Current Events in April 2012

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    Study Finds Hate Groups Flourish In Big Box Communities

    Researchers find communities with big box retailers also have hate groups

    Researchers at Penn State University say they have noted an odd correlation. In communities where big box retail stores flourish, so do "hate" groups.

    The researchers suggest the the presence of these stores, such as Walmart, Kmart and Target, may alter a community's social and economic fabric enough to promote the creation of groups that play on different types of prejudice.

    The number of Walmart stores in a county is significantly correlated with the number of hate groups in the area, said Stephan Goetz, professor of agricultural economics and regional economics, Penn State, and director of the Northeast Regional Center for Rural Development.

    Indirect cost of low prices

    "Wal-Mart has clearly done good things in these communities, especially in terms of lowering prices," said Goetz. "But there may be indirect costs that are not as obvious as other effects."

    The number of Walmart stores was second only to the designation of a county as a Metropolitan Statistical Area in statistical significance for predicting the number of hate groups in a county, according to the study.

    The researchers, said that the number of Walmart stores in a county was more significant statistically than factors commonly regarded as important to hate group participation, such as the unemployment rate, high crime rates and low education.

    What's behind this statistical correlation? The researchers have several theories.

    The researchers suggested several theories for the correlation between the number of large retail stores and hate groups in an area.

    Economic impact

    Goetz said it may have something to do with the economic impact a big box store like Walmart has on a local community. Local merchants may find it difficult to compete against large retailers and be forced out of business.

    Local business owners are typically members of community and civic groups, such as the Kiwanis and Rotary clubs. Losing members of these groups, which help establish programs that promote civic engagement and foster community values, may cause a drop in community cohesion, according to Goetz.

    "While we like to think of American society as being largely classless, merchants and bankers are part of what we could call a leadership class in a community," Goetz said.

    Nothing personal

    The large, anonymous nature of big-box retailers may also play a role in fraying social bonds, which are strongest when individuals feel that their actions are being more closely watched. For example, people may be less likely to shoplift at a local hardware store if they know the owner personally, Goetz said.

    While big box retailers are likely to recoil from the notion that their presence in a community has anything to do with the presence of hate groups, the researchers say it's nothing personal.

    "We're not trying to pick on Walmart," said Goetz. "In this study, Walmart is really serving as a proxy for any type of large retailer."

    Goetz suggests the store chain could use this study to find ways to play a role in supporting local groups that can foster stronger social and economic ties in a community.

    Study Finds Hate Groups Flourish In Big Box Communities...

    Goldman, Sachs Fined $22 Million for 'Huddles'

    Huddles created the risk that non-public information would be disclosed

    A Goldman, Sachs process known as "trading huddles" was supposed to allow research analysts to share ideas with the firm's traders, so they could provide better advice to their clients. Whether that happened or not is open to debate but the Financial Industry Regulatory Authority (FINRA) says the huddles "created the significant risk that analysts would disclose material non-public information."

    Despite that risk, FINRA said Goldman did not have adequate controls in place to monitor communications in trading huddles and by analysts after the huddles, and today it fined Goldman $22 million for failing to adequately supervise the huddles. The Securities and Exchange Commission (SEC) announced a related settlement with Goldman. Pursuant to the settlements, Goldman will pay $11 million each to FINRA and the SEC.

    FINRA said trading huddles created the significant risk that analysts would disclose material non-public information, including, among other things, previews of ratings changes or changes to conviction list status. Despite this risk, Goldman did not have adequate controls in place to monitor communications in trading huddles and by analysts after the huddles.

    Goldman did not adequately review discussions in the trading huddles to determine whether an equity research analyst may have previewed an upcoming ratings change, FINRA charged. For example, an analyst said of a particular company in a trading huddle in 2008 that "we expect companies with consumer and small business exposure to be under pressure in the current environment, including [the company]." The next day, the analyst sought and received approval to downgrade the company from "neutral" to "sell," and to add the stock to Goldman's conviction sell list. Goldman published an equity research report making these changes that same day.

    In concluding this settlement, Goldman neither admitted nor denied the charges, but consented to the entry of the SEC's and FINRA's findings and admitted to certain facts that were part of a prior settlement with the state of Massachusetts.as conducted by Sandra Del Buono and Jeanne Elmadany under the supervision of James Day, Enforcement Chief Counsel and Jessica Hopper, Vice President, Enforcement.

    Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA's BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2011, members of the public used this service to conduct 14.2 million reviews of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck or by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA's Disciplinary Actions Online database.

    A Goldman, Sachs process known as "trading huddles" was supposed to allow research analysts to share ideas with the firm's traders, so they could provide b...

    Beware of In-App Purchases, They Can Add Up Quickly

    Free apps can suddenly become very costly

    An eight-year-old with an iPad might not seem like a dangerous thing.  After all, who would think a “free” game downloaded from iTunes, or any other reputable site, would not actually be free?

    Kristy, of Portland, Mich., reports her eight year-old son downloaded a "free" game on his iPad. The game may have been free but by playing it, he managed to rack up more than $1,140 in charges in charges on iTunes from the in-app purchasing option, playing the game Dragonvale, which is labeled as appropriate for ages four and up.

    “On March 30, he made 15 purchases totaling $720 in less than one hour,” Kristi wrote in a ConsumerAffairs post. “On March 31, the charges totaled over $420 in under 20 minutes.”

    As she looked into it, Kristy said she discovered these in-app purchases, ranging in price from less than $1 to over $100, were for things like treasure chests of coins, sacks of food, bags of gems, and dragon treats to use in this children's game.

    iTunes refunds the charges

    After a few phone calls, Kristi said iTunes agreed to refund the charges. But the experience has made her extremely wary about in-app purchases, and whether consumers, particularly young ones, realize the charges that they can quickly incur. Here's what Apple says about in-app purchases:

    “With iOS 3.0 or later, you can purchase subscriptions and extra content from within an application using your iPhone, iPad, or iPod touch,” iTunes says on its website. “Some examples of In-App Purchases are bonus game levels/maps, additional experience points, subscriptions, and recurring services.”

    But the question could be raised -- if the game is "free" but the consumer is offered expensive add-ons to make it more fun, doesn't it cease to be free?

    And when thousands of consumers fail to notice the fine print on "free offers," and find resulting unauthorized charges on their credit cards, is it any wonder that people downloading a free game fail to realize they are spending real money when offered in-app options? And is it any wonder that children, especially, might not notice?

    Too easy

    “My son was required to use our password one time to download this allegedly free game and did not have to reenter the password to make all of these in-app purchases,” Kristi said. “In his defense, my son thought he was being charged 'game money' and had no concept that these were real-world charges. As a parent, I feel like my son's naivety was preyed upon by this company.”

    iTunes is not the only company using in-app purchasing. Amazon and Google also use the practice.

    It allows developers to earn revenue on apps they provide consumers for free. But is it also a new, high-tech form of bait and switch? Kristi apparently sees it that way.

    “Developers are clearly targeting children and creating victims out of their parents who take ownership for allowing their kids to download these so-called free, paradoxically high-grossing, games,” Kristi wrote. “Something needs to be done regarding the current industry practice with respect to the marketing and delivery of these applications.

    Beware of In-App Purchases, They Can Add Up Quickly...

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      U.S. & 16 States Sue Apple and Major Publishers for Price Fixing

      Charges the companies conspired to drive up the price of ebooks

      The Justice Department and 16 states today filed suits against Apple and five major publishers --  Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster -- alleging they conspired to limit competition in the pricing of e-books. The suit has been reported to be in the works for several months.

      "What was at first a great benefit to buyers of electronic books – lower prices – apparently was considered too much of a benefit," said Ohio Attorney General Mike DeWine. "Customers who pay out their hard-earned money, no matter the product or service, deserve better."

      Hachette, HarperCollins and Simon & Schuster have agreed to a proposed settlement, U.S. Attorney General Eric Holder said at a news conference this afternoon.  He said the proposed settlement would require the publishers "to grant retailers – such as Amazon and Barnes & Noble – the freedom to reduce the prices of their e-book titles." He said the settlement also requires the companies to terminate their anticompetitive most-favored-nation agreements with Apple and other e-books retailers. 

      Arizona Attorney General Tom Horne said the states have reached agreements in principle with Harper Collins and Hachette to provide "significant consumer restitution" as well as injunctive relief. 

      Holder said the alleged comspiracy began in the summer of 2009, whe "executives at the highest levels of the companies included in today’s lawsuit – concerned that e-book sellers had reduced prices – worked together to eliminate competition among stores selling e-books, ultimately increasing prices for consumers."

      "As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles," Holder said.  "During regular, near-quarterly meetings, we allege that publishing company executives discussed confidential business and competitive matters – including Amazon’s e-book retailing practices – as part of a conspiracy to raise, fix, and stabilize retail prices. 

      "In addition, we allege that these publishers agreed to impose a new model which would enable them to seize pricing authority from bookstores; that they entered into agreements to pay Apple a 30 percent commission on books sold through its iBookstore; and that they promised – through contracts including most-favored-nation provisions – that no other e-book retailer would set a lower price. Our investigation even revealed that one CEO allegedly went so far as to encourage an e-book retailer to punish another publisher for not engaging in these illegal practices."

      Holder said Connecticut Attorney General George Jepsen and Texas Attorney General Greg Abbott played a major role in the investigation and warned that other major companies should beware of running afoul of the antitrust laws.

      "Today’s action sends a clear message that the Department’s Antitrust Division continues to be open for business – and that we will not hesitate to do what is necessary to protect American consumers," Holder said.

      Other litigation

      The Justice Department's case is similar to an antitrust suit filed last August by by attorney Jeff Friedman of Hagens Berman Sobol Shapiro LLP, a Berkeley, Calif., law firm.

      Friedman's suit claims Apple conspired with five major publishers to raise the price of e-books, dominate the market and force Amazon to stop selling at a discount. The conspiracy worked so well that e-books now cost as much or more than paperbacks, the suit alleges.

      Friedman's suit traces the history of e-books, noting that when Amazon introduced the Kindle back in November 2007, its “electronic ink” technology was such a hit that supplies of the original Kindle sold out in less than six hours. Besides portability and instant delivery, e-books greatly reduce the costs associated with brick-and-mortar publishing. But the suit, filed in U.S. District Court in San Francisco, says large publishing houses quickly realized that e-publishing also represented a huge threat to their profit margins.

      Amazon was selling Kindle e-books for $9.99 or less, while hardcover editions of the same books sold for more than $20. Faced with this threat to their business model, the suit says, publishers teamed up with Apple to “fight back in an effort to restrain trade and retard innovation.”

      “Given Amazon’s first-mover advantage and ever growing installed user base, publishers knew that no single publisher could slow down Amazon and unilaterally force an increase in e-book retail prices. If one publisher acted alone to try and raise prices for its titles, that publisher would risk immediately losing a substantial (and growing) volume of sales,” the suit charges.

      “Not wanting to risk a significant loss of sales in the fastest growing market (e-book sales), the publishers … solved this problem through coordinating between themselves (and Apple) to force Amazon to abandon its pro-consumer pricing.”

      States take action

      The states' lawsuit, filed in the U.S. Court for the Western District of Texas, alleges that Macmillan, Penguin and Simon & Schuster conspired with other publishers and Apple to artificially raise retail prices for e-books by imposing a distribution model in which the publishers set the prices for bestseller e-books at $12.99 and $14.99.  When Apple prepared to enter the e-book market in late 2009 and early 2010, the publishers and Apple agreed to adopt an agency distribution model as a mechanism to allow them to fix prices. To enforce their price-fixing scheme, the publishers and Apple relied on contract terms that forced all e-book outlets to sell e-books at the same price. Because the publishers agreed to use the same prices, retail price competition was eliminated. According to the States’ enforcement action, the coordinated agreement to fix prices resulted in e-book customers paying more than $100 million in overcharges.

      The states seek injunctive relief to reverse the effects of the defendants’ anti-competitive conduct as well as damages for customers who paid artificially inflated prices for e-books.

      States mounting the action are Arizona, Alaska, Colorado, Connecticut, Illinois, Iowa, Maryland, Missouri, Ohio, Pennsylvania, Puerto Rico, South Dakota, Tennessee, Texas, Vermont and West Virginia.

      The Justice Department today filed suit against Apple and five major publishers, alleging they conspired to limit competition in the pricing of e-books. Th...

      Housing Groups File Discrimination Complaint Against Wells Fargo

      Alleges foreclosed homes better maintained in predominately white neighborhoods

      It's generally accepted that a foreclosure in the neighborhood has a negative impact on other houses nearby. But is the impact felt more severely in predominately minority neighborhoods?

      The National Fair Housing Alliance (NFHA) and four of its member organizations believe that it does, and that it is no accident. The groups have filed a federal housing discrimination complaint against Wells Fargo & Co. and Wells Fargo Bank, N.A.

      The groups say the complaint is the result of an undercover investigation of Wells Fargo’s bank-owned properties that found foreclosed properties in white areas are much better maintained and marketed by Wells Fargo than such properties in African-American and Latino neighborhoods.

      Investigation covered 218 properties

      The complaint details the results of an investigation of 218 foreclosed properties owned by Wells Fargo. The groups say the results show that Wells Fargo has engaged in a systemic practice of maintaining and marketing its foreclosed, bank-owned properties, also known as Real Estate Owned or REO, in a state of disrepair in minority communities while maintaining and marketing REO properties in predominantly white communities in a far superior manner.

      The Wells Fargo investigation evaluated REO properties in the eight metropolitan areas of Atlanta, GA; Baltimore, MD; Dallas, TX; Dayton, OH; Miami/Fort Lauderdale, FL; Oakland/Richmond/Concord, CA; Philadelphia, PA; and Washington, DC. One item in the complaint was the lack of real estate signs in front of foreclosed homes in minority neighborhoods.

      Without a “for sale” sign, for example, potential homebuyers would simply not know the property is available. Also, if there is storm damage or unauthorized occupants, neighbors have no one to call. With a for sale sign, neighbors can call a real estate agent to report these kinds of problems.

      More signs in white neighborhoods

      The complaint says almost twice as many for sale signs were found in white communities than in communities of color in Philadelphia, PA and Oakland, CA. In Washington, DC, there were four times as many for sale signs in white neighborhoods than in neighborhoods of color, the groups say. There were no for sale signs at 90 percent of Wells Fargo properties in Dayton, Ohio's minority communities.

      “Wells Fargo’s disregard for homes in communities of color has severely damaged these communities,” said Shanna L. Smith, NFHA President and CEO. “The company has also hindered this nation’s efforts to promote fair housing and is in clear violation of the Fair Housing Act.”

      The National Fair Housing Alliance in Washington, D.C., and four of its member organizations – the Miami Valley Fair Housing Center in Dayton, Ohio; Housing Opportunities Project for Excellence in Miami, FL; Metro Fair Housing Services in Atlanta, GA; and North Texas Fair Housing Center in Dallas, TX – evaluated the maintenance and marketing of REO properties for the existence of 39 different types of maintenance or marketing deficiencies, such as broken windows and doors, water damage, overgrown lawns, no “for sale” sign, trash on the property, and other deficits.

      It's generally accepted that a foreclosure in the neighborhood has a negative impact on other houses nearby. But is the impact felt more severely in predom...

      Court Halts Alleged Fake Debt Collector Calls from India

      California Defendant Ran Phantom Debt Collection Scheme from His Home, FTC Alleges

      A U.S. district court has halted an operation that alleged hounded consumers for payday loan debts they didn't owe to the defendants or, in some cases, didn't owe at all. The defendants' scheme involved more than 2.7 million calls to at least 600,000 different phone numbers nationwide, according to the Federal Trade Commission (FTC).

      In less than two years, they fraudulently collected more than $5.2 million from consumers, many of whom were strapped for cash and thought the money they were paying would be applied to loans they owed, according to FTC documents filed with the court. The court order temporarily stops the illegal conduct and freezes the operation’s assets while the FTC moves ahead with the court proceedings and seeks refunds for consumers.

      The agency charged Tracy, California-based Kirit Patel and two companies he controls with violating the FTC Act and the Fair Debt Collection Practices Act.

      Often pretending to be American law enforcement agents such as "Officer Mike Johnson" or representatives of fake government agencies like the "Federal Crime Unit of the Department of Justice," callers from India who were working with the defendants would harass consumers with back-to-back calls, according to the FTC. One consumer reported that the caller threatened to have her children taken away if she did not pay, according to court documents.

      Another consumer told the FTC, “The callers threatened me and claimed they would arrest me if I didn’t pay them the alleged debt. One of the callers even contacted my neighbors and told me he was watching my house. The callers had a lot of . . . personal information about me, including my work address. One caller told me, ‘We just saw you walk into your office building,’ and then listed my office address. Another caller told me there were 55 warrants out for my arrest. Sometimes my caller ID would indicate that the call was from the FBI. Because the callers knew so much about me, I believed they were police officers or FBI agents. The calls scared me and I was often shaking when I hung up the phone."

      Private data leaked

      In difficult economic times, consumers may turn to high-interest, short-term payday loans between paychecks. The FTC alleges that information submitted by consumers who applied for these loans online found its way into the defendants’ hands.  Because the callers had this information – which often included Social Security or bank account numbers – and because many of the victims already were in a tenuous financial situation, they often believed that they owed the defendants the money, according to the FTC. In some cases, when consumers made the allegedly bogus payments, they had nothing left over to cover legitimate expenses: Two mothers reported that they could not buy Christmas presents for their families after making payments on the phony debts.

      The defendants typically demanded several hundred dollars and, in violation of federal law, routinely used obscene language and threatened to sue or have consumers arrested, according to the FTC’s complaint. They also threatened to tell the victims’ employers, relatives, and neighbors about the bogus debt, and sometimes followed through on these threats, the FTC alleged.

      Once victims were pressured into paying, the callers instructed them to use a pre-paid debit card such as a Wal-Mart MoneyCard, another debit card, a credit card, or Western Union so the money could be deposited into one of the defendants’ merchant processing accounts, the FTC alleged. Even after victims made a payment, the harassing calls often continued, forcing them to change their phone numbers, or close their credit cards or bank accounts in an effort to get the calls to stop, according to documents filed with the court.

      $4.2 million in consumer losses

      The FTC alleged that of the $5.2 million the defendants collected, almost $1 million was returned or charged back by their merchant processor, resulting in consumer injury totaling more than $4.2 million.

      The complaint alleges that the defendants violated the FTC Act and the Fair Debt Collection Practices Act by:

      • misrepresenting that they had the authority to collect on supposedly delinquent loans that consumers owed, they were a law enforcement authority or were affiliated with a government agency, and that consumers would be arrested, imprisoned, or sued; and
      • using obscene or profane language, and calling consumers repeatedly with the intent to annoy, abuse, or harass them.

      A U.S. district court has halted an operation that alleged hounded consumers for payday loan debts they didn't owe to the defendants or, in some cases...

      Gas Prices Not High Enough For Refineries

      East Coast refineries may be forced out of business

      With the national average price of gasoline closing in on $4 a gallon, you might expect the oil refinery business to be booming. It isn't.

      In fact, the opposite is true. Refiners have seen their margins slashed to the point that many are no longer profitable.

      A report in the Financial Times notes Sunoco has closed two oil refineries in Pennsylvania and is ready to pull the plug on another, meaning the East Coast is about to lose half of its refining capacity.

      Refiners caught in a squeeze

      With consumers paying $4 a gallon, how can this be? Well, believe it or not, it's the marketplace at work.

      The price of oil has soared over $100 a barrel, making it more expensive to refine a gallon of gasoline. That gallon of gas is sold to a retailer, who adds in a small profit and sells it to a consumer for around $4.

      But because it's so expensive, the consumer doesn't buy as many gallons as she did when gasoline sold for $3 a gallon. So the refinery is selling fewer gallons, on which the profit margin is very small. As sales keep dropping, the refinery isn't making enough profit to justify keeping the refinery open.

      Adding to the red ink is the fact that the East Coast refineries have traditionally purchased oil from overseas, which is now much more expensive than crude oil pumped in the U.S., mostly in Texas. It doesn't buy Texas oil because, well, because it never has.

      There are no pipelines running from Texas to Pennsylvania, but then are pipelines really necessary? The refineries currently get their oil delivered from Africa by tanker. It's not clear why tankers couldn't deliver it from Texas as well. From the Gulf of Mexico, take a hard left at the southern tip of Florida, steam north and you're practically there, right? 

      Odd circumstances

      It all makes for an odd set of circumstances; oil prices remain high because traders who buy and sell it on the commodities futures market believe it will be in short supply in the future and be even more expensive in the future. Either recovering economies will demand more oil or hostilities with Iran will interrupt shipments from the Persian Gulf, creating supply shortgages, they've concluded.

      None of that has happened yet, but it affects the current price of oil just the same. It makes for hard times at East Coast refineries and confusion and anger at the gas pump.

      East Coast refineries may be forced out of business...

      Are Banks Causing Even Higher Gas Prices?

      Convenience stores say swipe fees add to the price at the pump

      What makes consumers madder than high gasoline prices? How about bank fees?

      So, if you were to combine high gas prices with bank fees, you might have the perfect consumer storm. The National Association of Convenience Stores, which warred with banks last year over “swipe” fees, is stirring the pot again, making the case that bank fees are adding to the already expensive prices at the pump.

      The association has released a new study that found drivers are paying 6 to 10 cents a gallon in hidden bank fees every time they gas up. To make matters worse, the retailers say, the banks' "swipe" fee goes up inexorably with the price of gas, even though your bank is doing nothing extra to process your debit or credit card transaction.

      Swipe fees, of course are what banks charge stores to process your transaction. You may not know about them, but the convenience-store owner does.

      Rates set 'in secret'

      The association says all kinds of card fees, including swipe fees, are set in secret by Visa and MasterCard. They have grown to be the store owner's largest operating expense after labor – more than rent, more than utilities. Though they were reduced last year, convenience stores say they are still too high.

      According to the association, convenience stores paid more than $11 billion in card fees last year, a jump of almost 25 percent and an amount almost 90 percent greater than their profits.

      "These fees have come to be a tremendous burden on convenience stories, most of which are run by small business people," said Lyle Beckwith, senior vice president of government relations for the National Association of Convenience Stores. "In many cases, the banks are profiting more from the sale of gas than our members."

      As gas goes to $4 in some markets, the bank's average cut of swipe fees alone increases to 7 cents, if you pay with a debit card and up to 10 cents with a credit card.

      Paying cash doesn't protect you

      Even if you pay cash, the association says you'll pay extra, because the credit card companies' rules push the merchant to pass along the costs to everyone, not just customers who pay with plastic. The study also found that gas prices increased 80 percent between 2004 and 2011. Card fees rose 180 percent. In other words, even when gas prices level off, the bank fees continue to rise.

      “Because credit-card fees are fixed in secret by a duopoly of MasterCard and Visa, they always are on the increase, to the point where they are now the highest in the industrialized world,” the association said in a press release.

      Sounds like the war between convenience stores and banks isn't over yet.

      Are Banks Causing Even Higher Gas Prices?...

      Chrysler Introduces Wireless Charging of Smartphones, MP3 Players

      New technology debuts in 2013 Dodge Dart, arriving in showrooms by June

      In a world seemingly filled with goofy gadgets and fairly useless innovations, Chrysler Group has come up with something that could actually save time and trouble: wireless in-car recharging of all those goofy gadgets.

      Through its Mopar division, Chrysler is introducing new technology that will allow your iPhone, Blackberry, MP3 Players and Droid-based devices to immediately begin charging in your vehicle once the engine has started -- without the need to plug in any cords. 

      No, you can't keep your phone in your pocket or purse. This is new technology, not a miracle. 

      The company said a seamlessly integrated power bin will be installed just below the center stack and in front of the center console. The bin has a built-in charging grid that is activated when customers place their battery-powered device in it. A phone case, specifically designed for a variety of smartphones, is required and included with the feature. 

      The new technology will debut for customer purchase in the all-new 2013 Dodge Dart, which arrives in dealerships in the second quarter of this year. 

      Mopar in-vehicle wireless charging is available for $199.99, plus installation. For a detailed look, watch Mopar President/CEO Pietro Gorlier and Head of Product Development and Sales Jim Sassorossi below.

      In a world seemingly filled with goofy gadgets and fairly useless innovations, Chrysler Group has come up with something that could actually save time and ...

      Pier 1 Outlines Expansion Plans

      New ecommerce platform, new store openings

      Pier 1 Imports has outlined plans for an upgraded e-commerce platform, store remodelings, and new store openings over the coming three years.

      Last year, the retailer opened 13 new stores, according to its website, and introduced a site-to-store initiative called Pier 1 To-Go. This July, it will launch Pier 1 To-You, which CEO Alex Smith said will "lay the foundation for the next phase of our evolution into a multi-channel retailer ... and have the ability to provide a truly seamless shopping experience for our valued customer."

      But many consumers tell ConsumerAffairs they have a less than seamless experience when they try to make payments on their Pier 1 credit card.

      "Trying to pay bill online, Chase Bill Pay page kept telling me I was not a recognized card holder," said Robin of Manor, TX. "I called the phone number on my statement and was told that Chase is no longer the bank for Pier 1. All the information on payments, phone numbers and online addresses are for Chase on the current month's statement. When I asked why customers were not notified, the rep, who gave her name as Marinol, stated that this was a sudden change and notices would be forthcoming."

      Melissa of Shippensburg, Pa., had a similar experience. 

      "I received a billing statement from Pier 1 for March. I have attempted to make a payment to chase.com/pier1card, which is who is listed on the statement, for the past week or so. The site states: 'Cannot confirm you as an account holder.'" she said.

      "Now, my payment is overdue. I will get a late charge and I still don't know how or where to make a payment. If I can't pay online, I certainly don't want to mail a check and have it get 'lost' if I can't be identified as an account holder. This is ridiculous."

      No payments, no interest

      Sherie of Eugene, Ore., wrote to ConsumerAffairs about a dispute over what was supposed to be a no payments-no interest promotion.

      "I purchased $1515.78 of mostly furniture in March of 2009 at what I understood to be a promotion through Chase of 'no payments, no interest for 12 months.' I am a regular at the store as I purchase for my business of home staging and I spoke with the manager to verify that it was truly no payments, no interest for 12 months. She strongly agreed and of course encouraged me to go forward to get 20% off. So I did," Sherie said.

      "Two months later, I receive a late payment and interest charge for the items. I called to complain to Chase that my promotion was for no payments, but they did not agree. So I paid the $1515.78 plus $203 in interest to stop the hassle."

      Even though I paid in full over the phone with a debit card, the next month, there were more interest charges owed. I then refused to pay more and since then have spent hours every months (from July 2009 to today, October 22, 2010) calling Chase and Pier 1. It took months to get work with Chase. I would find supervisors who would say that they stopped all charges, only to find the next month's bill with more charges. Finally, I started calling Pier 1 Customer Care. I was told by a representative there that, in fact, she could see that the promotion in March was "no payments, no interest".

      Sherie said the dispute damaged her credit rating and was never satisfactorily resolved.

      Refurbishings

      Perhaps the improved ecommerce platform will improve the bill-paying experience.

      Meanwhile, Pier 1 says that over the last fiscal year, it refurbished 125 stores with new fixtures and lighting, fully remodeled three stores, and added new merchandise fixtures throughout all of its stores. 

      This year, the company said it plans to remodel up to eight locations, refurbish roughly 100 existing stores improved merchandise fixtures and lighting, and integrate new merchandise fixture elements into all stores.

      Smith said Pier 1 remains on track to open approximately 80 to 100 new stores and close approximately 30 to 50 existing locations by the end of fiscal 2016.

      Pier 1 Imports has outlined plans for an upgraded e-commerce platform, store remodelings, and new store openings over the coming three years.Last year, t...

      Mercedes Diesel Wins 2012 World Green Car Award

      High-mpg clean diesels can rival the performance of many hybrids

      2012 Peugeot 3008

      In this year’s “World Green Car” competition at the New York International Auto Show, Mercedes Benz took home the trophy, with the company’s new S 250 CDI BlueEFFICIENCY model beating other top contenders,  including the Ford Focus Electric and a Peugeot 3008 Hybrid for the 2012 award. It’s the second time the German automaker has won World Green Car, which is presented by Bridgestone to honor eco-friendly automotive design.

      The World Green Car contest provides its own unique take on the best new auto technology  and presentations for the model year: this contest hinges on the opinions of three “green experts” who consider issues like tailpipe emissions, overall mpg, and progressive design before sending their short lists to a larger groups of “jurors” for ratification.

      The 2012 World Green Car choice is also a win for the wider range of high-mpg “clean diesel” cars; while in years past, the award has gone to all-electric cars like the Chevy Volt, this year’s judges chose to focus on the BlueEfficiency technology that Mercedes Benz is promoting as a way to get more out of every tank without going to a hybrid design. Although the German auto maker is still pursuing hybrid models like the S400 and electric “fuel cell” cars, the company has been putting a lot of work into the S 250 CDI model’s 204hp engine, which is estimated to get over 40 mpg combined.

      Judges also commented on the use of a “start-stop system” that limits emissions; ConsumerAffairs.com has been covering the addition of this technology to other new vehicles for today’s eco-conscious and fuel-thrifty market.

      We should point out that this year’s Mercedes Benz S class starts at around $92,000, but while that’s an amount guaranteed to produce sticker shock in most shoppers, an available Mercedes Benz C Class car with some of the same technology and high mpg retailed for around $34,000. Nor is Mercedes Benz the only carmaker proving that turbodiesel and related designs can get high mpg: from Volkswagen’s frugal diesel engines to new conventional engine designs from makers like Mazda, today’s auto makers are giving consumers more choices, so that going green doesn’t automatically mean buying a car sporting a battery. We recommend that consumers always consider the following while shopping:

      • Whether other models using similar technologies are more affordable or a better value
      • What local shops have the expertise to work on a given model
      • Whether additional technology will lead to a higher total cost of ownership over time
      • How much the owner will understand his/her vehicle and how it works in order to negotiate repairs and maintenance

      The growing competition in high-mpg, hybrid and all-electric auto markets is making it all the more important for drivers to do a significant amount of research before buying a car. In the past, lots of consumer advocates focused on warranties, features, etc. and now, many are making larger points about choosing, not just a certain brand of car, but a certain kind of technology for the road ahead.

      The emergence of fuel efficient engines is a major strategy for many auto makers, incuding Mercedes Benz, as an alternative to hybrids and plug-ins...

      Taking a Survey Can Compromise Your Privacy

      It's almost never worth the incentive they offer

      Everyone likes to get something for free, but if you are asked to fill out a survey in order to get that freebie, think twice.

      Surveys are a very clever way for marketers to get information about you. At best you'll get annoying emails with “special offers.” At worst, your identity might be compromised.

      “I recently agreed to participate in a survey Papa John's offered,” Clarence, from Kentucky, wrote in a ConsumerAffairs post. “In return, I was told I would possibly receive a $100.00 Papa John's certificate. I found the questions to be very personal in nature, ones that I'm sure my answers were sold to businesses that matched my answers. I feel that I have been duped by Papa John's, and it came as a big surprise. I never would have thought Papa Johns would take part in something like this.”

      Seems harmless, right?

      Filling out a survey might seem harmless, but stop and think for a minute. If a company is willing to give you a $100 gift certificate, they obviously expect to profit even more from your answers. They may, in fact, sell your survey results, complete with contact information, to a third party.

      Over the years ConsumerAffairs has heard from consumers who found unauthorized charges on their credit cards after filling out a survey. Some survey's are simply fronts for scams.

      Some survey scams start with a telephone call. "Nick called and asked if I would like to take part in a survey. For my participation, he would send me two free DVD's," wrote Chris of Portland, Oregon. "Once the brief survey was completed he told me that he would be sending me two free copies of 'Girls Gone Wild' and all I had to pay for these 'free' DVD's would be the shipping. He said that he would have to verify my age and this is done by credit card. I asked him, 'Do you really think I would give my credit card to some stranger who calls me?' He replied, 'Yeah, people do it all the time.'"

      Read the privacy policy

      If you are tempted to fill out an online survey at a website, be sure to read the company's privacy policy, to make sure you understand what you're getting into. Here's a portion of the privacy policy of a site called PaidForResearch.com:

      “Paid for research depends on advertisements to offer its free services. We make effort to get you the best offers and user experience on our site. We may always use and share with others your personal information for managing your account and to enable us to generally respond to you.  Paid for research may also use personal information for any marketing and survey purpose on behalf of itself and its trusted affiliates and subsidiaries. Paid for research may disclose personal information to third party agents and independent contractors that help us conduct our marketing and survey efforts...”

      Filling out a survey is probably never a good idea, and almost never worth what you think you are getting in return. As a final straw against the idea, consider this: if you fill out a survey, it establishes a relationship between you and the marketing company, providing a loophole to the Do Not Call law. Meaning, of course, you can look forward to telemarketing calls from these folks around meal time.

      Everyone likes to get something for free, but if you are asked to fill out a survey in order to get that freebie, think twice. ...

      Judge Tosses Proposed McAfee Settlement

      Suit alleged McAfee tricked customers into buying "PerfectSpeed"

      A federal judge refused to approve a proposed settlement to a class action lawsuit that claimed McAfee and an advertiser conspired to trick consumers into buying services from an unrelated third party, and then gave out their banking information to complete those purchases.

      U.S. District Judge Lucy Koh said the settlement agreement "does not pass muster," and said she found it impossible to differentiate between class members who actually downloaded the advertiser's software and those who did not, Courthouse News Service reported.

      The 2010 suit, filed in the U.S. District Court for the Northern District of California, says that consumers who purchase security products directly from McAfee's website are presented with a misleading pop-up display [that] leads them to unwittingly enroll in subscription-based services offered by a third party, Arpu Inc.

      According to the suit, McAfee transmits customer credit/debit card and billing information to Arpu Inc. and receives an undisclosed fee for each consumer.

      Customers say they clicked the "Try It Now" pop-up and unwittingly bought the Arpu product called PerfectSpeed because they thought clicking was a necessary step toward downloading McAfee's anti-virus software. Arpu charged $4.95 a month for PerfectSpeed after a 30-day free trial, using the credit card information already on file.

      Class members who did not download the software reached a $1.2 million settlement with McAfee and Arpu in July 2011. A separate class of customers who downloaded Arpu's software never reached a final agreement.

      The judge took issue with that and rejected the non-downloaders' claims that it was fair for the others to receive nothing from the settlement.

      "Those who did not download the Arpu software claim that they were charged for something that they never received. In contrast, the downloaders are in a different position," the judge wrote.

      A federal judge refused to approve a proposed settlement to a class action lawsuit that claimed McAfee and an advertiser conspired to trick consumers into ...

      Study Finds Workplace Is Dangerous for Young Workers

      Researchers call for more stringent safeguards

      A deeper look behind the workplace accident statistics in the U.S. and Canada shows a large percentage of those deaths and injuries involve youth under the age of 20. To safety researchers, it raises some troubling issues.

      "We don't tend to think of child labor as a major issue in the U.S. but we should," said Carol Runyan, of the Colorado School of Public Health the lead author and lead author of the workplace study. "Laws governing the employment of youth ages 14 to 17 in this country are often very lenient and in the case of family farms virtually non-existent."

      Stricter oversight

      Runyan, who led a group of American and Canadian scholars and public health professionals on the project, is now calling for stricter oversight of working conditions for the young including those employed in agriculture.

      "Work can help young people develop skills, explore career options, earn money and gain self-esteem," she said. "But without adequate safeguards in place, work can also be dangerous for youth."

      The report found that 88 youths under age 20 died from work-related injuries in 2010 while 20,000 missed work in private industry due to occupational-related illness or injury. This may be due partly to their inexperience, but it could also be partly due to their number.

      Significant part of the labor force

      Young people comprise a significant part of the U.S. and Canadian labor force. More than 17.6 million workers under age 25 are employed in the U.S. In Canada, nearly three million workers between ages 15 and 24 were employed in 2010.

      Runyan said that while work holds many positives for young people, it can also expose them to unsafe tasks and environments with limited supervision.

      "For example, a recent national U.S. study reported that 26 percent of workers younger than 18…worked at least part of the day without an adult supervisor and as many as one-third of them reported not having any health and safety training," Runyan said.

      Food service to construction

      You often find young employees in fast food restaurants, grocery stores, convenience stores and even construction sites. Hazards include being burned while preparing food, injured by equipment or even robbed. But these urban and suburban hazards, says Runyan, pale in comparison to the dangers of working in what seemingly is the safest of places – the family farm.

      "From a fatality standpoint, farm work is the most dangerous occupation for kids," she said. "In farm work, youths are working around heavy equipment, digging and cutting with sharp implements. There are deaths almost every year from young people suffocating in grain bins."

      Youths working on family farms have practically no legal protections and often drive while underage and operate tractors and other heavy equipment. Runyan and her colleagues are calling for new laws that would better safeguard the safety of young workers on the job.

      Study Finds Workplace Is Dangerous for Young Workers...

      Pet Owners Should Be Aware of Salmonella Threats

      Foodborne illnesses affect pets a lot more than you think

      The news that Diamond Pet Foods is recalling its Diamond Naturals Lamb Meal & Rice dry dog food because it may be contaminated with salmonella should be a reminder for pet owners. Salmonella and foodborne illnesses can affect your pets, just like humans.

      In the case of Diamond, the company said it has received no reports of people or animals getting sick. But it notes that pets who do get salmonella may have decreased appetite, fever, diarrhea, vomiting and abdominal pain. Those symptoms are often cited by consumers describing their pets after eating a variety of commercial pet foods.

      "Just got a female English bulldog about two weeks ago," Brandi, of Canon, Ga., wrote in a ConsumerAffairs post. "After a week she started gasping and vomiting , then my male started. The only thing that has changed was the food that I recently bought."

      It may not be what you think

      When consumers report these often life-threatening ailments to their pets, they assume that there is some ingredient in the dog food that is causing the illness. Other consumers report feeding their pets the same brand with no ill effect. In many cases, the problem may not be the food itself, but simply that it has become contaminated with salmonella or some other bacteria.

      “The problem of salmonella in pet foods and pet treats, even in pet supplements like vitamins, is something people should be aware of,” Dr. Casey Barton Behravesh, a veterinary epidemiologist at the Centers for Disease Control and Prevention., told the New York Times last August.

      Last fall the U.S. Food and Drug Administration (FDA) began a stepped-up program of testing pet food samples for salmonella, mainly to prevent exposure to humans who handle the food. But pet owners are arguing more should be done to protect food given to animals.

      Pay attention to recalls

      The Humane Society says pet owners should remain vigilant about pet food recalls, when they occur, such as the one just announced by Diamond. The company has recalled:

      • 6-pound bag with the production code DLR0101D3XALW and best before Jan. 4, 2013;
      • 20-pound bag with the production code DLR0101C31XAG and best before Jan. 3, 2013;
      • 40-pound bag with the production code DLR0101C31XMF and best before Jan. 3, 2013;
      • 40-pound bag with the production code DLR0101C31XAG and best before Jan. 3, 2013;
      • 40-pound bag with the production code DLR0101D32XMS and best before Jan. 4, 2013.

       If your pet's food or treats are recalled, the Humane Society says you should immediately stop feeding the product to your pet. Recalled products may be returned to the store where they were purchased for a full refund or thrown away in a secure area not accessible to animals. If you have questions about recalled food or treats or require additional information contact the company that manufactures the product.

      If your pet may have consumed a recalled product, consult your veterinarian, even if your pet does not appear to have any symptoms. If your pet has become ill or died because of a recalled food or treat, please you should report it to the FDA Consumer Complaint Coordinator in your state.

      The news that Diamond Pet Foods is recalling its Diamond Naturals Lamb Meal & Rice dry dog food because it may be contaminated with salmonella should be a ...

      Omega-3 Fatty Acid Supplements a Fish Story?

      Study finds little evidence the supplements help heart patients

      Omega-3 fatty acids -- the kind found in fish -- are thought to be helpful in preventing heart disease.  But that doesn't necessarily mean that taking omega-3 supplements is beneficial, and a new study finds the evidence "insufficient." Experts who reviewed the study said that doesn't mean you should stop eating fish, however.

      According to a report published Online First in Archives of Internal Medicine, a JAMA Network publication, the new analysis of previous studies finds "insufficient evidence of a secondary preventive effect of omega-3 fatty acid supplements" among patients with a history of cardiovascular disease (CVD). The evidence as to whether taking the supplements helps prevent cardiovascular disease was also inconclusive, the analysis found.

      Sang Mi Kwak, M.D., of the Center for Cancer Prevention and Detection, Republic of Korea, and colleagues conducted the study.

      “Our meta-analysis showed insufficient evidence of a secondary preventive effect of omega-3 fatty acid supplements against overall cardiovascular events,” the authors note. “Likewise, we found no beneficial effect of omega-3 fatty acid supplements on other cardiovascular events, such as sudden cardiac death, myocardial infarction (fatal or nonfatal heart attack), angina and unstable angina, congestive heart failure, and transient ischemic attack and stroke, or on all-cause mortality.”

      Their analysis included 14 randomized, double-blind, placebo-controlled trials that involved 20,485 patients with a history of CVD. The mean (average) age of participants was 63.4 years old and 78.5 percent of the participants were men. Among the trials, reported from June 1995 through November 2010, the daily dose of EPA or DHA ranged from 0.4 to 4.8 g/d (grams per day) and follow-up ranged from one to 4.7 years.

      What to do?

      What does this mean for doctors and patients?

      In an invited commentary, Frank B. Hu, M.D., Ph.D., of the Harvard School of Public Health, Boston, and JoAnn E. Manson, M.D., Dr.P.H., of Brigham and Women’s Hospital, Boston, noted that the trials included in the meta-analysis were mostly "very small short-term studies" and said more research is needed.

      “While waiting for more definitive results, what should physicians tell their patients?" they asked. "To date, there is no conclusive evidence to recommend fish oil supplementation for primary or secondary prevention of CVD. However, a diet high in fatty fish (≥2 servings of marine fish per week) should continue to be recommended for the general population and for patients with existing CVD because fish not only provides omega-3 fatty acids but also may replace less healthy protein sources, such as red meat.” 

      (Arch Intern Med. Published online April 9, 2012. doi:10.1001/archinternmed.2012.463. Available pre-embargo to the media at www.jamamedia.org.)

      Omega-3 fatty acids -- the kind found in fish -- are thought to be helpful in preventing heart disease.  But that doesn't necessarily mean that taking...

      Study: Hybrid Owners Not Likely to Buy Another Hybrid

      Only 35 percent of hybrid owners buy another one

      With sky-high gasoline prices, carmakers are turning out more hybrid vehicles. But who's buying them? An automotive research firm suggests it's mostly first-time buyers.

      While the incentives to drive a gas-stingy car have never been greater, Polk, an automotive research firm, says only 35 percent of hybrid owners chose to purchase a hybrid again when returning to market in 2011. Toyota Prius owners tend to be the exception, more often replacing their old Prius with a new one.

      If repurchase behavior among the high-volume audience of Prius owners isn’t factored in, hybrid loyalty drops to under 25 percent.

      Satisfied with the brand, not necessarily the car

      But just because a consumer doesn't buy another hybrid, that doesn't mean they are disillusioned with the car brand itself. The Polk researchers found they appear to maintain brand loyalty when returning to the new car market.

      For example, in 2011, 60 percent of Toyota hybrid owners returned to the market to purchase another Toyota, according to Polk, while 41 percent of them purchased another hybrid from any brand. In the case of Honda hybrid owners, more than 52 percent of them stayed with the Honda brand, while just under 20 percent of this same owner group bought another hybrid vehicle from any brand.

      The findings suggest that not all drivers are sold on a hybrid after driving one for a few years. But that doesn't mean offering a hybrid is bad news for the car company.

      Hybrids are profitable

      "Having a hybrid in the product lineup can certainly give a brand a competitive edge when it comes to attracting new customers," said Brad Smith, director of Polk's Loyalty Management Practice. "The repurchase rates of hybrid vehicles are an indication that consumers are continuing to seek alternative solutions to high fuel prices."

      Online cross-shopping data from Edmunds.com shows consumers are doing their due diligence to compare hybrids with similar gasoline-powered vehicles. As an example, the Honda Civic is the second most cross-shopped vehicle among both Toyota Prius and Honda Insight shoppers.

      Hybrid vehicles represent just 2.4 percent of the overall new vehicle market in the U.S., according to Polk, down from a high of 2.9 percent in 2008. And Polk researchers don't see it as what consumers are really looking for when it comes to selecting their vehicle.

      "The lineup of alternate drive vehicles and their premium price points just aren't appealing enough to consumers to give the segment the momentum it once anticipated, especially given the growing strength of fuel economy among compact and midsize competitors," said Lacey Plache, Edmunds.com chief economist. "For EVs and PHEVs in particular, certain obstacles -- including consumer unease with unfamiliar technology and the lack of an adequate recharging infrastructure -- will need to be overcome before sales increase."

      Research Suggests Hybrids Not Really Catching On...

      Consumer Debt Rises in February

      Borrowing for cars and college leads the way

      U.S. consumers went deeper into debt in February, but did not increase their credit card debt, according to the Federal Reserve.

      In its monthly report, the Fed found that consumer credit grew at a slower rate, mainly because "revolving credit," the kind of debt that goes onto credit cards, continued to contract. Credit card debt was down $2.95 billion in January and another $2.21 billion in February.

      Overall consumer debt, however, rose $8.73 in February after going up a revised $18.60 billion in January.

      Spending on cars and college

      If consumers weren't loading up their plastic, where did the increase in debt come from? According to the Fed, the two big drivers were auto loans and college loans. Those two categories grew by $10.94 billion in February.

      It's very possible that consumers are spending less on credit cards because credit card companies continue to reduce customers' credit limits.

      "I made an online payment today on one of my four Bank of America credit cards and noticed my available limit was much less than than established limit," Suzanne, of Austin, Tex., wrote in a post at ConsumerAffairs. "I called Bank of American credit card services to find out what the issue was. I talked with a credit counselor who said it was a credit decision, and since I carry such high balances it put them at risk! I asked about my other three credit card accounts and all of them have reduced limits, without any warning, nothing."

      The fact that student loan debt is rising may also prove troubling. Policy makers have worried recently that students are taking on too much education debt and will be unable to repay it, once they graduate and look for a job.

      Troubling trend

      The Consumer Financial Protection Bureau (CFPB) recently reported student debt in the U.S. is actually higher than anyone thinks, putting the total at around $1 trillion. Rohit Chopra, the CFPB’s student loan ombudsman, says the bureau recently undertook an effort to determine the size of the student loan market that she says went through the same boom and bust cycle that played out in markets for mortgages and other credit products.

      “Our initial findings on the size of the private student loan market are sobering,” Chopra said. “When we add in the outstanding debt in the federal student loan program, it appears that outstanding student loan debt hit the trillion dollar mark several months ago – much larger than estimates from other recent reports. It seems that this market is too big to fail.”

      U.S. consumers went deeper into debt in February, but did not increase their credit card debt, according to the Federal Reserve.In its monthly report, th...