Current Events in September 2011

The Pennsylvania Attorney General has reached a civil settlement agreement with SAS Group, Inc., a New York-based business that sells a wide range of consumer products through infomercials and over the Internet.

The settlement resolves allegations that the company promoted products as “free” when in fact shipping and handling fees often exceeded the value of the products.

On its Web site, SAS Group says its "worldwide network of experienced professionals makes us uniquely qualified to create and effectively execute programs that promote and sell products 'ON TV', on the internet and at retail, through credit card syndication and direct response print advertising."

The company's product line-up includes many names well-known to late-night TV viewers including Simoniz car wax, the Buttoneer sewing aid, Leather Miracle tear repair and many others.

Credit card info

Attorney General Linda Kelly said that consumer orders were placed over an automated phone system, which took credit card information before they were provided with a total purchase price.

After the credit card information was entered, consumers were allegedly told that they would have to pay additional shipping and handling fees. Consumers were not able to cancel their order nor were they able to disconnect the call without being charged for the items they inquired about.

Kelly said that consumers who stayed on the line were offered an array of supplemental “free” promotional products. However, SAS charged shipping and handling fees for those free products that far exceeded the actual cost for shipping and handling and in many instances reflect the actual cost of the item.

Two boxes

Additionally, SAS shipped items in two boxes, when the items would have fit in one box, charging consumers double shipping fees.

Kelly said that SAS has agreed to pay restitution to consumers who filed complaints with the Attorney General’s Bureau of Consumer Protection, pay civil penalties and fines. SAS also agrees to fully comply with Pennsylvania’s Consumer Protection Law.

Consumers who believe they are entitled to restitution in this case should file a complaint with the Attorney General’s Bureau of Consumer Protection within 60 days. Complaints filed online at www.attorneygeneral.gov or by calling the Bureau of Consumer Protection Hotline at 1-800-441-2555.

The Attorney General of Nevada, Catherine Cortez Masto, is turning up the heat in her battle with Bank of America and its subsidiary, Countrywide Mortgage.

Masto recently requested the court's permission to amend an earlier complaint to include additional claims relating to mortgage origination and servicing.

The stakes are high. Nevada is among the states that have been hardest-hit by the default and foreclosure epidemic and slumping home prices have hit the state's econony hard.

Masto says criminal charges are likely coming to the industry soon, which could provide more ammunition for her foreclosure fraud case.

"We’re in the middle of investigations right now looking at documents on homes that have been foreclosed that have been forged and materially altered," she said in an interview with VegasInc.com. "There are players involved in this process who are intentionally violating the law to make a quick buck. That always seems to be the impetus behind this type of crime."

Masto said it's not just the big banks and lenders who are being investigated.

"There are a lot of players in this process—from notaries to third parties to those hired by the servicers to prepare the documents and law firms to move through that process. I’ll be honest with you: We’re starting at the bottom right now," she said. 

Consent judgment violated

Masto's latest filing argues that Countrywide has violated a 2009 consent judgment that sought to resolve Countrywide's liability for fraudulent mortgage lending, including:

• failing to provide loan modifications to eligible borrowers;
• failing to make decisions on loan modifications, on average, within sixty days of
receiving requests from Nevada consumers; and
• initiating or proceeding with foreclosures while consumer’s modifications requests were pending.

In addition, the amended complaint contains new allegations that ank of America violated the consent judgment when it allegedly: 

• increased consumers’ interest rates and monthly payments, even though the consent judgment allows only modifications that decrease consumers’ interest rates, actually leaving consumers worse off.
• required consumers to provide extensive documentation – including pay stubs, tax returns, and sworn affidavits -- to qualify for modifications, despite the consent judgment’s promise of streamlined modifications.

"After two and a half years of lost implementation – of borrowers denied modifications, discouraged by repeated and futile efforts to obtain help, or already subject to foreclosure – the state no longer can get the benefit of its original settlement with Defendants," Masto said in a press release.

Original claims

Upon terminating the consent judgment, the state would be released to pursue its original claims against Countrywide for consumer fraud in originating, marketing and servicing mortgage loans.

The complaint alleges that Countrywide failed to disclose and affirmatively misrepresented that loans like its Payment Option Adjustable Rate Mortgages (“Option ARMS’) and Hybrid Adjustable Rate Mortgages (“Hybrid ARMS”) were originated at low teaser raters, in effect only for a short time, and that payment on these loans would increase dramatically – often more than double the original rate – when the teaser period expired or the loans reset or recast.

In addition, Countrywide did not disclose that consumers who made only a minimum payment, based on that low teaser rate, would experience negative amortization, which would cause them to fall deeper in debt.

Home prices are down 50 percent or more from their bubble highs in some markets. Mortgage rates are at historic lows. Rents are skyrocketing in some areas.

Sounds like a recipe for a rebound in the housing market, doesn't it? Only it isn't. Home sales remain in the gutter and more and more consumers, who insist they can afford to buy a house, say they simply can't get a mortgage.

“I have been trying to buy a home in the state of Florida for at least a year and never got past an accepted contract,” Anthony, of Kingston, Wash., told ConsumerAffairs.com. “During that time I have been pre-qualified two to three times by Bank of America.

That was then, this is now

Anthony says he is a long-time Bank of America customer, having paid off two previous mortgages. He said the bank had even contacted him in the past to see if he were interested in applying for a loan. With a credit score right around 800 and pension income, Anthony would seem to be the kind of applicant banks would compete for.

“On August 12, 2011 I finally received an accepted contract, contingent on loan approval,” Anthony said. “This is when my problems began. The unanswered e-mails and unreturned phone calls are too many to list. I received an e-mail stating they needed an extension on the Sept 15, 2011 closing date, then they told me that and they needed a full 30 days to close. I went to seller to get extension and got it. I faxed it to them and upon receipt by them was immediately told they couldn't close on the 19th. Not only that, they couldn't give me a new closing date.

Good start goes downhill

Paul, of Miami Lakes, Fla., says the loan process with Quicken got off to a promising start. After that, however, he says the underwriters began asking for what he says was “weirder and weirder documents.”

“Finally, two weeks prior to closing, they refused to make the loan,” Paul said. The reason? A W-2 and a 1040 extension form weren't good enough to prove my income. They wanted the filed 1040 or nothing! Their underwriters seemed unable to form common-sense opinions on numerous prior documents, this one just being the latest. I have a 760+ credit score, but that wasn't good enough for underwriting.”

Building on this theme, Mary, of Orland Park, Ill., reports PNC Bank underwriters have demanded what she calls “unnecessary documentation which have no bearing on securing this loan.” Mary and her husband are no strangers to real estate transactions. She says the one with PNC was for a second home.

“My husband's credit score is over 800 and mine is over 750,” Mary told ConsumerAffairs.com. “I feel as if we are being harassed by the bank and almost discouraged from borrowing money when we can clearly afford to do so.”

The old lending standards would do

Lawrence Yun, chief economist for the National Association of Realtors, has pleaded with lenders to make more loans. He says if banks would simply return to the lending standards in place before the housing bubble, home sales would surge by 15 percent.

Why don't they? The reasons may not be so simple. Industry officials say loan underwriters are being overly cautious out of fear of being sued for mortgages that default. Like generals fighting the last war, banks appear to be qualifying only top applicants for top properties, out of fear anything less would set off another housing crisis.

The lenders say their new standards are working – for them. They point proudly to the fact that fewer than two percent of the mortgages written in 2009, for example, have gone to foreclosure, compared to about 11 percent for loans made in 2006.

While that is indeed a good record, Realtors say these increasingly tough standards are choking off the money supply the housing industry desperately needs to recover.

Here's another consumer who reports a delivery problem when using an online florist.

“I placed an order on September 11 for flowers to be delivered for a birthday on September 19, Olga, of Baton Rouge, La., told ConsumerAffairs.com. “There was more than enough time for the order to be filled. However, the florist did not receive the order until the afternoon of September 19, after deliveries were made. The owner is dropping the flowers off on her way home. When Just Flowers was contacted,they only had excuses and justifications for their incompetence. No apologies!They are in the same time zone as the delivery!”

While many online florists do a good job of filling orders, it's not uncommon for orders to fall through the cracks, and if it's your order, it's a big deal. It may take a little extra effort to locate a local florist in the area you want to make a delivery, but your chances of having a smooth, trouble free delivery might be better. In Olga's case, the local florist went above and beyond the call of duty to help a customer. She would have been better off dealing with her in the first place.

Not happy with the response

The commercials for Progressive Insurance feature the always helpful Faye, but Otto, of Miami, Fla., says Faye is nowhere to be found when he needs her.

“My wife's car was hit by another vehicle and she called the police,” Otto said. “The other person was guilty and it was written in the police report. They don't care. Tomorrow is going to be a week since we called a Progressive representative and "there is nothing they can do at the moment". We left the car at the body shop because there is a noise in the front wheel but they can't even send the adjuster. They can't pay for the car rental either.”

It might be time for Otto to have a chat with an attorney, in case this turns ugly.

Scary experience

Chantix, a drug to help people quit smoking, has a number of potential side effects, including severe depression. Justice, of Charlotte, N.C., has the following scary experience to report:

“I started taking Chantix following a bout with pneumonia in April 2008,” Justice told ConsumerAffairs.com. “I was warned about increased depression and told to notify my doctor if depression worsened as I am bipolar. After 21 day of taking Chantix I went 92 consecutive days with zero sleep - literally none! On night four at 1:10 AM I had a very violent seizure. I quit breathing completely and my husband had to do rescue breathing to get me back. I was taken to the ER where at 5 AM I had another violent seizure and then another at 7AM. I was put on Dilantin and luckily I have had no further seizures. I have been left with a permanently fogged brain. I was an adult A student headed to graduate school when this occurred. Now, I lost four years of education. I can no longer access the information. My Name Compartment is fried, as I refer to it. I have panic attacks everyday all day. My neurologist did tests and I have no underlying seizure disorder. I am unable to leave my home and basically barricaded myself indoors. I lost all desire to communicate with anyone outside of my trusted circle of family and friends. I have also developed multiple allergic reactions to medications I could once take to control my bipolar and to control pain following surgery. Now, the only pain medication I can take is hydrocodone for surgery! Oh boy try that people! I used to only have one bout of depression a year at best and now I have them monthly.

Justice claims Chantix has ruined her life. And to top it off, she says, she still smokes.

John Deere is recalling about X300, X300R and X304 series tractors.  The cooling fan (A) installed on top of the front mounted Kawasaki engine in the lawn tractor can break. If the cooling fan is not operational, the engine can overheat causing the surrounding plastic to melt, creating the risk of fire and serious injury.

There have been 163 reported failures, including 83 reports of engine melting or engine fires and one report of a minor burn injury following a fan failure fire.

This recall involves John Deere X300, X300R and X304 Select Series™ Lawn Tractors with Kawasaki FS541V engines manufactured between September 20, 2010 and July 21, 2011 within the following serial number ranges listed below. The model number is on both sides of the tractor hood, and the serial number can be found on the machine frame near the front right tire.

1M0X300B++M180001 thru 1M0X300B++M180600
1M0X300C++M180001 thru 1M0X300C++M208330
1M0X300E++M180001 thru 1M0X300E++M180718
1M0X300F++M180001 thru 1M0X300F++M180888
1M0X300G++M180001 thru 1M0X300G++M183700
1M0X300H++M180001 thru 1M0X300H++M180145
1M0X300J++M180001 thru 1M0X300J++M180106
1M0X304A++M180001 thru 1M0X304A++M184936
1M0X304B++M180001 thru 1M0X304B++M180696
1M0X304C++M180001 thru 1M0X304C++M180054

John Deere dealers sold the lawn tractors in the U.S. from September 2010 to August 2011 for between about $3,000 and $4,000.  They were made in the United States.

Customers should stop using the mowers immediately and contact a John Deere dealer to make arrangements to have the engine cooling fan replaced. All registered owners of the recalled mowers will be directly notified by John Deere.

For additional information, contact Deere & Company at (800) 537-8233 between 8 a.m. and 6 p.m. Monday through Friday and between 9 a.m. and 3 p.m. on Saturdays ET or visit the firm’s Web site at www.johndeere.com

For more than 15 years, researchers, reports and policymakers have been able to access an online database that anonymously tracks physicians’ records of malpractice, medical errors and medical discipline.  

But the U.S. Department of Health and Human Services (HHS) abruptly took the database down recently, without offering an explanation or saying when or if it will return. 

In a letter sent to the agency, Public Citizen says the database should be restored immediately. 

“We find it ironic that at a time in which other parts of HHS are becoming more transparent and even proposing to make detailed ratings of health care entities and providers available to the public, HRSA appears to be restricting access to information mandated by law to be made public,” said Dr. Michael Carome, deputy director of Public Citizen’s Health Research Group. “The database has been very valuable to Public Citizen, researchers, scholars and writers. HHS should restore it immediately and keep it up to date.”

The National Practitioner Data Bank (NPDB) Public Use Data File has been the only comprehensive national source of reliable data on medical malpractice and other matters reported to the NPDB.

The public use file, which is updated quarterly, doesn’t contain physician names or even exact malpractice payment amounts, dates of payments or actions, practitioner ages or years of graduation. Rather, all these variables are provided only in broad ranges in the system.

Public Citizen and other organizations have used it to analyze trends in malpractice payments, to identify and report to HRSA potential compliance problems with reporting to the NPDB, and to identify state medical boards that failed to discipline physicians that had been disciplined by hospitals for serious infractions, such as being an “immediate threat” to health or safety of patients.

Consumers often complain that stores make it seem they are getting a bargain when they really aren't. In New York, state Attorney General Eric Schneiderman said a two-year investigation of Michaels Stores, Inc., provides a case in point.

Schneiderman says his probe showed Michaels engaged in deceptive advertising practices by misleading consumers into thinking they were receiving steep discounts over a two year period. As part of a settlement with the state, the company will change its advertising practices and contribute $1 million in art and craft supplies to public schools throughout New York State, in addition to $800,000 in civil penalties.

"For years, Michaels duped consumers into thinking they were receiving huge discounts, when in fact, they were simply paying the regular store price," said Schneiderman. "Through deceptive advertising practices, this company violated the law and took advantage of hardworking consumers trying to save money.  In addition to the civil penalties, the company is paying for their actions by providing $1 million in school supplies for hundreds of school districts statewide."

Price confusion

The price of items in the store, compared to those on the tags, is an issue for at least one Michaels customer.

I picked up a picture that was in front of a $5.00 sign but it had a price tag on it for $9.99,” Renae, Chester, S.C., told ConsumerAffairs.com. “At the register I asked the cashier to make sure it was $5 before I bought it. It scanned for $19.97. Then she scrapped off the $9.99 sign and left after telling me what a great deal that was for $20 because it was originally a $60 picture.”

Michaels is well known as a specialty retailer of arts, crafts, scrapbooking and custom framing. Its 48 stores throughout New York State are frequented by parents, students and teachers to purchase school supplies, Schneiderman said.

As a result of the Attorney General's settlement, Michaels will be required to give back to the public schools in communities which their stores are located. The settlement will benefit as many as 724 school districts throughout the state.

50 percent off...of what?

The investigation began in 2009 when the Attorney General's office began tracking the 50 percent off marketing materials where Michaels advertised its "Custom Framing" as a sale product for at least 104 consecutive weeks. The law prohibits sales that are never ending.

Investigators throughout the state collected newspaper flyers, online flyers, in-store banners and signs advertising the custom framing. Michaels advertised in at least one of these forms every day for two years. The ads stated that custom framing was either at least 50 percent off or a certain dollar amount off.

Political candidates and incumbents offer a never-ending menu of tax cuts, tax increases, jobs programs, financial stimuli, less regulation, more regulation and governmental "reform."

But what's most needed to get the economy moving again is consumer confidence, according to Mortgage Bankers Association President David Stevens, who blames the media for a relentless drumbeant of negative headlines.

"You don't see stories about good buying opportunities out there.  You only see stories about foreclosures," Stevens said at a recent economic conference sponsored by the Northern Virginia Association of Realtors.  "Actually, real delinquences are lower than they were a year ago but you don't see that in the headlines."

Today's delinquency rate is 8.44 percent versus 9.85 a year ago and the foreclosure rate is 4.43, down from 4.57, with 51% of all foreclosures in just five states, he said.  

Demographics

Location, location, location is the traditional mantra of the real estate business but demographics, demographics, demographics should be the second verse, according to Stevens, who said a massive population boom will create a "huge shortage of housing" over the next few decades.

"The Echo Boom, born from 1981 to 1991, is going to cause an extraordinary demand for homes.  They will be more urban, more Latino and will marry later but it is a huge generation and its impact with be huge," Stevens predicted.

Whether that generation winds up renting or buying will be a major factor in the nation's future economic well-being, he said.

If government regulations or onerous lending standards result in homebuyers needing a 20% down payment, "That's nothing more than saying you can buy a home if you're rich.  If you're not, you're going to a renter for life," Stevens said.

Blame game

While the housing bubble collapse was indeed traumatic, Stevens said there's plenty of blame to go around; while the financial services industry wrote too many bad loans, it wasn't the only villain. 

Consumers made mistake, he said:  "Consumers who thought homes were a piggy bank; occupancy fraud, where consumers say they're going to occupy a house when in fact they're going to rent it; and also income fraud."  That behavior was caused by consumers chasing 10 percent annual appreciation rates, he said.

Lawsuits and onerous regulations are now stymying the recovery, along with lack of consumer confidence, Stevens cautioned.

"There's a never-ending pile of lawsuits against anybody who can be sued," contributing to a lack of available credit, Stevens said.  "There's so much concern about litigation that lenders are putting guidelines in place that are higher than anyone requires simply to protect themselves against litigation."

As for pending and proposed regulations, Stevene had kind words for Richard Cordray, President Obama's nominee to head the Consumer Financial Protection Bureau.  Stevens said Cordray, the former Ohio Attorney General, is "a great guy who understands the issues."

Hurricane Irene, followed quickly by Tropical Storm Lee, soaked wide areas of the Mid-Atlantic and Northeast regions of the country, causing widespread flooding.

Like so many natural disasters, this one is also bringing out the scammers.

In New Jersey, the Division of Consumer Affairs is warning consumers about a “Financial Recovery Awards” scam mailing sent to homeowners in flood-affected areas. For example, homeowners in Little Falls, N.J., received a mailed letter that begins, “STATEMENT OF YOUR BENEFITS,” and states, “The Payment Security Administration (PSA) has determined that you shall receive entitlements and a Financial Recovery Award of up to $27,500.00.”

The letter asks recipients to mail a “Benefit Consent Form” to a post office box in Canada, along with a “Processing Fee” of $29.97 paid by check, money order, or credit card authorization. Consumers who don't look closely might think they are being offered disaster assistance. They aren't.

Read the fine print

The fine print on the back page includes language about sweepstakes rules. State and federal law, however, are clear that that no sweepstakes can require consumers to make a payment in order to receive a prize.

“Consumers should be extremely cautious with any request that they send money to an unknown person or business,” said Thomas R. Calcagni, Director of New Jersey's Division of Consumer Affairs. “By sending a check, you are giving the recipient your bank account information and the bank’s routing number. With this information, or with an authorization to charge your credit card, you expose yourself to unauthorized withdrawals of your hard-earned money.”

Signs of a scam

Calcagni noted that consumers should beware of any mailer or advertisement that, like the “Payment Security Administration” mailer, has any of these signs of a possible scam:

• Offering huge prizes in exchange for small, up-front payments;
• The use of an official-sounding but unverifiable name; for example, if an Internet search reveals that an agency by that name may not actually exist;
• Fine print that includes unclear or confusing language; or
• The request that payments be sent outside the United States.

“Anyone who receives this mailer should immediately contact the Division of Consumer Affairs,” Calcagni said. “The residents of New Jersey’s flood-affected areas have experienced enough stress and suffering, without the additional insult of being scammed.”

Old Spice aftershave has been around forever it seems, but lately has raised its profile with a series of clever TV commercials. Rich, of Shaelr, Pa., tried the Old Spice deodorant, and says he had a very bad reaction.

“After using the deodorant a couple of times I experienced a slight burning throughout the day,” Rich told ConsumerAffairs.com. “After I recently used it, I noticed a red ring around my armpits. It is the most uncomfortable pain and nothing that I do will help ease it.”

We'll keep an eye out for similar reports but so far, we have seen only one other case. It sounds like it could be an allergic reaction -- or Rich may simply have sensitive armpits.  Simple solution: switch to another deodorant.

Mostly satisfied

After seeing mostly bad experiences cataloged online, Kerry, of Ames, Iowa, thought it would be fair to relate her overall good experience with Tracfone, a low-cost cell phone provider.

“I have had one for several years, and renew it one year at a time,” Kerry said. “There has never been a problem and two years ago we purchased one for my mother, too. She also has had no problems. On the other hand, I have never tried to transfer the number to another phone or had to deal with customer service, which seems to be the source of most complaints. For the price it has been a very good service for us.”

Kerry says her one complaint is that when you turn the phone on, sometimes it doesn't find a signal right away. Though annoying, she says she puts up with it because, as she says, “Compared to a much more expensive full-service plan, it's a minor inconvenience.”

Suspicious

Rebates seem to be a constant source of consumer irritation. The rebate makes the advertised price of the product lower, so it seems like a bargain, but the consumers must jump through a series of hoops in order to redeem the rebate. Many, like Ginger, of New York, N.Y., thinks some rebates are actually impossible to collect.

“I was supposed to get a $400 rebate for the Canon Rebel and the printer that I purchased from Buydig.com,” Ginger told ConsumerAffairs.com. “I mailed out two UPC codes and the copy of my receipt, but they wanted the original receipt so I mailed that out as well via certified mail. I tracked and confirmed with U.S.P.S., but as per the record, they tried to deliver my certified mail to this company so they left a notice to them. 15 days later, no one from Advertising Checking Bureau bothered to check my certified mail in which my original receipt was enclosed! Therefore, U.S.P.S. sent it back to my address! However, one week later, A.C.B. send me another notice stating they couldn't honor my rebate because I did not send them the original receipt! How can they say this! They rejected my mail in the first place!”

This could be a case of a delivery error, or something else. Ginger's next step should be to file a report with the New York City Department of Consumer Affairs.

How much, really?

Tina, of Canon City, Colo., was looking for a bargain on rental cars. She says she thought Payless Car Rental offered it, based on what they told her.

“My total was to be $100.59,” Tina said. “When I arrived and went to the pick up my car they charged me $279.57. I was told that Arizona REQUIRED a certain insurance, even though I had already checked with my insurance company and they covered rental cars, and that Arizona REQUIRED a daily tax. None of this was stated when I made my reservation.”

Consumers often have the same complaint when booking airline travel, since baggage fees aren't included in the far. This is something the Federal Trade Commission might take a look at.

The postman always rings twice? Don't count on it. He may not be ringing at all unless the Postal Service finds a way to survive beyond the next few months, when it faces a series of potential financial calamaties.

The biggest calamity – email – has, of course, already occurred. The only remaining question is not whether the Postal Service fails but how long and ugly its demise will be.

The most immediate problem for USPS is a $5.5 billion payment due this month to the postal workers pension fund. There is no money to make the payment and it appears likely USPS will default.

Beyond that, USPS is in danger of running out of operating funds early next year, thanks to all the first-class mail that's no longer being sent. 

USPS likes to remind us that it is the nation's second-biggest “private” employer, after Walmart. But it's about as private as the Defense Department when it comes down to who gets stuck with the bill -- you do -- for the Postal Service's pension payments and other unavoidable liabilities. But then you already knew that, didn't you?

Few friends

While we could be generous and say the Postal Service is a victim of the times, it has also been incredibly slow to face up to its future, or lack of same, and one of its biggest failings has been the miserable way in which it handles customer complaints. Basically, it ignores them … and that's on a good day. ConsumerAffairs.com is awash in complaints from consumers whose complaints have been met with open hostility, followed by stunning inaction.

The result is that in its hour of need, the Postal Service has few friends willing to speak up for it, as a ConsumerAffairs.com analysis of consumer sentiments shows.

We analyzed roughly 83,000 comments about the Postal Service on Facebook, Twitter and other social Web sites, blogs, microblogs and so forth. Using computerized sentiment analysis, we found a dismal net sentiment over the past 12 months, one that seldom rises into positive territory and quickly plunges into an overall negative sentiment of 23% by the end of August, when consumers made 1,100 negative comments and 690 positives.

To say that consumers are wildly enthusiastic about their mail service and willing to go to great lengths to preserve it would be overstating the case several hundredfold. Consumers are, at best, neutral about the agency and it doesn't appear likely, based on the comments we sampled, that they're likely to mount a campaign to save it at taxpayers' expense.

One of the thousands of Tweets we analyzed came from @illuminatedNO who complained that the USPS tracking system is “awful.”

He and many other consumers complained that the USPS system of tracking is unreliable and imprecise: “They know when it left and when it gets (if it ever does) to the destination. That is not a tracking system. I predict they will be out of business or taken over by a private entity by 2015,” said Mike Funderburk in a Facebook posting.

Competitors

It's not really possible to compare USPS sentiment to its closet competitor, since its closest competitor is the Internet -- specifically, email. However, in the parcel and overnight letter delivery business, United Parcel Service and Federal Express have taken huge bites out of what business the Internet left behind. And although there is no shortage of complaints about lost and damaged shipments, late deliveries and other problems, both companies rank much higher in consumer sentiment than the Postal Service.

We found roughly 12,000 comments about UPS on social media and blogs. Big Brown was in positive territory for most of the 12-month period, peaking at a positive net ranking of 80% in February.

FedEx's overall trend is a bit more erratic but the total number of comments over the 12-month period was only 1,200, making it difficult to draw any firm conclusions.

Postal workers

And finally we come to the postal workers, a heavily unionized, politically powerful work force that is quick to remind Congress of how many votes it can turn out and also quick to remind taxpayers – with rather questionable accuracy – that they are supported entirely by purchases from customers, a claim that ignores the monopolistic powers granted to the USPS and the government's readiness to bail out the workers' pensions.

Postal employees are, after all, the Little People we are all quick to say we admire. No one could possibly be against continuing to support the Postal Service in the style to which it has become accustomed, right?

Wrong, according to the 68,000 consumer sentiments we measured over the last year. Net sentiment was a dismal -51% in August and ventured into positive territory for only a brief time in October 2010 before plummeting back into the dungeon of public approbation, as shown in this graph:

Most of the resentment towards postal workers is reflected in the commonly-held belief that their jobs are not very intellectually or physically challenging but are nevertheless poorly performed, often  with a notable lack of pride, accuracy and timeliness, as in this Tweet from @psyborg_007:

Much as we hate to say it, this is the time for that old bromide: it's hard to find anyone willing to say anything good about postal workers, as in this sampling of comments we found around the blogosphere:

Whether fair or not, negative sentiment on this scale will make it difficult for vote-hungry politicians to fashion a generous and speedy bail-out for the postal workers. That's not to say it won't happen but, with the Tea Party crusading against government spending, it will be politically treacherous for elected officials to be seen as lavishing funds on such an unpopular group of workers.

It's easy for those whose jobs seem exceptionally secure to fall into a pattern of ignoring or, worse, responding snappishly to their customers' and patrons' complaints and inquiries.  But as history makes all too clear, there is no such thing as exceptional security and dedicating oneself to customer satisfaction and simple human kindness is, at the very least, inexpensive insurance against the unexpected. 

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Sentiment analysis powered by NetBase

Seven states today joined the federal government in its effort to block AT&T Inc.’s proposed acquisition of T-Mobile USA Inc., saying the $39 billion deal would "substantially lessen competition."

The U.S. Department of Justice filed its civil antitrust lawsuit on August 31, seeking to enjoin the acquisition.  It amended the complaint today to add the seven states -- New York, California, Illinois, Ohio, Pennsylvania, Massachusetts and Washington -- as plaintiffs.

“Blocking this acquisition protects consumers and businesses against fewer choices, higher prices, less innovation, and lower quality service,” said Illinois Attorney General Lisa Madigan.

AT&T’s acquisition of T-Mobile would reduce the number of national competitors to three and eliminate a company whose low pricing and product innovation have made it an aggressive competitor in the mobile wireless telecommunications marketplace, the states said.

“We applaud the attorneys general who joined the Justice Department's suit today to block AT&T’s takeover of T-Mobile. They deserve praise for standing up to AT&T and standing with their citizens," said Craig Aaron, president of Free Press, a D.C. public interest group.

"They understand that families can’t afford to shoulder the burden of higher bills that would result from the merger, and that states struggling with unemployment can’t afford to stand aside while corporations kill competition and put people out of work. This lawsuit is yet another blow to AT&T and a victory for the public," Aaron said.

Four competitors

Four nationwide providers – AT&T, T-Mobile, Sprint and Verizon – account for more than 90 percent of mobile wireless connections. According to the complaint, AT&T and T-Mobile compete head to head nationwide. They also compete nationwide to attract business and government customers.

In addition, wireless customers across the country face similar choices from the four national competitors regardless of whether local or regional carriers also compete in any particular local area.

The complaint also describes the competitive limitations of regional providers, resulting from their lack of national networks. Similarly, it concludes that entry by a new provider would be difficult, time-consuming, and expensive, requiring among other things nationwide spectrum, the construction of a nationwide network, scale economies arising from having tens of millions of customers, and a strong brand.

AT&T’s efforts to increase its own already substantial scale economies through this transaction underscore the difficulties any new entrant would have in entering in a timely manner and with sufficient scale to thwart the competitive harm resulting from the proposed acquisition, the suit argues.

The complaint also concludes that the defendants have not been able to demonstrate merger-specific benefits that would sufficiently outweigh the proposed merger’s anticompetitive effects.

A Kansas City, Mo., man has been convicted of creating false obligations and of mail fraud as part of an attempted $100 million fraud scheme.  Denny Ray Hardin, 52, of Kansas City, was found guilty of 21 charges contained in a May 5, 2010, federal indictment.

Hardin produced and issued numerous “Bonded Promissory Notes” (BPNs), which are completely fictitious financial instruments that Hardin claimed to be backed by an account with the U.S. Department of Treasury.

Hardin falsely claimed that he was authorized by the U.S. Department of Treasury to produce and issue the worthless documents, which he claimed had monetary value and could be used to eliminate debt, court documents indicated

Hardin claimed to have produced and issued more than 2,000 bonded promissory notes, totaling more than $100 million, from September 2008 to September 2009, for himself as well as for his girlfriend, his daughter, and many customers who paid a fee, said Beth Phillips, United States Attorney for the Western District of Missouri.

Hardin created the notes on his computer and used them to attempt to discharge student loan debts, to purchase a car and a house, and for other personal items and debts. Hardin charged purchasers of the notes a fee—initially $100 per note, which was later increased based on the amount of debt Hardin falsely claimed to be discharged by the note.

Private bank

Hardin falsely claimed that he was authorized to issue the bonded promissory notes because he was a private banker. As part of his scheme to defraud both the individuals for whom he created BPNs and the creditors to whom he issued BPNs, Hardin claimed that he had created his own private bank—The Private Bank of Denny Ray Hardin, which operated out of his residence.

Hardin defrauded customers by selling them BPNs with the false promise that these fictitious instruments can discharge debts. Hardin defrauded creditors by presenting them with worthless BPNs.

Hardin operated a website for the purpose of marketing BPNs to potential purchasers. On his website, Hardin claimed that BPNs had been accepted by various institutions, which was false. Hardin marketed this scheme by spreading false stories to make his fraud sound legitimate and to try and force creditors into accepting BPNs through threats of legal action.

As part of the fraud scheme, Hardin would mail a BPN to creditors, along with various other documents that included a letter from Hardin stating that the account had been paid in full by the note. When he was notified that the BPN had been refused as payment, Hardin threatened the creditor with a lawsuit.

U.S. District Judge Gary A. Fenner found Hardin guilty of 11 counts of creating fictitious obligations and 10 counts of mail fraud at the conclusion of a bench trial that began Monday, Sept. 12, 2011.

Under federal statutes, Hardin is subject to a sentence of up to 25 years in federal prison without parole, plus a fine up to $250,000 for each count of creating fictitious obligations, a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million, for each of the four counts of mail fraud affecting a financial institution, and a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000, for each of the remaining counts of mail fraud. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

One of the many considerations consumers make when selecting a smartphone is its battery life. But a new invention just might level the playing field, making that less of a consideration.

University of Michigan computer science and engineering professor Kang Shin and doctoral student Xinyu Zhang have invented what they call a "subconscious mode" for smartphones and other WiFi-enabled mobile devices could extend battery life by as much as 54 percent for users on the busiest networks.

Still being tested

The researchers will present their invention at the ACM International Conference on Mobile Computing and Networking next week in Las Vegas. The approach is still in the proof-of-concept stage and is not yet commercially available.

Even when smartphones are in power-saving modes and not actively sending or receiving messages, they are still on alert for incoming information and they're searching for a clear communication channel. The researchers have found that this kind of energy-taxing "idle listening" is occurring during a large portion of the time phones spend in power-saving mode -- as much as 80 percent on busy networks.

More efficient listening

The researchers say they have simply tried to make smartphones perform this idle listening more efficiently. It's called E-MiLi, which stands for Energy-Minimizing Idle Listening.

To find out how much time phones spend keeping one ear open, Shin and Zhang conducted an extensive trace-based analysis of real WiFi networks. They discovered that, depending on the amount of traffic in the network, devices in power-saving modes spend 60 to 80 percent of their time in idle listening. In previous work, they demonstrated that phones in idle listening mode expend roughly the same amount of power as they do when they're fully awake.

"My phone isn't sending or receiving anything right now," Shin said, lifting his power-skinned iPhone, "but it's listening to see if data is coming in so I can receive it right away. This idle listening often consumes as much power as actively sending and receiving messages all day."

How it works

Here's how E-MiLi works: It slows down the WiFi card's clock by up to 1/16 its normal frequency, but jolts it back to full speed when the phone notices information coming in. While it's fairly easy to slow a device's clock to save energy, the hard part, Shin said, is getting the phone to recognize an incoming message while it is in this slower mode.

"We came up with a clever idea," Shin said. "Usually, messages come with a header, and we thought the phone could be enabled to detect this, as you can recognize that someone is calling your name even if you're 90 percent asleep."

44 percent power reduction

When used with power-saving mode, the researchers found that E-MiLi is capable of reducing energy consumption by around 44 percent for 92 percent of mobile devices in real-world wireless networks.

Widespread changes in the industry would be required to make all of this a reality. In addition to new processor-slowing software on smartphones, E-MiLi requires new firmware for phones and computers that would be sending messages.

They need the ability to encode the message header -- the recipient's address -- in a new and more detectable way. The researchers say they have created such firmware, but in order for E-MiLi use to become widespread, WiFi chipset manufacturers would have to adopt these firmware modifications and then companies that make smartphones and computers would have to incorporate the new chips into their products.

While Democrats ramp up calls to tax the rich and the Tea Party fulminates over excessive government spending, the chief economist for the National Association of Realtors worries about something more basic: the home mortgage deduction.

It's among the sacred cows being mentioned as a possible sacrifice on the altar of deficit reduction, a move  Lawrence Yun says would be a disaster.

"Limiting the mortgage interest deduction would crush the working class in resort areas and damage consumer confidence to buy a home in middle-class areas," Yun told the Northern Virginia Association of Realtors today.

"Housing can't go lower than this," Yun said.  "There will be some slight increases over the next two years.  Home values and sales will show slow but steady growth, again fueling small business start-ups."

Small business jobs

What do home values have to do with small business start-ups?

Most small businesses are started by entrepreneurs who risk their own money.  Few have enough cash on hand to fund a new business over the few years it often takes to hit profitability, so they tend to use the equity in their homes, Yun noted.

Few argue that rising home values fuel consumer confidence and encourage consumers to make big-ticket purchases like cars and homes. But Yun said it's too often overlooked that small businesses -- the largest source of new jobs -- are mostly fiinanced by home equity.

"Any discussion of limiting the interest deduction would be very, very harmful to home equity building," he said.  "We need to fight hard to be sure the housing deduction is not changed."

Smart money

Yun also showed signs of frustration with the current obsession with gold prices.  While many investors rely on gold as a hedge against inflation, Yun said the "smart money" -- wielded by cash-rich investors who have been successful for decades -- is a major force in the housing market's slow recovery.

Fully 35 percent of home sales today are all cash, Yun said.  It would normally be about 8 percent.

"Who makes these purchases?" Yun asked.  "People with money.  They're generally one step ahead, so this is a very reliable sign of a rising market."

Obviously, some regions of the country are in better shape than others.  North Dakota is doing well and Texas is "fully recovered," Yun said, while northern industrial states like Michigan are having a 10-year depression.

Two Minnesota companies whose Web sites allegedly claimed their amino-acid products could cure or mitigate disease have agreed to stop selling the supplements.

West Duluth Distribution Co., a corporation doing business as CHK Nutrition, and NeuroResearch Clinics Inc., both of Duluth, Minn., signed a consent decree of permanent injunction in the Minnesota U.S. District Court.

The U.S. Food and Drug Administration charged that the the companies violated the Federal Food, Drug and Cosmetic Act by claiming that CHK Nutrition’s amino-acid products could cure, mitigate, or treat diseases.

The consent decree prohibits the defendants from distributing any of their amino-acid products into interstate commerce unless and until they remove the drug claims from their websites. The defendants also agreed to hire an expert to review the claims they make for their products and certify that they have omitted all violative claims.

Under the decree, FDA can order the defendants to stop distributing their amino-acid products if they fail to comply with the Act or the terms of the decree. 

"By ensuring that CHK Nutrition and NeuroResearch can’t distribute these unapproved products, FDA is helping to prevent health risks for consumers that might take these drugs or delay other important treatments,” said Dara A. Corrigan, the FDA’s associate commissioner for regulatory affairs. “Until these companies meet FDA requirements, they will no longer be able to process or distribute their products." 

"Amino-acid therapy"

The FDA conducted an inspection of CHK Nutrition and NeuroResearch Clinics in July 2010. During that inspection, an FDA investigator observed evidence of the coordination of the sale of CHK Nutrition’s products with claims that such products are effective treatments for “neurotransmitter diseases.”

In September 2010, the FDA reviewed CHK Nutrition’s website and observed a link to NeuroResearch Clinics’ website containing extensive discussions about “amino-acid therapy” for the treatment of Parkinson’s disease, Alzheimer’s disease, depression, obsessive-compulsive disorder, attention-deficit hyperactivity disorder, fibromyalgia, and others.

Despite FDA warnings to stop making unapproved drug claims, CHK Nutrition and NeuroResearch Clinics did not do so.  The FDA conducted a follow-up review of the companies’ websites in February 2011 and found an ongoing connection between the sale of CHK Nutrition’s products and claims that they can be used to treat diseases.  

Since Howdy Doody first danced across a flickering black and white screen, social scientists have warned of the negative influences of television on children.

Now physical scientists are weighing in on the subject, with researchers in Ohio suggesting that watching TV can lead to less interaction between parents and children, with a detrimental impact on literacy and language skills.

The researchers compared mother-child communication while watching TV to reading books or playing with Toys to reveal the impact on children's development.

The study, conducted by Amy Nathanson and Eric Rasmussen from Ohio State University, focused on 'maternal responsiveness' to reveal differences in the way mothers communicate with their children while engaged with books, toys, and TV.

Mother's response has important impact

"Maternal responsiveness describes the quality of responses that a mother provides to an infant when they interact," said Nathanson. "When a mother and child are focusing on the same object, be that a book, toy or TV show, the mother's response can have an important impact on their child's understanding and self perception."

By explaining and describing objects or new words and images, or by prompting conversation through questions, maternal responsiveness can help to engage a child with the activity. The parent can also provide positive feedback and encouragement to a child, or repeat what the child has said to help familiarize them with certain words or sights.

"Mothers who are responsive to their infant's communication promote a positive self-perception for the child as well as fostering trust in the parent. Positive responses help the child learn that they can affect their environment," said Nathanson. "However, if maternal responsiveness is absent, children learn that their environment is unpredictable and may become anxious, knowing that their bids for attention or help may be ignored."

The authors explored the interactions of 73 mother–child pairs. The average mother was married, in their early thirties and had a bachelor's degree, while half were not employed. The children ranged in age from 16 months to 6 years.

The results demonstrated that who mothers co-read books communicated significantly more with their children than mothers watching TV. The amount of communication involved in reading was not significantly higher than playing with toys. However, the quality of maternal responsiveness was higher in books than toys.

Reading improves communication

The team found that when reading a book with their children parents used a more active communication style, bringing the child into contact with words they may not hear in every day speech, thereby improving their vocabulary and grammatical knowledge. In contrast watching TV resulted in significantly fewer descriptions and positive responses than mothers playing with toys.

"Reading books together increased the maternal communication beyond a level required for reading, while watching TV decreased maternal communication. This is significant when we consider the amount of time young children spend watching TV. In some cases children are left alone to watch TV, missing out on any parental communication at a critical stage in their development," said Nathanson. "We would encourage parents to regularly substitute TV for other forms of entertainment to ensure frequent and positive interaction with their child."

Cynthia, of San Francisco, has a Credit One bankcard and isn't very happy about it. She thinks the bank targets consumers who have seen their credit scores fall due to unemployment, foreclosure, or other economic factors.

“They charge you $9.95 if you want to make a payment by phone, even if its to avoid a late fee of $25.00 on the due date,” Cynthia told ConsumerAffairs.com. “And they use Eastern Standard Time, so if your payment on the west coast is not made by the EST deadline, then you are also issued a late fee, even if on same day of due date. There are sneaky fees at every turn.”

If you ask the banks, they'll tell you they must charge a premium to offset the added risk of lending in the subprime market. It still doesn't lessen the aggravation for consumers.

Disposable TV

Here's another consumer with an LCD flat screen TV that didn't last very long. In the case of Preston, of Sayville, N.Y., three years.

“I purchased a Toshiba 32" IHD LCD television model 32A500U in 2008,” Preston said. “In July, 2011, the picture feature failed completely although the audio was functional. I took the unit to a factory authorized repair shop; paid $50 for an evaluation of the problem, and was informed a week later that it would cost $300 to make the repairs. As this is almost the cost of a new TV, I declined. I then called and wrote Toshiba requesting some financial assistance in repairing the unit. Their response in all requests was that since the unit was outside their one-year warranty, there was nothing that could be done.”

As we have previously reported, it seems flat screen TVs are becoming a disposable product.

Caught in the middle

There's really no way a consumer can know that the chain store where they bought a new kitchen and the contractor the store hired to install it are in the midst of a major spat. Sandra, of Virginia Beach, Va., says she suddenly ended up in the middle.

“I had no idea the contractor, and Home Depot, were in the middle of a contract dispute, Sandra told ConsumerAffairs.com. The contractor explained the situation when he was out installing everything that he could before counter tops were installed. The rest, had to be done after countertops installed.”

But by then the contractor was history and Sandra said she had a hard time getting Home Depot's attention.

“I decided it was time to seek out legal representation,” Sandra said. Once I made that decision, I let Home Depot know what I was about to do, and they have finally gotten back to me, and are trying to resolve this mess.”

Sandra probably couldn't have anticipated she would be caught in the middle of this dispute, but she seems to have found an effective way to resolve it. Threatening to bring an attorney into the picture usually gets things back on track.

Not even close to an express line

Allan, of Breaux Bridge, La., seems exasperated with his local Walmart. Getting off from work late at night, he says he goes to the 24-hour Walmart because its about the only thing open at 10:30 pm. The problem, he says, is the store is always crowded at that hour but usually, only two check-out lines are open.

“Why even be open if you can't staff the registers?” Allan asks. “Surely you can hire more people. And if not, surely you can cross train people to work a register when its busy. I shop there often, two, three nights a week, and its always the same thing. Last night I stopped counting after 34 people waiting in line.”

With a 9.1 percent unemployment rate, it would see that there should be plenty of applicants if the store wanted to staff up.

Injury kills more 11-year-olds in the United States than all other causes combined, and a new study from University of Alabama at Birmingham (UAB) shows ADHD almost doubles the risk of serious injury among this age group.

“We found that children with more ADHD symptoms, those in the 90th percentile, are nearly twice as likely to get hurt as those with symptoms in the 10th percentile,” said David Schwebel, Ph.D., director of the UAB Youth Safety Laboratory and lead author.

In this group, boys are nearly twice as likely as girls to be injured.

ADHD is a problem with inattentiveness, over-activity, impulsivity, or a combination. For these problems to be diagnosed as ADHD, they must be out of the normal range for a child's age and development.

Commonly diagnosed behavioral disorder

ADHD is the most commonly diagnosed behavioral disorder of childhood, according to the U.S. National Library of Medicine. It affects about 3three to five percent of school aged children. ADHD is diagnosed much more often in boys than in girls

The research, published in the September/October Academic Pediatrics, studied 4,745 fifth-graders from Houston, Los Angeles and Birmingham. Serious injury is defined as one that requires medical attention; more than half of the injuries included broken bones.

“These are children that no longer have adults or parents or teachers watching over them all the time, which means they have to make decisions on their own,” Schwebel said. “Children with ADHD are impulsive, inattentive; they may not notice things because their mind is wandering, and they’re hyperactive so they’re always moving and getting into things.”

5.4 million children

The Center for Disease Control and Prevention says 9.4 percent, or 5.4 million, children ages 4-17 in the United States have been diagnosed with ADHD. Schwebel, professor in the UAB Department of Psychology, says this study will improve injury-prevention strategies for millions of mental health practitioners, pediatricians, parents and children.

“Medication, seeing a psychologist and getting treatment for ADHD will reduce the risk and the symptoms,” Schwebel said. “In some cases you can make the child aware and get them to think about what they’re doing so they will slow down and be more careful. It won’t work for everyone, but it certainly can’t hurt to try.”

This study is part of UAB’s Healthy Passages research, a decade-long program funded by the CDC, designed to help families, health-care providers, schools and communities develop effective policies and programs to keep children and adolescents healthy.