Current Events in May 2012

Everybody knows that coffee can help you stay awake. Maybe it can also help you stay alive? That's the suggestion from a study by researchers from the National Cancer Institute (NCI), part of the National Institutes of Health, and AARP.

The researchers found that older adults who drank coffee -- caffeinated or decaffeinated -- had a lower risk of death overall than others who did not drink coffee.

Coffee drinkers were less likely to die from heart disease, respiratory disease, stroke, injuries and accidents, diabetes, and infections, although the association was not seen for cancer. These results from a large study of older adults were observed after adjustment for the effects of other risk factors on mortality, such as smoking and alcohol consumption. Researchers caution, however, that they can’t be sure whether these associations mean that drinking coffee actually makes people live longer. The results of the study were published in the May 17, 2012, edition of the New England Journal of Medicine.

Neal Freedman, Ph.D., Division of Cancer Epidemiology and Genetics, NCI, and his colleagues examined the association between coffee drinking and risk of death in 400,000 U.S. men and women ages 50 to 71 who participated in the NIH-AARP Diet and Health Study. Information about coffee intake was collected once by questionnaire at study entry in 1995-1996. The participants were followed until the date they died or Dec. 31, 2008, whichever came first.

The researchers found that the association between coffee and reduction in risk of death increased with the amount of coffee consumed. Relative to men and women who did not drink coffee, those who consumed three or more cups of coffee per day had approximately a 10 percent lower risk of death. Coffee drinking was not associated with cancer mortality among women, but there was a slight and only marginally statistically significant association of heavier coffee intake with increased risk of cancer death among men.

Widely consumed

“Coffee is one of the most widely consumed beverages in America, but the association between coffee consumption and risk of death has been unclear. We found coffee consumption to be associated with lower risk of death overall, and of death from a number of different causes,’’ said Freedman. “Although we cannot infer a causal relationship between coffee drinking and lower risk of death, we believe these results do provide some reassurance that coffee drinking does not adversely affect health.”

The investigators caution that coffee intake was assessed by self-report at a single time point and therefore might not reflect long-term patterns of intake. Also, information was not available on how the coffee was prepared (espresso, boiled, filtered, etc.); the researchers consider it possible that preparation methods may affect the levels of any protective components in coffee.

“The mechanism by which coffee protects against risk of death -- if indeed the finding reflects a causal relationship -- is not clear, because coffee contains more than 1,000 compounds that might potentially affect health,’’ said Freedman. ``The most studied compound is caffeine, although our findings were similar in those who reported the majority of their coffee intake to be caffeinated or decaffeinated.”

A new poll finds that three quarters of American voters (74%) want the Obama administration to respect individual state medical marijuana laws.

The just-released poll conducted by Mason-Dixon Polling & Research informed voters that medical marijuana is legal with a doctor’s recommendation in 16 states as well as the District of Columbia, and in some of those states it is legal for licensed and tightly regulated individuals to grow and sell marijuana to qualifying patients.

Respondents were then asked if President Obama should respect the medical marijuana laws in these states, or continue to use federal resources to arrest and prosecute individuals who are acting in compliance with state medical marijuana laws.

"These results are consistent with the clear and growing body of evidence that documents substantial voter support for the legalization of medical marijuana," said Larry Harris, a principal with Mason-Dixon Polling & Research.

Support for keeping the federal government out of state medical marijuana issues was universal across all demographics. With respect to political affiliation, 75% of Democrats, 67% of Republicans, and, notably 79% of Independents said that President Obama should respect state medical marijuana laws. Even among the least supportive group (those identified as over 65 years of age), 64% were in favor of respecting state law.

“The results of this survey demonstrate that there is virtually no support in the country for the Obama administration's crackdown on state medical marijuana laws,” said Steve Fox, director of government relations for the Marijuana Policy Project. “Across all demographic and ideological groups, the American people strongly believe the president should respect state medical marijuana laws, as he promised he would when he campaigned to be president. It is clearly time for President Obama to stand up to the members of his administration who are carrying out the morally wrong and politically unpopular policy of denying patients safe access to this beneficial medicine.”

The nationwide poll of 1000 registered likely voters was conducted May 7 to 11, 2012, and commissioned by the Marijuana Policy Project.  

Whether you're living or dying, it's costing you more. A report from consulting and actuarial firm Milliman, Inc., shows health care costs for families are up nearly seven percent in one year.

At the same time, Nursing Economic$, a medical journal, examines the escalating expenses incurred in the process of dying in a special May/June 2012 issue.

Healthcare costs -- mostly insurance premiums paid through employer-sponsored programs -- rose for the typical family to an average of $20,728 this year, according to Milliman. While the 6.9 percent increase over 2011 is the lowest rate of increase in the ten years of this study, the $1,335 increase surpasses last year's record of $1,319.

Illustrates the challenge

"The average rate of increase this year dips below seven percent for the first time since we began analyzing these costs, but the total dollar increase is still the highest we have seen," said Lorraine Mayne, principal and consulting actuary with the Salt Lake City office of Milliman. "This helps illustrate the challenge of controlling healthcare costs. When the total cost is already so high, even a slower rate of growth has a serious impact on family budgets."

Families may be surprised to learn their health care costs have reached $20,000 since most only pay part of it. Their employers pick up the rest.

The study notes the future of healthcare remains uncertain, as the constitutionality of the Affordable Care Act is being decided by the U.S. Supreme Court. However, the report notes that, to date, the Act has had only a limited effect on healthcare costs for families covered by an employer-sponsored PPO plan. Longer term, the implications may be more pronounced, researchers say, and will depend on a number of changing and interrelated factors.

"We face a number of different potential scenarios depending on the future of reform," said Chris Girod, principal and consulting actuary with the San Diego office of Milliman. "We have tried to map out what those different scenarios may mean for consumers, employers, care providers, and the government."

High cost of dying

The special issue Nursing Economic$ examines the skyrocketing costs, the discomfort people experience in talking about death, and the emotional strain of end-of-life care. Six research reports are also presented. The authors outline alternatives to the care individuals usually receive at the end of life.

For example, in an article entitled "How Can We Afford To Die," the authors maintain that the U.S. cannot sustain society’s proportional cost commitment to end-of-life care as the baby-boomer generation ages.

"These crises beg the question: How does the United States deal with the substantial costs incurred in the last 6 months of life?" the authors ask.

The issues will get a thorough airing at the 5th Nursing Economic$ Summit, "June 6, 2012, in Washington, DC.

"Now is the time to bury past demons and discussions surrounding 'death panels' and replace them with conversations on progressive approaches to expanding hospice and palliative care, and the use of advanced directives, like living wills, in the United States," said Donna Nickitas, Nursing Economic$ editor.

The end of the Mayan calendar on December 21 doesn't mean the end of the world, according to researchers at Boston University.

Though few have taken it seriously, some have theorized that that Mayan astronomers had a glimpse of the distant future when they ended the calendar at what turns out to be December 21, 2012. There was even a disaster movie about it a few years ago.

It turns out it's a false alarm. BU Assistant Professor of Archaeology William Saturno and his team recently excavated a Maya ruin in Guatemala and uncovered a wall of paintings with calculations relating to the Maya calendar.

“For the first time we get to see what may be actual records kept by a scribe, whose job was to be official record keeper of a Maya community,” Saturno said. “It’s like an episode of TV’s ‘Big Bang Theory,’ a geek math problem and they’re painting it on the wall. They seem to be using it like a blackboard.”

Just a cycle

After deciphering the calculations, the project scientists say that despite popular belief, there is no sign that the Maya calendar — or the world — was to end in the year 2012, just one of its calendar cycles.

“It’s like the odometer of a car, with the Maya calendar rolling over from the 120,000s to 130,000,” said Anthony Aveni, professor of astronomy and anthropology at Colgate University, a coauthor of the paper being published in the journal Science. “The car gets a step closer to the junkyard as the numbers turn over; the Maya just start over.”

Though unemployment remains high and income growth slow, U.S. consumers appear to be doing a better job of keeping up with their mortgage payments and other bills.

The Mortgage Bankers Association reports the mortgage delinquency rate fell to its lowest level in four years in the first three months of the year. The percentage of payments at least 30 days behind fell from 7.58 percent to 7.4 percent. The rate has been as high as 10 percent, hitting that level in 2010.

“Mortgage delinquencies normally fall during the first quarter of the year, but the declines we saw were even greater than the normal seasonal adjustments would predict, so delinquencies are clearly continuing to improve," said Michael Fratantoni, MBA's Vice President of Research and Economics. "Newer delinquencies, loans one payment past due as of March 31, are down to the lowest level since the middle of 2007, indicating fewer new problems we will need to deal with in the future. The percentage of loans three payments or more past due, the loans that represent the backlog of problems that still need to be handled, is down to the lowest level since the end of 2008. Foreclosure starts are at their lowest level since the end of 2007."

Widespread improvement

The improvement in loan performance was widespread: only four states, Maryland, Delaware, New Jersey and Washington, experienced increases in their 90+ day delinquency rates. Forty one states had decreases in foreclosure starts and 22 states had decreases in the percentage of loans in foreclosure.

“Nationally, the percentage of loans in the process of foreclosure is up slightly, but that top-line figure covers up several important underlying trends," said Fratantoni. "First, the percentage of loans in foreclosure is up for prime and FHA loans. The percentage of subprime loans in foreclosure continues to fall as the subprime loans age and the problem loans are resolved one way or the other.

However, the percentages of loans in foreclosure for both FHA loans and prime fixed-rate loans are climbing and are just below all-time records.

Meanwhile, Standard & Poors and Experian jointly report all loans, with the exception of bank cards, saw a decrease in default rates for the fourth consecutive month.

The four types of loan that did see a decrease in their default rates posted their lowest rates since at least the end of the recent economic crisis, the report said. The national composite declined to 1.86 percent in April from its 1.96 percent March rate.

Continuing a positive trend

"April data show the continuation of the positive trend we saw in the first quarter of 2012," said David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Indices. "Not only have we continued the general downward trend in consumer default rates that began in the spring of 2009, but we appear to be reaching new lows across many of the loan types."

Blitzer says the first four months of 2012 show broad based declines in default rates with first and second mortgage, auto and composite default rates all reaching new post-recession lows.

Can shoes really help you lost weight? The Federal Trade Commission (FTC) didn't think so and charged Skechers USA with making unfounded claims about its shoes. The company has now agreed to pay $40 million in penalties and refunds to consumers who bought Skechers and its Resistance Runner, Toners and Tone-ups shoes. 

Consumers who bought these “toning” shoes will be eligible for refunds either directly from the FTC or through a court-approved class action lawsuit. The settlement with the FTC is part of a broader agreement, also being announced today resolving a multi-state investigation, which was led by the Tennessee and Ohio Attorneys General Offices and included attorneys general from 42 other states and the District of Columbia.

“Skechers’ unfounded claims went beyond stronger and more toned muscles. The company even made claims about weight loss and cardiovascular health,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “The FTC’s message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims.”

The settlement with the Manhattan Beach, California-based Skechers is part of the FTC’s ongoing effort to stop overhyped advertising claims, and follows a similar settlement with Reebok last year. The Skechers advertisements challenged by the FTC include:

• A Shape-ups ad telling consumers to “Shape Up While You Walk,” and “Get in Shape without Setting Foot in a Gym,” and claiming that the shoes are designed to promote weight loss and tone muscles. The FTC alleges that Skechers made unsupported claims that Shape-ups would provide more weight loss, and more muscle toning and strengthening than regular fitness shoes. 
• Shape-ups ads with an endorsement from a chiropractor named Dr. Steven Gautreau, who recommended the product based on the results of an “independent” clinical study he conducted that tested the shoes’ benefits compared to those provided by regular fitness shoes. The FTC alleges that this study did not produce the results claimed in the ad, that Skechers failed to disclose that Dr. Gautreau is married to a Skechers marketing executive, and that Skechers paid Dr. Gautreau to conduct the study.
• Shape-ups ads featuring celebrities including Kim Kardashian and Brooke Burke. Airing during the 2011 Super Bowl, the Kardashian ad showed her dumping her personal trainer for a pair of Shape-ups. The Burke ad told consumers that the newest way to burn calories and tone and strengthen muscles was to tie their Shape-ups shoe laces. 
• An ad that claims consumers who wear Resistance Runner shoes will increase “muscle activation” by up to 85 percent for posture-related muscles, 71 percent for one of the muscles in the buttocks, and 68 percent for calf muscles, compared to wearing regular running shoes. The FTC alleges that in citing the study that claimed to back this up, Skechers cherry-picked results and failed to substantiate its ad claims.

The FTC complaint charges that Skechers violated federal law by making deceptive advertising claims, including falsely representing that clinical studies backed up the claims. Under the FTC’s settlement, Skechers is barred from making any of the following claims for its toning shoes unless they are true and backed by scientific evidence:

• claims about strengthening;
• claims about weight loss; and
• claims about any other health or fitness-related benefits from toning shoes, including claims regarding caloric expenditure, calorie burn, blood circulation, aerobic conditioning, muscle tone, and muscle activation.

The settlement also bars Skechers from misrepresenting any tests, studies, or research results regarding toning shoes.

Change doesn't appear to be going over very well at J.C. Penney. The nation's fourth-largest retailer reports it lost $163 million in its fiscal first quarter of 2012, compared to a profit of $64 million in last year's first quarter.

The loss, which Penney's blames on falling sales, was so significant the company announced it was discontinuing its quarterly dividend.

There are plenty of consumers who might be saying “I told you so.” Penney's new CEO Ron Johnson initiated sweeping changes at the chain at the beginning of the year, rubbing many long-time customers the wrong way.

Johnson did away with Penney's discounts, coupons and sales and instead, initiated a “three tier pricing system.” Marilyn, of Hot Springs, S.D., says the result seems to be higher prices now at Penney's.

“I bought an Alfred Dunner blouse at Herbergers today for $18.20,” Marilyn wrote in a post at ConsumerAffairs. “I priced the exact same blouse at JCP and it was $40. I use to shop Penney's for Alfred Dunner but will no longer shop there.”

Turn-off

Sue, of Wilmington, N.C., says she was a long-time Penney's customer turned off by the changes

“Went through our Penney's a couple weeks ago after staying away awhile to recover from being shell-shocked by the commercials,” Sue wrote. “I've shopped Penney's for years! I was amazed to see a bustling well stocked and appealing local store morph into a dead-end! Didn't like the changes in merchandise, pricing or displays. I quickly walked through to get to another store. I have not been back!”

Even Penney's advertising campaigns have become a source of irritation for some shoppers. Pat, of Mountain City, Tenn., wrote to ConsumerAffairs about Penney's President's Day campaign back in February.

Annoying commercials

“I was annoyed by the screaming women commercial but I did not complain about it,” Pat wrote. “Their current commercial, however, should not be allowed on television. I am very offended to see a child dressed as Abraham Lincoln dancing around and grabbing his crotch. This type of child exploitation should be against the law. If this is the kind of thing that J.C. Penney is promoting, I certainly will not go into their stores.”

While Penney's may hope to eventually attract a new breed of shopper to its stores, it's losing Sue, Pat and Marilyn in the process. They, along with like-minded customers, are likely responsible for the sea of red ink.

Wall Street punished Penney's with a 14 percent one-day sell off in its stock, but most analysts say they still expect Johnson to turn things around, with a newly announced plan to cut costs by $175 million.

If you're determined to invest your last dollar in Facebook when it goes public Friday, here's one of several thousand reasons you shouldn't: the social media site is losing the world's fourth-biggest advertiser, General Motors.

GM said yesterday it will stop advertising on Facebook, saying the ads are ineffective. The automaker has been spending about $10 million annually on Facebook ads but, according to published reports, has determined it's not getting its money's worth because the ads don't perform well.

The company says it will continue to spend about $30 million on its unpaid Facebook marketing efforts, which should be just delightful news to Facebook.

GM spent about $3.9 billion globally on advertising in 2010, according to Advertising Age, a trade publication. That makes it the fourth largest advertiser in the world, trailing Procter & Gamble, Unilever and L'Oréal. 

Russian roulette

Now, as for the other reasons you shouldn't invest your retirement or college savings in Facebook.  And hey, don't think this is just our personal opinion. We were standing around talking to a car salesman in North Hollywood the other day and he said he used to own a chain of furniture stores before he invested all his money with a guy named Bernie Madoff, so we have done our homework.

• First and most important, it's never wise -- or even sane -- to put all your eggs in one basket. An investment portfolio should include stocks and bonds and several types of each: dividend-paying stocks, long-term growth stocks, emerging-market stocks and so forth. On the bond side, the mix should include taxable and tax-free bonds. By diversifying, you protect yourself against volatility that hits one sector harder than the rest. Maybe in time you stay even with inflation or eke out a percent or two of growth.
  
• It's almost impossible for small investors to get in on a much-hyped IPO. Institutional investors, investment banks and the like scoop up everything that's available. Buying in a secondary market -- like from the company you never heard of that sends you an email -- is an easy way to lose your money and get your name added to a sucker's list that will attract more con artists to your door. Sorry to be blunt, but it's true.
  
• It's likely Facebook's shares will almost certainly lose value immediately after the IPO. This is normal. Insiders and big interests scoop up all the available shares on the first day, the price skyrockets. Then they unload them and on the second day, the price plummets.  Eventually, it may come back up.  It may even double, triple and quadruple. Then again, it may not. It's impossible to predict, especially since Facebook essentially has no earnings to speak of and the entire enterprise is built on hope and hot air.

It can be disconcerting to be driving along and suddenly have your vehicle's "check engine" light come on. The light is meant to get your attention, but keep in mind it can be a warning of something simple or something more serious.

For Tim, of Parker, Colo., when the check engine light came on in his 2005 Nissan Pathfinder, it was something serious.

"I drove it in to the dealership and reported that for about a week the transmission was slipping," Tim wrote in a ConsumerAffairs post. "The service rep, when he heard it was transmission related, asked me right away, 'does it stutter at about 40 mph when shifting?' I said it did and he replied, 'that's not good.'"

Decimbra, of Jackson, Miss., says the check engine light in her 2006 PT Cruiser was an indicator of something less serious. At least, that's what she was told.

Just needs a tune-up

"I was told that my car needed a tune up so Firestone kept my vehicle from 7:04 am until 1:01 pm to complete the tune up," she wrote at ConsumerAffairs. "When I picked my vehicle up I was told that the light would not come on and that everything was done that needed to be done."

Decimbra says a couple of weeks later the light was back on again.

"On my way to work my car began to pull and make a strange noise," Decimbra reports.

Since the 1980s vehicles in the U.S. have had onboard diagnostic systems, tied into the car's computer. When the computer senses a problem, the check engine light comes on. The only problem is, it only tells you should check you engine, it doesn't tell you why.

In many cases, the light signals a problem with your car's emission control system; the "O2" sensor is a frequent culprit.  It's often a simple fix but it's one you shouldn't put off since it affects your fuel economy as well as what's coming out of your tailpipe.  If you live in a state or region where cars must pass an emission test every year or so, you can be certain your car won't pass if the light is on, so it's worth getting it checked out.

Code reader

A relatively inexpensive device can tell you why, and if you have a persistent problem with your check engine light and are getting little help from your auto repair shop, you might consider investing in a check engine code reader. Many of these small devices sell for around $60.

These code readers are designed to work on 1996 and later models, which have the On Board Diagnostic (OBD) II system. The devices come with an attached 16-pin connector cable that connects to the output of the diagnostic system, located under the dashboard. The device will register the "trouble codes" that are triggering the check engine light. It also allows you to turn off the light.

That will tell you right away how serious the problem is. When you take the car in for repair, you can tell the service personnel what the problem is. Whether you trust your mechanic to find and repair the problem or use a code reader to do it yourself, automotive experts say the one thing you should not do is ignore the check engine light.

Who doesn't like to travel? There's something about that feeling you get when you're boarding a plane, knowing that when you exit you'll be away from your normal routine. New surroundings, new sights, new meal experiences, is all we need sometimes to free us from feelings of monotony.

Now the-not-so-fun part of traveling -- having to scour the Internet for a good place to stay. We all know that it depends on when you purchase your ticket to get the lowest prices and best hotel deals, but it seems the cost of lodging can be quite pricey all year around.

Now of course, you can throw caution to the winds and find somebody offering to rent you a room on Craigslist, but the quality control may be somewhat lacking. Airbnb is a step or two above.

Now there's Hometel Travel, another alternative to more traditional travel sites. The travel and lodging company has developed a social networking site that allows users to access corporate housing for their leisure travel plans. As many companies have their workforce spread around the globe, international employees have empty houses and apartments that non-business travelers can use for a lower cost than a hotel.

Founder and CEO of Hometel Travel Randy Williams says looking for a place to stay within corporate circles offers better deals and wider selection for the vacationer.

"You have these great corporate networks, and no one ever thinks to use them for travel," he says. The site will allow room owners to post available rooms or empty houses for short-term vacation rentals. It will also allow vacationers a chance to select those spaces, and even negotiate pricing with the owner. This is practically unheard of when booking hotels on a regular travel site.

More authentic

Williams said that choosing an actual home or room provides the vacationer with a more authentic and out-of-the-box travel experience, while also allowing property owners to make a little extra money for themselves.

"Hometel's motto is 'live like a local,' and we stick by that motto," he said in a press release. "We really want to show people that hotels are taking away from an authentic travel experience, and that traditional tourism often furthers the disenfranchisement of local businesses and properties."

So the next time you're looking for a place to stay when vacationing, you may want to consider corporate housing over a traditional hotel stay. It may save you money, provide a fuller cultural experience by  living like a local, and you can better control the pricing and type of lodging you desire.

But if you're the type of vacationer who prefers to lounge by the hotel pool, and doesn't want to even think about making our own bed during your stay, you may want to stick with a more traditional travel routine. But it may cost you more and not be as unique.

This is either good news or bad news, depending on how you look at it.

If you consider airline flights as wasted time, when you could be making business calls, you're in luck. But if you find the thought of sitting next to someone on a plane who makes and receives calls the entire flight, Virgin Atlantic's announcement may be your worst nightmare.

Virgin Atlantic said it will initially offer cell phone service on flights on its Airbus A330 fleet between New York and London. It will later be expanded to the airline's Boeing 747s.

The service, which includes text and data services as well, will not be available during take-off or landing. And since current U.S. regulations forbid the use of cell phones on airliners, the system will be disabled when the plane gets within 250 miles of the U.S. border.

Essentially the service is only available over the Atlantic Ocean, where obviously there are no cell towers. So the system relies on an onboard GPRS communication system. It's like having a cell tower on the plane, connecting with a satellite.

Banned in the USA

U.S. regulations currently forbid the use of cell phones on airplanes because they are thought to pose an interference threats to the craft's navigation system. The on-board communication system provides a shield between cell phone traffic and the plane's navigation instruments.

However, there are some limitations to the system. Only 10 cell phones can be in use at any given time. On a flight with 300 passengers, that might pose a problem.

It will also be rather expensive. Just as when you are in a foreign country, when you are out over the Atlantic, international roaming charges will be in effect.

When the issue last came up in the U.S., the Federal Communications Commission (FCC) said no to the use of cell phones on airline flights. In 2007 the agency opted for the status quo in releasing a Memorandum Opinion and Order that terminates its proceeding on the use of cellular phones on airplanes.

The Federal Aviation Administration (FAA) has long had regulations in place to restrict the use of cell phones and other portable electronic devices onboard aircraft to ensure against interference with the aircraft's navigation and communication systems. The FAA has not sent any signals that it is willing to reconsider that safety measure.

For the second year in a row, gasoline prices in most areas are falling, not rising, as the Memorial Day weekend approaches.

This year, AAA predicts 34.8 million Americans will take advantage of that fact and travel 50 miles or more from home over the holiday weekend that ushers in the unofficial start to summer. That would be an increase of 1.2 percent over last year.

While gas prices have trended lower over the last couple of weeks, consumers are still recovering from the dramatic rise over the winter.

"The overall domestic economic picture continues to improve slightly, however, American consumers faced a new challenge this year as steadily increasing gas prices throughout the spring significantly squeezed many household budgets," said AAA President and CEO Robert L. Darbelnet. "Americans will still travel during the Memorial Day holiday weekend but many will compensate for reduced travel budgets by staying closer to home and cutting entertainment dollars."

Road trip

Those who plan to travel will predominately be on the highway. Approximately 30.7 million people plan to drive to their destination, an increase of 1.2 percent from the 30.3 million who drove last year.

Almost nine out of ten holiday travelers - 88 percent - will take to the nation's roadways during the Memorial Day weekend keeping automobile travel in the traditional lead as the dominate mode of holiday travel transportation.

Though gas prices have caused pain this year, apparently not enough to keep people at home. Triple-A said it's survey of intended travelers found that 53 percent said recent increases in gasoline prices would not impact their Memorial Day holiday travel plans.

National gasoline prices peaked in April despite seasonal highs in early spring when motorists experienced average price increases for all but four days in February and March.

April experienced a full reversal as prices fell for 23 of 30 days during the month, helping to break a streak of 911 days since the national average price was lower than the previous year. The current national average price for a gallon of regular gasoline is approximately 25 cents lower than this time last year.

If you were to ask your average consumer what they're looking for in a company that sells them a product or service, they might say they're looking for decent pricing, or maybe good customer service. But according to a recent report, free products and services are extremely important to many consumers, and nearly half of them will return to a company that gives away something for free.

A new report conducted by technical support firm iYogi Insights shows that 42 percent of consumers will use a company again, if they receive new products and services for free. Which makes total sense, right?  Think about when you're strolling through your mall's food court, and you receive that free toothpick sample of orange chicken from that Chinese eatery, or you accept a first-week-free-deal from that gym you always wanted to try. Let's face it, receiving a product or service for free helps to bring down the consumer's wall of trepidation. 

Of course, it can also be a trap for unwary consumers who may find that their "free trial" has turned into a continuing monthly charge on their credit card statement. More on that later.

Despite the risks to consumers, "Freemiums" have become a growing necessity in the relationship between buyer and seller. A Freemium is a way for companies to introduce new types of products and services for communication, entertainment, music, productivity, and cloud applications.

The report shows that 100 percent of respondents have received Freemium offers in the past for at least one product or service, and 39 percent of consumers have received a free one-on-one consultation with an industry expert, whether that industry was Nutrition and Fitness, Career and Life Coaching, Lasix Surgery or Energy Savings.

ConsumerAffairs briefly spoke with iYogi's co-founder and president of marketing, VishalDhar, about the growing trend of Freemiums, when they started growing in popularity, and whether they are a good fit for all companies.

Can you speak about when Freemiums became the norm for a lot of businesses, and around when that time was?

Most companies turned to the Freemium model as a means of increasing usage over the last 10 years, largely propagated by Internet-based delivery models and products that were creating new categories. In the recent years, we have seen a growing trend of Freemium services being delivered through one-on-one consultations for new services covering a wide range of services including health and nutrition, energy savings, Lasik surgery and tech support, to name only a few.

Can you please speak a bit more on why Freemiums are so important to today's consumer?

In today’s market, consumers often need to test pioneering products and for free to truly understand their relevance and appreciate the value they offer. These are what we call ‘Experience Goods’. Freemium models allow consumers a chance to use and experience these goods and develop the confidence in transitioning to paying for them.

To give you an example from our own business, iYogi has been delivering subscription-based tech support to customers located in four different countries from delivery centers located thousands of miles across the world. While this is an extremely efficient delivery model, it is also a relatively new concept made possible in the high speed Internet age, and is something that people need to experience and believe in before they are willing to commit to long term.

At iYogi, we realized at an early stage that Freemium was the way to go, and we now offer customers a free one-on-one consultation by which our tech experts access users’ computers remotely, after seeking due permission, and help diagnose their problems and the resolutions available before asking them to subscribe to our services.

Are there certain industries that should use Freemiums more than others?

While Freemium has been used primarily by Web-based products and services, various other categories have recently adopted the Freemium concept and customized it to suit their purposes. Energy-savings, Lasik surgery, nutrition and fitness and tech support are examples of industries where a free one-on-one consultation with an expert is a new kind of Freemium that is quickly gaining popularity.

 As new kinds of services emerge to keep in pace with our rapidly digitally-dependent lives, with new kinds of delivery models one would not even have thought about few years back, we see services as a new area of growth whereby people can actually experience a service and feel confident about its usefulness and quality before signing up for more.

Using the iYogi remote tech support services again, users need to be convinced that this is indeed a dependable and cost efficient model which they can access from the comfort of their home without risking damage to their devices and putting their data security at risk, before they agree to sign up for long-term.

Since Freemiums make perfect business sense, especially for newer and more radical products, why do you believe some companies are still unwilling to offer them?

Freemium has worked very well for many products, but it still is, comparatively speaking, unchartered territory. Established products and services are constantly challenged by new types of offerings and delivery models. New companies trying to change an existing ecosystem need to offer a different approach to get people to use their products.

They have to take a longer-term approach and be willing to give away that free experience in order to gain user loyalty and establish themselves in the market. After all, it’s not just about trying a new brand or a service, it’s about trying a whole new method of delivering a services, and people want to be sure that it works before they commit.

Marketers need to have the mindset for innovation and the boldness to use Freemium. The Freemium Hall of Fame is filled with genuinely excellent products – it takes a huge confidence and belief in your product and the value it brings to the consumer, to be able to give it away for free!

A note of caution

The India-based tech firm went on to say that "freemiums will become the new benchmark for products and services," and  if a product or service can't be enjoyed for free, there's a good chance it will not sell at all.

That's all fine, but consumers need to be aware that many "free trials" are, in fact, little more than scams intended to separate you from your money.

In a recent story, ConsumerAffairs' Mark Huffman advised consumers to say "No, thanks" when offered a free trial that requires them to give their credit card or checking account information.

Despite what freemium's promoters have to say, that's still good advice. 

A CT-scan-based form of virtual colonoscopy that does not require laxative preparation appears to be as effective as standard colonoscopy in identifying the intestinal polyps most likely to become cancerous.

In the May 15 issue of Annals of Internal Medicine, a Massachusetts General Hospital (MGH)-based research team reports finding that the new technique, which uses computer-aided systems both to virtually cleanse and to analyze the images acquired, was able to identify more than 90 percent of the common polyps called adenomas that were 10 mm or larger.

"While we know that colon screening can save lives, not enough people participate, in part because of the discomfort of the required laxative preparation," says Michael Zalis, MD, director of CT Colonography at MGH Imaging, who led the study. "In our study, the laxative-free form of CT colonography performed well enough that it might someday become an option for screening, which we hope would increase patient participation."

Optical colonoscopy, the most common form of screening for colon cancer, allows examination of the internal surface of the colon through a fiberoptic tube with a light and camera at the end. In addition to being sedated for the examination, patients must ingest laxative preparations – sometimes up to a gallon of liquid – the preceding day in order to completed clean out the colon, a process universally regarded as unpleasant. CT colonography, which produces images via CT scanning and not direct visualization, has become available in recent years. But while it is as effective as colonoscopy for detecting polyps, does not require sedation, and can be used in some patients for whom colonoscopy is not appropriate, CT colonography still requires the laxative preparation that many patients choose to avoid.

Preparation for the procedure tested in the current study involves two days of a low-fiber diet and oral ingestion of small doses of a contrast agent to label fecal material in the colon. Software programs developed by the MGH team subtract labeled feces from the CT images and analyze the images for the presence of lesions – primarily adenomas, the type of polyps most likely to develop into cancer. The investigators recruited patients scheduled for screening colonoscopy between June 2005 and October 2010 at the MGH, Brigham and Women's Hospital, North Shore Medical Center and the Veteran's Administration Medical Center at the University of California at San Francisco; and 604 patients completed the full protocol.

The laxative-free CT colonography procedures were done within the 5 weeks before the scheduled optical colonoscopies. Gastroenterologists performing the colonoscopies were not informed of polyps identified in the first procedure until they had completed the initial examination, allowing a second-pass colonoscopy to confirm and if necessary remove any missed polyps. CT colonography results were interpreted by three MGH radiologists trained in the use of both the virtual cleansing and the lesion detection systems but blinded to the results of the colonoscopies and to the diagnosis of any removed tissues. Patients also completed written surveys of their experiences with both procedures and were asked which they preferred.

Study results showed the effectiveness of computer-assisted, laxative-free CT colonography to be comparable to that of optical colonoscopy for detecting adenomas 10 mm or larger. While it did not do as well finding smaller polyps, those lesions are less likely to show cellular changes associated with higher risk for cancer development. Among colonoscopy-confirmed lesions that showed such risk-associated changes, 85 percent were 10 mm or larger. Three cases of colon cancer were diagnosed among the study group, and all of those lesions were 10 mm or larger and were detected by both screening methods. Participants completing the survey indicated that laxative-free CT colonography is more comfortable and easier to prepare for, and it was the preferred screening method for 62 percent of respondents.

"Colon cancer is common, with more than 120,000 new cases and approximately 50,000 deaths in the U.S. each year; and it is largely preventable through screening. So the most important thing is for all adults over 50 to be screened," Zalis stresses. "After the question of access to care, the biggest public health issue is getting people to participate in any type of colon screening. While optical colonoscopy is a very effective test, not enough people are willing or able to undertake it. Our results suggest that this more patient-friendly form of screening is feasible and can perform well enough to really help screen patients.

"If these results hold up in larger trials, we would expect this procedure would first be offered to moderate-risk patients who are otherwise unable or unwilling to be screened," he adds. "If we can validate that this form of CT colonography performs reasonably well for screening and is easier for patients, it could have a significant impact on reducing the incidence of colon cancer and related cancer deaths." An associate professor of Radiology at Harvard Medical School, Zalis notes that the radiation dose associated with CT colonography is much lower than that of diagnostic CT scanning and would be considered safe for widespread screening.

Many people think their cell phones will work just about anywhere. That misplaced faith can sometimes have tragic consequences, as in the case of Arthur and Madeleine Morris, an elderly New York City couple whose vehicle fell down an embankment near the end of vacation home driveway in New York’s Catskills region.

When it became clear their Ford Focus was stuck, the couple made five attempts to call for help. But calls to 911, Mrs. Morris' son and a neighbor all failed to connect, thanks to the spotty cellular service in the mountainous region. Investigators say that, finally giving up on the phone, Arthur Morris, 88, tried to climb out of the vehicle but became wedged between the door and the ground. He soon asphyxiated.

Mrs. Morris, 89, managed to climb out of the car but still could not get her phone to work. She was able to walk to the home of their nearest neighbors, only to find them not at home. She covered herself with a tarp but died of hypothermia when nighttime temperatures dipped into the 40s, local newspapers reported.

A CNET News article said the couple's grandson had bought them a phone from AT&T, "in the belief that a network from such a large carrier would offer the best chance of a signal in that remote area. But locals reportedly say no carrier has much of a signal in those mountains.”

AT&T responded to the CNET article with a brief statement:

“Our thoughts and sympathies go out to the Morris family during this extremely difficult time. Wireless coverage in mountainous and remote areas is an industrywide challenge, and AT&T, along with other carriers, are continually striving to improve service levels in those areas.”

AT&T's striving aside, it's a fact of life that cell phones do not work well in any mountainous area, sparsely populated or not.  They are, after all, little high-frequency radios that rely on line-of-sight transmission.  If the phone can't "see" a tower, it's not going to get a signal.  Mountainous areas of Los Angeles, like Pacific Palisades, despite being densely-populated to this day have spotty cell phone service, something residents have learned to live with.

Perhaps the best advice for anyone who routinely travels in sparsely-populated rural areas is to carry survival supplies -- including food, water and blankets -- in the trunk. They might also follow the practice of hikers and mountain climbers: always tell someone when you are leaving, your route and when you expect to reach your destination.  That way, if you don't arrive on time, rescue teams can come looking for you.

Denny’s is the latest restaurant chain to vow that it will be nicer to its pigs.

The nationwide diner chain says it will work with its suppliers to eliminate the practice of confining pigs in gestation crates for its bacon, sausage, and other pork products. Denny’s and The Humane Society of the United States have worked together to address animal welfare issues for more than five years, and the restaurant giant’s pledge on gestation crates is just the latest positive action taken by the company, the Human Society said.

In the pork industry, most mother pigs are confined day and night during their four-month pregnancy in gestation crates, cages roughly the same size as the animals’ bodies, preventing them from moving or turning around. They are then placed into another crate to give birth, re-impregnated, and put back into a gestation crate. This happens pregnancy after pregnancy for their entire lives, adding up to years of virtual immobilization.

“Denny’s takes its role as a responsible corporate citizen seriously, which is why we have adopted a strong position on animal welfare,” said Greg Linford, Denny’s vice president, procurement and distribution. “We will endeavor to purchase products from companies that provide gestation crate-free pork and are committed to influencing our suppliers to share in a gestation crate-free vision for the future. Working to eliminate gestation crates is best for our company, our guests, and our continued work to improve animal welfare.”

“We’ve got a very good relationship with Denny’s, and the company is serious about dealing with farm animal welfare issues in a meaningful way,” said Wayne Pacelle, president and CEO for The HSUS. “We welcome the news that Denny’s will move its supply chain to a gestation crate-free future.”

Porkers' progress

The Humane Society says things are looking up for pigs. It released this compilation of hopeful signs:

• Denny’s is one of the largest restaurant chains in the country, operating more than 1,650 locations across the U.S. In 2008, the company began switching millions of eggs to cage-free eggs – those that do not come from hens kept in notoriously cramped battery cages.
• McDonald’s, Burger King and Wendy’s recently announced that they will require suppliers to deliver plans for eliminating gestation crates. Compass Group – the largest food service company in the world, operating 10,000 dining facilities in the U.S. – also recently announced that it will eliminate gestation crates from its supply chain by 2017. And Bon Appétit Management Company, another leading food service provider, has committed to be gestation crate-free within three years.
• Pork providers Smithfield and Hormel have pledged to end the use of gestation crates at their company-owned facilities by 2017, and Cargill is already 50 percent crate-free. Eight U.S. states have passed laws to ban the practice and Massachusetts, New York, New Hampshire, Rhode Island and Vermont have bills pending that would do the same.
• Renowned animal welfare scientist and advisor to the pork industry, Dr. Temple Grandin, is clear on this issue: “We’ve got to treat animals right, and the gestation stalls have got to go.”

You might not think baby bottles, pacifiers and sippy cups would be dangerous. But a new study at Nationwide Children's Hospital found that from 1991 to 2010, an estimated 45,398 children younger than three years of age were treated in U.S. emergency departments for injuries related to the use of these products.

That turns out to be something like 2,270 injuries per year, or one child treated in a hospital emergency department every four hours for these injuries.

Baby bottles accounted for 66 percent of injuries, followed by pacifiers at 20 percent and sippy cups at 14 percent. Since babies put these products in their mouths, it's no surprise that the most commonly injured body regions were the mouth, head, face and neck.

Most injuries were the result of falls while using the product, which suggests that children were walking or running with the product in their mouth at the time of the injury.

“Two-thirds of injuries examined in our study were to one-year-old children who are just learning to walk and more prone to falls,” said the study’s co-author Sarah Keim PhD, principal investigator in the Center for Biobehavioral Health at Nationwide Children’s Hospital. “Having children sit down while drinking from baby bottles or sippy cups can help reduce the occurrences of these injuries.”

One year-olds should be using regular cups

Both the American Academy of Pediatrics (AAP) and the American Academy of Pediatric Dentistry (AAPD) recommend that children be transitioned to regular, lidless cups at 12 months of age. The AAP also suggests that parents try to limit pacifier use after six months of age as use after that age may increase the risk of ear infections.

“These are products that almost everyone uses,” said study co-author, Lara McKenzie, PhD, principal investigator in the Center for Injury Research and Policy at Nationwide Children’s Hospital. “Educating parents and caregivers about the importance of transitioning their children away from these products at the ages recommended by the AAP and AAPD could prevent up to 80 percent of the injuries related to baby bottles, pacifiers and sippy cups.”

Data for the study were obtained from the National Electronic Injury Surveillance System (NEISS), which is operated by the U.S. Consumer Product Safety Commission.  

Several times since 2009 analysts have suggested that home prices had bottomed, only to see home values go even lower.

But with months of data showing a strengthening heartbeat in the housing sector, optimism is building. A study by the Demand Institute predicts home valuations will start to climb again while adjacent consumer industries will capture significant new growth opportunities in 2012 and beyond as the U.S. housing market finally turns the corner.

The Demand Institute is a non-profit, non-advocacy organization that tracks global consumer demand.

The report predicts that average home prices will increase by up to one percent in the second half of 2012. By 2014, home prices will increase by as much as 2.5 percent.

Different kind of recovery

From 2015 to 2017, the study projects annual increases between three and four percent. This recovery will not be uniform across the country, and the strongest markets could capture average gains of 5 percent or more in the coming years. The researchers say this recovery will be weaker than those in the past, and very different in one important way.

"In these initial years, the prime driver of recovery won't be new home construction, but rather demand for rental properties," said Louise Keely, Chief Research Officer at The Demand Institute and a co-author of the report. "This is a remarkable change from previous recoveries. It is a measure of just how severe the Great Recession has been that such a wide swath of Americans had to delay, scale back, or put off entirely their dreams of home ownership."

One reason owner-occupants aren't leading the recovery is the stricter lending standards in the mortgage industry. Borrowers must now have larger down payments and higher credit scores. Currently, about a third of monthly home sales are to investors, most of whom pay in cash.

Stable home ownership rates

"In the long-term, we don't expect home ownership rates to change," said Bart van Ark, Chief Economist at The Conference Board and co-author of the report. "Over 80 percent of Americans in recent surveys still agree that buying a home is the best long-term investment they can make. What will be intriguing to watch is how their aspirations around home ownership are affected by this period of extended austerity."

Between 2006 and 2011, some $7 trillion in American wealth was wiped out when home prices dropped 30 percent after dramatic climb in valuations during the housing bubble. Looking forward, the moderate growth expectations for coming years suggest a return to normalcy, the researchers say.

As home prices continue to drop and interest rates fall further, first-time buyers and others who remained relatively cautious will be drawn back into the housing market. And, as the market recovers, so too will consumer spending.

A well-established Bronx, N.Y. tax preparer has been indicted on 29 counts of grand larceny, accused of operating a “massive” Ponzi scheme that defrauded dozens of New Yorkers out of millions of dollars.

New York Attorney General Eric T. Schneiderman says Robert H. Van Zandt, owner of the Van Zandt Agency, was also charged with two counts of money laundering.

"Money laundering and securities fraud are serious crimes, and when someone abuses the trust built upon longstanding relationships to steal individuals' life savings, our office will prosecute that person to the fullest extent of the law," Schneiderman said. "It's unconscionable that many hard-working people put their futures in the hands on this defendant only to see their financial security destroyed by greed. Mr. Van Zandt stole his victims’ life savings, and forced some of them to re-enter the workplace or rely on government assistance to survive, while others face foreclosure on their homes or bankruptcy. The perpetrator of this despicable Ponzi scheme will be brought to justice."

Began in 2007

Schneideran says Van Zandt ran is tax preparation business for decades. Starting in 2007, Schneiderman said Van Zandt began accepting investments from tax preparation clients, who trusted him to manage their retirement funds and savings. In many cases, these investors handed over their entire life savings or retirement accounts, only to see their money disappear. From at least February 2008 through January 2011, Van Zandt solicited money from unsuspecting clients, promising guaranteed rates of returns.

According to the indictment and statements made by prosecutors at the arraignment, Van Zandt's alleged investment opportunities turned into a purely Ponzi-style scheme starting in approximately 2008. Van Zandt guaranteed high rates of return to new investors, promising to invest their money in lucrative securities, including real estate projects that were, in fact, impossible to build.

Money not invested

The Attorney General said the money was not invested as promised, but rather was used to pay previous investors or diverted for personal expenditures. The scheme brought in over $4.6 million from February 2008 through January 2011 alone.

Van Zandt also allegedly abused his position as a manager of a tax preparations business to identify and lure new investors, targeting victims who had large amounts of money available, such as retirement funds, savings, inheritances or settlements.

Up to $900,000 in losses

Van Zandt allegedly made materially false representations and failed to disclose material facts to his investors in order to induce them to invest enormous sums of money with him, ranging from $25,000 to nearly $900,000. The invested monies were allegedly deposited into accounts affiliated with the Van Zandt Agency or controlled by Van Zandt and then commingled and transferred between accounts as needed, to pay investors, business expenses, and for personal use.

The indictment claims the money was never legitimately investment. In particularly egregious cases, although Van Zandt promised that investors' money would be used to purchase government bonds or corporate securities, no such bonds or securities were ever purchased for the victims, Schneiderman said.

A Ponzi scheme works by paying early investors with money invested by new victims. As long as a large number of investors don't withdraw money at the same time, the scheme can go on indefinitely.

In 2008, when a financial crisis gripped the world, many investors moved to cash, exposing a number of Ponzi schemes, most notably Bernard Madoff's, whose clients included some of the wealthiest people in New York.