Current Events in July 2012

The dog days of summer find consumers feeling much less confident about the economy. The Reuters/University of Michigan index of sentiment declined this month to 72.3 -- the lowest level of the year.

Unemployment is still high, stuck at 8.2 percent. Gas prices have started going up again after falling for several months. The drought promises to make food more expensive next year and, in fact, some food items are already going up in price.

Nearly half of all consumers reported in July that their finances had recently worsened, with equal numbers attributing the decline to lower incomes and to higher prices. Complaints about rising prices have shifted from gas to food prices. Just 10 percent of all consumers expected any inflation-adjusted gains in their incomes in the next year, and just 22 percent thought there was a better than even chance of real income gains over the next five years.

Depressing news

Consumers who follow the news may also be influenced by the daily dire warnings about Europe's staggering debt and the warnings of a “fiscal cliff” looming in the U.S. at the end of the year if Congress doesn't find a bipartisan agreement to trim the deficit.

“Consumers expect continued economic stagnation since they believe that current economic policies are incapable of solving the problems facing the economy,” said Richard Curtin, the Index's chief economist. “While politicians continue their semantic posturing about how and when the fiscal cliff will be bridged, consumers have begun to take precautionary steps. Although politicians understand that no consumer likes this game of chicken, they have pinned their political hopes on the other party being blamed, while ignoring the economic consequences of inaction. Even a temporary extension would decrease the impact of uncertainty on consumer spending in the second half of the year.”

Not as dark as they seem?

But just how bad are things, really? Perhaps not as bad as they might seem.

The U.S. government today reported Gross Domestic Product (GDP), the sum total of goods and services sold in the U.S., grew by 1.5 percent in the second quarter, while the first quarter growth was revised up to 2.0 percent. That's not particularly inspiring except that it's better than a lot of forecasters expected and is better than much of the rest of the world is doing.

At the same time, the real estate market appears to be in the beginning stages of righting itself after four years of carnage. The real estate site Zillow.com reported this week that the market had finally bottomed, with the national average price of a home rising for the first time in four years.

Consumers are basically saying they'll believe it when they see it. The Reuters/Michigan Index shows consumers do not expect the pace of economic growth to revive job and income prospects. Curtin says consumers never willingly choose to lower their aspirations; that change is slowly forced on them by unrelenting adversity.

The greatest concern to consumers is that wage and job growth will remain depressed in the foreseeable future, and that these meager gains are likely to be diminished in the years ahead by rising taxes and benefit cutbacks.

If it seems your email inbox is getting cluttered with spam again, its not your imagination. A German technology security firm says unwelcome or dangerous e-mails were on the rise again in the first half of 2012.

The company, called Eleven, said it documented a clear jump in the second quarter in particular: the bottom line shows 54.8 percent more spam, 52.4 percent more identified malware, and 90 percent more virus outbreaks.

In contrast, phishing e-mails saw an increase particularly in the first quarter, when their growth rate jumped by 169.6 percent. Measured against total e-mail volume spam had an average share of 70.8 percent in the first six months of 2012. On June 29, the heaviest spam day of the year until now, its share jumped to 89.2 percent.

The second main trend of the first half of 2012 was the rise in spam, phishing, and malware campaigns targeted to a specific country, customers of a regional banking institution or the users of specific services. What set this apart was a clearly limited recipient area, credible content, high language quality, and Websites that are almost perfect copies of the originals. In other words, more sophisticated perpetrators.

In the first six months of 2012, Eleven registered phishing campaigns against customers of Amazon Germany and Deutsche Postbank, as well as PayPal users. Malware campaigns disguised themselves as phony mobile telephone bills, postal notification slips, and tax notifications.

Holidays and special events

Valentines Day and Mother's Day in the U.S. were highpoints of spam activity. Most recently Euro 2012 and the run-up to the Olympic games in London have been marked by phishing campaigns. The most popular trick in both cases: phony ticket lotteries requesting bank account and credit card data.

The spam and malware are back, Eleven says, because spammers are recovering from the law enforcement efforts that shut many of them down in 2011. After the Rustock botnet was shut down in March 2011, the volume of spam coming from Western countries was reduced to a trickle.

For several months, they did not place on the top ten spam senders list at all. But in the second quarter of 2012 in particular, the volume of spam from these countries was clearly on the rise, Eleven says.

And in the first six months of this year, the U.S. was back on the list in sixth place, reaching fith in June alongside Germany in third and the United Kingdom in eighth.

India, meanwhile, remains the number one country for generating email-delivered spam and malware.

CRM Laboratories is recalling all X-ROCK 3 Day Pill For Men and Z-ROCK products sold between October 2011 and April 2012. 

Analytical tests conducted by the Food and Drug Administration (FDA) concluded that the products contained sildenafil and hydroxythiohomosildenafil. Hydroxythiohomosildenafil is an analogue of sildenafil and is close in structure to sildenafil and is expected to possess a similar pharmacological and adverse event profile. Sildenafil is the active pharmaceutical ingredient in a FDA approved drug (Viagra) that is used to treat erectile dysfunction (ED), making these products unapproved new drugs. 

Threat to consumers 

These undeclared active ingredients pose a threat to consumers because sildenafil and hydroxythiohomosildenafil may interact with nitrates found in some prescription drugs (such as nitroglycerin) and lower blood pressure to dangerous levels. 

Consumers with diabetes, high blood pressure, high cholesterol or heart disease often take nitrates. ED is a common problem in men with these conditions and they may seek products to enhance sexual performance. Additionally, hydroxythiohomosildenafil, like sildenafil, may cause side effects, such as headaches and flushing. 

Packaging 

All codes of X-Rock 3 Day Pill for Men and Z-Rock All Natural Male Supplement, within expiration, are included in this recall. The products are blue capsules individually packaged on a cardboard blister card; some older packaging configurations include blister double pack (2 capsules per blister card) and white plastic bottles (6, 12, 24 count). The products were sold as wholesale in the US to distributors who further distributed it nationwide through Internet sales and at retail. 

X-Rock 3 Day Pill for Men back panel may read “Distributed by XRock Industries PO Box 120863 Ft. Lauderdale, FL 33312” or “MATE Enterprises 1020 N. Venetian Drive Miami, Florida 33139 www.XRockHim.com   (888) XROCK-HIM).” 

Z-Rock All Natural Male Supplement back panel will read “Distributed By XRock Industries PO Box 120863 Ft. Lauderdale, FL 33312 www.ZrockUSA.com   877-976-2563.” 

XROCK Industries has not received any reports of adverse events related to this recall. 

Customers who have these products in their possession should stop using them immediately and contact their physician if they have experienced any problems that may be related to taking this product. 

The Company is advising consumers to return any unused products, for a refund of the full purchase price, to the retail location from which it was purchased or to the Company directly. Consumers can call 305-587-9830 Monday through Friday 9am-5pm EST to receive instructions for returning the products.

The risk of a high-speed crash has prompted Ford Motor Company to recall nearly 424,000 model year 2001 through 2004 Escape vehicles equipped with 3.0L V6 engines and speed control manufactured from October 22, 1999, through January 23, 2004. 

Inadequate clearance between the engine cover and the speed control cable connector could result in a stuck throttle when the accelerator pedal is fully or almost-fully depressed. This risk exists regardless of whether or not speed control (cruise control) is used. 

A stuck throttle may result in very high vehicle speeds and make it difficult to stop or slow the vehicle, which could cause a crash, serious injury or death. 

Ford will notify owners, and dealers will repair the vehicles by increasing the engine cover clearance, free of charge. The safety recall is expected to begin on, or before, August 6. Remedy parts are expected to be available in mid-August. 

Until then dealers will disconnect the speed control cable as an interim remedy, if parts are not available at the time of an owner's service appointment. Owners may contact Ford at 1-866-436-7332. 

It’s the second incident involving the Escape in two weeks.  On July 16, Ford issued a recall of thousands of 2013 models, saying the positioning of carpet padding could lead to the risk of a crash.

Michelin is recalling 799,900 BF Goodrich Commercial T/A A/S LRE and Uniroyal Laredo HD/H LRE tires, sizes LT235/85R16 120 Q and LT245/75R16 120 Q. 

The tires may develop a separation at the tread/belt edge. A tread/belt separation of the tire while the vehicle is in use can result in rapid air loss that may increase the risk of a vehicle crash. 

Michelin will notify owners and replace the affected tires free of charge. The safety recall is expected to begin on, or about, August 6. Owners may contact Michelin Consumer Care at 1-800-637-5527.

Netflix has been King of the Hill in the DVD and streaming video game but Redbox and Verizon are hoping to muscle their way in with a new partnership expected to be available later this year.

The service called "RedBox Instant by Verizon" will offer more or less the same features as Netflix will, without the home delivery option.

Consumers will be able to select DVDs at the Redbox' kiosks, stream movies directly to home television sets, and also choose to download them.

Customers will be able to choose between 36,800 Redbox kiosks across the U.S., and will also be able to subscribe to Verizon's subscription and video on-demand streaming services.

Industry experts believe the partnership could make a fairly large dent inNetflix' customer base.

Perhaps the two companies teaming up will not only provide an alternative for DVD and game consumers, but also fix some of the service problems that Redbox has created over the years, although if anyone has ever tried to straighten out a customer service problem with Verizon -- and who hasn't? -- it's not exactly an encouraging prospect.

Redbox rants

Redbox' kiosks are pretty straightforward but they still generate their share of grousing from movie-hungry consumers. 

"I rented 3 movies from Redbox and returned them within the allotted timeframe of a one-night rental. I have now been charged for all 3 movies totaling almost $80.000," said Cassandra of Minnesota."

"I contacted Redbox and after going back and forth with them for about a week, they decided they would be kind enough to refund half of the money they charged me. What?! I don't have these movies! I'm going to be calling them to offer one more chance to refund the remaining amount and then I will be heading to the bank to dispute that charge. I will never again be renting from a Redbox," she said.

Other consumers experienced problems with Redbox' DVD's being damaged or even blank.

"I want my money back," wrote Candice of Accokeek Md.

"Two weeks ago, I rented a game from a local Redbox, only to find out when I got home that there was a huge ring around the disc and it wouldn't play at all. I was charged 2 days on a game I couldn't play. Today, I made a reservation for another game at a Redbox, 10 miles out of the way. I got all the way to the Redbox, swiped my card, got 'what I thought was the game', and it’s nothing but a blank DVD-R disc with the barcode pasted around the ring."

Exactly how much Redbox' movies and games will now cost has yet to be announced.

Amazonian rumblings

Earlier this month Amazon said it will be working with Warner Bros. Domestic Television Distribution to offer new programming for its at-home video service.

Just like Netflix and Redbox, Amazon's Prime Instant Videos offers streaming services for those U.S. customers with a paid Amazon Prime or student membership. This of course is separate from the company's instant video division, that allows customers to rent and buy movies from a large selection.

However, Amazon only offers streaming capabilities, so customers aren't able to download. By partnering with Warner Bros., viewers will now have access to shows like "The Voice", "2 Broke Girls" and "The Bachelorette."

Netflix in the lead

With Netflix still being way ahead in the movie rental game, it will take both RedBox Instant by Verizon, and Amazon a long while to catch up. Especially since Netflix is doing everything in its power to strengthen its lead, at great cost to its bottom line. Its profits were off 91% for the second quarter and is forecasting a loss for the fourth quarter.

Just one year since the company's price fiasco, which drew away a large number of customers, Netflix recently announced that its customers watched over 1 billion hours of online video in June of 2012, which shows that while consumers may gripe, they are taking full advantage of Netflix' "all you can watch" pricing policy.

Netflix is in perhaps in that fabled location between a rock and a hard place. It is losing about 1 million DVD customers per quarter while its slow-growing online customers are consuming more and more streaming video. DVD rentals are about five times more profitable than streaming video.

All this and new competitors too? What's Netflix to do? Guess we'll have to wait and see.

If you are already having a hard time staying within your grocery budget, this will not come as good news. Because of the extended U.S. drought, the U.S. Department of Agriculture (USDA) says we can expect food costs to go up across the board next year.

The forecast calls for a 3 to 5 percent increase in retail food prices next year, on top of additional increases likely to be felt this year. Food prices are up one percent so far this year, according to the U.S. government.

This year's drought has been worse than usual. It's not just the length and severity of it, but the extent of it. Drought-parched counties declared federal disaster areas stretch coast to coast. It's already sent prices for corn, wheat and soybeans skyrocketing.

In it's forecast, USDA said it expects the prices consumers pay for beef and veal to jump 3.5 to 4.5 percent this year. Not only is the feed for livestock more expensive, producers are reducing the size of their herds to save money. With fewer animals being slaughtered, the law of supply and demand drives up prices.

Meanwhile USDA sees no relief in the corn market. Prices of corn for December delivery rose to nearly $8 a bushel this week. Corn prices are up over 50 percent in the last three months.

Dought worsens as summer goes on

During the week ending July 22, USDA reports the portion of the U.S. corn crop rated in very poor to poor condition climbed to 45 percent. Soybeans rated very poor to poor rose to 35 percent. These ratings for both commodities have increased for seven consecutive weeks.

During the same period, from June 3 to July 22, the portion of the U.S. corn rated good to excellent fell from 72 to 26 percent. Soybeans rated good to excellent tumbled from 65 to 31 percent. The current corn and soybean ratings represent the lowest conditions at any time of year since 1988. At the same time, more than half -- 55 percent -- of the nation's pastures and rangeland are rated in very poor or poor condition.

Agriculture Secretary Tom Vilsack this week designated another 76 counties in six states as primary natural disaster because of the loss of crops due to heat and drought. That brings the total for the year to 1,369 counties across 31 states as disaster areas -- 1,234 due to drought -- making all qualified farm operators in the areas eligible for low-interest emergency loans.

The additional counties designated this week are in the states of Indiana, Illinois, Kansas, Michigan, Nebraska and Wisconsin. The U.S. Drought Monitor currently reports that two-thirds of the continental United States is in a moderate to exceptional drought.

"President Obama requested that USDA take the steps within our existing programs to support struggling farmers and ranchers and we announced these new measures earlier this week," said Vilsack.

Like most other publications that have been "saved," Newsweek may be in danger of relapse. Reports today say it will soon end its 79-year run as a printed newsweekly, ascending into the cloud in hopes of living happily ever after.

For most of its life, Newsweek was a doted-upon child of the Washington Post Company. It wasn't very profitable but no one much cared back in the day when newspapers printed money even faster than newsprint.

But a few years ago, as the Post's cookie jar began emptying at an alarming rate, Newsweek was cast off for the humiliating price of $1 to Sidney Harman, a fabulously wealthy stereo magnate, Congressional spouse and, one assumes,  avid reader.

Harman merged Newsweek into the Daily Beast Co., owned by Interactive Media Corp. (IAC).  Harman died not long afterwards, in April 2011, and now the Harman trust says it doesn't intend to keep putting money into Newsweek.

That leaves IAC Chairman Barry Diller at the helm. He didn't get to be a media kingpin by funding losing ventures forever and he reportedly made that clear during a a quarterly earnings call this week, saying the transition to online from print "will take place," according to Advertising Age magazine.

IAC makes most of its revenue from the Match.com and Ask.com websites. "Content" sites like Newsweek and The Daily Beast? Well, like doted-upon children, they're nice to have around but they don't contribute much to paying the rent.

Two southern California men have been sentenced in the U.S. District Court for the Northern District of California in Oakland for their roles in a scheme to defraud nearly 1,000 debit card holders by using stolen bank account information to withdraw money from ATMs. 

Eduard Arakelyan, 21, and Arman Vardanyan, 23, have each been sentenced to serve 36 months in prison on bank fraud and conspiracy charges, and an additional, consecutive 24 months in prison for the identity theft charge.  In addition, they were ordered upon release from prison to serve five years of supervised release and to pay $42,043 in restitution. 

Arakelyan and Vardanyan were charged in a criminal information filed on March 5, 2012, in the U.S. District Court in Oakland, with one count of conspiracy to commit bank fraud, one count of bank fraud and one count of aggravated identity theft. They pleaded guilty to these crimes in Oakland and U.S. District Judge Claudia Wilken pronounced the sentences. 

“These sentences send a clear message that if you take part in a fraud scheme that cheats consumers out of their hard earned money, you will pay a significant price,” said Assistant Attorney General Lanny Breuer of the Justice Department’s Criminal Division.  “No matter the sophistication or size of the scheme, we are determined to bring to justice those who engage in these kinds of frauds.” 

High-tech theft 

Arakelyan and Vardanyan admitted that in or about July 2011, they participated in a scheme to defraud bank account holders and financial institutions by obtaining 952 stolen bank cards and traveling to Northern California to withdraw from ATMs as much money as possible using these stolen bank accounts.  

According to court documents, they possessed two loaded firearms, a GPS device pre-programmed with ATM locations and eight mobile telephones, all to further their scheme. 

The information charged that the stolen cards were linked to a 2011 theft of a reported 94,000 debit and credit card account numbers from customers buying goods at 84 Michaels Stores Inc. stores across the United States.  

The perpetrators of that security breach replaced about 84 authentic personal identification number pads, used by the stores to process debit and credit card purchases, with fraudulent pads from which they downloaded customers’ banking information.  

After this breach, financial institutions reported tens of thousands of incidents of fraudulent activity linked to customers who had visited the affected Michaels stores. 

Here's another reason not to pay for an extended warranty. The credit card you use to purchase the product may already provide one at no extra charge.

First, let's take a look at so-called extended warranties but which are in reality service contracts. When you buy electronics or a major appliance, you can be sure the salesperson will push hard for you to also get the extended warranty.

According to a study from the University of Maryland, 31 percent of consumers opt for the extended warranty each year, spending around $1.6 billion. According to Business Week, extended warranties provide about three to four percent of a company's revenue but translate into as much as 50 percent of its profits. Why? Because many claims are never made or claims are made but denied.

Money wasters

As a result, CardHub says extended warranties are generally regarded as being among the biggest money wasters for consumers, and the ability to receive extra coverage at no cost through one’s credit card can provide a valuable source of savings.

When using a credit card to make a purchase, the card network, not the credit card company itself, provides the benefit. Visa, MasterCard, Discover and American Express all offer some level of extended warranty coverage for products purchased with their cards.

According to CardHub's study, all four major card networks extend original manufacturer’s warranties for up to one year for at least certain cardholder segments and will cover amounts up to $10,000. American Express’ extended warranty policy received a 90 percent rating, the highest cumulative score in this study. Discover finished second at 80 percent, MasterCard came in third at 71 percent, and Visa placed last with a rating of 67 percent.

The study also found that Discover and American Express are the only networks that provide coverage to all cardholders and that Discover used to be the only network that required cardholders to purchase extended warranty protection but has since upgraded to an improved policy that is free for all cardholders.

Exceptions

There are some exceptions to the coverage. MasterCard is the only network that excludes physical damage to an item from its coverage and none of the four networks provide a product warranty on items that lack an existing manufacturer’s warranty. In other words, if the manufacturer doesn't stand behind the product, the credit card network won't either.

Also, if you are buying a refurbished products, such as a computer or TV set, use your American Express card. American Express is the only network that provides coverage on refurbished products.

The best part for the consumer, besides this feature being free, none of the networks’ extended warranty programs require sign up or product registration. All you have to do is purchase the product with your credit card. Consumers must keep their purchase receipts in order to be eligible for an extended warranty under each of the networks’ programs.

It will be up to the card network administrator to decide whether the product that is the subject of a claim will be repaired, replaced or refunded. You should call your credit card company to find out the best way to submit your claim.

If you do a lot of traveling by air, you already know this: the cost of flying is on the rise 

Average domestic air fares rose to $373 in the first quarter -- up 4.8 percent from the average fare of $356 in the first quarter of 2011, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS). 

Cincinnati had the highest average fare -- $526, while Atlantic City, NJ, had the lowest at $157. 

Record-high fares 

Not adjusted for inflation, the $373 first-quarter 2012 average fares reached an all-time high for any quarter. The previous high was $370 in the second quarter of 2011. The previous first-quarter high was $356 in 2011. 

First-quarter 2012 fares were $246 in 1995 dollars, down 19.2 percent from $304 in 1999, the inflation-adjusted high for any first quarter since the beginning of BTS air fare records in 1995.  

Figuring fares 

BTS, a part of the Research and Innovative Technology Administration, reports average fares based on domestic itinerary fares. Itinerary fares consist of round-trip fares unless the customer does not purchase a return trip. In that case, the one-way fare is included. 

Fares are based on the total ticket value, which consists of the price charged by the airlines plus any additional taxes and fees levied by an outside entity at the time of purchase. Fares include only the price paid at the time of the ticket purchase and do not include other fees, such as baggage fees, paid at the airport or onboard the aircraft. 

Averages do not include frequent-flyer or “zero fares” or a few abnormally high reported fares. 

Passenger airlines collected 69.5 percent of their total revenue from passenger fares during the first quarter of 2012, down from 87.6 percent in 1990. 

Historical record 

Air fares in the first quarter of 2012 increased 9.6 percent from the first quarter of 2000, not adjusted for inflation, compared with an overall increase in consumer prices of 34.0 percent during that period. 

In the 17 years from 1995, the first year of BTS air fare records, air fares rose 25.6 percent compared to a 51.5 percent inflation rate. The average inflation-adjusted first-quarter 2012 fare in 1995 dollars was $246 compared to $297 in 1995 and $301 in 2000.

While Apple is waging war on Samsung in the courtroom, charging patent infringement, the battle between the two smartphone makers for the consumer's heart and mind continues as well. And Samsung appears to be winning that battle.

Juniper Research has released data showing Samsung has taken a rather sizeable lead in the number of shipped smartphones. According to Juniper, Samsung shipped 52.1 million units in the second quarter to Apple's 26 million.

Samsung also doubled its lead over Apple quarter-on-quarter, with its flagship product, the Galaxy S3, playing a key role by racking up sales of 10 million in June. Earlier this week Apple released disappointing second quarter profits, in part because of softer than expected iPhone sales.

Analysts say many smartphone shoppers who are normally partial to Apple are simply waiting for Apple to introduce the iPhone 5, expected in the next couple of months. The new product, they say, will help iPhone sales rebound in the last quarter of the year.

Coming on strong

But Juniper said Samsung's recent success can't simply be blamed on Apple's temporary weakness. The company says the Galaxy S3 has been a phenomenal success but other Samsung phones have proved to be highly popular among consumers who prefer an Android phone.

Other competitors are struggling and falling further behind the two leaders. RIM, whose Blackberry was once the dominate smartphone, continues to try to cope with the touchscreen world. Juniper says Nokia has yet to show any clear indication it is benefitting from the switch to Windows Phone 7, with its hopes riding on Windows 8.

Juniper says Samsung's other Android competitors continue to fall short, with the resources needed to compete with Samsung’s marketing push halting HTC’s early promise and Motorola, distracted by the Google acquisition, lacking a strong presence in Western Europe.

All of this puts added pressure on Apple to come up with a major advance in its next iPhone. The iPhone 4S, introduced last fall, added Siri, the voice-activated personal assistant. While the feature has been a major selling point, there has been grumbling lately that the feature doesn't always work the way it's supposed to.

Juniper says the iPhone 5 will need to offer something splashy like Siri, especially if the device retains the 3.5-inch display size, which is now dwarfed by the Galaxy S3's 4.8-inch screen.

Selling recalled products and not reporting problems is a serious matter -- and Burlington Coat Factory is finding out just how serious. 

The U.S. Consumer Product Safety Commission (CPSC) says the Burlington, NJ-based retailer has agreed to pay a civil penalty of $1,5 million to resolves CPSC staff allegations of a variety of offenses. 

Allegations 

Among the allegations are that Burlington knowingly failed to report immediately to CPSC, as required by federal law, that it had sold many different children's sweatshirts and jackets with drawstrings at the neck between 2003 and 2010. Children's upper outerwear with drawstrings, including sweatshirts, sweaters, and jackets, poses strangulation and entanglement hazards to children that can result in serious injury or death. 

The settlement also resolves CPSC staff allegations that from 2008 to 2012, contrary to federal law, Burlington knowingly sold or had in its store inventories many of these garments after they had been recalled. 

The penalty is the highest that CPSC has ever assessed for violations involving children's upper outerwear with drawstrings. 

Reporting requirements

Federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect that could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard or ban enforced by CPSC. 

Federal law also bars selling products that have been recalled by a manufacturer. 

Drawstring warnings

CPSC began warning about drawstring dangers in the early 1990s. The agency issued guidelines in 1996 about drawstrings in children's upper outerwear. Those guidelines were incorporated into an industry voluntary standard in 1997. In 2006, CPSC's Office of Compliance announced that children's upper outerwear with drawstrings at the hood or neck would be regarded as defective and presenting a substantial risk of injury to young children. 

Then, in July 2011, based on the guidelines and voluntary standard, CPSC issued a federal regulation that designated as substantial product hazards children's upper outerwear in sizes 2T to 12 (or extra-small to large) with neck or hood drawstrings, and children's upper outerwear in sizes 2T to 16 (or extra-small to extra-large) with certain waist or bottom drawstrings. 

The sweatshirts and jackets that are the subject of the penalty were sold by Burlington Coat Factory stores throughout the country. Beginning in 2007, CPSC and the garments' manufacturers and distributors, as well as Burlington in 2010, announced the recalls listed in the chart below of children's garments with drawstrings covered by the penalty.

In agreeing to the settlement, Burlington denies CPSC staff allegations that it knowingly violated the law.

We could all use some improvement in our financial management skills but perhaps it's most critical for new college students.

Millions of teenagers will head off to school in late August to live on their own for the first time. Among the challenges they'll face is managing money. It's important as an adult but may be even more critical to getting through college.

Here's why. These days most students go off to school with some type of student loan to help pay the cost of tuition, fees and books. As has been well-publicized in recent months, the total student loan indebtedness is now over $1 trillion and may pose the risk of a new financial catastrophe.

Keep loan money separate

That's why it is important for students to avoid, if possible, using student loans to pay for routine living expenses -- especially meals. It's the same as charging all your meals on a credit card and letting the balance accumulate. Keeping a barrier between pure education expenses and living expenses can keep student debt levels lower.

That's where financial management skills come in, and the first step is to create a monthly budget and stick to it. Not only will it help to manage finances throughout the college years, but it is an essential skill that will be needed throughout life and could be as important as anything you'll learn in the classroom. A budget, done properly, will have lasting benefits.

A monthly budget identifies the money that is accessible and where that money is going. By distinguishing between needs and wants students are able to identify exactly what they are spending their money on. The basics of budgeting, outlined for us by financial counselors at Money Management International, are the same for college students as they are for anyone else.

Income vs. expenses

First tally your sources of income including wage earnings, scholarships, grants, loans, family contributions, and available savings. Next, document your spending including fixed, variable, and periodic expenses and build a budget with help from an online expense worksheet.

Set Financial Goals. They need to be specific, measurable, achievable, rewarding and timely, and they can be both short-term or long-term. That allows you to determine how your spending decisions affect your progress toward your financial goals.

As a college student you may feel like you're living hand-to-mouth but try to save some money and put it in a savings account. You'll find you'll need it, not only for emergencies, but for the unexpected expenses you know will come up, such as the last-minute extra book your college professor will assign or repairs for your car. Being prepared with savings will keep a minor financial setback from becoming a financial emergency.

Track your spending. Often, it is the little everyday purchases that make the biggest impact on your budget. It's important to track your expenses and look for ways to keep costs down.

Get a job

As you prepare a college budget it may become clear that you might need another source of income to live comfortably. Instead of borrowing more money, consider getting a part-time job, the time-honored way millions have gotten their education in the past. Even a small paycheck each week can make it easier to stay on a budget.

There was a good reason for your mom to tell you not to put your toys in your mouth: they can hurt you. 

In an effort to prevent children from suffering further harm, U.S. Consumer Product Safety Commission (CPSC) staff has filed an administrative complaint against Maxfield & Oberton Holdings LLC, of New York, alleging that Buckyballs and Buckycubes contain a defect in the design, packaging, warnings, and instructions, which pose a substantial risk of injury to the public. 

The complaint seeks -- among other things-- an order that the firm stop selling Buckyballs and Buckycubes, notify the public of the defect, and offer consumers a full refund. 

Stopping sales 

In response to a request from CPSC staff, a number of retailers have voluntarily agreed to stop selling Buckyballs, Buckycubes, and similar products manufactured by other companies. 

CPSC staff called upon these retailers to cease distribution of high-powered, manipulative magnetic products after dozens of young children and teenagers swallowed multiple magnets, which connected inside their gastrointestinal tracts and caused internal injuries requiring surgery. eBay has also agreed to implement steps to remove listings by sellers for these items. 

Voluntary recall plan fails 

The commission staff filed the administrative complaint against Maxfield & Oberton after discussions with the company and its representatives failed to result in a voluntary recall plan that considered to be adequate. This type of legal action against a company is rare; this is only the second administrative complaint filed by CPSC in the past 11 years. 

In May 2010, CPSC and Maxfield & Oberton announced a cooperative recall of about 175,000 Buckyball high powered magnets sets, because they were labeled “Ages 13+” and did not meet the federal mandatory toy standard, F963-08. The standard requires that such powerful loose as received magnets not be sold for children younger than 14. 

The Buckyballs and Buckycubes sets contain up to 216 powerful rare earth magnets. 

Multiple injuries 

At the time of the 2010 recall, Maxfield & Oberton was aware of two reports of children swallowing one or more magnets without injury. Subsequent to the recall, CPSC staff continued to receive reports of children ingesting the product and learned of incidents in which children had suffered injuries when the magnets attracted to each other through the victim’s gastrointestinal tract. In subsequent months, staff learned of one dozen surgeries, including numerous surgeries that involved Buckyballs. 

In November 2011, CPSC and Maxfield & Oberton worked cooperatively to inform and educate consumers that Buckyballs were intended for adult use only, and although the risk scenarios differ by age group, the danger when multiple rare earth magnets are ingested is the same. However, even after the safety alert, ingestions and injuries continued to occur. 

Since 2009, CPSC staff has learned of more than two dozen ingestion incidents, with at least one dozen involving Buckyballs. Surgery was required in many of incidents. The commission staff alleges in its complaint that it has concluded that despite the attempts to warn purchasers, warnings and education are ineffective and cannot prevent injuries and incidents with these rare earth magnets. 

CPSC has received reports of toddlers finding loose magnets left within reach and placing them in their mouths. It can be extremely difficult for a parent to tell if any of the tiny magnets are missing from a set. In some of the reported incidents, toddlers have accessed loose magnets left on a refrigerator and other parts of the home. 

Serious consequences

Use of the product by tweens and teenagers to mimic piercings of the tongue, lip or cheek has resulted in incidents where the product is unintentionally inhaled and swallowed. These ingestion incidents occur when children receive it as a gift or gain access to the product in their homes or from friends. 

When two or more magnets are swallowed, they can attract to one another through the stomach and intestinal walls, resulting in serious injuries, such as holes in the stomach and intestines, intestinal blockage, blood poisoning and possibly death. Medical professionals may not diagnose the need for immediate medical intervention in such cases, resulting in worsening of the injuries. 

Due to the number of ingestion incidents received by CPSC staff since the 2010 recall announcement and 2011 safety alert, CPSC staff seeks the remedies outlined in the complaint to stop further incidents and injuries to children.

With the stroke of the governor's pen this week, Illinois debtors no longer have to fear going to jail if they don't pay their debts. The Debtors’ Rights Act of 2012, which will prevent poor people from being jailed over unpaid debts, is now law.

“It is outrageous to think in this day and age that creditors are manipulating the courts, even threatening jail time, to extract whatever they could from people who could least afford to pay -- veterans, the unemployed, seniors who rely solely on their benefits to get by each month,” said Illinois Attorney General Lisa Madigan, who drafted the measure. “This law corrects that gross oversight and puts a stop to throwing people in jail for being poor while still allowing fair debt collection when people have the means to pay their debts.”

Pay or appear orders

The new law, which Gov. Pat Quinn signed Wednesday and becomes effective immediately, was prompted by “pay or appear” orders that are routinely entered against debtors in some Illinois counties. These orders -- which usually remain in effect for three years -- require debtors to make a monthly payment or appear in court each month to explain why they are unable to pay, even if their financial circumstances have not improved.

That means, if a debtor misses just one payment and court hearing, he can end up in jail. Debtors who have been victims of this practice typically owe outstanding medical bills, credit card debts or payday loans.

According to court documents obtained by Madigan’s office, one Illinois court entered a “pay or appear” order against a mentally disabled man living on legally protected disability benefits that provided him with $690 a month. Even though the man informed the court of his circumstances, he was still ordered to either pay $100 a month or appear in court once a month for a three-year period.

One-third of Illinois counties used the practice

Illinois' debtors’ rights bill effectively bars creditors from using the court system to put debtors in jail to collect on a debt they justifiably cannot pay. The attorney general said she sought the measure after learning that residents in roughly a third of Illinois’ counties commonly face incarceration when they fail to appear in court over a previously entered judgment to pay a debt.

In many of these cases, notices of court hearings were mailed to addresses that were no longer valid, leaving many debtors unaware of the hearings. In spite of the failure to notify the debtors, courts have frequently issued warrants for their arrests.

Madigan said in many of these cases, the debtors are living on income that is legally protected from being used to pay outstanding judgment debts, including Social Security, unemployment insurance or veterans’ benefits.

“This law corrects that gross oversight and puts a stop to throwing people in jail for being poor while still allowing fair debt collection when people have the means to pay their debts,” Madigan said.

As many already may know, Omega-3 fatty acids, found in some seafood and plant oils, are really good for you. Many experts say they increase heart health, improves cholesterol levels and can even help with high blood pressure.

In fact, a new study conducted by the American Academy of Neurology shows that Omega-3 can even reduce the risk of developing Alzheimer’s disease.

Many consumers who are health conscious simply take a daily gel-cap or two for the health benefits. But now a company claims that by drinking its newly released beverage, consumers can get  Omega-3 in one tall  cool drink of water.

Omega3Water comes in two different flavors, Orange Kiwi and Bold Berry, which both contain 20,000 mcg of Omega-3.

The beverage is also supposed to lack the fish flavor one often gets when consuming Omega-3s, since the additive is extracted from flax seed.

Core nutrients

"Omega-3 is one of the core nutrients to a healthy lifestyle," said Omega3Water's inventor Ed Beja.  "As more people become health conscious, we start to see supplements with Omega-3 (like fish oil), flying off shelves. We needed a way to incorporate more Omega-3 into our daily routine."

Claiming to provide a dose of Omega-3 is one thing. Making health claims for the water ... well, that's something else. Brands like POM Wonderful  and Kellogg's Frosted Mini Wheats are being brought up on lawsuits for making allegedly false health claims and agencies like the Federal Trade Commission (FTC) have created a long trail of litigation, sanctions and penalties against companies claiming health benefits that are not scientifically documented.

So, consumers should be wary of any new dietary supplement -- be it food, drink or tablet -- that makes health claims.

Dietary supplements are largely unregulated and don't go through the kind of rigorous testing that drugs are subjected to. However, while it's legal to sell supplements, making claims that can't be supported can get a company or promoter in hot, Omega-3-free water.

The Omega3Water site lists many of the benefits of Omega-3 without coming right out and saying the product delivers these benefits. 

Legalities aside

But legalities aside, do consumers really receive health benefits when nutrients are added to drinking water, especially when they're laced with other unhealthy additives?

If you look at the ingredients in the Omega water it has a pretty decent dollop  of sugar (13 grams) and a calorie count of 45 for an eight-ounce serving.

Obviously, there are other flavored waters with way more sugar, but if a health drink has added sweeteners in it, is it still a health drink?

Sugary drinks are much easier to consume in large numbers, which can cancel out any health benefits that the Omega-3 water may provide. Instead of drinking the water for its Omega-3 content, consumers could start drinking the product for its pleasing sugary taste.

In 2009 a class action lawsuit was filed against Coca-Cola, for claiming its Vitaminwater product had a number of health benefits. In the company's defense, lawyers for Coca-Cola stated the following: "No consumer could reasonably be misled into thinking Vitaminwater was a healthy beverage."

That statement alone should make one leery of drinking a manufactured water product that claims to have a bunch of health benefits.

The mega-soda-company tried to have the suit dismissed but was unsuccessful.

Can the liquid calories

John Robbins, who is author of the two books "Diet for a New America" and "The New Good Life: Living Better Than Ever in an Age of Less," says if one truly wants to become healthier and lose weight, they must abstain from consuming liquid calories and sugar based drinks, regardless if only a little bit of sugar is added.

In other words sugar, calories and vitamins should be on the opposite ends of the nutrient spectrum, not side by side.

Robbins also says the best way to get proper nutrients is to go to the actual source. Instead of drinking a beverage rich in B12 for example, you're much better off consuming a portion of eggs or fish, which are loaded with the important vitamin.

Also if you notice, many products on the market claim to be rich in vitamins. It's sort of the new marketing angle for a lot of companies. Everything from sweetened cereals to 5-hour energy drinks claim to have some sort of health component.

Now does that mean Omega3Water doesn't have any health benefits at all?

Maybe not, but if it's really Omega-3 you're after, it's a lot easier and probably cheaper to just swallow a capsule or -- much better -- have a serving of salmon or a soybean burger once or twice a week.  Getting nutrients in good instead of through supplement tablets is far superior, most nutritionists agree. 

It's true that Omega3Water doesn't have much sugar compared to other sweetened beverages, but you'll be getting more sugar than if you simply got your Omega-3 the traditional way.

Walmart and Target are joining convenience store operators and many consumers in opposing a proposed $6 billion settlement between credit companies, banks and retailers.

Under the settlement, which must still be approved by a judge, retailers, who will split the $6 billion settlement, will be allowed to charge customers more for paying with credit cards -- something the card issuers have long prohibited and consumers generally oppose.

"I will not stand for this and [will] just pay cash then or leave the store. Consumers have to stand up," said Nicole Swopes of Lake Forest, Ill., responding to a ConsumerAffairs story on the settlement. Seconding the sentiment was Steve Brienen, who said: "As Usual the real pain will be in the backside of the consumer no matter how this turns out. Using a credit card will cost us more one way or the other."

The retailers agree, or at least say they do.

“Walmart, along with a growing number of consumer groups and merchants, is disappointed in the proposed credit card interchange fee settlement," Walmart said in a statement. It said the settlement would not prohibit credit card networks from "continually increasing hidden swipe fees, which already cost consumers tens of billions of dollars each year."

Walmart said the settlement would also hamper payments innovation, such as paying for purchases with a smartphone or other device.

"As Walmart continues to seek reform that will provide transparency and true competition among financial institutions, we encourage all merchants to put consumers first and reject the settlement,” the statement concluded.

Consumer spin

Target also put a consumer spin on its opposition.

"Target believes the proposed interchange fee settlement is bad for both retailers and consumers," the company said. "Target has no interest in surcharging guests who use credit and debit cards in order to allow VISA and MasterCard to continue charging unfair fees."

Retailers who brought the long-simmering suit have claimed the swipe fees of 2% or more charged by the card companies are a "hidden tax" on consumers and have long pressed for the ability to pass along the swipe fee to consumers who choose to pay with credit cards -- in effect giving a discount to customers who pay with cash.

But the National Association of Convenience Stores (NACS), a class plaintiff in the lawsuit, was quick to say it rejects the agreement.

"Not only does the proposed settlement fail to introduce competition and transparency into a clearly broken market, it actually provides Visa and MasterCard with the tools to continue to shield swipe fees from market forces," said Tom Robinson, chairman of the group.

According to the convenience store group, the proposed settlement allows the card companies to continue to dictate the prices banks charge and the rules that constrain the market including for emerging payment methods, particularly mobile payments, arguments later echoed by Walmart and Target.