federal law.”

The Tennessee card (issued by JP Morgan Chase) draws the two of clubs for the card with the most junk fees, including ATM, PIN debit, denied transaction, and balance inquiry fees.

Winning hand

So who holds the winning hand? California and New Jersey currently have the best cards (both issued by Bank of America), although both could benefit from fees more clearly and prominently displayed on websites. The State of California loses one trick for not offering direct deposit.

The report urges the new U.S. Consumer Financial Protection Bureau, which starts work in July, and DOL to work together to ban overdraft fees and other unfair fees and to improve transparency and competition by posting all fee schedules in one place so that states and consumers can compare who has the best hand.

The report cautions states not to see prepaid cards as a payment panacea. Workers with bank accounts should first be offered the choice of direct deposit, but they do not have that option in six states: California, Indiana, Kansas, Maryland, Nevada and Wyoming.

This report adds to the body of research that National Consumer Law Center has done on banking and payment systems, including prepaid debit cards.

“It took months of research to obtain this information, so now that we’ve laid the cards on the table, it should help states to cut a better prepaid card deal,” said Saunders. “This issue also reinforces the need for the new Consumer Financial Protection Bureau, which will help safeguard consumers from unfair fees on prepaid cards, credit cards and other financial products.”

The FBI is warning that the recent tornadoes in several Southern states have spawned a cluster of scams that take advantage of consumers' desire to be helpful.

“Unfortunately, criminals can exploit these tragedies for their own gain by sending fraudulent e-mails and creating phony websites designed to solicit contributions,” an FBI press release said. The FBI said it has already received complaints alleging fraudulent schemes.

Tips should be reported to the National Center for Disaster Fraud, (866) 720-5721. The line is staffed 24 hours a day, seven days a week. Additionally, e-mails can be sent to disaster@leo.gov, and information can be faxed to (225) 334-4707.

The FBI reminds the public to perform due diligence before giving contributions to anyone soliciting donations or individuals offering to provide assistance to those affected by the tornadoes. Solicitations can originate from e-mails, websites, door-to-door collections, flyers, mailings, telephone calls, and other similar methods.

Before making a donation of any kind, consumers should adhere to certain guidelines, including:

• Do not respond to any unsolicited (spam) incoming e-mails, including clicking links contained within those messages, because they may contain computer viruses.

• Be skeptical of individuals representing themselves as members of charitable organizations or officials asking for donations via e-mail or social networking sites.

• Beware of organizations with copy-cat names similar to but not exactly the same as those of reputable charities.

• Rather than follow a purported link to a website, verify the legitimacy of nonprofit organizations by utilizing various Internet-based resources that may assist in confirming the group’s existence and its nonprofit status.

• Be cautious of e-mails that claim to show pictures of the disaster areas in attached files because the files may contain viruses. Only open attachments from known senders.

• To ensure contributions are received and used for intended purposes, make contributions directly to known organizations rather than relying on others to make the donation on your behalf.

• Do not be pressured into making contributions; reputable charities do not use such tactics.

• Be aware of whom you are dealing with when providing your personal and financial information. Providing such information may compromise your identity and make you vulnerable to identity theft.

• Avoid cash donations if possible. Pay by credit card or write a check directly to the charity. Do not make checks payable to individuals.

• Legitimate charities do not normally solicit donations via money transfer services. Most legitimate charities’ websites end in .org rather than .com.

Consumers can also report suspicious e-mail solicitations or fraudulent websites to the FBI’s Internet Crime Complaint Center, www.ic3.gov

The National Center for Disaster Fraud was created by the Department of Justice to investigate, prosecute, and deter fraud in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region. Its mission has expanded to include suspected fraud from any natural or manmade disaster.

More than 20 federal agencies, including the FBI, participate in the National Center for Disaster Fraud, which allows the center to act as a centralized clearinghouse of information related to disaster relief fraud.

At the midway point of a pivotal week for gasoline, the price of the fuel has edged up again. That ends a string of five days in which the price declined.

The national average price of self-serve regular today is $3.962 a gallon, according to AAA's Fuel Gauge Survey. That's up from $3.951 per gallon Tuesday but is two cents lower than the price seven days ago.

The national average gas price peaked last Thursday at $3.985 before beginning small incremental declines through Tuesday. Prices reversed direction after the crude of crude oil tumbled last week, with the price on the New York Mercantile Exchange falling below $100 a barrel.

However, crude oil prices have recovered this week to around $102 a barrel. How prices behave for the rest of the week could provide a strong indicator for the future of gasoline prices. Will prices at the pump head down from here, or will they surge past $4 a gallon?

Many analysts have said market fundamentals do not support oil prices above $100 a barrel – that traders have bid up the price, speculating that a worsening political situation in the Middle East and a recovering economy that needs more oil will lead to supply shortages.

Gasoline prices, they say, may have already peaked. Normally, gas prices peak around Memorial Day but level off over the summer, then begin to go down in the fall and winter.

The fact is, there really is no shortage of oil. The American Petroleum Institute reports that U.S. stockpiles of crude oil rose last week by nearly three million barrels. That's a lot more than analysts expected. Stockpiles of gasoline went down again last week, but that's not necessarily a function of increased demand. Refineries may have just produced less.

For motorists, it's a waiting game. Prices may go higher, or they could start coming down in the coming weeks. The only near certainty is, if prices do start falling, it won't be by a lot.

When Tim, of Columbia, Tenn., contacted Dish Network to cancel service, he knew they would require him to return all the leased equipment. But he said he was surprised when a customer service rep told him he would be assessed a $15 fee for each return label he used.

“I was told that this was clearly stated in the terms and conditions I signed for my service,” Tim told ConsumerAffairs.com.

However, Tim went back and read the company's terms and conditions.

“Dish Network's RCA Page 7, Item 5, Part B states you must 'contact our customer service... to schedule the return of your leased Equipment.' It says nothing about the customer being responsible for return shipping charges. Nor does it say anything about Dish Network paying the return fees.”

Tim also doesn't like the idea that Dish Network keeps your credit card information on file, saying they maintain it even after you request it to be deleted.

Let's see some ID, please

 Some might find this next story humorous. Albert, of Clinton, N.Y., certainly does not. Shopping Monday at his local Target, the 80-year old retired colonel picked up some Pepsi and a Smirnoff ICE six-pack and headed for the checkout counter.

“When he scanned the Smirnoff I was asked for an ID card,” Albert said. “Now I am almost 80 years and infirm enough to look my age. However still interested in trying the product, I provided my readily available Military retired ID card which had my photo and birth date clearly marked. The cashier refused it and asked for a driver license.”

Albert said he fumbled around through assorted papers until he found his drivers license.

“I produced it in its clear plastic envelope,” he said. “The cashier returned it and told me to remove it from the envelope so he could scan it. At this time I cancelled my purchases and told him why. Rudely he replied he just worked there and blame Target not him.”

Albert says he thinks Target's policy of combining a consumer's name and phone number with a credit card purchase increases the risk of identity theft. Beyond that, he says there is no reason an 80 year old man should have to produce proof that he's over the age of 21. We have to agree with Albert on that one.

You can't assume anything

We get a lot of complaints about Sirius XM satellite radio and other subscription services that use automatic renewal. Consumers end up making wrong assumptions, thinking they have cancelled when they haven't.

“This February my one year contract was due to end,” Jim, of Springfield, Mo., said. “The first week of February I received my renewal notice for $161.83. The contract was up at the end of February. I chose not to continue the XM car radio service, therefore I did not send in the money for continuation of the service.”

Jim thought he had cancelled the service, but he hadn't. He was surprised in March when he got a bill.

“I called XM radio customer services and was informed that I had the statement of $28.65 for March and a pending bill of $28.65 for the month of April,” he said. “I tried to explain to the customer service representative that I did not want to continue their services, because I did not sent in my money for the renewal of services.”

But the customer service rep explained to Jim that Sirius XM Radio Inc. automatically renewed the service. The representative explained that the policy was on their web sight and also in their billing statement.

Consumers should understand that subscription services like satellite radio make it as hard as possible to cancel, because they do not want to lose customers. You must go to great lengths, it seems, to cancel any service.

To cancel a service, you must speak to a customer service representative and get a confirmation number for your cancellation order.

Nearly $3000 in fees

GM Money Bank offers a credit service to help pay medical bills that, all too often, health care providers push on their patients.

“In 2006 I went to the dentist and had a bill for $1500,” Elaine, of Indianapolis, Ind., told ConsumerAffairs.com. “They requested I talk with these people. I've had nothing but trouble.”

Elaine said she got hit with late charges every month, even though she paid on time. She said they took money out of her checking account, sometimes twice a month. She said she got discouraged and stopped making payments.

“Now after all this time I get another bill from the law office of Michael Sipes telling me I now owe $4,223.40” Elaine said. “I paid $1215. The total loan was $1500 to start. I am willing to pay the 285.00 i have left on the loan.”

What should Elaine do? In this case she should hire a lawyer to present her settlement offer. Ordinarily, the company might not be inclined to take it, but since GE Money bank's relationship with health care providers in other states has resulted in fraud investigations and lawsuits, a smart attorney should be able to get the message across that it would be better to settle this matter with an Indiana consumer, lest another investigation begin in the Hoosier state.

Microsoft is buying Skype, which millions of consumers use to hold peer-to-peer conversations and video conferences. The price tag is the biggest ever for a Microsoft acquisition - $8.5 billion.

“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer. “Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.” 

Division of Microsoft

Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Ballmer.

Skype is basically communications software. With an Internet-connected device, families, friends and colleagues can use it for free with messaging, voice and video, in a peer-to-peer connection. For a small charge, they can also also call landlines or mobile phones. The company recently introduced group video, allowing groups of more than two people to do things together whenever they're apart.

Founded in 2003 and based in Luxembourg. Skype can be downloaded onto computers, mobile phones and other connected devices for free. It counted over 170 million users and logged over 207 billion minutes of voice and video conversations in 2010.

The deal should help Microsoft where it needs it most; in the areas of video and voice communication. Microsoft also expects to use Skype technology on several platforms, including Xbox 360 and outlook.

Still free?

The question for Skype users is this; will Skype remain a free service under Microsoft? The company has struggled to make a profit, mainly because it receives no revenue from much of its services.

Microsoft, not known for giving things away, may be looking for new ways to create revenue with the acquisition. After all, it is staking $8.5 billion on the deal.

“Microsoft has a long-standing focus and investment in real-time communications across its various platforms, including Lync, Outlook, Messenger, Hotmail and Xbox LIVE,” the company said in a release.

Skype will support Microsoft devices like Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities.

In late April, Rebbecca of Lorain, Ohio, wrote to ConsumerAffairs.com complaining that the fuel tank on her 1999 Ford F150 pick-up fell off while she was driving it.

“Eleven years old isn't that old of a vehicle for it to be okay to die in,” Rebbecca told ConsumerAffairs.com. “Luckily we were breaking for a red light when it happened. The entire family was in the vehicle. Called Ford, they don't care, gave me a line about no recalls at this time. Filed a complaint with NHTSA.”

Whether it was Rebbecca's complaint, or one of dozens of others, the National Highway Traffic Safety Administration has decided to take a closer look at the problem. Agency officials said they had already begun an investigation, but now the probe is being expanded to include vehicles in the model years 1997 through 2001.

According to NHTSA investigators, one or both steel straps holding the gas tank to the trucks frame could weaken over time and eventually fail. That would cause the tank to slip down and make contact with the pavement, or in Rebbecca's case, fall off altogether.

The friction with the pavement could open holes in the tank, spilling gasoline all over the highwayand creating a fire hazard. No injuries have been reported, but the agency says fires have been reported in two of the incidents.

Meanwhile, a mechanic posted a video on YouTube showing what he said was a completely rusted, and leaking, F150 fuel tank.

Last month Ford expanded its recall of F150 pick-ups to address another problem; front seat airbags have reportedly gone off by themselves. Ford has recalled 1.2 million of the vehicles from the 2004 to 2006 model years.

When Congress passed the CARD Act two years ago, to curb some of the worst credit card industry abuses, there were plenty of skeptics who said the measure would backfire, creating other problems for consumers.

But new research by the Pew Health Group's Safe Credit Cards Project says that hasn't happened. In a study, the group says the CARD Act appears to be doing its job. Credit card holders are seeing stabilized interest rates, the elimination of over-limit penalty charges, a reduction in late fees charged by banks and minimal changes in annual fees since the Credit CARD Act of 2009 took effect.

Stability

For example, the data shows that median advertised interest rates for purchases on bank credit cards remained the same as in 2010. Bank cash advance and penalty rates held firm.

The percentage of cards with annual fees held steady for credit unions, at 14 percent, and increased for banks, from 14 percent in 2010 to 21 percent in 2011. The amount charged for annual fees remained unchanged.

One of the biggest changes stops credit card companies from raising the interest rates on existing balances. When a lender increases the rate now, it only applies to new purchases. In the past, consumers with large balances found their payments rose sharply when lenders significantly raised the interest rate on their account, which at the time applied to existing balances.

"Pew's research shows that predictions that the legislation would spark new charges and long-term interest rate growth have not materialized," said Nick Bourke, director of Pew's Safe Credit Cards Project. "Whatever increases in advertised interest rates we saw going into 2010 have not continued into 2011.”

Positive changes

Bourke says the legislation has created what he calls “a new equilibrium” where interest rates have flattened, penalty charges have declined and a number of practices considered unfair or deceptive have disappeared.

“Consumers are enjoying safer, more transparently priced credit cards - and banks and credit unions are able to compete on a more level playing field," Bourke said.

The Credit CARD Act, signed on May 22, 2009, is a comprehensive law that aims to protect consumers by restricting when interest rates can be raised on existing balances and banning "unfair or deceptive" practices. It also allowed new rules to be created to ensure that late charges and other penalties charged by issuers are "reasonable and proportional." The bill passed with bipartisan support by both the House of Representatives and the Senate.

"The Credit Card Act is an excellent example of how bipartisan legislation can be enacted that both protects consumers from potentially harmful practices while simultaneously creating a marketplace where banks and credit unions are able to compete based on clear and predictable pricing," said Eleni Constantine, director of the Financial Security Portfolio at the Pew Health Group. "Congress should take a similar approach to make other financial products, such as checking accounts and short-term, small-dollar loans, safer and more transparent."

American consumers increased their borrowing for a sixth straight month in March, according to the Federal Reserve. The Fed notes borrowing increased for car loans, as well as credit card purchases.

This, of course, was almost universally greeted as good news. But not too long ago, it might not have. Taking on significant debt has become "normal"—and even patriotic—to some consumers, according to a new study in the Journal of Consumer Research.

"How did America, a country once so indelibly marked with Puritan principles of self-discipline and thrift, become a nation so awash in personal debt?" ask authors Lisa Peñaloza and Michelle Barnhart.

Normal

The researchers interviewed 27 white, middle-class Americans before the 2008 financial crisis and found that even though consumers believe that they should limit their debt, they take on debt because doing so has become normal.

"As one participant put it, taking on debt is 'the American way,'" the authors write.

For many participants, the disconnect between what consumers say they should do and what they actually do begins in young adulthood.

"When their parents did talk about credit and debt, it was to counsel them to use credit only in emergencies," the authors write. "In contrast, these study participants viewed debt as acceptable and necessary for middle class Americans who 'have to' buy a house, furnishings, a college education, and a car—items most cannot afford without credit."

Participants recognized the value of a good credit history and understood that they needed to use credit to build one.

Punished for living within her means

"The only one who had avoided credit in an attempt to live within her means found it impossible to be a 'normal consumer' without it, recalling that she had been denied a cell phone and had difficulty when traveling because she did not have a credit card," the authors write.

Although consumers generally tried to use credit responsibly, some participants "gamed" credit by taking out multiple cards, rolling over balances, and amassing large debts.

"So long as these consumers consistently paid at least the minimum amount required, financial agents rewarded them with higher credit limits and even mortgages," the authors write.

In recent decades, economic growth has been based in large part on credit. If consumers can spend more than they earn, they are able to increase consumption, thereby creating more wealth. That's the theory, at least.

In the fall of 2008, when the collapse of Lehman Brothers triggered a credit crisis, consumers found it much harder to get credit. Not surprisingly, the economy began to contract into the Great Recession.

"Spurred on by tax rebates, prominent among which is the mortgage tax deduction, ambition to get ahead, and social pressure to build wealth, study participants accumulated debt to demonstrate financial independence and express freedom, and some participants even cast their credit use as a patriotic duty to boost the national economy," the authors conclude.