Current Events in July 2011

Walmart says it is teaming with VUDU to begin offering movie stearming on its website, Walmart.com.

The service is provided by VUDU, a movie streaming service Walmart acquired in 2010, but consumers will complete the transaction while on the Walmart site and pay for the movie through Walmart.com's checkout.

Walmart said that customers already purchase DVDs online. The new streaming service will provide another option for viewing entertainment, allowing customers instant access to their purchase.

The movies may be viewed directly from Walmart.com, VUDU.com, or from one of more than 300 VUDU-enabled devices, including select HDTVs, Blu-ray Disc players and the PlayStation3.

"At Walmart, one of our key priorities is to provide a continuous channel for our customers, from our stores to our powerful e-commerce and social media platforms," said Steve Nave, SVP and general manager, Walmart.com. "With VUDU becoming increasingly popular among our customers, we're providing them more access to enjoy this digital entertainment experience directly online at Walmart.com."

The new service became available today. Consumers will pay from $1 to $5.99 to rent movies and may purchase titled from $4.99 to $19.99.

This isn't the first time Walmart has attempted to enter the online movie business. The first effort, in 2005, was short lived. It was followed by a partnership with HP that was also shut down a year later.

Walmart is re-entering the arena at a time when market-leader Netflix has encountered some consumer headwinds, over changes to its price structure announced earlier this month. 

The Financial Industry Regulatory Authority (FINRA) today issued an Investor Alert warning investors about putting their assets into riskier and sometimes complex products that promise higher returns than more traditional investments.

With yields on many fixed-income investments at historically low levels and a volatile stock market, investors may be tempted to chase returns by investing in structured notes with principal protection, high-yield bonds, floating-rate loan funds and leveraged products.

 The alert was prompted by significant recent inflows into investments like high-yield bond funds, floating-rate loan funds and structured retail products.

High-yield bond funds had $75 billion in new sales in 2010. Floating-rate funds grew from $15 billion in 2008 to $60 billion in April 2011, and sales of structured products increased from $33 billion in 2009 to $54 billion in 2010.

"Investors should never make an investing decision solely by looking at an investment's return, whether past or projected. Higher returns come with higher risk. Investors should always look behind an investment's yield, ensure that they understand how the investment works and carefully consider its fees and risks before investing," said Gerri Walsh, FINRA's Vice President for Investor Education.

 While there are many ways investors could try to increase their return, Walsh notes that many investors are turning to riskier products.

Higher yield, higher risk

High-yield bonds are bonds with lower credit ratings, higher risk of default and consequently a more attractive interest rate to compensate the investor for the additional risk. While high-yield bonds can make sense in many portfolios, the higher yield may come with an increased possibility of losing money.

Floating-rate loan funds invest in loans extended by financial institutions to entities of below investment-grade credit quality. Companies that are extended these high interest rate loans usually have a high debt-to-equity ratio, and those loans' yields tend to be higher than investment-grade bonds.

The interest rates on floating-rate loans adjust by a pre-determined spread over a reference rate, like the London Interbank Offered Rate (LIBOR). A fund that invests in floating-rate loans may be attractive in a low or rising interest rate environment because, in addition to having higher yields, the fund's interest rate increases when rates rise.

Unsecured debt

Structured retail products are typically unsecured debt with payoffs linked to a variety of underlying assets. These products can seem attractive to investors because they can offer higher returns and might even feature a level of principal protection, subject to the credit worthiness of the issuer. However, these products can also have significant drawbacks such as credit risk, market risk, lack of liquidity and high hidden costs.

Leveraged products include ETFs and mutual funds that seek to deliver multiples of a specified benchmark by increasing exposure to the benchmark through the use of derivatives. Leveraged products often "reset" daily, meaning that they are designed to achieve their stated objectives on a daily basis. Their performance over longer periods of time can differ significantly from the performance of their underlying index or benchmark.

 FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business in the United States. 

Customers used to accuse the neighborhood butcher of putting his thumb on the scale when weighing their purchases.

But modern food processors have a better way of beefing up the weight of meat and poultry: They inject salt water, and the U.S. Department of Agriculture (USDA) is about to blow the whistle on them.

The department is expected to publish a new rule this week that would require food processors to prominently disclose the percentage of the product that is added solution, and the solution’s ingredients.

The agency will rule separately whether such products can be labeled “natural,” as many saltwater-injected meat and poultry products are.

Added water and salt

“Who wants to pay $4.99 a pound for the added water and salt?” asks Michael F. Jacobson, executive director of the nonprofit Center for Science in the Public Interest. “Besides cheating customers financially, ‘enhancing’ meat and poultry delivers a stealth hit of sodium. Better labeling would help consumers concerned about high blood pressure, stroke, or heart disease avoid products that contribute to those diseases.”

Chicken breasts, pork tenderloins, or other foods enhanced with a salt-water solution can have more than five times as much sodium as occurs naturally in those foods, according to CSPI.

A whole chicken enhanced with a solution of water, salt, sodium phosphate, chicken broth, and other ingredients might have 550 milligrams of sodium per four-ounce serving, while a similar serving of unprocessed chicken has just 75 mg of sodium.

According to USDA, 30 percent of poultry, 15 percent of beef, and 90 percent of pork contain added solutions.

In 2007, CSPI filed a petition with USDA’s Food Safety and Inspection Service urging the agency to go beyond labeling and actually set ceilings on the amount of sodium that would be allowed in all processed meat and poultry, including deli meats, bacon, sausage, chicken pot pies, and frozen dinners.

CSPI had previously petitioned the Food and Drug Administration to revoke salt’s status as a Generally Recognized as Safe, or GRAS, ingredient and instead regulate it as a food additive, subject to reasonable limits or special labeling requirements.

“We applaud the USDA for acting to protect consumers’ health and pocketbooks with this sensible proposal,” Jacobson said.

It's called “opinion spam.” Someone wanting to convince consumers that their product is good – or not a scam when it really is – will put up a website, or submit content to an existing site, that contains favorable reviews.

How do you tell opinion spam from sincere reviews? Researchers at Cornell University say they are developing computer software that’s pretty good at it.

In 800 Chicago hotel reviews, their software was able to pick out 90 percent of deceptive reviews. In the process, the researchers uncovered some key features to help determine if a review was spam, and even evidence of a correspondence between the linguistic structure of deceptive reviews and fiction writing.

Help spot the fraudsters

“While this is the first study of its kind, and there's a lot more to be done, I think our approach will eventually help review sites identify and eliminate these fraudulent reviews,” said Myle Ott, Cornell doctoral candidate in computer science.

The researchers asked 400 people to deliberately write false positive reviews of 20 Chicago hotels. These were compared with an equal number of randomly chosen truthful reviews.

As a baseline, the researchers submitted a subset of reviews to three human judges – volunteer Cornell undergraduates – who scored no better than chance in identifying deception. The three did not even agree on which reviews were deceptive, reinforcing the conclusion that they did no better than chance.

Humans suffer from 'truth bias'

This may not be surprising, since humans don't appear very skilled at  figuring out when someone is blowing smoke. Historically, Ott notes, humans suffer from a “truth bias,” assuming that what they are reading is true until they find evidence to the contrary.

When people are trained at detecting deception they become overly skeptical and report deception too often, generally still scoring at chance levels.

The researchers then applied statistical machine learning algorithms to uncover the subtle cues to deception. Deceptive hotel reviews, for example, are more likely to contain language that sets the scene, like “vacation,” “business” or “my husband.”

Truth-tellers use more concrete words relating to the hotel, like “bathroom,” “check-in” and “price.” Truth-tellers and deceivers also differ in their use of certain keywords, punctuation, and even how much they talk about themselves. In agreement with previous studies of imaginative vs. informative writing, deceivers also use more verbs and truth-tellers use more nouns.

Not foolproof

Ott cautions that the work so far is only validated for hotel reviews, and for that matter, only reviews of hotels in Chicago. The next step, he said, is to see if the techniques can be extended to other categories, starting perhaps with restaurants and eventually moving to consumer products. He also wants to look at negative reviews.

“Ultimately, cutting down on deception helps everyone,” Ott said. “Customers need to be able to trust the reviews they read, and sellers need feedback on how best to improve their services.”

All right, pay attention a minute. Amy Winehouse died. Rupert's boys (and girls) behaved badly. JenLo may split from whomever she's married to. There's more buzz about the IMF chief and the hotel maid. It's been really hot.

But forget all that for a minute. Let's talk about something more important – your money. Where is it right now? If all of your money is currently invested in debt, then you can sleep soundly (or at least as soundly as you usually do) but if you have stocks, bonds and other investments, it's worth taking a moment out to consider that the full faith and credit of the United States may not mean much in the weeks ahead.

In the scheme of things, this is probably more important than the details of Jennifer Lopez' marital situation so let's consider the possible end of the world as we know it. Forget politics for a minute; this is serious.

If you are in the stock market, whether through individual stocks or mutual funds, consider for a moment that if Congress abdicates its responsibility, the stock market is likely to tank, losing a huge amount of its value. How will you feel if you wake up Aug. 3 to find that your IRA is now worth half what it was the day before?

Lambs to the ...

We don't like to say this, but up and down Wall Street the talk is all about how the “sheep” (the term of art for individual investors) are still sitting in equities. Financial advisors are amazed that their clients have not even called to discuss the situation.

Folks, this is not a good situation. The last time the stock market took a dive, millions of individual investors sat tight until the market hit bottom. Then they sold, taking huge losses.

Remember the credo: Buy low, sell high. Not the other way around.

If your equity holdings – stocks and mutual funds – are part of your IRA or other tax-exempt vehicle, this might be the time to move a portion into cash or a cash-equivalent. It won't cost you anything to do so, other than any brokerage fees you may incur.

Time to move?

Even if your portfolio is not tax-exempt, it may be a good idea to move at least some of your holdings out of equities. Yes, you may incur capital gains tax (the “rich person's tax” we hear so much about) but that may or may not be an issue depending on the basis of your holdings.  

Yes, you may have to pay some capital gains tax if you sell some stocks now but if the market goes south in a few weeks, you will most likely be ahead of the game.

Because this is not an investment-advisory site, we are going to ignore the whole area of equities versus bonds. Let's just say that if your retirement fund, nest egg, life's savings, investment portfolio or whatever you want to call it consists mostly of stocks, you are Humpty Dumpty right now, sitting on the wall, hoping everything turns out OK.

If you fall off the wall, it will take a long time to put you back together.

What to do

It's pretty simple. The big money has been moving into cash. That means money market funds, even certificates of deposit if you are truly risk-averse, and various bond funds.

Bonds may be good for individual investors but a U.S. government default would not do wonders for the bond market either.  It's crucial to choose the right bonds or bond funds.

We're not financial advisors so don't rely on us for specific advice. But if you don't do anything else this week, consider this: Congress is fiddling while the economy burns and your life savings (assuming you have been trying to do the right thing and save for your retirement so that you are not a drag on society and your family) are at risk. You need to think about this. And research it. And talk to your financial advisor, assuming you have one. If you don't, get one.

Do it now. Forget about Amy, Rupert and Jennifer. Focus on what matters.

The Federal Aviation Administration (FAA) has been forced to furlough more than 4,000 employees in 35 states because Congressed failed to approve a new FAA authorization bill before adjourning Friday.

For many airports around the country, it means construction projects – underway or ready to begin – are now on hold. But in a strange twist, it also means a break for air travelers.

Normally, ticket sales include an FAA tax. Without the new authorization, ticket agents will not collect that tax. That amounts to a savings of about $61 on a $300 ticket, according to AAA. Until the impasse is broken, consumers won't have to pay the tax.

Consumers who purchased tickets in advance for flights that took place after Friday were charged the tax, but may be due a refund. However, it remains to be seen if airlines will pass the savings on to passengers.

Transportation Secretary Ray LaHood assured the flying public that the partial FAA shutdown would not affect public safety. Still, he said the disruption was unnecessary.

“I’m very disappointed that Congress adjourned without passing a clean extension of the FAA bill,” LaHood said. “Because of their inaction, states and airports won’t be able to work on their construction projects, and too many people will have to go without a paycheck. This is no way to run the best aviation system in the world.”

The Republican-controlled House of Representatives declined to approve the reauthorization unless new rules were adopted to make it more difficult for FAA personnel to unionize. 

You enter a search term on Google and hit the search button. Up pops a warning message that reads: "Your computer appears to be infected. It appears that your computer is infected with software that intercepts your connection to Google and other sites. Learn how to fix this."

Graham Cluley, senior technology consultant at Sophos Security, said the first time he heard about this he suspected it was one of those clever, fake anti-virus come-ons.

It's not. After doing some checking, Cluley said he learned Google is trying to give consumers a heads-up when it detects their computers aren't fully under their control.

Diverting Google traffic

Damian Menscher, a security engineer at Google, has posted details on his blog, explaining how he discovered that infected computers were sending search traffic through proxies to the search engine.

The intention is purely profit-driven. They hackers that have infected your computer want to modify your search results to highlight money-making pay-per-click sites instead of the sites Google would normally serve up.

In all, Google estimates that a couple of million Windows PCs may be affected around the world by this particular strain of malware. Google says it has already been able to warn hundreds of thousands of computer users their devices are infected.

“Fortunately, although Google does not scan your hard drive when you search for things via google.com, it can detect the unique traffic signature from visiting infected PCs and make a pretty informed guess about your computer's health in regard to this malware strain,” Cluley said in his blog.

Providing security function

Cluley says Google wants the warning message to encourage users to update their anti-virus software, scan their computers and become more conscious of security issues.

“I think what Google is doing should be applauded - anything which warns computer users about genuine malware threats has to be a good thing,” Cluley said.

There is a danger, however, that scammers will quickly mimic the Google warning and offer a cure, which of course, will be more malware. Google, meanwhile, urges consumers to conduct searches for security software for their computers.

In the video below, Cluley notes that, in itself, can be rather dangerous.

We are often rushed and in a hurry, but you have to read what you sign. Especially when renting a car. Jeff, of Vancouver, Wash., was renting a car from Budget Rent A Car in Orlando when the issue arose.

“They offered me an upgrade but I said no, on a budget with four kids,” Jeff told ConsumerAffairs.com. “We talked, the contract ripped, and he had to reprint. He had me sign an ATM type screen with no data on it and advised me that a car had just been returned and I could have it, even though it was much nicer than what I rented. I thanked him for this.

Jeff said he ran off to catch his plane and only then, once aboard, did he look at his rental contract.

“I see I am charged an extra $350 plus tax,” Jeff said. I called and was advised that I agreed to an upgrade. I explained the counter person flim/flamed me with conversation and put it in without my knowledge after I told him I did not want to pay for an upgrade.”

The company told Jeff that he signed the contract, so there was nothing that could be done.

Fan mail

We heard from Doris, from San Luis Obispo, Calif., commenting on a recent “What's On Your Mind” segment concerning food poisoning.

“My question: Do we need to wash frozen foods when we take them out of the package?” Doris asked. “Are there some we should and others need not?”

Processed food is supposed to be prepared and frozen in a clean environment, and for the most part, it is. Also, if you are going to cook the frozen food, that will kill most bacteria that might be present. Any food that is to be consumed without cooking, whether fresh or frozen, should be thoroughly washed. If it makes you feel better to wash frozen food items before preparing them, there's no harm in doing so.

Coupon? What Coupon?

Groupon – and maybe a very tough economy - have made coupons fashionable once again. Everyone would like to save a little money on their purchase but, as Dan, of Mishawaka, Ind., discovered at Staples recently, not all coupon experiences are good ones.

“On July 15 I presented an Internet coupon to the cashier who was unable to scan the promotional coupon,” Dan told ConsumerAffairs.com. “The manager was called and she informed me that the coupon was 'a mistake.' I explained that I had met all the requirements to use the coupon and that I had traveled several miles just to be able to use it. I had not received any emails indicating a mistake.' The manager basicaly stated too bad and I left the store without making any purchase.”

Some chain stores have been leery of Internet coupons because of their global nature. Some stores, for example, operate in districts where advertising and promotion is tightly controlled. In Dan's case, this Internet coupon was clearly counter productive for Staples, as it created an unhappy consumer.

Too much information?

Diane, of Everette, Wash., is not happy about the new Facebook feature called “Happening Now.” She says her account was placed in a trial of the new feature without her permission.

“This has left my account wide open for anyone to steal information on me,” Diane said. “My private email account has been hacked, private messages are now public, not to mention the multiple issues even trying to use the site. I have had to close the Facebook account to prevent any further theft of private information. This new trial app is also giving me untold info. on other people and all their friends that I never requested or wanted.”

So, what is Happening Now? We checked in with All Facebook, which calls itself the “unofficial Facebook resource.” It says Happening Now is a new version of the news feed that displays liking and commenting activity by a user’s friends in real time. All Facebook describes the feature as “pretty slick,” but obviously not everyone is a fan.

The United States Consumer Financial Protection Bureau (CFPB) officially begins work today. The new agency is charged exclusively with protecting American consumers from predatory practices by the financial services industry.

It's rare for a federal agency to have such a single-minded assignment. Most are supposed to encourage the growth and prosperity of whatever industry they oversee while also protecting consumers, ensuring safety and so forth.

Of course, the bureau is off to a somewhat shaky start. President Obama has nominated former Ohio Attorney General Richard Cordray as its new director but when, of if, Cordray will be confirmed by Congress is anyone's guess.

Republicans have vowed to fight the nomination, scrap the agency's budget and pass new legislation that would weaken its consumer focus.

Be that as it may, there's no shortage of people with ideas on what the agency should do now that it has taken off the training wheels.

The National Consumer Law Center says there are ten things the bureau can and should do right now, using its existing authority:

1. Mortgages

Stop mortgage companies from charging illegal fees, keeping sloppy records of what people owe, forcing homeowners into overpriced insurance, or rushing to foreclose before considering home-saving options.

Authority: Truth in Lending Act (TILA), Real Estate Settlement Procedures Act.

2. Overdraft and Bank Fees

Stop banks from tricking people into incurring overdraft fees, help consumers get the cheapest overdraft coverage, and provide clear information on bank fees.

Authority: Electronic Funds Transfer Act (EFTA), Truth in Savings Act (TISA), TILA.

3. Internet and Bank Payday Loans

Stop 400% internet and bank “account advance” payday loans from grabbing consumers’ wages, Social Security or unemployment benefits before families pay food or rent.

Authority: EFTA.

4. Prepaid Cards

Protect prepaid debit cards, a growing but unregulated bank account substitute, from identity theft, bank errors and hidden fees.

Authority: EFTA, TISA.

5. Credit Cards

Get inside the books of credit card companies to make sure they are not charging illegal fees or rate increases and help consumers shop for the best card without back-end tricks and traps.

Authority: TILA.

6. Credit Reports

Force the credit bureaus to clean-up error-plagued credit reports and  respond to consumers trying to fix mistakes.

Authority: Fair Credit Reporting Act.

7. Student Loans

Help students avoid expensive student loans when cheaper aid or loans are available.

Authority: TILA.

8. Auto Loans

Prohibit kick-backs to auto dealers who put consumers, especially minorities, in more expensive loans and stop bait-and-switch tactics.

Authority: Equal Credit Opportunity Act, TILA.

9. Debt Collectors and Debt Buyers

Go after debt collectors who make illegal threats, harass people for debts they do not owe, and pursue zombie debt long after it expires.

Authority: Fair Debt Collection Practices Act.

10. Money Transfers

Ensure that consumers who are transferring money across the country or across the world know exactly what the transfer will cost and how much their family will receive.

Authority: EFTA.

It used to be that payday loans – the legal equivalent of loan-sharking – were something you got on the Internet or from some hole-in-the-wall storefront.

But now big banks are getting into the business. And just like the loans made by their shadier cousins, the payday loans made by banks carry sky-high interest rates — an average 365 percent APR — and, though marketed as short-term debt, regularly lead borrowers into long-term debt, a new study finds.

The report from the Center for Responsible Lending finds that, on average, a bank payday loan is repaid within 10 days, eats up 44 percent of a borrower’s next deposit, and often creates the need for a subsequent loan.

As a result, borrowers stay in debt an average of 175 days, paying over $900 in interest to borrow $500 for less than 6 months.

The study also found that nearly 25 percent of  these payday loans went to Social Security recipients, who were 2.6 times as likely to have used this type of loan compared with other customers. A 365 percent APR worsens financial challenges facing seniors living largely on government benefits, even as more affordable loan products could ease the situation for many.

Loaning cheap money at high rates

Banks are offering these triple-digit interest loans even as they enjoy record-low rates to borrow from the Federal Reserve, unlike smaller payday lenders who generally are in debt to – you guessed it – the big banks, who are only too happy to keep the payday loan industry afloat.

The features and impact of payday loans offered by banks make them the same as payday loans offered by non-banks. Seventeen states restrict payday loans, and a federal law curbs their availability to military families. Yet bank regulators allow banks to evade these restrictions.

“Banks should not be above state and federal efforts to protect consumers from high-cost loans,” said Center for Responsible Lending president Mike Calhoun. “Bank regulators, particularly the Office of the Comptroller of the Currency and Federal Reserve, should stop banks from making payday loans.”

The Consumer Financial Protection Bureau, which formally goes into operation today, should quickly assume the job of overseeing large financial institutions to police against predatory products, Calhoun said.

He said one of the CFPB’s first tasks should be to collect data from banks on the use and impact of payday loans, to make that data public, and to use its new authority to halt this harmful product.

A federal court has ordered Swish Marketing Inc. to pay more than $4.8 million for tricking hundreds of thousands of payday loan applicants into paying for an unrelated debit card.

The Federal Trade Commission (FTC), which brought the complaint against Swish Marketing, Inc., said it is closely monitoring payday lending and other financial services to protect financially distressed consumers.

The FTC charged that Swish operated websites advertising short-term, or “payday,” loan matching services that purportedly matched loan applicants with lenders. The websites included an online loan application form that tricked online loan applicants into unknowingly ordering a debit card.

No means yes?

On many sites, clicking the button for submitting loan applications led to four product offers unrelated to the loan, each with tiny “Yes” and “No” buttons. “No” was pre-clicked for three of them; “Yes” was pre-clicked for a debit card, with fine-print disclosures asserting consumers’ consent to have their bank account debited.

Consumers who clicked a prominent “Finish matching me with a payday loan provider!” button were charged for the debit card. Other websites touted the card as a “bonus” and disclosed the fee only in fine print below the submit button. As a result, consumers were improperly charged up to $54.95 each.

In August 2009, the FTC charged Swish Marketing and VirtualWorks LLC, the seller of the debit card, and their principals with deceptive business practices. In April 2010, the FTC added allegations that Swish they sold consumers’ bank account information to VirtualWorks without the consumers’ consent, and that the company principals were aware of consumer complaints about the unauthorized debits.

The court order announced today requires Swish Marketing to pay more than $4.8 million and bans it from marketing any product with a “negative-option” program, in which a consumer’s silence or failure to reject a product is treated as an agreement to make a purchase.

The order also requires the company to obtain consumers’ informed consent before it can use their personal information collected for a particular purpose for any other purpose or by a different entity, and bars the company from:

• misrepresenting material facts about any product or service, such as the cost or the method for charging consumers;

• misrepresenting that a product or service is free or a “bonus” without disclosing all material terms and conditions;

• charging consumers without first disclosing what billing information will be used, the amount to be paid, how and on whose account the payment will be assessed, and all material terms and conditions; and

• failing to monitor their marketing affiliates to ensure that they are in compliance with the order.

The summary judgment was entered in the U.S. District Court for the Northern District of California, San Jose Division.

The Federal Trade Commission is mailing 450,177 refund checks worth almost $108 million to homeowners who were allegedly overcharged by Countrywide Home Loans, Inc.

As part of the FTC’s efforts to protect financially distressed homeowners, the FTC reached a settlement with Countrywide last year over allegations that the company collected excessive fees from borrowers who were struggling to keep their homes.

“It’s astonishing that a single company could be responsible for overcharging more than 450,000 homeowners,” FTC Chairman Jon Leibowitz said. “Countrywide’s unconscionable behavior harmed American consumers on a massive scale and we are proud to be getting every single dollar back to hundreds of thousands of struggling consumers who can least afford to lose the money.”

The FTC’s June 2010 settlement order required Countrywide, which is now owned by Bank of America, to pay $108 million to be used for refunds and barred the company from taking advantage of borrowers who have fallen behind on their payments.

The refunds are being distributed to consumers whose loans were serviced by Countrywide between January 1, 2005, and July 1, 2008, and who were subject to the company’s allegedly unlawful practices.

Excessive fees

According to the FTC, homeowners who were in default on their loans were charged excessive fees for services such as property inspections, lawn mowing, and other services meant to protect the lender’s interest in the property.

Rather than simply hire third-party vendors to perform the services, Countrywide used subsidiaries to hire the vendors. The subsidiaries allegedly marked up the price of the services charged by the vendors – often by 100 percent or more – and Countrywide then charged the homeowners the marked-up fees. The FTC complaint alleges that the company’s strategy was to increase profits from default-related service fees in bad economic times.

Also, in servicing loans for borrowers trying to save their homes in Chapter 13 bankruptcy proceedings, the FTC alleged that Countrywide made false or unsupported claims to borrowers about amounts owed or the status of their loans, and added fees and escrow charges to their mortgage accounts without notice.

An administrator working for the FTC will send out refunds to consumers who were overcharged for property inspections, maintenance services, title searches, and foreclosure trustee services, and to those who were in Chapter 13 bankruptcy, and were charged fees or escrow charges without being notified.

Consumers who receive the checks should cash them by September 19, 2011. The amount of each check will vary from less than $500 to as much as several thousand dollars. The FTC never requires consumers to pay money or provide information before redress checks can be cashed.

Former Countrywide customers with questions should call the redress administrator, Gilardi & Co., LLC at 1-888-230-3196 or visit the FTC’s Countrywide settlement webpage.

The new “health” fad, judging by Internet sites and Facebook postings, is raw egg drinks and shakes, touted as “primal and powerful.”

You don't have to look hard to find recipes suggesting uncooked eggs be blended with vanilla or avocado for a tasty, healthy snack.

Don't believe it for a minute, says Suzy Weems, Ph.D., a national food expert and chair of Baylor University’s family and consumer sciences department.

“Under no circumstances eat a raw egg,” said Weems, a registered dietitian and a past chair of the American Dietetic Association’s legislative and public policy committee.

Salmonella danger

The danger, of course, is Salmonella. While only a fraction of a percentage of eggs are contaminated, virtually every egg has had some contact with salmonella. Because the bacteria can cause disease — including food poisoning accompanied by fever, diarrhea or dehydration — it’s best to be proactive.

It was just last year that a half billion eggs were recalled in the U.S. because of a Salmonella risk. More than 1,000 people got sick from eating the contaminated eggs. The eggs were eaten either raw or under-cooked, since cooking eggs destroys the salmonella germs.

Though some websites may make it sound like it's the latest and greatest, extolling the virtues of raw eggs is nothing new. In the 1890 bodybuilding promoter Bernarr Macfadden advocated them. Modern proponents contend that heating the egg changes its chemical shape and destroys many of its nutrients and proteins.

Not so, says Weems.

“The protein profile in eggs is used as the standard for all other proteins, because it’s complete enough to allow baby chickens to develop based on the nutrients. It’s that good,” Weems said. “But we don’t need all of that. If you cook it, it’s safe, the protein is still there, and it makes it easier to digest.”

Don't eat raw cookie dough, either

Relatively few people would be tempted to wolf down a raw egg, but those who love eating raw cookie dough need to be aware that it, too, is risky because it contains uncooked eggs, she said.

“There are a lot of old recipes floating around that call for raw eggs, but people need to realize if the recipe is based on one from when Grandma gathered her eggs, then Grandma gathered them locally. There wasn’t much of a time lag,” Weems said. “Now, eggs are much more likely to sit for a time before being used, and that gives salmonella the chance to grow.”

Risk of salmonella contamination lessens with eggs from cage-free, organically fed chickens, and salmonella generally is not life-threatening, Weems said. Most at risk are children, senior citizens, pregnant women and people with compromised immune systems.

You don't hear much about timeshare foreclosures, but it should come as no surprise that owners walk away from these arrangements. However, we've heard from someone who says she made what she thought was her final payment on her Diamond Resorts International timeshare, only to be told her unit is going to foreclosure.

“They stated that my account had a balance of $526.82, which included a late fee of $25.00 and interest of $34.14,” Kristine, of Northbridge, Mass., told ConsumerAffairs.com. “I explained that this had all been paid except for the $100.00 check that was returned to me. They looked at the records on my account and said they did not receive five checks that I had in my bill pay account.”

But Kristine said she called her bank and obtained copies of the five cancelled checks. Kristine said she was told it was too late, the unit was already in foreclosure. If Kristine has the cancelled checks, and there are no other issues, it seems strange that there is no way to stop the foreclosure, whose timing seems a little suspicious, to say the least. It doesn't appear that Kristine will get to the bottom of this without a lawyer.

Power of persuasion

Pam, of Gulf Breeze, Fla., has had a run of bad luck with Maytag dishwashers.

“I purchased a Maytag Dishwasher in Jan 2010,” Pam said. “In Jan 2011, the electronic control panel failed. It was still under the 1 yr warranty so Maytag had it replaced. The repairman says there is a problem w/ steam/water getting into their front panels.

One month later, Pam said the second electronic control panel failed. She said Maytag replaced it again "as a courtesy."

“One month later, the third electronic control panel failed,” Pam said. “Maytag refused to honor the replacement of the third control panel even with threats of litigation. I wrote to Home Depot who had sold the unit. They contacted their Maytag buyer who replaced the dishwasher with a new one and installed it free of charge.”

Remarkably, Pam persuaded Maytag to repair an out-of-warranty unit and persuaded Home Depot to pay for an install a new dishwasher for her. She's one savvy consumer, in our book.

Troublesome transfer

For-profit colleges are feeling some heat for their costs and their aid and loan policies. John, of Leesburg, Va., doesn't have any problem with that, but wishes Strayer University, which he attended, would be a little more responsive to what he sees as a simple request.

“In the beginning of May, I sent through the mail a request to have my transcript sent to a college along with a $5 check,” John told ConsumerAffairs.com. “The college I wish to attend never received the transcript. I also never received any notification that there was a problem. I called several times and spoke to people who promised to get back to me and never did. In June I went down to the admissions office with my grade statements, which they scanned in and created a case number. I paid another $5 in cash. I have called to find out the update on the case and no one has replied back. It is now July.”

John points out he spent good money to earn credits at Strayer, and he will have to spent more if he can't transfer them to another school.

Foot in the door

From the earliest days of the republic, peddlers have gone door to door selling their wares. But Roger, of Carmi, Ill., was upset when an insurance agent knocked at his door this week.

“Tuesday, July 19, a man and a woman in a Cadillac pulled up in my drive way wanting to talk to me about insurance,” Roger said. They were trying to peddle or talk to me about insurance. No business card was presented or name given to me. When I asked what his business was at my home unannounced, he said I looked busy and would contact me later. I promptly put up no soliciting signs. My security cameras may have captured his license plate, I hope. I am trying to contact the company about this tasteless way of selling door to door.”

It certainly isn't against the law to sell door to door (Roger said he was tempted to call the police), but it goes without saying you shouldn't buy insurance that way.

A federal judge today approved a settlement of antitrust charges against Visa and Mastercard that either will or won't increase competition among credit card issuers, depending on who you talk to.

U.S. District Judge Nicholas G. Garufis said he found the "public interest is best served by approving the proposed final judgement." But American Express, which is not a party to the settlement, said the settlement will allow Visa and Mastercard to "pay merchants to discriminate against American Express."

But American Express said the settlement will create less, not more, competition.

All three credit card issuers had been sued by the U.S. Justice Department and 18 states, claiming that the rules the issuers had in place prohibited retailers from steering customers to lower-cost payment options.

The rules also prohibited merchants from telling customers about the transaction fees charged to the merchant by the credit card companies.

Under the settlement, Visa and MasterCard are required to allow merchants to offer discounts to customers who pay with other credit cards that charge lower merchant fees as well as to customers that pay with cash or other alternative payment forms.

Comments submitted to the Court from trade groups, retailers associations and individual merchants were "overwhelmingly positive if not enthusiastic" in support of the settlement, Judge Garufis noted.

The U.S. Department of Transportation (DOT) has shifted into high gear in its drive to get unsafe buses and trucks off the road. DOT said today that in the last two years, it has issued as many imminent hazard orders placing unsafe bus and truck companies out of service as in the previous 10 years combined.

The Federal Motor Carrier Safety Administration (FMCSA) has cracked down on unsafe carriers through surprise inspections, full compliance reviews, and enforcement actions.

Between 2000 and 2009, FMCSA issued a total of 14 imminent hazard orders placing unsafe carriers out of service. In just the last two years, FMCSA has already issued another 14 imminent hazard orders to take carriers that pose an immediate risk to passengers off the road. For example, last month the Department of Transportation issued an imminent hazard order to a Michigan company found to be transporting passengers in luggage compartments, at great risk to passengers.

“From Day One, I have pledged to put public safety above all else, and we will continue to take action when we see carriers placing passengers at risk,” said U.S Transportation Secretary Ray LaHood.  “We have seen the tragic consequences of unsafe practices – whether it’s ignoring fatigue regulations, providing inadequate driver training, or failing to conduct the proper maintenance of a bus or motorcoach. We continue using all of the tools at our disposal to get unsafe carriers off the road and hope that Congress will act on our proposal to provide us with the necessary authority to expand our safety oversight.”

In the past four months, FMCSA has issued eight out-of-service orders.  FMCSA issued these orders immediately following safety investigations that found the carriers and/or the drivers to be in such substantial non-compliance with federal safety regulations as to pose an imminent hazard to public safety.

The eight imminent hazard out-of-service orders in 2011 have been issued to seven interstate motorcoach companies:  two each based in Georgia and Pennsylvania, and one each in Michigan, Mississippi and North Carolina.  One order was issued to a Tennessee-based truck driver. 

“I’m proud of FMCSA’s efforts to crack down and take action on unsafe interstate bus and trucking companies,” said FMCSA Administrator Anne S. Ferro.  “Our safety investigators, inspectors and state partners will continue demanding that motor carriers and their drivers adhere to safety requirements.  While most of the industry operates safely, I also look forward to working with Congress to add new tools to prevent unsafe companies and drivers from operating.”

A parent or loved one who has begun to have problems with balance could be experiencing early indicators of Alzheimer's disease, according to researchers at Washington University School of Medicine in Saint Louis.

The researchers reported their findings this week at the Alzheimer’s Association International Conference on Alzheimer’s Disease in Paris.

They found that study participants with brain changes suggestive of early Alzheimer’s disease were more likely to fall than those whose brains did not show the same changes. Until now, falls had only been associated with Alzheimer’s in the late stages of dementia.

No obvious signs of Alzheimer's

“If you meet these people on the street, they appear healthy and have no obvious cognitive problems,” said lead author Susan Stark, PhD, assistant professor of occupational therapy and neurology. “But they have changes in their brain that look similar to Alzheimer’s disease, and they have twice the typical annual rate of falls for their age group.”

About one in three adults age 65 or older typically fall each year. But in the 18 participants with high amyloid levels in the brain, a hallmark of Alzheimer's disease, two-thirds fell within the first eight months of the study. High levels of amyloid in the brain were the best predictor of an increased risk of falls.

“Falls are a serious health concern for older adults,” Stark said. “Our study points to the notion that we may need to consider preclinical Alzheimer’s disease as a potential cause.”

Inherited Alzheimer's

In an unrelated study at the university, researchers found that inherited forms of Alzheimer's may be detectable as many as 20 years before memory problems surface. The discovery, they say, may lead to much earlier diagnosis, which could slow the impact of the progressive disease.

“We want to prevent damage and loss of brain cells by intervening early in the disease process — even before outward symptoms are evident, because by then it may be too late,” said Alzheimer’s researcher and physician Randall Bateman, MD, of Washington University School of Medicine in St. Louis and an associate director of the Dominantly Inherited Alzheimer’s Network (DIAN), an international study of inherited forms of Alzheimer’s.

While some consumers complain that they get no respect from their credit card company, credit card companies are doing everything they can to please another group of consumers – those who maintained great credit scores during the economic turmoil of the last two years.

Low interest rates don't always mean much to this group because, in most cases, they don't carry balances on their credit cards. They pay it off each month.

Instead, credit card companies compete with one another to offer the best and most enticing rewards programs, hoping to lure the most credit-worthy consumers with gifts, cash and airline miles. If you happen to fall into this group, you basically have your pick of rewards cards. But which one should you choose?

Card Hub, a site that analyzes credit cards, says the offers have gotten better and the rewards, well, more rewarding. The site has issued a list of what it says are among the best rewards credit cards:

• Southwest Airlines Credit Card – Users get 50,000 bonus points (worth over $800 in Wanna Get Away Fares) after your first purchase. But it comes with a $99 annual fee.
• Chase Sapphire Preferred Card – Get $625 worth of airfare or hotel accommodations, or $500 cash back when you spend $3,000 during the first three months. There is no annual fee for the first year, but you should expect to pay one after that.
• Capital One Venture Rewards – Customers receive $250 in travel expenses when they spend $1,000 in the first three months and the annual fee is waved the first year.
• New Ink Cash Business Card – Offers $250 cash back to business owners who spend $5,000 in the first three months. Perhaps the biggest reward, no annual fee.
• Chase Freedom Visa – You can earn $200 cash back after spending $500 in the first three months and there is no annual fee.
• British Airways Credit Card – Earn 50,000 miles, enough for a free transatlantic flight, if you spend $2,500 in the first 90 days. The card carries a $95 annual fee.

Annual fees

The downside to rewards credit cards is that most of them charge an annual fee. From the credit card company's perspective, if they are catering to customers who pay little or no interest because they don't carry a balance, and the company is handing out rewards, it needs to charge the fee if the account is going to be at all profitable.

If you're a consumer in this sought-after group, perhaps the question you have to ask yourself is, do you really need a rewards card at all? If you routinely put thousands of dollars in charges on your card each month, then the rewards you'll rack up might be worth an annual fee.

However, if you don't use your credit card all that much, a large credit line, flexible terms and no annual fee are probably more important than any enticing rewards.