Current Events in October 2011

Toyota just can't seem to catch a break lately.  First it was the charges of unintended acceleration, then the Japanese earthquake and tsunami.  Now it's flooding in Thailand.

The company says it will suspend production at all of its North American plants this Saturday because of a shortage of parts made by suppliers in Thailand.

The closures affect plants in Indiana, Kentucky and Ontario, Canada, as well as an engine factory in West Virginia.

"We will continue to monitor the supply situation in Thailand," the company said in a statement.

Earlier, Toyota cut production in Japan by a total of 6,000 vehicles, trying to get parts and production back in sync.  

Other Asian automakers are also being stymied by the Thai flooding, frustrating their efforts to get production and sales back on track.

VW moving up

All of this is good news for Volkswagen, which is coming up fast behind Toyota, seeking to dislodge Toyota as the world's biggest carmakers.  VW hopes to deliver 8 million units this year, which would be an 11% increase.

VW's profits surged 46 percent on demand for the revamped Audi A6 sedan and the VW Tiguan SUV, according to yesterday's quarterly earnings report.

VW plans to hire more than 50,000 workers by 2018 as it drives towards its target of more than 10 million cars per year.  

Will you take your medicine tomorrow?  You may not know but Fair Isaac thinks it does.

The company that invented the FICO credit score is now branching out and adopting some of the behavior-prediction methodologies used by Web advertisers, but with potentially more far-reaching effect.

After all, if you don't like a behaviorally-targeted ad, you can just skip it.  But Fair Isaac will be selling its new behavior scores to insurance companies, lenders and others whose decisions can have a big effect on your finances, your employment prospects and even your health.

The Medication Adherence Score is Fair Isaac's latest product.  It tries to measure the likelihood that you'll take your prescriptions on time.  How can it know that?  Good question. 

The company is understandably not very forthcoming about its methods but says it draws conclusions based on massive amounts of data it gathers about each of us, including such seemingly benign data as how long we've lived at the same address, whether we own a car, our marital status, employment, and so forth.

Can this be legal?

You might think this can't possibly be legal.  Well, so far it is.  In fact, some of the new scores don't even fall under existing laws that require credit-rating companies to disclose what they know about us.

That's not likely to last long though, as politicians and regulators are even now beginning to paw the ground and snort loudly as they get a whiff of what's afoot out in the wild world of data-gathering.

In fact, much of the data that Fair Isaac, Experian and other companies are gathering isn't even about us personally.  It's based on massive aggregations of data that, in theory anyway, tell us how people like us are likely to act.

For example, one new Experian score seeks to measure disposable income.  It doesn't go line by line through each household's income and outflow but bases its predictions on an analysis of large numbers of people whose situation is roughly equivalent.

Privacy advocates don't like any of this very much.  They say it's invasive and may not even be accurate.

But the credit companies say it actually "empowers" consumers by making it easier for lenders, employers and others to snoop around in our affairs.

That may be a tough sell if Congress ever gets around to putting on one of its show trials but for now, the business of nosing around in your affairs is booming.

Last spring's outbreak of tornadoes caused widespread destruction over a wide area of the south Midwest. Now, some people whose homes were damaged by tornadoes think they are being victimized again by their insurance companies.

“My home was hit with a tornado in April,” Tamara, of Granite City, Ill., told ConsumerAffairs.com. “I am still making repairs to the property. I am beginning to submit receipts. I am being told that I have already been overpaid on my claim! Seriously? I submitted copies of bids for the damage to my kitchen that they are now saying they will not pay for. And, I get a letter that my policy will NOT be renewed in November. I have had State Farm for my homeowners for 30 years and also various autos.”

Tamara believes her policy calls for restoring her home to pre-tornado condition. Obviously, her insurance company has another view. That's why it's important for homeowners to review their policies from time to time to make sure they have the coverage they think they do.

Oops

There are hazards, as well as convenience, when you allow a company to automatically debit your bank account. Mistakes can happen.

“Dish Network took a $91 payment twice for my service on the same day; now they tell me it will take 10-12 days for them to reimburse me,” said Denise, of Rancho Cordovo, Calif. “In this day of technology, this in unacceptable. It took only one day for them to make their mistake. No one is able to tell you why it takes them so long to reimburse even though it is showing on their system as a mistake.”

The simple answer is that businesses go through internal red tape any time they make a refund, even for a payment taken by mistake. Also, they don't mind holding onto your money as long as possible, That's one reason why it's much better to use your bank's online bill payment system to pay your bills and not allow businesses access to your bank account.

Seasonal

Troy, of Dallas, Tex., wonders why Turbo Tax's online tax filing system is taking a few months off.

“I submitted an extension for my 2010 1040 return in April, got approved and wasted time and procrastinated and left life get in the way of me filing before the October 17 deadline,” Troy told ConsumerAffairs.com. Now that being said, I find it extremely disconcerting that the entire website, with the exception of the ability to download a PDF copy of prior year returns, is now unavailable until mid-December! I can understand shutting down E-FILE services, but no access whatsoever to the software for those of us that forgot about our returns?”

It appears to be true. There is a message on the website that reads “Turbo Tax online for tax year 2010 is no longer available.” Another message reads “in December 2011, come back and sign in to a new, more powerful Turbo Tax Online for your 2011 taxes.

Missing drugs

PlanetRX.com seems to be having a problem filling orders in a timely manner. At that's the report from some consumers we've heard from lately.

“I am in the same boat as are many many others,” said William, of Rochester Hills, Mich. “I submitted an order and on the same day they drew the money from my credit card account. It's almost been a month now and I have contacted them over and over to no avail.”

Another consumer said he cancelled his order after being told the medication was back ordered, but never received a refund.

The cheapest, safest and "greenest" way to drink water is, of course, to get it out of the nearest faucet but Americans have somehow decided that water in little plastic bottles is not only cooler (go figure) but also more environmentally pure.

California Attorney General Kamala D. Harris takes issue with this. Harris today filed a first-of-its-kind "greenwashing" lawsuit against three companies that allegedly made false and misleading claims by marketing plastic water bottles as "100 percent biodegradable and recyclable." 

Under California law, it is illegal to label a plastic food or beverage container as biodegradable. Plastic takes thousands of years to biodegrade and may never do so in a landfill. Today's lawsuit is the first government action to enforce the state's landmark environmental marketing law. 

"These companies' actions violate state law and mislead consumers," Harris said. "Californians are committed to recycling and protecting the environment, but these efforts are undermined by the false and misleading claims these companies make when they wrongly advertise their products as 'biodegradable.'" 

There is a slowly growing recognition among consumers that bottled water is one of the most expensive purchases they can make -- much more expensive per gallon than gasoline, milk or liquor -- but there is still scant awareness of how ecologically harmful it is, as shown in a ConsumerAffairs.com analysis of about 2,070 recent consumer comments on Twitter, Facebook and other social media and blogs.

Microbial additive

Balance and AquaMantra sell their products in plastic water bottles marketed by ENSO Plastics LLC; according to the label, ENSO claims that a microbial additive created the "first truly biodegradable and recyclable" plastic bottle.

The bottles' labeling states that the bottles will break down in less than five years in a typical landfill or compost environment, but that claim is false because the additive does not speed up the centuries-long process required to break down plastic, Harris said.

The claim of recycling is also deceptive, she added. The microbial additive put into the bottle is considered by the Association of Post Consumer Plastic Recyclers to be a "destructive contaminant" that can compromise the strength of the products they make. 

Consumers may buy these defendants' bottles and either dispose of them incorrectly, on the assumption that they will biodegrade quickly, when in fact they will simply take up space in landfills, or they will try to recycle them, creating problems and costs for recyclers. 

Greener than thou

A recent Gallup poll found that 76 percent of Americans buy products specifically because of their perception the product is better for the environment. 

In 2008, the California Legislature banned the use of words like "biodegradable," "degradable," or "decomposable" in the labeling of plastic food or beverage containers. Senate Bill 567, signed into law by the Governor this year, will expand that law to all plastic products beginning in 2013. 

---

Sentiment analysis powered by Netbase

Six men have been charged in fraud schemes involving the sports memorabilia business and the purchase and sale of equipment and uniforms used by professional and collegiate athletes.

In U.S. District Court in Rockford, Ill., yesterday, four defendants were charged in criminal informations and two defendants were charged in indictments.

According to court documents, each case involved the sale, consignment, or auction of jerseys, in which each defendant falsely and fraudulently represented to buyers that the jerseys were “game used,” when they were not.

Jerseys worn by professional and collegiate athletes during a game are usually known as “game used” or “game worn,” and are commonly bought and sold by collectors and others. The value of game used jerseys varies based on the popularity of the player that used the jersey and how long it had been since the player had actively played the sport. The value of a jersey was greater if it was game used.

Trading cards

The fraud charges also involved the use of game used jerseys by sports trading card companies. As stated in the charges, to increase the value and price of packages of sports trading cards, manufacturers frequently purchase game used jerseys, cut the jerseys into small pieces, and insert the pieces into card packages.

When game used jerseys were purchased for this purpose, the manufacturers often required that the seller provide a “certificate of authenticity” that the jerseys were authentic game used jerseys.

As charged, the defendants obtained hundreds of jerseys from a variety of sources, including retail sellers, then frequently changed the jerseys’ appearance by roughening, scuffing, washing, or dirtying the jerseys so that they appeared to have actual “wear and tear.”

The same jerseys were then re-sold, consigned, and auctioned for hundreds of thousands of dollars to sports trading card companies and other buyers as game used jerseys.

As part of the scheme the defendants provided the buyers with fraudulent certificates of authenticity. Each defendant was allegedly involved in a business engaged in the purchase and sale of sports memorabilia, and the schemes are alleged to have taken place in Rockford and several other states.

Two men are charged by indictment with mail fraud:

• Eric Inselberg, a resident of New Jersey, involved in the business operations of Taylor Huff, Inc. and Pasadena Trading Corp, from late 2001 through late 2009, in two counts of mail fraud.
• Bradley Wells, a resident of Florida, involved in the business of Authentic Sports, Inc., and Historic Auctions, LLC, both Florida businesses, from late 2005 through the middle of 2009, in two counts of mail fraud.

Four men are charged by information with mail fraud:

• Bernard Gernay, a resident of New Jersey, involved in the business operations of Pro Sports Investments, Inc., a New Jersey business;
• Bradley Horne, a South Carolina resident, involved in the business operations of Authentic Sports Memorabilia, Inc., a South Carolina business;
• Jarrod Oldridge, a resident of Nevada, involved in business operations of JO Sports, Inc., a Nevada business; and
• Mitchell Schumacher, a resident of Wisconsin, using the trade name MS Sports.

Each mail fraud charge in these cases carries a maximum penalty of 20 years in prison, and a $250,000 maximum fine, or an alternate fine totaling twice the loss or twice the gain, whichever is greater. If convicted, the court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.

Harvard researchers looking into causal relationships associated with teen violence have found what they call a shocking link: teens who drink more sugary soft drinks are more likely to be associated with violent activity.

The study focused on high school students in inner-city Boston. Researchers found that teens who consumed more than five non-diet sodas per week were between 9 and 15 percent more likely to behave in a violent manner than their peers who drank less.

Statistical association

The researchers make clear they have identified nothing in the carbonated beverages that could cause people to become aggressive. It's simply a statistical association, they say.

The study was based on teens' answers to a questionnaire. More than 1,800 students between the ages of 14 and 18 provided answers. Most of those filling out the questionnaire were Hispanic or African-American, with Asian and whites much less represented. All were from inner-city neighborhoods, where crime rates tend to be higher than in wealthy suburbs.

One of the questions involved how many non-diet carbonated beverages the teens consumed in an average week. Another question asked whether they regular carried a weapon of some type. Another asked whether they had been involved in violent acts, either with a friend, family member or date.

Lining up the answers

When the answers were overlaid, it shows that of teens who drank one or no cans of soft drinks per week, 23 percent carried a weapon and 35 percent had been violent toward a peer. Among those who consumed 14 or more can per week, 43 percent carried a weapon and 58 percent had been violent toward a peer.

Previous studies have also found a statistical correlation between violence and tobacco use and alcohol consumption. The researchers say they don't know why that is, but says it's an area that deserves more study.

The Consumer Financial Protection Bureau (CFPB), created by the Dodd Frank Financial Reform Act, has set its sights on student loans as one of its first major areas of consumer protection.

The new agency is teaming with the Department of Education to launch a new a program called Know Before You Owe, aimed at creating a ”financial aid shopping sheet,” which colleges and universities could use to help students better understand the type and amount of aid they qualify for and easily compare aid packages offered by different institutions.

The draft shopping sheet – a model financial aid disclosure form – makes the costs and risks of student loans clear upfront, before students have enrolled, outlining their total estimated student loan debt and monthly loan payments after graduation.

Better informed decisions

The objective is to reduce the number of students who emerge from colleges and universities saddled with massive debt. Also, to reduce the number of students like recent University of Phoenix graduate Theresa, of Irvine, Calif., who has a case of graduate's remorse.

“I received a Bachelors Degree in Business Administration,” Theresa told ConsumerAffairs.com. “The potential employers do not view University of Phoenix a scholastic institution. My degree is worthless in the business world. The college credits will not transfer to other institutions. And I have a student loan debt of over $30,000.00. The time and money spent to obtain what I considered one of the biggest achievements were all wasted.”

“Student loans are one of the best examples of how credit can make lives better and help people achieve the American dream,” said Raj Date, Special Advisor to the Secretary of the Treasury for the CFPB. “But in these tough economic times, the stakes have never been higher for students and their families to clearly understand the costs and risks of student loans. Having a simple, one-page financial aid shopping sheet would help students compare offers and choose the one that’s right for them.”

Surpassing credit cards

Student loans have now surpassed credit cards as the No. 1 source of U.S. household debt outside of mortgages. In part, this is because more students are accessing higher education. But it’s also because tuition is increasing.

At public colleges, tuition and fees are increasing by an average of 5.6 percent per year beyond the rate of general inflation. While federal funding for Pell Grants and education tax credits has kept net prices – what students ultimately pay after grants and scholarships – relatively steady, many students are covering these rising tuition costs by taking on more debt.

The complex and confusing financial aid process can make it difficult for students to understand college costs, evaluate loan options, and figure out how much debt to take on. Currently, prospective students too often receive jargon-laden financial aid award letters using inconsistent terms and calculations, making it hard to compare them side by side.

Information about the total debt, interest, and monthly payments of student loans may not be clear or may not be included at all. This may be an important reason why many students are choosing higher-priced private loans before exhausting subsidized federal loan options. Or students and their families may resort to credit cards and other debt products when better options are available.

To ensure that the financial aid shopping sheet is helpful to students and their families, the CFPB is putting it online and will provide the public with an opportunity to rank items in order of usefulness. The CFPB and Department of Education will use the feedback on this draft version to improve the shopping sheet. The Department of Education plans to publish a model form that schools could use to provide clear student loan and financial aid information to prospective students.

What's the real cost of renting a car these days? It probably isn't just the daily rate that rental companies advertise. Now, you almost have to figure on taking the company's expensive insurance coverage. Why? Because you could end up with a big repair bill if you don't.

“I rented a car from Alamo at Baltimore Washington International Airport in May,” Thomas told ConsumerAffairs.com. “I was directed to my car by the rental agent and drove off. I did not inspect the car beforehand. Upon arriving at my hotel, I did notice minor damage to the front passenger's side of the car. The damage was absolutely pre-existing and I had no responsibility for it. Upon returning the car, I received a receipt. The return agent made no mention of the damage. Shortly afterwards I began to receive a variety of letters and phone calls from something called the "Damage Recovery Unit" demanding approximately $1700.00 in damages.”

You would think that rental car companies would have insurance that covers incidental, “wear and tear” damage to fleet vehicles that are in almost constant use but in fact the companies self-insure, meaning that if they can't shift the repair burden to the customer, they must pay it themselves.

Keep in mind that many credit cards provide you with a limited damage waiver if you charge your rental to the card.  This can save a great deal of money and aggravation, but be sure you understand the terms before you rely on it.

Bubble, bubble toil and trouble...

Tammie, of Cotari, Calif., had new Pergo laminate flooring installed in her home back in March. She writes to say she is not happy with the results.

“Two weeks after installation flooring began to bubble or tent in multiple areas,” Tammie said. “The contractor was contacted, came back in May to make stress cuts which relieved some areas but not all. Since installation contractor came back a total of three times, but flooring continues to bubble in one large area.”

This sounds like it could be a common installation problem with laminate flooring and not the product itself. Laminate “floats” on the floor and is not nailed down. It's normal for the product to expand and contract with moisture in the air, so installation requires there to be a gap between the edge of the molding and the wall. If there isn't a gap, or if the gap is too small, the flooring will buckle. In short, the problem may be with the installer.

Too much for too little?

Food prices are going up. Apparently, even diet food prices.

"Slim-Fast has increased their prices by 33 percent,” Andrew, of Jamestown, N.Y., told ConsumerAffairs.com. “They originally came in 6 packs of 11 oz. cans for somewhere around $5.00-$5.50 per pack. They have now repackaged and have reduced the size from 11 oz. to 10 oz. and most importantly they now come in 4 packs at around $5.75 for the 4-pack.”

Businesses, of course, respond to consumer behavior. If Andrew finds the price hike too much, he should try some high-fiber, home-prepared meals as an alternative. If he prefers liquid nourishment, making smoothies at home can provide delicious, healthful treats.  Nearly anything you prepare at home from fresh ingredients will be more nutritious and healthful than packaged products -- and cheaper to boot.

Can't win

We've written extensively of the pitfalls of trying to negotiate a mortgage modification. But Robin, of Oconomowoc, Wis., was fortunate enough to negotiate her way through the modification maze, only to run into a new frustration.

“My Chase loan was modified in April 2010 due to being out of work for two years,” Robin said.”My first payment was due that month. As of today I keep getting foreclosure letters because they say I'm two months behind on my mortgage. I have copies of payments made every month since Oct 2010. I have called them and asked them several times to explain where/when I became late. After being put on hold several time, they seem dumbfounded, they came back to say I owed Aug/Sept 2011. I have proof of payment for the last year, and I told her that. She did not offer any assistance but told me I can make arrangements to pay or see if I qualify for another loan mod! My only question is when did it fall behind, and they cannot seem to answer that.”

It sounds like sloppy bookkeeping on Chase's part if they can't tell Robin, who says she has proof that she made every payment since the modification, where she fell behind. Robin should not treat this matter lightly. It may pay her to seek legal advice now before this escalates.

The Obama Administration has announced a new government program to help underwater homeowners – those who owe more than their homes are worth.

The plan is narrow in scope and will only benefit about 1 million homeowners. Whether you are one of them depends on whether you fall into a number of set categories.

First, this is not a mortgage modification program. The government's efforts to help struggling homeowners avoid foreclosure have been less than a resounding success. Rather, this is a refinancing program.

There are many consumers, for example, who purchased homes at the height of the bubble at the prevailing interest rates of the time, between 6 and 7 percent. They may have good jobs and sterling credit, but they have not been able to refinance their 6.5 percent mortgage to the current 4.5 percent rate because the house they purchased for $500,000 is now worth $350,000.

Criteria

But not everyone in this category can take part in the new program. To qualify, you must meet all of the following criteria:

• Your loan must be included in the portfolios held by Fannie Mae and Freddie Mac
• Fannie and Freddie must have acquired your loan before May 31, 2009
• Your current loan must be for more than 80 percent of your home's present value
• You must have made six consecutive monthly mortgage payments (in other words you can't be delinquent)

If you meet these criteria, chances are you can qualify, no matter how far underwater you are. Why would lenders agree to refinance for significantly more than a home is worth? If they do, the government will eliminate their responsibility for problems with the original loan, a significant incentive.

The administration sees the payoff as more homeowners with lower monthly payments, allowing them to spend the money on other things, thus helping the economy. If you think you might qualify, start by discussing it with your loan servicers. Just keep in mind that it may take several months for the program to be launched.

The Federal Aviation Administration (FAA) wants airlines to take a very carerful look at the horizontal stabilizers on the tail sections of Boeing 757 jets.

The agency says that corrosion on the stabilizers could cause pilots to lose control of the aircraft.

It might sound far-fetched but 11 years ago, a a similar mishap befell an Alaska Airlines McDonnell Douglas MD-83 off the Southern California coast.  The airplane became uncontrollable and crashed into the sea, killing all 88 on board.

Investigators looking into that crash blamed poor maintenance, faulty design and slipshod federal oversight.

The FAA is proposing what's called a mandatory safety directive that would require all U.S. carriers to check the stabilizers on more than 700 757s.  Overseas airlines would eventually do the same, it's hoped.

Boeing said it supports the proposal and noted that it already recommends carriers "regularly inspect and lubricate" moving parts.

It's hard to find a more luxurious airline than Virgin America -- spiffy cabins, mood lighting, elaborate entertainment systems, on-demand snacks and food, friendly flight attendants.

But while those friendly flight attendants appear to enjoy their work much more than their seemingly embittered colleagues on legacy carriers, the Transport Workers Union (TWU) says an "overwhelming majority" of them have signed a petition seeking a representation election.

The union is expected to ask the National Mediation Board (NMB), which oversees labor relations in the airline and railroad industries, to schedule an election.

"Flying Virgin can be enjoyable for passengers but flight attendants have a very different experience,” TWU Organizing Director Frank MacCann said. “Work rules are inconsistently enforced, promises regarding rest, vacation and benefits are often broken, and discipline for minor violations can be unnecessarily harsh and inconsistently applied.”

“It’s become difficult for flight attendants, who helped build this company, to believe what management tells them. Flight attendants realize that the only way they can improve their working conditions is to form a union,” MacCann said.

Entirely nonunion

Virgin America is currently entirely nonunion.  The fast-growing discount carrier flies to about a dozen cities in the U.S. and three in Mexico.  It operates a fleet of 46 Airbus A320 airplanes and is partly owned by Richard Branson's Virgin Group of the U.K.

Flight attendants at Branson’s Virgin Atlantic Airlines and subsidiary Virgin Australia have voted to form unions with British and Australian labor unions, TWU noted.

The NMB recently adopted new rules that, in theory, make it easier to unionize.  The new rules require a "yes" vote by only a majority of those voting.  Previous rules required a "yes" vote by a majority of the entire work group.

The change didn't help the Air Line Pilots Association organize JetBlue pilots though.  ALPA lost a recent representation election at JetBlue.

The TWU already represents the flight attendants at Southwest and Allegiant Airlines.  

Talk about identity theft.  A conservancy group says its tests found that one in five seafood samples from Boston supermarkets were mislabeled.

“We went looking for seafood fraud in Boston and we found it,” said Gib Brogan, Northeast representative for Oceana, an advocacy and conservation organization. “The results are troubling. Consumers are frequently getting something other than what they paid for. Seafood mislabeling is ripping off consumers, while potentially endangering their health and harming our oceans.”  

Brogan said that early this spring, Oceana targeted 15 supermarkets in and around Boston that are owned by three popular grocery store chains. Oceana attempted to purchase two (frozen or fresh) fish fillets of three commonly mislabeled species – red snapper, wild salmon and Atlantic cod – from each supermarket.

When these species were not available, other fish species were selected such as grey sole and vermilion snapper.

In total, Oceana collected 92 samples, of which 88 yielded results for species identification through DNA testing. The results found that 16 of the 88 samples were mislabeled and that the rate of mislabeling ranged from 14 to 23 percent for any given grocery store chain.

“It is a shame that one in five Boston shoppers who are trying to make informed choices at seafood counters are being swindled,” said Dr. Kimberly Warner, senior scientist at Oceana. “The U.S. government should be doing more testing to ensure that consumers are not being deceived.”

Oceana’s findings also concluded that Atlantic cod was the most commonly mislabeled fish species and overfished red snapper was often sold as vermilion snapper.

About seafood fraud

Oceana recently launched its new campaign to stop seafood fraud, which can come in many different forms – from mislabeling fish and falsifying documents to adding too much ice to packaging.

In a new report, Oceana found that while 84 percent of the seafood eaten in the United States is imported, only two percent is currently inspected and less than 0.001 percent specifically for fraud. In fact, recent studies have found that seafood may be mislabeled as often as 25 to 70 percent of the time for fish like red snapper, wild salmon and Atlantic cod, disguising species that are less desirable, cheaper or more readily available.

Despite growing concern about where our food comes from, consumers are frequently served the wrong fish – a completely different species than the one they paid for, Oceana said.

With about 1,700 different species of seafood from all over the world now available in the U.S., it is unrealistic to expect consumers to be able to independently and accurately determine what fish is really being served.

Oceana wants the federal government to make combating seafood fraud a priority, including implementing existing laws, increasing inspections, and improving coordination and information sharing among federal agencies. 

Look on any food package and you'll find a Nutrition Facts label. It tells you how many calories per serving the food contains, along with various nutrient content. The label provides helpful information – but only if you read it.

Researchers writing in the Journal of the American Dietetic Association asked consumers if they read the food labels and recorded the results. Then, they watched as the participants were asked to shop for food and recorded those results. They found that the consumers didn't read the labels nearly as much as they said they did.

"The results of this study suggest that consumers have a finite attention span for Nutrition Facts labels: although most consumers did view labels, very few consumers viewed every component on any label," according to investigators Dan J. Graham, PhD, and Robert W. Jeffrey, PhD, Division of Epidemiology and Community Health, University of Minnesota, Twin Cities. "These results differed from the self-reported survey responses describing typical grocery shopping and health behaviors submitted by the participants."

Does position matter?

Currently most Nutrition Facts labels are positioned peripherally, not centrally, on food packages and, as such, may be less likely than they could be to catch and hold the eye of a potential consumer, according to the study.

In a simulated grocery shopping exercise, 203 participants observed 64 different grocery products displayed on a computer monitor. Each screen contained three elements, the well-known Nutrition Facts label, a picture and list of ingredients, and a description of the product with price and quantity information.

These three elements were presented so that one third of the participants each saw the Nutrition Facts label on the left, right, and center. Each subject was asked whether they would consider buying the product. Participants were aware that their eye movements would be tracked, but unaware that the study focus was nutrition information.

The top comes out on top

Using a computer equipped with an eye-tracking device, investigators observed that most consumers view label components at the top more than those at the bottom. Further data suggest that the average consumer reads only the top five lines on a Nutrition Facts label.

Self-reported viewing of Nutrition Facts label components was higher than objectively measured viewing. 33 percent of participants self-reported that they almost always look at calorie content on Nutrition Facts labels, 31 percent reported that they almost always look at the total fat content, 20 percent said the same for trans-fat content, 24 percent for sugar content, and 26 percent for serving size. However, only 9 percent of participants actually looked at calorie count for almost all of the products in this study, and about one percent of participants looked at each of these other components (total fat, trans fat, sugar, and serving size) on almost all labels.

Results

When the Nutrition Facts label was presented in the center column, subjects read one or more sections of 61 percent of the labels compared with 37 percent and 34 percent of labels among participants randomly assigned to view labels on the left- and right hand sides of the screen, respectively. In addition, labels in the center column received more than 30% more view time than the same labels when located in a side column.

The researchers say consumers are more likely to view centrally located labels and nutrients nearer the label's top. Because knowing the amounts of key nutrients that foods contain can influence consumers to make healthier purchases, prominently positioning key nutrients, and labels themselves, could substantially impact public health, they say.

Solving the puzzle of high-definition video, Internet packet protocols and other esoterica comes down to a single question for most consumers: how many remotes will I need?

All of the technology that's needed to watch sparkling high-def video on demand, from cable, DVDs, off-the-air and from DVRs and other storage devices already exists.  What doesn't exist is an appliance that ties it together for consumers who don't, can't or won't do it themselves.

If the rumors sweeping the tech and financial worlds are true, it may that Steve Jobs' legacy won't be the iPhone, the iPad, iPod or even the iMac but rather the iTV, or whatever it will be called.

With the release of Jobs' authorized biography today, we learn that he hinted to biographer Walter Isaacson that the Apple design team was hard at work on a "connected" television -- one that would do for TV what Apple once did for the computer, cell phone and portable music player.

"Finally cracked it"

And just what would that be, exactly?  Well, we don't know because we're consumers.  And as no less an authority than Jobs himself once put it: "Consumers don't know what they want."  He went on to say that the designer's job was to anticipate consumer needs and fill them in as elegant and simple a way as possible.

"I’d like to create an integrated television set that is completely easy to use. ... It would be seamlessly synced with all of your devices and with iCloud," Jobs is quoted as saying.  "It will have the simplest user interface you could imagine. I finally cracked it.”

Apple, of course, already makes a pretty nifty set-top box that does quite a bit of seamless syncing, as do quite a few others. But no one has yet built an entire TV set -- a video appliance, if you will -- that combines all of the technology into a single box, a very elegant box no doubt -- with a slippery little remote that even a Baby Boomer can understand.

Various financial analysts are saying today that the beta version is already moving through the assembly process in China and that some of the software is already in consumers' hands, in the form of iCloud, iTunes and Siri.

Siri?  That's the software that enables the new iPhone 4S to talk with you, as opposed as just talking to you.  

OMG, do you think maybe there won't even be a remote?  Maybe we'll just ask the iTV what's on tonight?  Or whether there's a new series or movie that resembles Deadwood?  Maybe iTV will pipe up and remind us we wanted to watch Bill Maher tonight?

Jobs' last act

Much has been written and said about Steve Jobs since his untimely death but often lost in the shuffle was recognition of what was perhaps his greatest gift -- showmanship.

Except for its adherents and practitioners, geekdom is actually pretty boring.  Do you really want to learn about sampling rates? Jobs and his team had the ability to take a box of components and turn it into a thing of beauty, much the way Detroit was able to bend sheet metal into the stuff of dreams back in the 1960s.

People once bought computers and related gadgets because they needed a device to perform certain functions. Now they buy them because they love them.  This is no small accomplishment.

The ability to meld engineering, design and marketing with art is a gift given to few.  It is often transitory and always subject to the limitations mortality imposes.  Witness Mozart (a poor marketer but you get the point).

If Jobs really did manage to reinvent the lowly TV set and bequeath an elegant new version to a world of consumers who don't yet know they want it, it will be a posthumous feat of marketing and design genius pretty much unmatched in modern times.  

Can't wait to see it.

Economists tell us that the cost of living hasn't gone up that much, in the form of inflation, over the last three years. So why, for millions of consumers, does it feel like they are constantly falling behind?

A study that examined living standards in Washington state provides some interesting clues. It shows that two areas in particular, healthcare and housing, are putting consumers in the hole.

A University of Washington (UW) research group examined the bare-bones expenses for a single parent with one preschooler and one school-age child living in Seattle and found it needs an annual income of $56,904 – up 13 percent from $50,268 two years ago – to meet the family’s most basic requirements.

A similar family living in Spokane County needs $41,750, up 8 percent from $38,562 two years ago.

Families are getting squeezed

“Even as wages have stagnated and unemployment doubled during the Great Recession, the cost of meeting basic needs has continued to rise, putting an economic squeeze on families who are struggling to survive in this difficult economy,” said Diana Pearce, author of the report and director of the Center for Women’s Welfare at the UW School of Social Work.

Pearce says that the increase in costs were not due to inflation and occurred even as wages stagnated.

“Even though many people are working hard, they still can’t make ends meet, and these cost increases make it even harder,” she said.

Of all costs, health care increased the most since 2009, with a 12 percent average increase across the state. Housing costs showed the second-highest percentage increase, up an average of 10 percent from 2009 to 2011. However, some urban counties had substantially greater housing cost increases.

Why is housing going up?

But wait, how could housing costs be going up when home prices in most parts of the country are still falling, or at best holding their own? True, but when home sales down nearly everywhere, more people are renting, and rents are not going down.

“Falling house values has not translated into falling rents for most households,” Pearce said. “Of course, for families subsisting at this basic needs level, buying a house is rarely an option, and indeed some families may have experienced bank foreclosure on their homes, resulting in their coming into a rental market where rents are rising.”

In many markets now, the cost of a monthly mortgage, including tax and insurance, is significantly lower than the cost to recent the same home. But with tighter lending standards, fewer people can qualify for mortgages.

Self-sufficiency standard

The self-sufficiency standard, created by Pearce and used in 37 states and the cities of New York and Washington, D.C., differs from the federal poverty level because the standard factors in geography as well as family composition. The federal poverty level – the most commonly used income benchmark for determining public assistance – considers three-person families poor if they make $18,530 or less each year, whether they live in New York City or rural Mississippi.

“The federal poverty level is outdated, inadequate and vastly underestimates what it actually costs for American families to get by,” Pearce said. “It was designed almost a half century ago, when food was a bigger portion of the family budget and child care was rarely a cost,” she said.

A Danish study said to be the largest of its kind finds no association between long-term cellphone use and tumors of the brain and central nervous system.

Researchers from the Danish Cancer Society and the International Agency for Research on Cancer (IARC) reported in the BMJ (British Medical Journal) that they studied more than 358,000 people over 18 years. 

The study was funded by the Danish government and did not receive any financial report from the cellphone industry, the researchers said.

With more than 5 billion cellphone subscriptions globally, there has been increasing concern about the longterm health effects of exposure to radiofrequency emissions from the phones.

The Danish study focused on Danes aged at least 30 years who were born in Denmark after 1925. They divided them into two groups, those who had been subscribers since 1995 and people who had a cellphone before 1995. 

Among the findings were these:

• 10,729 nervous system tumors were reported from 1990 to 2007.
• Brain and nervous system tumor rates among long-term cellphone users (at least 13 years usage) were nearly the same as for those with no cellphone.
• There was no overall increase of any type of tumor risk for long-term cellphone users, compared to those with no cellphones

The authors cautioned that, while they did not find any higher risks of cancer in the study group, that does not rule out the possbility of greater risk in those exposed to cellphone radiation for even longer periods of time.

Thinking of going to law school?  Don't look to Access Group for a loan.

The nonprofit company has been the largest single provider of loans to law students since 1983 but a change in federal policy has forced it to stop lending and shed most of its staff, the company said.

"We are out of the lending business," said Access Group President and Chief Executive Officer Christopher Chapman, the National Law Journal reported. "We've been legislated out of the federal loan program." 

Students with existing loans and graduates still repaying loans should notice no difference, he said.  Access is reducing its staff from 260 to about 40 and will hire a third party to service about $8.5 billion in existing loans

Access Group is one of many private student lenders affected by changes made under the federal Health Education Reconciliation Act of 2010. That law made the U.S. Department of Education the sole provider of federally-guaranteed student loans, eliminating outside loan services like Access Group. 

The changes should not hamper new students' ability to get loans, said New York Law School Dean Rick Matasar, chairman of Access Group's board.

Church Brothers, LLC is recalling 560 bags of clipped spinach as a precautionary measure after one bag tested positive for Salmonella during a random USDA Microbiological Data Program sampling.

The recalled product was processed on October 6, 2011 and shipped in 2.5 pound bags to Super King Markets in Los Angeles, California. The bagged spinach affected by this recall was available for sale beginning October 7, 2011 and has a “best if used by” date of 10/23/11.

Salmonella is an organism which can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. Healthy persons infected with Salmonella often experience fever, diarrhea (which may be bloody), nausea, vomiting and abdominal pain.

“We are cooperating closely with the US Food and Drug Administration and California Department of Public Health to ensure prompt removal of product associated with the recall,” said Steve Church, Church Brothers, and LLC. “While we are not aware of any illnesses associated with this product, it is important that we act quickly based on the random sample results in order to reduce any risk to public health.”

Anyone who has in their possession any of the recalled bagged spinach as described above should not consume it, and should destroy it or return it to Church Brothers, LLC.

Consumers with questions or who need information may call 1-800-799-9475.

The Obama Administration this week is reportedly set to announce a new plan to help struggling homeowners modify their mortgages. Sound familiar?

It should. The administration launched the Making Home Affordable (HAMP) program soon after taking office, but it never got close to meeting expectations. The repackaged programs that have followed it haven't done that much better.

According to Amherst Securities Group, nearly one in five U.S. homeowners could eventually default on their mortgage unless Congress adopts new policies to prevent it. Amherst senior marketing director Laurie Goodman testified before Congress recently that approximately 10.4 million homeowners out of 55 million who currently have mortgages are likely to default and lose their homes in the next few years. The number is more than double the current number of home loans in default, 4.5 million.

Foreclosures have more causes now

While early foreclosures were caused by subprime mortgages – on homes the buyers really couldn't afford in the first place - resetting to sharply higher rates, with completely unaffordable payments. Next came a 9.1 percent unemployment rate, with the newly unemployed unable to make mortgage payments.

Mortgage modification programs were designed to help qualified homeowners negotiate lower payments, but from the beginning, homeowners complained that loan servicers dragged their feet, lost paperwork and provided wrong information. The result that many homes that might have been saved went to foreclosure.

Then, there are the cases like Micheal's, of Society Hill, S.C., that sounds like it should never have fallen into the foreclosure category. Micheal says that eight years ago he and his wife purchased a mobile home for $1200 down and $325 a month and made payments on a 12 year note.

Losing home over insurance policy

He said Vanderbilt Mortgage purchased his mortgage and sent him a letter informing him he must have insurance on his mobile home and offering a policy. But Michael said he and his wife already had an insurance policy on their home.

“We never, and I mean never, ever let our mobile home insurance lapse,” Michael told ConsumerAffairs.com. “The company we bought insurance from was local and charged us about $600 for the entire year. We called Vanderbilt and explained that we had insurance and we never let it lapse. The Vanderbilt customer service department did not respond and added the payments to our $325 which was well over $400.”

Michael said his local insurance agent faxed a copy of his current policy to Vanderbilt, but the fax was never acknowledged. Michael said Vanderbilt told him he must but their more expensive insurance policy or lose their home.

“We only had four more years left and our home that we worked so hard for would have been paid off,” Michael said. “Long story short Vanderbilt came and took the home and sold to a buyer at the beach. We are now homeless, even after paying over $31,000 on a trailer that was six years old when we bought it.”

Especially tragic

While all foreclosures are tragic, this one appears especially so. With some support, and maybe some legal advice, Michael and his wife should have been able to hold onto the home for which they were making regular, on-time payments. There may have been no place in his community to turn for help, and by the time Michael contacted ConsumerAffairs.com, he had already lost his house.

All of this makes at least one member of Congress very, very angry. As he announced his retirement from Congress earlier this month, Rep. Dennis Cardoza (D-CA) issued a scathing indictment of the Obama Administration's efforts to address the foreclosure crisis.

"Home foreclosures are destroying communities and crushing our economy, and the Administration's inaction is infuriating," Cardoza said.

The Administration is said to be ready to address this criticism with a new plan to assist distressed homeowners. But Bloomberg News quotes lawmakers and analysts briefed on the plan that the new effort is only expected to reach fewer than one million mortgage holders.

As health experts worry about American's ever-expanding waistlines, fingers of blame are sometimes pointed at huge restaurant portions. If only restaurants would scale back the amount of food they serve consumers, the reasoning goes, people would be healthier.

But there's got to be a reason that consumers want these giant-sized servings, and researchers say it might not be just because they're hungry. The study, published in the Journal of Consumer Research, suggests consumers who feel powerless in their daily lives will choose larger size food portions in an attempt to gain status.

Eating more and enjoying it less

"An ongoing trend in food consumption is consumers' tendency to eat more and more," write authors David Dubois, if HEC Paris, Derek D. Rucker, and Adam D. Galinsky, both of Northwestern University. "Even more worrisome, the increase in food consumption is particularly prevalent among vulnerable populations such as lower socioeconomic status consumers."

Many cultural norms associate larger products with greater status. For instance, the size of a vehicle, house, or TV. The authors tested whether or not consumers used the size of food products to express their status.

"Because vulnerable consumers are prone to express their status in order to compensate for their undesirable position and respond to daily threats, this research further proposes that the tendency to use the size of food options within an assortment will be particularly strong among those consumers who feel powerless," the authors write.

Experiment

In one of the authors' experiments, they confirmed that consumers equate larger sizes of food options with greater status. For example, participants perceived that consumers who chose a large coffee had more status than someone who chose medium or small, even when the price was the same.

In other experiments, powerless consumers chose larger pieces of bagels than baseline participants. And the authors found that participants chose larger smoothies when they were at a social event than when they were alone.

But there is hope for our expanding waistlines, according to the authors. When powerless participants in one study were told that smaller hors d'oeuvres were served at prestigious events, they chose smaller items that had fewer calories.

"Understanding and monitoring the size-to-status relationship of food options within an assortment is an important tool at the disposal of policy makers to effectively fight against overconsumption," the authors conclude.