Current Events in December 2011

The owner of a Utah loan modification business has been charged with 9 felony counts for allegedly defrauding hundreds of desperate homeowners. 

David Shawn Moffitt, 34, operated Fortified Financial, Fortified Academy and Wasatch Rent 2 Own between 2009 and 2010.

According to court documents, Moffitt charged between $2,500 to $3,000 to modify a loan so they would not lose their homes.  Customers were promised a full refund if they were not satisfied.

However, Moffitt allegedly refused to give refunds to as many as 200 eligible clients money because the money was being used to pay for personal expenses, including food, rent, entertainment and even $4,000 for his wife’s plastic surgery, prosecutors charged.

“We hope these charges send a strong message to anyone seeking to take advantage of struggling homeowners,” says Attorney General Mark Shurtleff.

Company accountants found that Moffitt and his wife took $124,000 in 2009 and $72,000 in 2010 from Fortified and and other $33,000 was transferred to Wasatch Rent 2 Own during those two years. During the same time, Fortified employee paychecks started to bounce and bonuses were not paid.

A hard look

“This scam should be a warning to everyone to take a hard look at anyone before trusting them with your money and especially your home,“ said Utah Department of Commerce Executive Director Francine Giani. 

After an investigation by Utah Division of Real Estate Chief Investigator Kent Nelson, Assistant Attorney General Che Arguello filed 7 second-degree felony counts of communications fraud, theft and racketeering and 2 third-degree felony counts of theft.

Investigators interviewed numerous clients victims and the charging documents include alleged victims in Vernal, St. George, Salt Lake City and Centerville. 

If convicted, Moffitt could serve 1-15 years in prison for each second-degree felony and 0-5 years behind bars for each third-degree felony.  

Last March, Moffitt was ordered to pay $92,000 in actual damages and $2 million in punitive damages after a civil lawsuit was filed by former clients.  One of the defendants in the lawsuit, Daniel Pogue, was shot and killed by police in December 2010 after he pointed a shotgun at people outside the LDS Oquirrh Mountain Temple.

For at least nine months, Saab's owners have been hoping to restart the troubled brand, left at the side of the road by General Motors along with Saturn, Pontiac and Hummer back in 2009. 

But the struggle to get Saab rolling again came to an end this weekend, as its Dutch owners admitted defeat and filed for bankruptcy and liquidation. A Swedish court approved the action  Monday.

GM can take credit not only for dumping Saab in the first place but also for vetoing a rescue attempt that included Chinese investor Zhejiang Youngman Lotus Automobile.

GM still owns a small part of Saab and holds licenses to key technology. When it nixed the latest resuscitation plan this weekend, Saab's Dutch owners conceded the deal was dead and so, therefore, is Saab, ending a 60-year run as one of the world's most idiosyncratic cars.

Jet fighters

Saab, whose roots are in aviation, was nothing if not innovative. Its front-wheel-drive cars proved a sporty car could also perform well on ice and snow.  Saab's engineers pioneered everything from small-block engines to the now-ubuiqitous teardrop shape and even came up with headrests that actually protected occupants' necks in crashes.

The first Saab prototype was unveiled in 1947 and quickly became a favorite of weekend racing enthusiasts, as it demonstrated that a daily driver didn't have to be dull. The cars became legendary for their speed, handling and safety, although reliability was not always on a par with other European marques.

Many enthusiasts wrote off the reliability problems or blamed them on poorly-trained dealer personnel.

"I bought an eight-year-old 9-3 four years ago. I haven't had one single problem with it. The only money I've spent is the annual cost of the MOT certificates and two new front tires," said happy Saab owner Steve earlier this year. "I think my Saab was a bargain, a powerful luxury car at a low price, and extremely reliable!"

In the Swedish town of Trollhattan, emotions ran high, Reuters reported, as townspeople prepared for the loss of 3,500 high-paying jobs. The plant has been idled since April and most workers knew the end was near but held out hope of a last-minute rescue.  

A niche player, Saab's latest owners had hopes that the fast-developing Chinese market would at last allow Saab to crank its plant up to its full capacity of 100,000 cars annually.  

Swedish rival Volvo, now owned by China's Geely Automobile Holdings Ltd., made almost 400,000 cars last year and plans to sell at least 50,000 of them in China this year.

An Illinois-based telemarketing firm will pay $500,000 to settle Federal Trade Commission charges that it interfered with consumers' requests to be placed on company-specific do not call lists and transmitted deceptive Caller ID names.

The FTC alleged that Americall Group, Inc. violated the FTC's Telemarketing Sales Rule.

"When it comes to the Do Not Call provisions, compliance is not rocket science," said David C. Vladeck, Director of the FTC's Bureau of Consumer Protection. "It includes honoring a consumer's request to be placed on a specific do not call list, and not messing with anyone's caller ID. Legitimate companies comply with the law every day."

Americall, headquartered in Naperville, Illinois, is a third-party telemarketer that specializes in calling consumers on behalf of major banks, credit card issuers, insurance companies, and other financial institutions. The company also conducts telemarketing campaigns for firms selling household products, magazine subscriptions, beauty products, and educational materials.

Under the FTC's Telemarketing Sales Rule, a company may not call a consumer who has requested not to receive calls from that particular seller. The Rule also makes it illegal to deny or interfere with a consumer's right to be included on a company-specific do not call list.

Ignored requests

According to the FTC's complaint, Americall trained its representatives to avoid honoring the requests of consumers who asked to be put on a company-specific do not call list of an Americall client.

For example, Americall's training manual instructed its telemarketers that when a consumer said, "Don't call again" or "Don't call me back," the employee should not place the consumer's name and number on a client's do not call list.

The FTC's complaint also alleges that Americall transmitted false Caller ID information to consumers. In many cases, the Caller ID information did not name Americall or its client as the caller. For instance, when telemarketing on behalf of an insurance company, Americall masked the company's identity by transmitting the name "Gas Rebate Center" over Caller ID. The Telemarketing Sales Rule requires telemarketers to transmit accurate Caller ID information so consumers can know who is calling before they pick up the phone.

The settlement order resolves the FTC's charges against Americall. In addition to imposing the $500,000 civil penalty, it prohibits the company from continuing to engage in the conduct alleged in the complaint and from violating any provision of Telemarketing Sales Rule in the future.

A proposed class-action settlement between a debt-adjustment law firm and its clients should be rejected, Public Citizen said in a brief filed Tampa on behalf of an objecting class member.

A class of more than 120,000 people alleges that the law firm and an affiliated credit counseling company, CareOne, offered to help consumers settle their debts with their creditors but instead took large fees from the consumers.

"I entered the debt management program at CareOne for the express purpose of lowering my interest rate and consolidating my payments. My cards were not late, my credit is in good standing," Teresa of Illinois told ConsumerAffairs.com last week. "CareOne didn't send my payment in a timely manner to my Citi accounts and after 3 months of 're-negotiating, Citi has now dropped those accounts from my consolidation, leaving me with late fees, a penalty 29% interest and late payments."

Additionally, the law firms are alleged to have misrepresented their debt-settlement services, failed to assist their clients and discouraged their clients from responding to creditors even when the consumers were sued.

Often in settlements in cases against debt-adjustment firms, the plaintiffs recover most or all of the money they paid to the debt adjustor. But under the proposed settlement, wronged members of the class would give up their right to take legal action against the defendants but get nothing in return.

Consumers get nothing

The defendant law firms and affiliated credit counseling company would make a payment to the American Bar Foundation ($100,000), to the settling attorneys (up to $300,000) and to the named plaintiff in the class action ($5,000), and would be responsible for the costs of administering the settlement.

The more than 120,000 other consumers in the class would be forced to surrender any claims that they have against the defendants but not get a penny.

“The release under the proposed settlement is of staggering breadth,” said Michael Kirkpatrick, the Public Citizen attorney representing a member of the class who objects to the proposed settlement. “The release sweeps far beyond the conduct at issue in this lawsuit to grant defendants blanket immunity for any type of claim. The settlement is unfair because in exchange for giving up their legal rights, class members get nothing in return. A settlement that provides no value to the class should be rejected.”

“Class counsel and the representative plaintiff should not be rewarded for selling out the class,” said Scott Michelman, another Public Citizen attorney working on the case.

Payment improper

In addition to the problem of class members getting nothing in this settlement, Public Citizen argues that the proposed payment to the American Bar Foundation is improper because the foundation has no connection to the interests of the class and so would not benefit class members even indirectly.

The defendant law firm involved in the settlement is Persels & Associates, LLC; also named as defendants are its associated and predecessor entities Ruther & Associates, LLC and Legal Advice Line, LCC, along with Persels & Associates attorneys Jimmy M. Persels, Neil Ruther, Robyn R. Freedman. The other defendant is an affiliated debt management company, CareOne Services, Inc.

The hot-selling Kindle Fire tablet has been taking a lot of heat from users about software glitches but Amazon says it will be fixing many of those problems with a software upgrade within the next few weeks.

"In less than two weeks, we're rolling out an over-the-air update to Kindle Fire," an Amazon spokesman told The New York Times, in a story published Sunday.

Amazon wasn't specific about the update but said it would improve overall performance and navigation and would also add a feature that will let users delete their browsing histories, a concern that has been raised by privacy advocates.

Users have also complained the Fire's audio volume is somewhat anemic and have said the device is prone to unpredictable lock-ups that require a full restart.

The initial problems aren't hurting sales of the new tablet.  Amazon says it expects to sell nearly 4 million by year's end, which would give it nearly 14 percent of the global tablet market, second only to Apple's iPad, with nearly 66 percent.  Samsung is expected to end up around 4.5 percent with its Android-based Galaxy Tab.

The Fire's low price -- $199 -- makes it highly competitive with the iPad, which starts at $499.  The Fire includes many high-end features including an LCD screen that displays 16 million colors in high resolution.

Just because you delete a file from your computer hard drive, it doesn't mean the data is gone. Special software can bring the deleted files back to life.

That's why Connecticut Attorney General George Jepsen voiced concern when he learned office supply retailer Staples was selling used and refurbished computers whose hard drives had not been completely initialized. But after his office intervened, Jepson now says his concerns have been addressed.

According to Jepsen, Staples has changed the process it uses to clear the hard drives of personal information of previous owners at stores in Connecticut.

Jepsen approached the Massachusetts-based company in June to present his concerns. Based on the company's subsequent actions, he says he has now closed his investigation.

Issue first arose in Canada

Jepsen wrote to the company after reading a report that more than one-third of the used and refurbished computers, memory cards and USB flash drives sold by Staples Canada still held private customer information.

“I am pleased by the quick response by Staples to address the issue and in time for the holiday shopping season,” Jepsen said. “I am assured the company’s new procedures will clear the hard drive of refurbished computers before they are offered for re-sale.”

Staples told the Attorney General that its stores in Connecticut and across the United States only resell HP computers returned to the store within 14 days of purchase. They do not sell other used computers or used storage devices. No issues similar to those in Canada had been reported to Staples in the United States.

In response to the Connecticut probe, Staples said it adopted a new, enhanced procedure for clearing used computers. The process seeks to prevent even specialized software from accessing information of any previous user.

Once the process is completed, a store manager inspects the computer, verifies its status and signs a sticker placed on the box, which states the product was used previously and has been reset to original factory settings.

Either consumers are spending more money this holiday season or more of that spending has shifted to online sales. Data from research firm comScore over the weekend showed U.S. online sales this holiday shopping season are up 15 percent compared to last year.

Not only that, the company says this past week may have been the busiest week of the season in terms of online sales. The data shows shoppers spent over $1 billion on four days last week. Total sales for the week climbed 15 percent to $6.31 billion compared to last year.

The five days that ended on Friday “will almost certainly be the heaviest week of the online holiday shopping season,” said comScore chairman Gian Fulgoni. Online spending will begin to slow as Christmas draws closer, he said.

Shoppers have spent $30.9 billion online from Nov. 1 through Dec. 16, up from $26.9 billion at the same point last year.

Despite last week's massive spending, “Cyber Monday,” the Monday after Thanksgiving, is still the largest online shopping day ever, according to comScore. Sales for that day rose 22 percent from last year to $1.25 billion. Cyber Monday sales topped $1 billion for the first time last year.

Consumers taking advantage of promotions

What's behind the big jump in online spending? Part of it may have been the product of declining gasoline prices during the autumn months. Consumers feel that they have more money to spend.

Online merchants have also been more aggressive with their marketing, including promotions like "free shipping day."

“Free shipping is undoubtedly one of the most important incentives for consumers and has become a key driver of online buying activity over the past few years,” Fulgoni said. “This season has seen a continuation of the trend where an increasing percentage of transactions involve free shipping, as more consumers demand it and more retailers provide it. During the week of Thanksgiving and Cyber Week we saw at least 3 in 5 transactions use free shipping, significantly higher rates than we’ve ever previously observed.”

Most likely a lot of big screen TVs will end up under the tree this year. Let's hope Santa shops carefully and does a lot of homework, because these devices, almost regardless of the make and model, seem to be prone to problems.

"Bought a 65-inch 3D Vizio in February 2011, Dave, of San Antonio, Tex., told ConsumerAffairs.com. "It has gone out. Vizio said they would have the repair man call to set up an appointment in about five days, and in 24 hours after that they should come out. Yep.. Over a week without a television that I paid over $3000.00 for. The question becomes how can a company that makes such items that are repeatedly failing costumers be allowed to continue?"

It's your money, but you can't have it yet

Diane, of Fenton, Mo., says she opened an account at US Bank two weeks ago and Friday deposited her paycheck. She said she was told $200 would be available immediately with the balance available on Saturday.

"I tried withdrawing to buy groceries, get gas and pay bills and was rejected. I spoke with the clerk and gave her my deposit slip," Diane said.

Diane didn't get what she considered a satisfactory explanation so she told the branch manager to close her account and give all of her money back. That's when she got another surprise.

"He refused and said I had to wait five days to get my money," Diane said. "He said it was in all the paperwork he had given me. So, for five days, we are without grocery money, 2 bills will be late, and I have no gas to get back and forth to work with. This is not what I was told when I opened the account."

The delays are probably due to the fact that Diane's account is new. But her point is that she thinks this was not adequately explained when she opened the account.

Mistreating Santa?

Patty, of Decauter, Ala., has a rather unusual complaint against Best Buy. She writes to say she doesn't like the company's Christmas-themed commercials.

"The ads are showing the moms being mean to Santa. It is not right," Patty said. "My kids do not like it! There are enough people who are mean in this world. We do not need to show kids it is alright to be mean to Santa."

The commercials in question show moms competing with Santa to give the best gifts by picking up iPads and other gadgets at Best Buy. They're obviously meant to be humorous and not mean-spirited. Patty probably needs to lighten up a bit.

War is hell, but being young and unemployed is no fun either. American forces who survived their tours of duty in Iraq, Afghanistan and elsewhere are returning home to a faltering economy, poor job prospects, questionable education and job-training opportunities and a nation that does not understand their needs.

The unemployment rate for veterans aged 20 to 24 has averaged 30 percent this year, more than double that of others the same age, though the rate for older veterans closely matches that of civilians.

The situation for reservists and those in the National Guard may be even worse, although exact figures are hard to come by.  Federal law prohibits employers from discriminating against reservists and National Guard members but enforcement is less than poor.

No one seems to know quite why veterans are having a harder time finding a job than civilians with similar educations. Most employers say they prefer veterans because they are highly disciplined and more likely to take their work seriously, but those kind words don't often translate into employment.

Hard transition

Part of the problem, many veterans say, is that the transition from day-to-day life in Iraq or Afghanistan to Main Steet USA is simply so jarrging that returning military personnel are in a state of virtual shell shock, unable to easily switch from worrying about roadside bombs to  keeping track of the Starbucks flavor of the month, the latest Twitter jargon or shopping app.

Aggravating the situation, says a group called Ohio Combat Veterans, is that so few Americans today have served in the military.

"Ninety-nine percent of Americans have not served in the military. That means veterans make up less than 1 percent of the population," the group says on its Web site.  "Yet 25% of the nation's homeless are veterans."

"It’s shell shock for a lot of them, going from such a structured lifestyle to a lifestyle that’s got so many variables,” said group founder Daniel Hutchison, 29, in a New York Times story today.  “They’re dealing with all the emotional things they went through, and they feel like they’re alone.”

Hutchison was so affected by the difficulties and roadblocks he and his returning comrades faced that he uses his combat disability check to cover the start-up costs of his group, which tries to ease the transition and find jobs for returning War on Terror veterans. 

Besides volunteer groups like Hutchison's, there are any number of official government and industry-sponsored jobs programs for veterans, including:

• U.S. Labor Department administers the Jobs for Veterans Act; 
• Veterans Affairs Department has numerous training and placement services; and 
• State employment service offices in every state.  All states provide special programs for veterans.

Many veterans, however, have trouble navigating the bureaucracy and red tape that accompany government programs, partly because of the after-effects of their combat service.

In Iraq and Afghanistan, notes Hutchison, more than 40,000 troops have been physically wounded. The estimates are that over 300,000 will suffer from PTSD or Traumatic Brain Injury, severely complicating the return to civilian life. 

Financial pitfalls

Besides facing the challenge of finding, or returning to, a job, veterans face numerous financial risks and are often targeted by unscrupulous businesses, including payday loan providers and shady car dealers.  

Supposedly reputable businesses have also taken advantage of veterans, sometimes through ignorance of the legal protections afforded to veterans, other times simply because they can get away with it.

The Soldiers and Sailors Credit Relief Act limits the interest rates that can be charged on mortgages, credit cards, auto loans and other debts when military personnel are called to active duty. But it is routinely ignored and prosecution of violators is almost unheard of.

In April, JPMorganChase agreed to pay $56 million to settle claims it overcharged service members for their mortgages.  The case came about only through the action of U.S. Marine Corps Capt. Jonathon Rowles, whose South Carolina home was foreclosed on by Chase while he was flying military missions over South Korea.

Morgan Stanley, Wells Fargo, Countrywide and other large financial institutions were also investigated and, in some cases, paid penalties and refunds but most cases go unprosecuted and, once the highly-publicized cases are settled, Congress gets back to its primary task of assuaging large contributors.

So severe was the damage being done to active-duty military by predatory payday loans that in 2005, the Defense Department determined they were affecting military readiness.  

Mild reforms were instituted after the dust-up but as ConsumerAffairs.com reported in July, big banks, unable to pass up iinterest rates averaging 365 percent, are now wading into the payday loan business as alleged government regulators stand meekly by.

For-profit education

Nothing better typifies the shabby treatment afforded returning military than the for-profit colleges and vocational training institutes that have sprouted like weeds over the last decade.

“The price tag for these colleges is so high that about half of all borrowers who default on their student loans attend for-profit colleges,” the consumer group USPIRG said earlier this year. “The quality of the education is so weak that, in one survey, 57 percent of students departed without a diploma.”

Sen. Tom Harkin (D-Iowa) went on the offensive against for-profit schools and browbeat the U.S. Education Department into adopting tougher standards but many military veterans say they have wasted their education benefits on degrees and certificates that turned out to be worthless.

"If I decide to change schools, none of the credits I received from [University of] Phoenix will be accepted, and this is where Phoenix gets to keep veterans on their books in order to receive more money, because we are veterans," said Timothy of Frankfurt, Ky., earlier this month. "This is a sham, and a poor excuse for a higher education facility."

In his efforts to rein in for-profit schools, Harkin has noted that -- among their other drawbacks -- for-profit schools are far more expensive than comparable programs at community colleges or public universities. The average tuition for a for-profit school is about six times higher than a community college and twice as high as a 4-year public school.

Strangers at home

Of course, none of this harrumphing and listing of outrages does much to help individual veterans. As in nearly every other sorry situation of corruption and neglect, government agencies and a Congress that is almost totally removed from reality simply don't provide the feet on the street that are needed to deal with each and every individual veteran who needs -- and deserves -- a grateful nation's help.

Grassroots self-help organizations like Hutchison's are the most likely to provide the understanding and unstinting 24/7 dedication that can  eventually help heal those wounded by war and its aftermath. The need is great -- and urgent.  If you know of organizations worthy of public support, please tell us about them.  Email news@consumeraffairs.com.

"The saddest statistic tells a terrible story," Hutchison said. "On average, 18 American veterans commit suicide -- every single day."

Say good-bye to the Ford Ranger.  The last of Ford's small pickups rolls off the assembly line sometime next week.  When it does, Ford's Twin Cities plant in St. Paul, Minn., will close, taking some 800 jobs with it.

What happened to the mid-sized Ranger?  

Auto industry analysts say that over the last few years, Ford put more of its money into the full-sized F-150, offering more and bigger rebates and upgrading the bigger truck's styling and fuel economy.

Basically, we're told, Ford did such a good job with the F-150 that it put the Ranger out of business, as truck buyers discovered they could get a full-sized for about the same price as the little Ranger.

Bad habits

Of course, it didn't help that the Ranger shared many of the problems of its bigger sibling.  Like the F-150, the Ranger had a nasty habit of catching fire.

"I bought a 2001 Ford F-150," said Doug of Royal Palm Beach, Fla. "On July 28, 2011, I parked it at the golf course. On the 9th hole tee box, a ranger came up and asked if I owned a F-150. I said yes. He said 'It's on fire.' It had been parked under a tree for nearly 2 hours. The fire department Captain said it was an engine fire that started on the driver's side."

Some owners, like Carlos of El Sobrante, Calif., complained about erratic handling.

"Truck hydroplaned at around 25 mph from the back. This caused it to spin, losing control, and go off the freeway, rolling sideways down a hill next to the freeway. The truck is a loss. The driver suffered injuries," Carlos told ConsumerAffairs.com.  "There is something very wrong about this truck model. It demonstrated instability at 20-25 mph on the curves, and on one occasion, after starting it uphill, even on dry road."

Bug truck

The last Ranger reportedly will go to Orkin, the pest control company, whose fleet includes many Rangers.  Orkin is probably a typical small-pickup user.  It doesn't haul big loads and needs the maneuverability and ease of operation offered by a smaller truck.

Besides being good light-duty work trucks, Rangers were also popular with consumers who used them to commute to work as well as for weekend handyman and lawn-care chores and for the occasional hunting or fishing trip.  Those who needed a heavy-duty work truck opted for the F-150 or similar models from Chevrolet, Dodge and Toyota.

The energy crisis of the late 1970s built demand for lighter, smaller trucks that didn't guzzle as much gas and the Ranger at one time commanded a healthy share of the market but sales fell off rapidly in the late 1990s and early 2000s, prompting Ford to close its Edison, N.J., plant in 2004.  

Today, the St. Paul plant is producing only 500 or so Rangers per day and by the end of the year, the plant's 86-year run will be over.  It's an economic blow to those who worked there and also to Minnesota, which has lost 100,000 of its 400,000 manufacturing jobs in recent years.

No doubt there's a market for baristas and Walmart greeters, but for semi-skilled workers in the Twin Cities, the Ford plant closing does little to brighten spirits as 2012 dawns.

Two people have died in Louisiana in recent months from a rare brain-eating amoeba that health officials have traced to a common cold treatment.

The Louisiana Department of Health and Hospitals says a 51-year old woman died after using tap water in a neti pot to irrigate her sinuses and becoming infected with the deadly amoeba known as Naegleria fowleri. The pot creates steam, which is supposed to open up and sooth clogged sinuses. 

In June, a 20-year-old St. Bernard Parish, La., man died under the same circumstances. Naegleria fowleri infects people by entering the body through the nose. The problem occurred, in this case, when the water was converted to steam.

"If you are irrigating, flushing, or rinsing your sinuses, for example, by using a neti pot, use distilled, sterile or previously boiled water to make up the irrigation solution," said Louisiana State Epidemiologist, Dr. Raoult Ratard. "Tap water is safe for drinking, but not for irrigating your nose."

It's also important to rinse the irrigation device after each use and leave it open to air dry.

Infection enters through the nose

Naegleria fowleri infection typically occurs when people go swimming or diving in warm freshwater lakes and rivers.

In very rare instances, Naegleria fowleri infections may also occur when contaminated water from other sources, such as inadequately chlorinated swimming pool water or heated tap water less than 116.6 degrees Fahrenheit, enters the nose when people submerge their heads or when people irrigate their sinuses with devices such as a neti pot. You cannot be infected with Naegleria fowleri by drinking water.

Naegleria fowleri causes the disease primary amoebic meningoencephalitis (PAM), a brain infection that leads to the destruction of brain tissue. In its early stages, symptoms of PAM may be similar to symptoms of bacterial meningitis.

Initial symptoms of PAM start one to seven days after infection. The initial symptoms include headache, fever, nausea, vomiting, and stiff neck. Later symptoms include confusion, lack of attention to people and surroundings, loss of balance, seizures, and hallucinations. After the start of symptoms, the disease progresses rapidly and usually causes death within one to 12 days.

Naegleria fowleri infections are very rare. In the 10 years from 2001 to 2010, 32 infections were reported in the U.S.  

Starting January 1, U.S. consumers won't be able to purchase light bulbs that don't meet strict energy conservation standards. Under the rule, most of the cheap, incandescent bulbs on the market today won't be available.

At least, that's what the law says.

But in a lengthy appropriation bill just approved by Congress, there is a provision that eliminates the funding to implement the new rule. As a result, the rule will not go into effect January 1, 2012, as mandated in the 2007 legislation.

As the deadline approached this year, the light bulb became a partisan issue. Democrats generally supported the new rule as a sensible step to reduce the nation's energy consumption. Republicans opposed it, saying the government shouldn't dictate what kind of light bulbs consumers have to buy.

The incandescent bulb hasn't changed much since Edison invented it. It's considered highly inefficient because it produces both heat and light. However, it has the advantage of being very cheap.

CFL and LED bulbs

Its replacements are the Compact Florescent Light (CFL)  and LED bulbs, both much more expensive but advertised as lasting much longer than traditional incandescent bulbs and using much less electricity to produce the same amount of light.

Politics aside, many consumers who've tried out the new bulbs aren't impressed.

"I have replaced numerous GE Energy Smart 13 watt CFL bulbs in the past year," Candace, of Cocoa Beach, Fla., told ConsumerAffairs.com. "All of them say 'lasts 8 years' on the package. I'm lucky if one lasts 8 months! These things are not cheap, and in my humble opinion are a total rip off! As soon as I replace one, another one burns out, and at almost $10 for a package of two bulbs."

For consumers, the reprieve may only be temporary. The 2007 is still on the books and will presumably be implemented at some point.

The U.S. is actually behind much of the rest of the world on the light bulb transition. The European Union and several Latin American countries have already banned them.  

A medical-alert system, offered by national chains and local operators, can provide peace of mind to the elderly and their loved ones. But that peace of mind comes only if you're sure the company is providing the service it says it is.

While the national chains draw their share of consumer complaints, so do the independents. In Maryland, Attorney General Douglas Gansler says his Consumer Protection Division has issued a Cease and Desist Order against Glenn Chumley and his business, Medical Alert Buyers Alliance Corp.

The state alleges that Chumley preyed on elderly consumers by selling them emergency alert devices and one-year service plans promising to connect them with an emergency alert center if they fell or had other medical emergencies, but then failed to respond when they needed help.

'Appalling act'

"Taking advantage of vulnerable Marylanders who depend on their medical alert devices is an appalling act that could lead to serious injury or even death and it must not be tolerated," said Attorney General Gansler. "Consumers rely on emergency alert providers for help when they need it most."

According to the charges, the company entered into contracts with more than 1,000 customers promising to help them, but after going more than $100,000 in debt with a vendor, it stopped providing the emergency alert services for which consumers had already paid. As a result, when consumers had emergencies and pressed the buttons on their emergency alert devices, nobody responded.

No one responded

In a petition that accompanied the charges, one consumer described his elderly mother pressing her emergency alert device when she fell and broke her shoulder, but nobody replied. Another consumer described waiting for hours to get help after she could not reach anyone using the emergency alert device purchased from Chumley's.

To make matters even worse, the state alleges that the company continued to bill consumers for emergency services it did not provide, made unauthorized charges on consumers' credit cards and failed to honor warranties and guaranties that it made to customers.

The order requires Medical Alert Buyers Alliance Corp. to stop selling medical-alert services unless it posts a $20,000 bond with the state.

The lesson in all of this, of course, is finding the right medical-alert/security firm takes some research. One question to ask is how secure is the security firm. Is it adequately funded to provide services in the future. Keep in mind most of these companies require of contract of year or more.

Speculators have taken a lot of the blame for the collapse of housing prices and the subsequent financial crisis, but evidence to support the charge has been scant.

Now the New York Federal Reserve has documented the role of speculators in the housing collapse, conducting a study that found real estate "investors" -- borrowers who use financial leverage in the form of mortgage credit to purchase multiple residential properties -- played a very important role in the housing downturn by defaulting in large numbers.

Data unearthed by the Fed included:

• Investor shares of home purchases roughly doubled between 2000 and 2006.
• At the peak of the boom in 2006, over a third of all U.S. home purchase lending was made to people who already owned at least one house.
• In 2007-2009, investors were responsible for more than a quarter of seriously delinquent mortgage balances nationwide.

The effects of investors on the housing bubble are even more pronounced in those states that faced the harshest effects of the bubble.  Arizona, California, Florida and Nevada had the most severe housing downturns, and they also had some of the highest activity of home investors.

The National Center for Policy Analysis (NCPA) found these highlights in the Fed study: 

• While investors were responsible for one third of all home purchases nationwide in 2006, this number is approximately 45 percent in these four states.
• Furthermore, investors with three or more properties constituted 20 percent, which is triple their share from 2000.
• In the years following the bubble burst, investors were responsible for more than a third of delinquent balances in Arizona, California, Florida and Nevada.

Flipping

The impact of investors on the housing market can be understood by taking a closer look at their basic strategy.  By "flipping" a house, an investor attempts to buy it and sell it as quickly as possible while maximizing profit, NCPA said.  

Because they have little intention of holding onto or living in the house in the long term, they often accepted high interest rates on mortgages in order to minimize down payments.  However, when the housing market dried up and investors were no longer able to clear houses, they were left with unforeseen interest payments that were too high to be kept up with. 

This caused a disproportionate number of investors to become delinquent and for their flipping to contribute strongly to the housing crisis.

The Securities and Exchange Commission has charged a father and son in Utah with securities fraud for selling purported investments in their real estate business that turned out to be nothing more than a wide-scale $220 million Ponzi scheme.

The SEC alleges that Wendell A. Jacobson and his son Allen R. Jacobson operate from a base in Fountain Green, Utah, and offer investors the opportunity to invest in limited liability companies (LLCs) in order to share ownership of large apartment communities in eight states.

The Jacobsons solicit investors personally and through word of mouth, and appear to be using their memberships in the Church of Jesus Christ of Latter-Day Saints to make connections and win over the trust of prospective investors.

The SEC alleges that the Jacobsons represent that they buy apartment complexes with low occupancy rates at significantly discounted prices. They then renovate them and improve their management, and aim to resell them within five years.

Investors are said to share in the profits derived from rental income at the apartment complexes as well as the eventual sales. But in reality, the LLCs are suffering significant losses and the Jacobsons are merely pooling the money raised from investors into large bank accounts from which they are siphoning money to pay family expenses and the operating expenses of their various companies. They also are paying earlier investors with funds received from new investors in classic Ponzi scheme fashion.

Assets frozen

After filing its complaint yesterday in federal court in Salt Lake City, the SEC obtained an emergency court order freezing the assets of the Jacobsons and their companies.

“Wendell and Allen Jacobson misled investors to believe they were financially supporting what was portrayed as a widespread and reputable operation to revamp apartment communities and turn a significant profit,” said Ken Israel, Director of the SEC’s Salt Lake Regional Office. “Their promises were anything but truthful.”

According to the SEC’s complaint, the Jacobsons raised more than $220 million from approximately 225 investors through a complex web of entities under the umbrella of Management Solutions, Inc.

They have operated the allegedly fraudulent scheme since at least 2008, the complaint said. They sold the securities in the form of investment contracts without filing any registration statement with the SEC as required under the federal securities laws. Wendell and Allen Jacobson are acting as unregistered brokers in connection with their offers and sales of membership interests in LLCs.

The SEC alleges that the Jacobsons falsely assure investors that the principal amount of their investment will be safe, and their funds will be used to acquire, rehabilitate, and manage certain identified properties.

Investors are promised annual returns ranging from 5 to 8 percent per year depending upon the particular apartment complexes pertaining to their LLC, with additional profits promised when the properties are sold. Wendell and Allen Jacobson tell investors that their funds are designated for a particular LLC. Wendell Jacobson has told investors that only one time has he ever lost money on a property, and on that occasion he covered the loss personally so that investor returns would not be reduced.

According to the SEC’s complaint, investor funds are never held and used exclusively to acquire, rehabilitate, and operate rental properties as represented by the Jacobsons.

In fact, the LLCs are experiencing significant net losses, the complaint charges. Nevertheless, the LLCs continue to pay returns to investors, falsely leading those investors to believe their LLCs are operating at a profit. When investor funds are received, they are almost always transferred or pooled immediately in accounts of various Jacobson-owned entities, most commonly in the account of Thunder Bay Mortgage Company. Investor funds are then used for a variety of purposes that have not been disclosed to investors.

The SEC further alleges that on numerous occasions since Jan. 1, 2010, investors have been told that the property owned in their LLC has been sold, and that they have realized a profit on the sale. In fact, those properties were not sold, and the Jacobsons used the alleged “sales” as a means of shifting investors into and out of certain properties. They have essentially been operating a shell game intended to raise additional funds from new or existing investors in order to meet the rapidly growing financial obligations of their operation.

A new study finds the bankruptcy system is more cumbersome and expensive than ever, thanks to the 2005 Congressional "reform" of bankruptcy laws.

The study found that since the new law took effect, debtors’ attorneys’ fees plus filing fees and the debtor education fee have increased the total direct access costs for both consumer chapter 7 and 13 cases.

The study was funded by the American Bankruptcy Institute Anthony H.N. Schnelling Endowment Fund and National Conference of Bankruptcy Judges Endowment for Education.  It found that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) made the bankruptcy system cumbersome and costlier to use for both debtors and bankruptcy professionals.

According to the study, additional debtor paperwork requirements have added time and monetary burdens throughout the consumer bankruptcy system. The new law also imposed new duties and obligations on attorneys, trustees and court personnel.

Increased complexity

The increased complexity of the consumer bankruptcy system calls for professionals to have a “nuanced understanding of the dissonance between how the system is designed to work in theory, and how it works in practice, said Lois R. Lupica, Maine Law Foundation Professor of Law at the University of Maine School of Law, the study's principal investigator.

"There is a disconnect between the skill, time and commitment it takes for attorneys to provide debtors with first-rate representation, and compensation that does not always reflect such excellence,” Lupica said. The “tension inherent in the indispensability of highly skilled consumer bankruptcy attorneys, and the resources reasonably available to sustain a quality bar,” means the system is fighting “best practices.”

Lupica examined a national random sample of 11,221 chapter 7 and chapter 13 consumer cases (approximately 0.12 percent of the consumer bankruptcy cases filed) in 90 judicial districts filed between 2003 and 2009. 

A full copy of the study is available online. 

When a brand new washer breaks down in the first year you might not be overly concerned, since it has to be under warranty. But not so fast. Let Pat,of Elkhart, Ind., tell you about her experience.

"I purchased a Maytag Bravo 300 from Lowes in February of 2011," Pat told ConsumerAffairs.com. "Last week I was doing a load a laundry and the washer stop in mid-cycle, and it gave an alarm and error code "d. I checked out the manual and it said there was a problem with the drain line. I check the drain line and it was fine, so I called Maytag to have a service man take a look at it. Before he even looked at the washer he said it was probably the pump, and it is not covered under warranty, and he said that it will cost $140."

Pat says the repairman told her that the pump is too small for the unit.

"He obviously sees this all the time," Pat said.

Late is late

Lezlie, of Long Beach, N.Y. is another consumer who apparently doesn't understand what a payment "grace period" means.

"In the past few months, NationStar Mortgage has starting calling our house approximately six times a day after the sixth of the month on, to inform us that we are 'late' on our mortgage," Lezlie said. "They also call my work twice a day. Like others, we have a grace period until the 16th of the month, after which a late fee is charged. I have filed complaints with the BBB and the Texas Attorney General's Office and would encourage others to do the same. It is shocking that a business is allowed to get away with this."

Lezlie, your mortgage lender is well within its rights to prompt you for a late payment, and if you pay after the due date, your payment is late. A grace period is provided as a courtesy because things can happen, and a payment might be mailed late a couple of times a year. The grace period means the consumer doesn't get reported to the credit agencies if they make up the payment quickly. Consumers who habitually milk the grace period run the risk of causing lenders to review the hole concept of a grace period.

Choose a preparer carefully

With tax filing season starting next month, it might be good to give some throught now to who is going to prepare your taxes. It can make a difference.

"I had used Jackson Hewitt when I lived in Maryland so I used it at a Wal-Mart location here," said David, of Marion, N.C. "It took the man a LONG time to complete. When it was all finished he charged $210, more than I had ever paid. I told him about the move. He didn't mention I could get a deduction because of the move. I waited some time for the refund and it didn't come. I finally called IRS and they had no record of a filing! I called Jackson Hewitt and was told to go to another branch. The woman at that tax office gave me a disc with my info and told me to take it someplace else. I was fed up and took it to another tax preparer who understood my problem with Jackson Hewitt and filed it free and I was able to claim the move and it turned out better."

The problem with a national franchise tax preparer is one office might be terrific and another not so good. A consumer really has no way of knowing. It's better to do what David finally did, finding a reputable independent tax preparer or accountant, who likely will be there year after year.

Cars keep getting safer but Subaru is the only manufacturer this year to win the distinction of having every one of its models chosen as a Top Safety Pick by the Insurance Institute for Highway Safety, which gave the designation to a total of 115 models covering every size range.

In all, 69 cars, 38 SUVs, 5 minivans, and 3 pickups earned the IIHS' top safety award, which recognizes vehicles that do the best job of protecting people in front, side, rollover, and rear crashes

Because the federal government now requires all 2012 and later passenger vehicles to have electronic stability control to help drivers avoid loss-of-control crashes, ESC no longer is a requirement to win as it was in prior years.

The winners' circle includes 18 new recipients for 2012, while 97 models that previously qualified for the 2011 award carry over to 2012.

"For the second year running a record number of models qualify," says Institute president Adrian Lund. "It's tough to win, and we commend auto manufacturers for making safety a top priority."

That commitment to protecting people in crashes is evident in the fast pace of design improvements automakers have made during the past year, Lund said. Initially 66 vehicles qualified for last year's award as less-than-perfect rollover ratings held back many contenders. Later the number climbed to 100 as manufacturers redesigned roofs to make them stronger or introduced new models to win.

Again this year every major automaker has at least one winner. Subaru remains the only manufacturer with the distinction of earning awards for every model it builds. Subaru picks up five awards, including one for the redesigned Impreza, a small car.

Toyota/Lexus/Scion has 15 winners for 2012, more than any other auto manufacturer. General Motors is next with 14, followed by Volkswagen/Audi with 13, and Ford/Lincoln and Honda/Acura with 12 awards apiece.

Honda improves

Ten of the 18 new additions are Honda/Acura models, including the midsize Accord sedan, which hasn't earned the top pick since the Institute toughened criteria to win the 2010 award by adding a test to assess roof strength in a rollover crash.

Vehicles rated good for rollover protection have roofs more than twice as strong as the current federal standard requires. The Institute estimates that such roofs reduce the risk of serious and fatal injury in single-vehicle rollovers by about 50 percent compared with roofs meeting the minimum requirement. A new federal standard for roof strength will phase in beginning with 2013 models.

Roofs on the 2009 Honda CR-V and 2010 Pilot scored marginal ratings in prior Institute tests, while earlier models of the Accord, CR-Z, Fit, and Insight rated acceptable. Now all of these 2012 models earn good ratings and the top pick.

"Honda/Acura deserves credit for most-improved status," Lund says. "The automaker buckled down and upgraded roofs on 10 models that missed winning last year because of rollover protection. Now, the automaker has winners in the minicar, small car, midsize car, small SUV, midsize SUV, minivan, and large pickup categories."

Another midsize sedan, the Toyota Camry, earns its first-ever top safety pick. Last year, the Camry missed the mark because of a marginal rating for seat/head restraints. The Toyota Yaris also earns its first award. Toyota upgraded the roof and seat/head restraints of the 4-door hatchback model to win. Good ratings secure the Yaris a spot alongside 3 other minicars, the Fiat 500, Ford Fiesta, and Honda Fit, as 2012 winners.

"It's great to see the Accord and Camry, 2 of the top-selling midsize cars in the U.S. market, join the top safety pick ranks this year," Lund says. "The Accord previously won the 2009 award but has been missing from the list since then."

Greener

With fuel efficiency and reduced emissions on many buyers' wish lists, the winners' circle includes more green choices. Toyota's all-new Prius v is among them. Roomier than the original, the v hybrid brings to 15 the number of winners available as hybrids. The plug-in electric Chevrolet Volt and Nissan Leaf, winners in 2011, also earn this year's award.

For drivers who need to haul loads, the Ford F-150, Honda Ridgeline, and Toyota Tundra are good choices in the large pickup category. Small pickups continue to be shut out. None the Institute has evaluated qualify for the award.

"When we launched top safety pick in 2005, consumers had 11 models to pick from. Six years later, finding a winner that fits most budgets and lifestyles is easy," Lund says. "It's a testament to the commitment automakers have made to going above and beyond minimum safety standards."

Complete list

Minicars
Fiat 500 built after July 2011
Ford Fiesta sedan and hatchback
Honda Fit
Toyota Yaris 4-door hatchback

Small cars
Chevrolet Cruze
Chevrolet Sonic
Chevrolet Volt
Ford Focus
Honda Civic 4-door
Honda CR-Z
Honda Insight
Hyundai Elantra
Kia Forte sedan
Kia Soul
Lexus CT 200h
Mazda 3 sedan and hatchback
Mini Cooper Countryman
Mitsubishi Lancer except Ralliart and Evolution
Nissan Cube
Nissan Juke
Nissan Leaf
Scion tC
Scion xB
Scion xD
Subaru Impreza except WRX
Toyota Corolla
Toyota Prius
Volkswagen Golf 4-door
Volkswagen GTI 4-door

Midsize moderately priced cars
Audi A3
Buick Verano
Chevrolet Malibu
Chrysler 200 4-door
Dodge Avenger
Ford Fusion
Honda Accord
Hyundai Sonata
Kia Optima
Subaru Legacy
Subaru Outback
Toyota Camry
Toyota Prius v
Volkswagen Jetta sedan
Volkswagen Jetta SportWagen
Volkswagen Passat
Volvo C30

Midsize luxury/near luxury cars
Acura TL built after September 2011
Acura TSX sedan and hatchback
Audi A4
Lincoln MKZ
Mercedes C-Class
Volkswagen CC except 4-wheel drive
Volvo S60

Large family cars
Buick LaCrosse
Buick Regal
Chrysler 300
Dodge Charger
Ford Taurus
Toyota Avalon

Large luxury cars
Audi A6
BMW 5 series except 4-wheel drive and V8
Cadillac CTS sedan
Hyundai Equus
Hyundai Genesis
Infiniti M37/M56 except M56x 4-wheel drive
Lincoln MKS
Mercedes E-Class sedan
Mercedes E-Class coupe
Saab 9-5
Volvo S80

Small SUVs 
Honda CR-V
Hyundai Tucson
Jeep Patriot with optional side torso airbags
Kia Sportage
Subaru Forester
Volkswagen Tiguan

Midsize SUVs
Chevrolet Equinox
Dodge Durango
Dodge Journey
Ford Edge
Ford Explorer
Ford Flex
GMC Terrain
Honda Pilot
Hyundai Santa Fe
Jeep Grand Cherokee
Kia Sorento
Subaru Tribeca
Toyota Highlander
Toyota Venza

Midsize luxury SUVs
Acura MDX
Audi Q5
BMW X3
Cadillac SRX
Infiniti EX35
Lexus RX
Lincoln MKT
Lincoln MKX
Mercedes GLK
Mercedes M-Class
Saab 9-4X
Volvo XC60
Volvo XC90

Large SUVs
Buick Enclave
Chevrolet Traverse
GMC Acadia
Volkswagen Touareg

Minivans
Chrysler Town & Country
Dodge Grand Caravan
Honda Odyssey
Toyota Sienna
Volkswagen Routan

Large pickups
Ford F-150 crew cab models
Honda Ridgeline
Toyota Tundra crew cab models

The Bumbo Baby Sitter is not, as its name implies, something that "baby sits" infants.  It is instead a plastic seat that helps infants sit upright before they are able to do so on their own.

The problem with this is that babies can arch their backs and hurl themselves out of the Bumbo.  That's bad if the Bumbo is on the floor but it's really bad if a parent or caregiver has placed the Bumbo on a table or counter.

There have been at least 45 known incidents in which infants fell from Bumbos.  In 17 of those cases, the infants suffered skull fractures, which are always serious and can be life-threatening. In at least 50 other reported cases, babies managed to wriggle out of Bumbos that had been placed on the floor, resulting in two skull fractures and a concussion.

The seats, made by Bumbo International Trust of South Africa, were recalled on October 25, 2007 but, like many recalls, the action did not require that the seats be collected and destroyed -- or even that that they no longer be sold.  Instead, Bumbo International agreed to put safety-warning stickers on the seats, warning parents and caregivers to keep an eye on their children.

The company dutifully supplied the stickers to parents who bothered to ask for them and now slaps the stickers on new seats, which continue to line the shelves of Toys R Us and other mass merchandisers.

Parents protest

Parents were quick to complain that the recall was too little, too late -- and that was back in 2007.

"I feel that this item should be taken off the market, as a new warning label is not going to reduce the hazard this product poses," said Wendy of Hawthorne Fla., in a 2007 complaint to ConsumerAffairs.com. Wendy said her child was injured while her Bumbo was on the floor.

"I have a Bumbo Baby Seat and have always used it as suggested. I keep it on the floor and keep a close eye on my daughter," Wendy said. "She weighs way less than the 22 lbs suggested maximum weight. She still managed to come out of the seat landing on her head resulting in a large bruise."

Not much has happened since then.  The seats are still being sold, some 3.85 million of them since 2003 and, from what we hear, babies are still falling out of them.

"My 8 month old daughter fell out of the chair while she was on the floor in our living room!" said Scarlett of Oil City, Pa. in a July 2011 complaint. "She was reaching over the side for a toy and she went face first into the carpet! The idea is good but NOT SAFE for your child!"

What's being done?

So what is being done about this clear and present danger to infants? Well, the supposedly rejuvenated and re-energized U.S. Consumer Product Safety Commission (CPSC) has issued a press release reminding parents and caregivers not to let their infants fall off of tables.

More aggressive action is coming from the much-maligned trial bar. In Austin, Texas, Ross Cunningham of the Rose Walker law firm old Reuters he has settled a dozen lawsuits over Bumbo's safety.

Of course, while a settlement presumably provides compensation to the injured parties it does nothing to get dangerous products off the market. Also, in nearly every case, companies routinely require that the court proceedings be sealed as a condition of the settlement, thus preventing the public from learning of the case.

In one lawsuit that's still pending, Cunningham alleges that Bumbo "has taken no effort" to reconfigure the product to prevent children from getting out of it, "despite having actual knowledge of the dangers associated with the Bumbo Baby Sitter...and the potential of the Bumbo Baby Sitter to cause serious injury to children."

Bumbo says the seat is safe when used as directed.  In merchandising directories, the company boasts that "Innovation, Safety and Comfort are the two [sic] most important starting points for developing any of our products here at Bumbo."

Brain development

"No parent can afford to be without a Bumbo," according to the company's listing in GVPedia.com, an international business directory. The company goes on to promote the Bumbo as stimulating infants' brain development:

"[I]t enables and encourages babies' interest in their environment, which, until now, has been problematic for moms (who, contrary to popular belief, only have one pair of hands). And this interest, a crucial element for stimulating brain development, profoundly affects Baby’s intelligence over the long term." 

In fairness, it should be noted that on the home page of its corporate site, Bumbo posts this warning:

WARNING! Prevent falls
Never use the Bumbo baby seat on any elevated surface.
The seat is not designed to be totally restrictive.
Use of the seat on any elevated surface may result in serious injury.
Never leave your child unattended.

No doubt that's good advice but whether it's adequate, given the clear danger of the product, is a question perhaps not yet fully addressed.