Current Events in February 2012

It's hard enough keeping up with current debts without old debts raising their ugly head. Often consumers get a call out of the blue from a debt collector seeking payment for some long-forgotten debt.

The Federal Trade Commission (FTC) recently published a brochure to help consumers understand their rights when it comes to old debts. It explains, among other things, that if you have old debts, collectors may not be able to sue you to collect on them.

Time-barred debt

That's because debt collectors have a limited number of years — known as the statute of limitations — to sue you to collect. After that, your unpaid debts are considered "time-barred." According to the law, a debt collector cannot sue you for not paying a debt that's time-barred.

How old does a debt have to get before it's time-barred? There's no easy answer because each state has its own statute of limitations.

It is also tricky because, under certain circumstances, the clock can be reset, and the time period can be started fresh.

Under the federal Fair Debt Collection Practices Act (FDCPA), a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy unpaid debts and then try to collect them. The term 'debt collector' doesn't include original creditors who collect their own debts.

When is an old debt too old for a collector to sue?

Typically, state law determines how long the statute of limitations lasts. Usually, the clock starts ticking when you fail to make a payment; when it stops depends on two things: the type of debt and the law that applies either in the state where you live or the state specified in your credit contract.

For example, the statute of limitations for credit card debt in a few states may be as long as 10 years, but most states impose a period of three to six years. To determine the statute of limitations on different kinds of debts under each state's law, check with a legal aid lawyer, another attorney, or your State Attorney General's Office.

Disclosure

If a debt is time-barred, a debt collector is supposed to tell you. Unfortunately, not all do. Ask the collector if the debt is beyond the statute of limitations. If the collector answers your question, the law requires that his answer be truthful. Some collectors may decline to answer, however.

Another question to ask a collector if you think that a debt might be time-barred is what their records show as the date of your last payment. This is important because it helps determine when the statute of limitations clock starts ticking.

Should you pay a time-barred debt? The decision to pay a time-barred debt is up to you. You have options, but each one has consequences. For example, whether you pay the debt and how much you pay will affect your credit rating.

Consider this: Many of us reach a point in life where we frankly no longer care much about our credit rating.  If you are not expecting to buy a house, a car or some other big-ticket item, you may be ahead to let old debts and sleeping dogs lie.

Jack, of Palmdale, California, may still be in the doghouse after he ordered a dozen long stem roses for his wife for Valentine's Day from 1-800-Flowers and they never arrived.

“I tried to contact 1800flowers again by phone several time till one time I was put on hold for 20 minutes then a guy came on the phone and I was about to give him order number when he said to wait a second and the phone was again cut off,” Jack told ConsumerAffairs. “I have also tried emailing 1800flowers via its own website and again no response.”

As we've said in the past, you tend to come out better by ordering flowers directly from a local florist. Jack said his wife was not happy with him and he had to show her the email confirmation for his undelivered order before she forgave him.

Not so lonely anymore

It's no fun when your washing machine breaks down. Gillian, of Beverly, Mass., says her new Maytag Bravo broke down after only six months and she's having trouble getting it repaired.

“It's now taken over a month to get a repair person in to fix it,” Gillian said. “From the time we called Maytag, to the referral to the service person, to the service appointment, to waiting over two weeks for the part to come in it's been over a month with no washer. This is unacceptable!”

Gillian says she thinks Maytag should be reimbursing their customers who've been spending money at the laundromat after spending between $700 and $900 on a washing machine.

Tale of two fees

LaVerne, of Washington, DC, recently cancelled cell phone service with Sprint to sign up with AT&T;.

“I understand the early termination fees, but they increase the price from $200.00 to $350.00 without notification,” LaVerne said. “Before I terminated my service the fees were only $200.00 per phone. Now its $200.00 for one phone and $350.00 for another phone.”

LaVerne simply needs to consult the contract, or contracts, if each phone has its own agreement. The Early Termination Fees should be spelled out in the agreement.  Unfortunately, cell phone companies change the terms of their contracts frequently, using micro-text in the monthly bills and their customer service reps are some of the nastiest, most unbending you're liable to find.

We'd say LaVerne should head over to 441 4th St., NW and seek assistance from the DC Attorney General, who has been quite active in other cell phone disputes over the years. 

Apple today revealed the next generation of Mac OS X, to be known as "Mountain Lion," and released it to developers. The software, which takes many of its cues from the iPad, will take on Microsoft's Windows 8 when it arrives later this year.

The software, version 10.8, will arrive via download. Like its predecessor, Lion, Mountain Lion will further shrink the gap between Mac OS and iOS, incorporating more iOS features into the Mac interface. 

New features include "Messages," which will replace iChat, as well as further integration with iCloud.

“The Mac is on a roll, growing faster than the PC for 23 straight quarters, and with Mountain Lion things get even better,” said Philip Schiller, Apple’s senior vice president of Worldwide Marketing. “The developer preview of Mountain Lion comes just seven months after the incredibly successful release of Lion and sets a rapid pace of development for the world’s most advanced personal computer operating system.”

The developer preview of Mountain Lion introduces Gatekeeper, a revolutionary security feature that helps keep consumers safe from malicious software by giving them complete control over what apps are installed on their Mac.

The preview release of Mountain Lion is available to Mac Developer Program members starting today. Mac users will be able to upgrade to Mountain Lion from the Mac App Store in late summer 2012.

Yes, chocolate is good for you ... but only up to a point.  And Mars Inc. has decided that point falls right at 250 calories.

The candy giant says that by the end of next year, all of its chocolate products will contain no more than 250 calories.  The king-sized Snickers bar will be among the targets of the slimdown. 

The calorie limit is part of the company's "broad-based commitment to health and nutrition," said spokeswoman Marlene Machut.

Mars, which makes a great deal of its environmental, social and health commitment, previously announced it would reduce sodium levels in all its products by 25 percent by 2015.

In 2007, the company promised not to buy advertising if more than one quarter of the audience was expected to be under 12 years old.

Based in McLean, Virginia, Mars has net sales of more than $30 billion and six business segments including Petcare, Chocolate, Wrigley, Food, Drinks and Symbioscience. 

The FBI is looking for four suspects who allegedly stole the largest mined ruby in the world, which is sculptured into an image of the Liberty Bell. The men made off with the ruby Liberty Bell during an armed robbery at Stuart Kingston Jewelers in Delaware on November 1, 2011.

The suspects forced one employee to open and empty the jewelry store vault. The four suspects fled in a U-HAUL cargo style van with stolen New York license plates. 

Capital One has received federal approval to complete its purchase of ING Bank, although the Federal Reserve attached some conditions to the transaction.

Hoping to avoid creating the next "too-big-to-fail" institution, the Fed  directed McLean, Va.-based Capital One to take specific steps to ensure that its risk-management functions, including compliance, are commensurate with its new size and complexity.

"We are very pleased that the Federal Reserve has approved our acquisition,” Capital One said in a statement.  It said it hopes to close the deal in the next few days.  It will have 90 days to outline its plan to strengthen its compliance and other risk-management controls.

Capital One for years was a "credit card bank," meaning it did nothing but issue credit cards. But in 2006, it acquired  New York's North Fork Bancorporation in a stock and cash transaction valued at approximately $14.6 billion, making it one of the 10 largest banks in the United States, based on deposits and managed loans, and the third-largest retail bank in the New York region, the nation's largest deposit market.

In 2008,  it bought Chevy Chase Bank for $520 million, gaining the No. 1 position in the Washington, D.C., market and — not coincidentally — giving it control of Chevy Chase's $11 billion in deposits. Capital One said at the time that Chevy Chase's cash cache would help it ride out the deepening recession, along with $3.6 billion in TARP funds. CitiGroup had also been bidding on Chevy Chase.

ING is a global financial institution of Dutch origin offering banking, insurance and asset management to over 85 million private, corporate and institutional clients in more than 50 countries. The Capital One deal affects only U.S. banking operations.

Whole Foods helped pioneer the organic, fresh food trend but in the process, its large, trendy stores -- located mostly in cities and close-in suburbs -- acquired a reputation for high prices and the chain now finds itself trying to live down its "Whole Paycheck" reputation as it builds smaller stores in more distant suburbs.

It may not be easy.  Competitors, including the behemoth Walmart, have discovered the fresh food market while the funky but beloved Trader Joe's is expanding inward from the coasts. Trying to present a fresher face, Whole Foods is building smaller stores and holding the line on prices even as its costs rise.

But it may be hard to counter the high-price perception, as a ConsumerAffairs.com computerized sentiment analysis of about 220,000 consumer comments on Twitter, Facebook and other blogs and social media found.

Fully 83% of consumers voicing dislikes said they found Whole Foods expensive, while 84% of those citing what they liked about Whole Foods said it "helps you live." While positive enough, that sentiment's possibly not specific enough to entice suburban shoppers who may have lower incomes and bigger families than the hipper urbanites who are the stereotypical Whole Foods clientele.

Wealthy whites

Whole Foods may also need to make a greater effort to welcome ethnic and racial minorities to counter the perception that it is a store that caters to wealthy whites.

"I went to my local whole foods in Vienna, Va. I thought to get my usual favorite coffee and head home. While I was getting coffee I decided to test out a new coffee type," said Karina in a complaint to ConsumerAffairs.com. "As I was doing that a sales person, who has been very rude to me, gives me the feeling as if I’m not a wanted customer because I am a Hispanic woman.

"As I was at the coffee section I was approached by the store manager, and at first I thought he was just asking how things were but as the conversation continued he came out and said I get samples from here every week. I feel very offended because I felt as if I was being discriminated against. I am a hard working single mother who has never stolen from anyone," Karina said.

Adam, who said he is a cashier at a Whole Foods in Atlanta, complained about what he called "Whole Foods' horrible treatment of people."

"They routinely follow minorities around and I was told I was only hired because the other black male cashier had just quit," Adam said.

That's the experience Stacie of Houston had: "The store workers  followed me around the store, interrogating me about the choice of snacks I picked. Ted was rude to me and insulted me because I am black."

Lynne of Natick, Mass., complained that Whole Foods does not welcome disabled shoppers.

"Whole Foods in Framingham, MA does not provide motorized shopping carts for mobility challenged guests! No excuse! If you have crutches or need other mobility aids, you are not welcome to shop independently at Whole Foods," she said. "Team members told me there are daily requests for these carts. Apparently, WF doesn't care about their customers! I had to flop myself over a cart and hobble around the store while other shoppers looked at me oddly. I felt foolish and left with just a few items."

Big spenders?

Beyond the challenge of appealing to customers who don't fit its stereotypical profiles is the challenge of getting those customers to loosen their purse strings.

Core customers at Whole Foods spend, on average, nearly three times more than new customers, the company said, according to the Wall Street Journal. 

If Whole Foods can figure out how to attract customers who are convinced its prices are too high and then get them to spend more, it will perhaps have qualified for a place in retailing history.

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Sentiment analysis powered by NetBase

The U.S. Department of Transportation (DOT) today fined Allegiant Air $100,000 for violating rules protecting air travelers with disabilities, as well as the Department’s rule for full-fare advertising.           

“We adopted our rules on reporting of disability complaints and advertising of airfares to protect consumers,” said U.S. Transportation Secretary Ray LaHood.  “Protecting the rights of airline passengers is a high priority for DOT, and we will take enforcement action when our rules are violated.”

Under DOT’s rule, carriers must sort disability-related complaints into categories based on the type of disability and nature of the complaint and submit an annual report to the Department on disability complaints received the previous year.  Each issue raised in a complaint must be recorded separately to account for the total number of complaints a carrier receives. 

The Department compiles carrier reports, publishes them on the Internet for consumers to compare, and submits them to Congress as required by law.  In addition, if an airline receives a written complaint alleging a violation of the Department’s disability rules, the carrier must provide a written response within 30 days that specifically discusses the complaint, gives the carrier’s view of whether a violation occurred, and states that the complaint may be referred to DOT for an investigation.

The Department’s Aviation Enforcement Office reviewed a sample of the disability-related complaints that Allegiant received directly from passengers in 2009 and 2010, as well as disability complaints against Allegiant that the Department received directly from passengers during 2009 and 2010. 

The Department found that in a number of instances, Allegiant responded to the complaints through a telephone call rather than in writing as required by the rule, and that the carrier both failed to record all of the disability complaints it received and to properly categorize and account for all the issues that were raised in the complaints. 

Advertising

In addition, the Enforcement Office found that Allegiant violated DOT’s price advertising rule by posting offers on its homepage for free flights to Las Vegas and Tampa Bay, Fla.   The banner for the Las Vegas ads did not indicate that taxes and fees would be extra.  Although an asterisk appeared after the words “Fly Free,” there was no information on taxes and fees on the page where the asterisk appeared, and there was no hyperlink that took consumers to a description of required taxes and fees. 

Instead, once consumers clicked on the link, they were taken to a page where they could see the amount of taxes and fees only after scrolling to the bottom of the page.  For the Las Vegas and Tampa ads, Allegiant also failed to include its fee of $14.99 for tickets purchased anywhere except at one of the carrier’s airport ticket offices in the initial fare quote provided on the website as required by DOT. 

These ads violated the Department’s rule requiring ads for airfares to identify the existence and amount of government-imposed taxes and fees at the first point a fare is displayed and to include in the initial fare quotes appearing on the website all carrier-imposed fees that passengers must pay to make on-line bookings. 

Until Jan. 26, 2012, government-imposed taxes and fees assessed on a per-passenger basis, such as passenger facility charges, could be stated separately from the advertised fare but had to be clearly disclosed in the advertisement so that passengers could easily determine the full price to be paid.  Internet fare listings were permitted to disclose these separate taxes and fees through a prominent link next to the fare stating that government taxes and fees were extra, and the link had to take the viewer directly to information where the type and amount of taxes and fees were displayed. 

Under DOT’s new advertising rule, which became effective on Jan. 26, 2012, carriers and ticket agents must show the total price, including all government taxes and fees, in every advertised fare.  

A start-up called LightSquared has been promising to build a nationwide wireless network that would bring high-speed broadband to areas that are not now adequately served.

But the Federal Communications Commission (FCC) has bowed to objections from the military and other government agencies which argued that LightSquare posed an unacceptable risk to Global Positioning System (GPS) devices, which use adjacent frequencies.

LightSquared has blamed GPS receivers, saying they're too sensitive.

“LightSquared’s proposal to provide ground-based mobile service offered the potential to unleash new spectrum for mobile broadband and enhance competition. [But] the Commission clearly stated from the outset that harmful interference to GPS would not be permitted," said FCC spokeswoman Tammy Sun.

“NTIA, the federal agency that coordinates spectrum uses for the military and other federal government entities, has now concluded that there is no practical way to mitigate potential interference at this time. Consequently, the Commission will not lift the prohibition on LightSquared," she said.

LightSquared said it "profoundly disagrees" with the conclusion, saying the decision disregards "more than a decade of regulatory orders, and in doing so, jeopardize[s] private enterprise, jobs and investment in America's future," the company said in a statement.

Backed by hedge-fund manager Philip Falcone, LightSquared has promised to "unleash the boundless opportunity of wireless broadband connectivity for all."

"We believe that it is time to transform the broadband industry to one that truly fosters innovation, creativity, and freedom of choice—with limitless and unimaginable possibilities," the company said in a statement on its Website.

But the Commerce Department's National Telecommunications and Information Agency (NTIA) said in a letter to the FCC yesterday that there was "no practical way to mitigate the potential interference at this time." The FCC issued its statement this morning.

Counterfeit drugs are always dangerous, but a counterfeit cancer drug is especially dangerous. Drug maker Roche and its U.S. unit Genentech are warning that counterfeit versions of Roche's blockbuster cancer drug Avastin have shown up in the U.S.

The companies provided few details, saying their were informed by an unnamed health agency and that the drugs originated outside the U.S. The companies said the U.S. Food and Drug Administration (FDA) is taking the lead in the investigation to determine where the drugs came from.

“We are working with the F.D.A. and law enforcement to aid their evaluations, determine the source of the counterfeit drug, and prevent its further distribution,” Roche and Genentech said in a statement. “The counterfeit product is not safe or effective and should not be used.”

How to tell the difference

Fortunately, there are some striking differences between the real and counterfeit versions. The real version's label is says Genentech and is all in English. The counterfeit label says Roche and includes some words in French.

If you check the lot numbers of actual Avastin, you'll find they are six digits with no letters. The counterfeit lot numbers begin with a letter.

The counterfeit Avastin is a cause for concern because the real Avastin is a highly successful cancer drug. It works by slowing the spread of cancer cells.

Last fall the FDA removed Avastin as an approved treatment for breast cancer, saying there was no evidence it was effective for treating that illness. The drug remains on the market, since it is used primarily to treat colon cancer. It is still approved for that use.

The discovery of counterfeit Avastin comes at a time of reported shortages of many cancer drugs in the U.S.

The Earned Income Tax Credit(EITC) is the U.S.' largest anti-poverty programs for working families, bringing an estimated $2 billion in refunds to qualified taxpayers nationwide. These refunds help to subsidize family income and often help drive the local economy in both rural and urban areas.

The credit can be claimed by taxpayers who owe no taxes. It can amount to a refund of up to $5,751 for low and moderate-income families with three or more children – a figure equal to nearly two months of income for many families.

Here are some of the ways working families can benefit from the EITC:

• Families with three or more qualifying children who earn less than $49,078 (or $43,998 for a single parent) are eligible for up to $5,751;
• Families with two qualifying children who earn less than $46,044 (or $40,964 for a single parent) are eligible for up to$5,112;
• Families with one qualifying child who earn less than $41,132 (or $36,052 for a single parent) are eligible for up to$3,094; and
• Married workers between the ages of 25-64 who earn less than $18,470 (or $13,660 for single) and have no children are eligible for up to $464

Many fail to file

Surprisingly, many people who are eligible for the EITC never file for it, and thus never receive it.

"The EITC is a vastly underutilized benefit, with up to 20 percent of eligible taxpayers leaving $300 million in credits left on the table. Costs for basic needs like housing and food are on the rise, and wage growth is virtually non-existent," said Elise Buik, president and CEO of United Way of Greater Los Angeles. "Last year our goal was to increase participation in EITC by ten percent, and we succeeded, helping residents claim over $38 million in total refunds. This year, we want to again increase participation in the program by another ten percent, which means almost 50,000 residents would get free tax assistance and help to claim money that is rightfully theirs, and back into our local economy."

This year, EITC has been expanded to help qualifying families with three or more children with a larger credit worth up to $5,751. Those who qualify, but have failed to claim the credit in prior years, may also apply for the EITC retroactively for a period of up to three years, making for an even larger check.

Qualifying for the EITC

To qualify for the EITC, claimants must be qualified working U.S. citizens and individuals with valid Social Security numbers. If a U.S. resident meets all of the qualifications, they are also able to retroactively claim the EITC for a period of up to three years.

Consumers have been in a somewhat cranky mood lately as they deal with expensive TV sets that break just out of warranty and cope with bank fees.

But it turns out there are companies that earn consumers' trust, giving them a high Reputation Quotient (RQ) rating in Harris Interactive's annual survey. This year, the top five are:

• Apple
• Google
• Coca-Cola
• Amazon.com
• Kraft Foods

"We are seeing the emergence of a group of companies that garner reputation equity by being positively associated with multiple industries," said Robert Fronk, executive vice president and Global Corporate Reputation Practice Lead for Harris Interactive. "Companies like Apple, Google, and Amazon.com combine innovation and leadership across multiple business areas, giving them true competitive advantage."

Could be, but a ConsumerAffairs.com computerized sentiment analysis of 28 million -- that's 28 million -- consumer comments in social media found opinion hovering in the high 40% positive range over the last year. Not bad, but not as great as the hosannahs produced by Harris' much smaller but more methodical sample.

In terms of year-over-year change, only Toyota, General Motors, BP, and Apple enjoy significant improvement in their RQ scores while one quarter of companies saw drastic declines. Among those with the most significant declines, five were financial institutions, including the 2010 top scorer, Berkshire Hathaway.

Again, could be, but our analysis found a surprisingly high ratio of negative-to-positive attributes expressed by consumers posting to Twitter, Facebook and other social media and blogs.

Where's Facebook?

While Facebook is a hot topic on Wall Street these days as it prepares for an initial public offering of stock that could, by some estimates, raise as much as $100 billion, it didn't even make the list. In fact, the survey found that Facebook's standing dropped since last year, now bordering between fair and good when it comes to reputation.

We looked at comments from 72 million consumers over the last year and also found net sentiment dropping from a rather anemic 31% a year ago to 24% now, dipping as low as 11% in September. 

While Facebook has grappled with privacy issues over the last year or so, many of the users who post comments at ConsumerAffairs.com take issue with the company over a lot of other, less-reported, issues.

“Why is it that Facebook can shut down sites which publish photos of mothers breastfeeding but allows publishing of photos of brutal and violent acts towards animals published in abundance,” asked Cheryll, of Ravensbourne, New Zealand. “A pathetic attempt to control this by reliance on users of Facebook to report such photos and videos is not good enough. Facebook has become nothing more than an electronic record of just how brutal and violent humans can be.”

She said, he said

More common are complaints about what one user posts about another on Facebook.

“A person that I am familiar with but do not know personally has posted a very hateful and distasteful comment about me on their Facebook,” said Deborah, of Byron, Ga. “This comment has defamed me as a person! The comment is also showing up on Google for anyone and everyone to see. This is not right!”

With more than 850 million members, nearly three times the U.S. population, Facebook might argue that it's impossible to police pages to the extent some users might like. Chances are, those policing efforts would elicit complaints from other users, who believe they're not justified.

What an RQ means

RQ measures six dimensions that comprise reputation and influence consumer behavior. Apple has the greatest score overall. In fact, despite today's challenging environment, Harris said Apple records the highest score in the RQ's history, and is top-ranked in four of the six key dimensions of reputation:

• Social Responsibility - Whole Foods
• Emotional Appeal - Amazon.com
• Financial Performance - Apple
• Products & Services - Apple
• Vision & Leadership - Apple
• Workplace Environment - Apple

Credit card companies increasingly make their money on various fees, in addition to the interest rates they charge on balances. While new regulations have made some fees less onerous for consumers, there are others that can sock unsuspecting customers.

Card Hub, a company that analyzes the credit card industry, says it has completed an evaluation of over 1,000 credit card offers and focused on two fees in particular that it says should be “alarming” to consumers. The fees are assessed by the same credit card issuer, First Premier Bank.

The first is a 25 percent fee on credit limit increases. First Premier charges customers who ask for and receive a credit line increase a fee equal to 25 percent of the amount by which their credit limit rose.

$50 for a $200 increase

For example, a customer receiving a $200 credit limit increase will get charged a $50 fee. This fee, of course, is on top of any annual fee the customer pays. The fine print dictates that this fee will not be refunded unless the customer notifies the bank that they do not wish to keep the higher limit within 30 days of the date of the periodic statement on which it appears.

The second fee amounts to $170 in first-year fees for a $300 credit limit. The main card displayed on the company's website charges $170 in first-year fees, which is equivalent to 56.6 percent of its credit line. The recently passed CARD Act limits first year fees to 25 percent of the card's initial credit line. Card Hub points out that, with just an extra $30, a consumer could instead use that $170 fee to put $200 in cash toward a secured card's security deposit, which is completely refundable.

Complaints

Consumers have often complained about First Premiers fees and policies.

“First we had to pay over $130 to get the card and activate it in hopes to help our credit,” Lindsey, of Aurora, Colo., told ConsumerAffairs.com. “Then we found out we have to pay to access the account online, make a payment, and you can never talk to a live representative. The fees and rates are astronomical and for what? There is no benefit to owning this card.”

Lindsey said she would like to close the account once she finishes, but worries there will be a fee for that too.

Card Hub CEO Odysseas Papadimitriou notes First Premier successfully went to court to expect a portion of its initial fees from CARD Act limits. He says it's in the industry's best, long-term interests to try and help consumers.

“I think it’s time for credit card companies to really get on board with working together with regulators to do what’s right for their customers and the economy,” Papadimitriou said.

When the University of Arkansas School of Law set up a program for law students to work with consumers who have filed for bankruptcy protection, one fact quickly became clear. These consumers waited too long to act.

“It’s very sad,” said Tim Tarvin, associate professor and supervising attorney in the student-staffed Federal Practice Clinic. “It's not unusual for people to break down in the interview setting with the student attorneys who are representing them. These families have been working so hard trying to figure out how to pay off their debt, and it’s just not working. The cash just doesn’t flow. The money isn’t there, and in most cases, it hasn’t been there for a long time.”

Tarvin cites statistics in The Two Income Trap, a book written by Harvard law professor Elizabeth Warren and published in 2003. According to Warren half of all bankrupt families were unwilling to admit, even in an anonymous survey, that they had filed for bankruptcy. She went on to say that as many as 18 million households – compared to the 1.5 million that actually filed in 2003 – would have seen a significant improvement in their balance sheets if they were only willing to sign a bankruptcy petition.

Shame

Why do people wait? Tarvin says is all comes down to shame. This single trait sometimes forces people to go “underground,” meaning they work for cash only, purchase with cash only and then cannot borrow money for any reason or even open a bank account. This usually comes after there has been some kind of legal judgment against them.

“Very often and for whatever reason, there is tremendous shame,” Tarvin says. “For many of our clients, it’s against the tenets of their religion.”

He says it's part of the culture in the state to pay your debts and be self-reliant. When you can't meet those standards, it's hard to accept. Tarvin said he stresses that the real purpose of bankruptcy is not to punish the consumer, but to get them back on their feet and make them productive again. To accomplish that, he says, the consumer has to be willing to consider bankruptcy sooner, before their financial situation becomes even worse.

Real purpose of bankruptcy

The real purpose of bankruptcy, according to Tarvin, is not to shame the debtor but rather to simply determine whether he or she can pay. It is a process designed to determine whether the debtor can pay all debts and still have enough money for the basic necessities for living.

“To blame bankruptcy for the debtor’s insolvency and non-payment to the creditor is like blaming the coroner for the death,” Tarvin says. “He – the coroner – is simply pronouncing that the person is deceased. Likewise, a bankruptcy discharge issued by the judge is merely a determination that the debtor is financially unable to pay his debts.”

Causes

In her book, Warren found that 87 percent of families with children cite only three reasons for bankruptcy: job loss, family breakup and medical problems. Bad investment and credit card overspending are included with “all other reasons” within the remaining 13 percent.

Tarvin admits that some clients who come into the federal clinic have reached a financial condition that necessitates bankruptcy because they were irresponsible with credit cards, but these people, he says, are a minority.

By far, individuals rather than businesses file the greater number of bankruptcies in federal courts each year. In 2010 there were nearly 1.6 million total filings. Only 3.5 percent of these were business filings.

Rear-wheel-drive cars have come to mean big-bucks models from Europe, with an occasional Japanese model thrown in. But now Kia is gearing up to launch its first-ever rear-wheel-drive sedan, Automotive News reports. 

The auto industry trade magazine says the top-of-the-line "halo" car -- code-named "KH" -- will launch in Korea in the first half of this year, but there's no word on when it will come to the U.S.

Not surprisingly, the KH will share a platform with the Equus, Hyundai's RWD sedan, which launched in late 2010 with a base price of $58,900. The Equus sold a little more than 3,000 vehicles in the U.S. ini 2011. The slightly less elegant Genesis sold about 33,000, proving that Korean models can compete in the luxury segment.

Kia has been pinning the sales needle in the U.S. of late, selling nearly half a million cars last year, a gain of 36 percent. The KH would presumably be slotted in about the Optima, currently Kia's most expensive and luxurious model.

Kia says the car will "definitely become the leading model of our lineup around the world, showcasing the best of the best of Kia," but reports from Australia say it will be manufactured only in left-hand drive, meaning it won't be available Down Under or in other locales where right-hand drive is the norm.

Kia says the new model unites "innovative design with high-tech features" and can be expected to be packaged will a veritable cornucopia of radars, proximity sensors and touch screens.

It's expected that a selection of gas and turbodiesel engines, as well as the V8 engine from the Hyundai Genesis.

Why RWD?

Why is rear-wheel-drive so important?  Well, it's much more expensive to build, which restricts it to upmarket models but more important is the driving experience. Basically, RWD provides weight balance and better handling at very high speeds while eliminating the unpleasant and dangerous torque steer phenomenon that limits the off-the-line performance of FWD cars.

To a certain type of car enthusiast, a front-wheel-drive car is just a transport unit. Listen to Wall Street Journal columnist Dan Neal describe the 2012 Porsche 911 Carrera S after a recent romp: "a ripping, scalping, torque-wrenching, swivel-hipped snake of a car."  

Nobody ever said that about a Kia. But check back in a year or two. 

The Federal Trade Commission dropped the ball by letting Google amend its privacy policy, a public interest group claims in a federal lawsuit.

The Electronic Privacy Information Center (EPIC) claims the government failed to enforce its 2011 consent order that barred Google from "misrepresenting the company's privacy practices, requires the company to obtain users' consent before disclosing personal data, and requires the company to develop and comply with a comprehensive privacy program," Courthouse News Service reported.

"In 2012, Google announced that it would change its terms of service for current users of Google services and consolidate users' personal information across more than 60 Google services in clear violation of its prior commitments to the Federal Trade Commission," the group argues.

The mounting opposition to Google's new privacy policy is taking a toll on consumers' opinion of the once universally admired company, according to a ConsumerAffairs.com sentiment analysis of about 270,000 consumer comments on the topic.

Net positive sentiment hasn't exceeded mid-40% territory during the last year and has dipped to nearly 0 at times.  Most recently, it is hovering around 20%. 

Buzz

Those commitments stemmed from concern over Google's privacy policy after the widely-panned 2010 launch of Google's social network, Buzz. EPIC complained then that Google was using information from its Gmail users "to populate Buzz, a separate and discrete social network service."

EPIC charged in the 2010 case that Google linked users' Gmail data to their Buzz accounts without clearly communicating that the company was making certain personal information public.

Eventually, the FTC found that Google "had launched Buzz through Gmail, and that 'options for declining or leaving the social network were ineffective.'"

Consent order

The FTC also found that Google "failed to disclose adequately that consumers' frequent email contacts would become public by default," and that it violated the Safe Harbor Framework between the United States and European Union by "failing to give consumers notice and choice before using their information for a purpose different from that for which it was collected."

The FTC's consent order bars Google from misrepresenting how it maintains personal information and requires the company to get consent before sharing the information. It also requires Google to implement a comprehensive privacy program, submit to independent assessments, and make its privacy-related documents available to the FTC.

EPIC contends that Google's recent announcement of its plan to create a single profile for users of all its services violates the FTC order, but the agency "has thus far failed to take any action regarding this matter, placing the privacy interests of literally hundreds of millions Internet users at grave risk," the group says.

EPIC wants an injunction forcing the FTC to enforce its own consent order.

The U.S Food and Drug Administration is warning dental and veterinary professionals to not purchase or use certain potentially unsafe hand-held dental X-ray units. The FDA is concerned that these devices may not be safe or effective and could expose the user and the patient to unnecessary and potentially harmful X-rays.

The units, sold online by manufacturers outside the United States and directly shipped to U.S. customers, have not been reviewed by the FDA and do not meet FDA radiation safety requirements. 

The Washington State Department of Health alerted the FDA after tests on a device purchased online revealed it did not comply with X-ray performance standards.

As a result, FDA is investigating the extent of the problem and notifying state regulatory authorities, dental professional organizations and other health organizations about the safety risks. To date, no adverse events have been reported.

A hand-held dental X-ray unit is a small, portable device that is intended for dental X-ray examinations. All units that have been cleared by the FDA bear a permanent certification label/tag, a warning label, and an identification (ID) label/tag on the unit.  Use of these devices requires a prescription from a licensed practitioner.

“Health care professionals using these devices should verify they are purchasing and using those that have been reviewed and tested to meet FDA’s standards,” said Steve Silverman, director of the Office of Compliance in the FDA’s Center for Devices and Radiological Health.  

To ensure this, users should:

• Verify the presence of required labels on the device.
• Ask vendors whether the device has been reviewed and cleared by the FDA.
• Access the FDA Medical Device Approvals and Clearances searchable database to verify that the X-ray unit has been cleared by the FDA. 
• Contact their state regulatory agency if they become aware of a device that may be hazardous or does not meet the FDA’s requirements. 

Businesses are complaining that their employees are giving away the store, but many consumers say they aren't seeing it.

In fact, many consumer complaints focus on dealings with a company's employee. The consumer feels the employee is rude, or in some cases inflexible and unable to cut them some slack.

A case in point is a complaint from Nancy, of Bellrose, N.Y., unhappy with the clerk at a Comfort Inn, where she had checked in on a trip to visit her mother in a nursing home.

“I checked in at 11:00 am,” Nancy said. “I just looked at the room and didn't even bring up my bags because I wanted to get to the nursing to meet my mother for her birthday luncheon.”

Change in plans

Nancy said she was at the nursing home when she received a call that her son was taken to the hospital. She returned to the motel to say she had to return immediately to New York and wanted to cancel the room.

“The receptionist said that I had had the room for five hours and I would not be able to receive a refund,” Nancy said. “I told her that I had not even brought my bags up to the room because I had to go to the nursing home. She didn't care and charged me $80.00.”

Nancy thinks the motel employee should have shown some compassion and refunded her money, but it probably wasn't that easy. Employees are under increasing pressures to account for every dime of revenue. Once a check-in has taken place, it's very hard to remove it without a lot of questions being asked.

Employees under pressure

Despite such incidents, many businesses think employees are giving away too much stuff to consumers. A recent study found that nearly 70 percent of the nation’s service employees give away free goods and services – from hamburgers to cable TV – costing companies billions of dollars a year.

Clay Voorhees, study co-author and marketing expert at Michigan State University, said one of the best ways to combat this illegal practice – called “sweethearting” – is through better screening of job candidates.

“Our results show that by adding a few screening questions that focus on the potential employee’s risk-taking, ethics and need for social acceptance, employers could identify ‘bad apples’ up front and simply avoid hiring them,” Voorhees said. “In the long run, this approach would address the issue.”

All this means that current employees are coming under closer scrutiny from their bosses, and are held more accountable. That means the clerk at the Comfort Inn might have felt she could not give Nancy a break without getting a reprimand or even losing her job.

Consumers like Nancy might argue that “sweethearting” isn't nearly the problem businesses think it is. But in this business climate, there seems to be growing pressure to play it by the book.