Current Events in July 2012

Like turning a cruise ship, changing public opinion takes a lot of time, patience and planning. 

For decades, tobacco was regarded as harmless and even as a healthful stress management tool.  Medical experts recognized the error in the 1950s but it wasn't until 1964, when the Surgeon General of the United States, Luther A. Terry, issued a landmark report on smoking and health, that public opinion began to shift.

The report was factual and fully documented, devoid of loaded language or political overtones.  Like a U.S. Treasury note, it carried the full force and authority of the United States government.  

Even then, it took more than 30 years for widespread acceptance of the horrific health effects of smoking on both smokers and those unlucky enough to be downstream. Add another 10 years for state and local governments to finally ban smoking in public places. 

Since then, various Surgeons General have continued the crusade, issuing more than 25 subsequent reports documenting various ill effects of smoking -- smoking and women, smoking and youth, smokeless tobacco -- along with occasional reports on youth violence, sexual abuse, physical inactivity and AIDS, but nothing on excessive sugar intake.

It's time

Now, a coalition of health and consumer advocates and several municipal public health departments say it's time to do it again. They're calling on the current Surgeon General, Regina A. Benjamin, to issue a similarly authoritative report on the health effects of soda and other sugary drinks.

They're looking for a comprehensive report that pulls together all the current research on the health effects of widespread consumption of soda and the damage done to the economy by the diseases attributed to large-scale guzzling of the sugary goop that has somehow come to be identified with youthful vigor.

"Soda and other sugary drinks are the only food or beverage that has been directly linked to obesity, a major contributor to coronary heart disease, stroke, type 2 diabetes, and some cancers, and a cause of psychosocial problems," the groups wrote in a letter to Secretary of Health and Human Services Kathleen Sebelius. "Yet, each year, the average American drinks about 40 gallons of sugary drinks, all with little, if any, nutritional benefit."

Impossible?

Is it an impossible dream? Isn't bubbly, sugary soda so ingrained in the American way of life that it can't be driven out? You might think so but then again, public opinion may already be shifting.

ConsumerAffairs conducted a computerized sentiment analysis of more than 2.3 million postings about Pepsi-Cola on social media like Facebook and Twitter over the last 12 months. Surprisingly, we found that the negative attributes far outweighed the positive ones, as shown in this graph:

Interestingly, we found nearly identical sentiments about Coca-Cola -- about 2.3 million comments with an overwhelming number recognizing that sugary drinks contribute to tooth decay.

Devastating effect

The groups say that soda and sugary drinks have a devastating effect on the health of young people in particular. Each extra soft drink consumed per day was associated with a 60-percent increased risk of overweight in children, according to one important study.

Type 2 diabetes, which used to occur primarily in middle-aged and older adults, is now becoming more common among teens. Though soda consumption has declined somewhat in recent years, consumption is still dangerously high, according to the letter. Even almost half of two- and three-year-olds consume sugary drinks every day, according to the group.

"Previous reports and calls to action from the Surgeon General, on topics as varied as tobacco, underage drinking, and obesity, have helped galvanize policymakers at all levels of government," said Center for Science in the Public Interest executive director Michael F. Jacobson. "Unlike just about any other product in the food supply, sugar-based drinks are directly connected to obesity and diet-related disease. Reducing their consumption should be one of the main pillars of the government’s prevention strategy."

The call for a Surgeon General's report on soda and sugary drinks was organized by the CSPI, and included the American Diabetes Association, the American Heart Association, Consumer Federation of America, National Hispanic Medical Association, Prevention Institute, the Trust for America's Health, and Yale University’s Rudd Center for Food Policy and Obesity. Public health departments in Boston, El Paso, New York City, and Philadelphia also signed the letter to Sebelius.

If you've noticed lately, cashiers and cash registers are becoming scarce in retail locations.

With the increasing use of kiosks and digital checkout scanners, stores are using technology to speed up the shopping experience and make paying for items easier.

The latest retailer to do so is J.C. Penney, which just announced it will be getting rid of its cash registers and replacing them with mobile checkout devices and self-pay kiosks.

J.C. Penney CEO Ron Johnson said within the next year, he would like to see all cash registers disappear, and also said the new process will be extremely user friendly.

"My goal by the end of 2013 is to eliminate the cash route," he said. "You'll be able to check out anywhere anytime, from anyone including yourself, because we're going to roll out self-checkout to our stores next year. It's really cool and it's really easy because it's RFID-based. You don't have to scan an item. You just throw it down and there's the price."

Need to spruce up

Johnson, who helped Apple and Target grow into retail prominence, also said that brick-and-mortar stores still need to make continuous efforts to spruce up the shopping experience and make it better for consumers.

As the popularity of online shopping continues to grow, many retailers have put large amounts of effort into keeping up with the digital times by creating apps and adding more product selection to online stores.

But Johnson says as the physical and digital shopping worlds continue to merge, stores should still pay plenty of attention to their offline shopping experience, not just their online offerings.

"If I had to pick today, would I rather be an online-only retailer trying to compete ten years from now, or a physical retailer trying to compete ten years from now?" he asked the audience at the Fortune Brainstorm Tech conference. "Knowing that the digital and physical worlds come together, I'd take the physical retailer in a heartbeat."

Apple has also adopted this philosophy and eliminated cash registers in all of its stores.

Instead of forming pesky lines and dealing with slow cashiers, Apple sales people now come directly to you and complete transactions with a mobile point-of-sale check-out.

Visa gets into the game

Visa has also gotten into the game of trying to eliminate both the cashier and the cash register.

In April of this year the credit card company announced its partnership with Square Inc., the company that created a small device that attaches to iPads, iPhones, and Androids through the headjack, and allows credit card payments to be excepted anywhere. The company was founded by Jack Dorsey, who also created Twitter.

Square, Inc. has enabled all-cash-businesses like street vendors to have the option of accepting at least two types of payments, thus creating more earning potential.

The tiny device which resembles a flattened cube is also perfect for the everyday person who needs to accept a one-time payment for a reimbursement, or the selling of a personal item. The device is under $10, making it affordable for most consumers who want to give it a whirl.

People can also use Square to make payments at everyday stops like coffee shops and convenience stores, making the need for cash registers, and eventually credit cards much smaller, which is more or less the same concept Johnson wants to bring to J.C. Penney.

Early in the year Penny announced it was changing its pricing structure by replacing its big sale days for an everyday low price system, but the plan hasn't seemed to catch on. The company has experienced a net loss of $163 million in the first quarter.

But Johnson says the loss is just a matter of the buying public getting used to the new order of the store.

"Transformation takes time," he said. We're in a marathon here. It's going to be four years, and we've got a very precise vision of how we're going to get there, and we're going to stick to our plan."

Whether Johnson will be able to bring JCPenney out of its slump remains to be seen, but many retail experts believe making the shopping experience easier and faster is a step in the right direction.

When Apple introduced its iPad tablet computer, it set the entry-level price right at $500. For Apple and the competitors who followed with tablets of their own, that price has remained firm.

But there is now an entire subset of smaller tablets that sell for much less. While the iPad has a nine-inch display, the lower-priced competitors have seven-inch screens. Some consumers, in fact, prefer the smaller size since it can be easily gripped in one hand.

The popularity of these seven-inch devices was aptly demonstrated last week when online and brick-and-mortar retailers quickly sold out of the new Google Nexus 7 tablet, which starts at $199.

As the holidays approach some electronics industry analysts think tablets will be the “hot toy” for children this year. For parents on a budget, the seven-inch variety is an attractive alternative to the pricier nine-inch models.

Here then are some seven-inch tablets to consider:

Google Nexus 7

Assuming you can get your hands on one, the Google Nexus 7 seems to be the hot tablet in the class of 2012. The Nexus 7 wins high praise for its screen clarity, speedy performance and cool media options. The 8GB version is $199 with a 16GB version for $249.

Samsung Galaxy Tab 2

Samsung is no stranger to mobile devices, with a full range of smartphones and tablets. Its Galaxy Tab 2 offers a lot of things other smaller tablets don't. It's pluses include front and back cameras, the ability to add memory and a TV remote function. The 8GB version retails for $250.

Amazon Kindle Fire

Amazon had been making grayscale e-readers as part of its retail book operations for a couple of years when it jazzed up its line, offering the full-color Kindle Fire. If you are already an Amazon customer then this device will make it easier to purchase and use Amazon content. Unlike many of the other devices it's limited to Wi-Fi connections and lacks some other tablet features like cameras. It's limited to 8GB of storage but, at $199, many consumers still find it attractive.

Barns and Noble Nook

The Nook is another e-reader that evolved into a tablet. The latest Nook wins praise for its screen clarity and offers 16 GB of storage. While ideal for downloading and reading books, the device also has an excellent video display for watching movies. It, too, lacks some tablet features like cameras and, at $240, costs a little more than the Kindle Fire.

Blackberry Playbook

The Blackberry Playbook started off costing as much as an iPad when it was introduced last year but has quickly come down in price. In fact, it's price tag may now be one of the more compelling arguments for it. Initially designed for business use it now finds a consumer audience willing to consider it for its $200 price tag for the 16GB version. Many in the industry saw the Playbook as another of RIMs series of missteps last year as it tried to adapt to the new mobile universe. However, at the lower price the Playbook offers enough apps and capability to make it worth consideration.

Economy tablets

For especially price-conscious tablet shoppers, there are a growing number of tablets being offered well below the $199 price point. These generally have less memory and features but may provide all the tablet that needed. They might especially be appropriate for a child's first tablet.

Sylvania Mini Tablet

The device, with 256MB Ram and up to 4GB Flash, comes out of the box with features to let you download and read books, watch movies and play music. Because it runs the Android operating system there are plenty of apps to choose from. The suggested retail prices is $199 but some online retailers sell it for as low as $76.

Archos 4GB Arnova 7 G2

This device runs the Android 2.3 Gingerbread operating system and is powered by a 1 GHz processor. It also has full video capability and access to a wide range of games. It sells for around $105.

Coby Kyros MID7022-4G

Another Android-powered device with a 1 GHz processor. Works well for video, music and games. Offers many tablet features such as front and back cameras and microphone. Retails for around $105.

Game changer?

If you are planning a tablet purchase for the holidays, it might be wise to wait until October before making a purchase. The Apple rumor mill has been busy with suggestions that Apple will change the landscape later this year by introducing its own seven-inch version of the iPad.

Some discount this theory since the late Steve Jobs was adamantly opposed to the idea when he was running the company. However, a low-priced iPad would certainly be something for consumers to consider and might force competitors' prices even lower.

Since January consumers have consistently reported fires caused by their microwave ovens, in particular ovens made by Emerson. The complaints continue to roll in.

“The (Emerson) MWC9115SL microwave nearly burnt down my home and business when it caught on fire,” Shaun, of Monett, Mo., reported last week in a ConsumerAffairs post. “I contacted Emerson by email and phone, and finally got a supervisor to agree to pay for the return shipping so they could look at the microwave, and then refund my money. Today, I got by FedEx a brand new MWC9115SL microwave, the exact model that nearly destroyed my home.”

Shaun writes that he has found over 300 complaints online about this problem.

“My six-month old microwave, the red one, caught on fire, burned the food and nearly my house,” K., of Moore, Okla., reports to ConsumerAffairs.

Michael, of Lawson, Mo., is a concerned father who last week got a disturbing phone call from his daughter, telling her parents the Emerson microwave they bought for her a year ago turned on by itself while she was asleep and caught fire.

Nighttime fire

“It was the crackling and smoke that awoke her,” Michael write. “She doused it out with baking powder. If she hadn't been home, her apartment may have caught fire. After reading many of the other reviews, I'm not surprised. We'll buy her a GE microwave like the one we have which has worked perfectly.”

The Consumer Product Safety Commission (CPSC) does not comment on ongoing investigations. Still, consumers who experience a fire issue with their microwave should file a report with the CPSC here. 

A similar report should also be filed with the company. The more reports that are received about a safety issue, the faster it is likely to be addressed.

In the meantime, consumers should not try to repair a faulty microwave oven themselves. Small appliance repair experts say microwaves retain lethal amounts of electricity, even when they are unplugged.

Not just Emerson

Emerson is not the only brand with reports of fire problems, as this TV news report shows:

It’s bad -- really bad. 

In response to a request by the Federal Communications Commission (FCC) for comment, the Federal Trade Commission (FTC) says the “cramming” of unauthorized charges on wireless phone bills poses a serious problem for American consumers. In its comment, the agency also said wireless providers should be required to give customers the option to block all third-party charges from their bills. 

In its efforts to protect consumers against the cramming of unauthorized charges on their landline telephone bills, the agency has advocated for reforms to eliminate landline cramming.  

A growing problem 

With regard to wireless cramming, the comment notes, in the past few years the FTC and FCC have reviewed thousands of complaints about unauthorized third-party charges on wireless bills. The number of reported complaints undoubtedly understates the full extent of wireless cramming by a substantial amount. 

“Mobile cramming is likely to continue to grow as cramming schemes expand beyond the landline platform and mobile phones are more commonly used for payments,” the comment states. 

Many of the complaints involve recurring charges of just under $10 a month for “premium services” that provide trivia or horoscope information by text message to a consumer’s phone, the comment states.  

Consumers often report receiving a text message informing them of a subscription to a service of which they have never heard and that they never requested. 

A ban? 

The comment states that it would be premature to recommend a ban or default blocking of third-party billing as it did for landline phone bills in a separate comment to the FCC in October of last year.  

In contrast to landline third-party billing, which has been used almost exclusively by scam artists, the mobile billing platform has been used for some legitimate charitable activity; it also is a potential platform for consumers to fund mobile payments by placing those payments on their wireless bills, the comment states. 

However, it is unclear whether industry best practices have been consistently followed or are effective in stopping mobile cramming, the comment states.  In light of the significant number of mobile cramming complaints received, the FTC believes that some basic consumer protections are needed in the mobile billing space. 

“At a minimum, all wireless providers should offer their customers the ability to block all third-party charges.  Wireless providers should clearly and prominently inform their customers that third party charges may be placed on the consumers’ accounts and explain how to block such charges at the time accounts are established and when they are renewed.  And wireless providers should provide a clear and consistent process for customers to dispute suspicious charges placed on their accounts and obtain reimbursement.  The FTC believes that such measures should be mandated by law or regulation to ensure that consumers have baseline protections,” the comment states.

It seems that consumers are doing a better job of resisting unhealthy foods.

Whether it's due to the many awareness campaigns centered on healthy living or it's people just being tired of feeling poorly due to diet, folks are eating healthier these days than in years past.

According to a report entitled "Attitudes Toward Healthy Food- US June 2012," well over half of consumers are choosing healthier food options. Results of the report showed that 31 percent of consumers are selecting healthier foods for weight loss, and 30 percent are choosing foods that will help them maintain their current size.

The research conducted by market research company Mintel also shows that 48 percent of Americans age 65 and above say they are mindful of what they eat, while 32 percent of those 18 to 24 said the same. This shows that people are more likely to become increasingly aware of their diet choices as they grow older, the study shows.

"Consumers are more aware than ever of their own nutritional deficits, and what poor eating habits can do in terms of their long-term health," said John N. Frank, who is the category manager for Consumer Packaged Goods.

"As a result, today's consumers are seeking out healthy food with greater urgency. However, skeptical or confused consumers aren't likely to pay a premium for healthier food, making it hard for manufacturers to justify investment in nutritional/ingredient upgrades," he said.

Seniors less active

The Mintel report also shows participants aged 65 and older often choose not to exercise at all, and researchers feel this increases the older populations desire to eat healthier, since their level of motivation and sometimes ability keeps them from exercising on a regular basis.

"Younger adults generally still feel invincible and have a more naturally active metabolism, making it easier to maintain their weight," said Frank.

The report also shows not only age causes a difference in eating habits and exercise but also gender, as 67 percent of men believe they can judge the health level of foods, compared to 76 percent of women who had similar beliefs.

The researchers attribute this health awareness to women being more in-the-know when it comes to fitness, as they are more inclined to read nutritional labels and be more selective with their food choices.

Results also showed that 64 percent of women read the nutritional facts on labels, compared to 56 percent of men, and both genders said their children provided the necessary motivation for healthier eating.

In total, 67 percent of females said they eat healthier to be good examples for their kids, compared to 57 percent of men who said the same.

But when it comes to eating healthier, which foods are the most fattening and cause the most weight gain?

Skip the chips

In a separate study conducted by Harvard University, and published in The New England Journal of Medicine, it was found that potato chips had the most impact on a person’s weight per serving, followed by unprocessed and processed meats, potatoes, and sugary beverages.

Researchers studied 116,686 women and 51,529 men for a 20-year period, and tallied their weight gain every four years.

It was learned that potato chips accounted for a yearly weight gain of 1.69 pounds every four years, and regular potatoes whether baked, boiled or mashed accounted for 1.28 lbs.

French fried potatoes caused a 3 lb weight gain each year, sugary beverages accounted for a 1.00 lb gain, unprocessed meats 0.95, and processed meats caused a weight adage of 0.93 lbs annually.

Additionally, refined grain food items like bread, white rice and certain cereals caused the same amount of weight gain (0.39 lbs.) as sweetened deserts (0.41 lbs).

Researchers also found that the lack of eating healthy foods caused the same amount of weight gain as indulging in fatty foods like chips or unprocessed meats.

All of the study participants gained more weight when choosing not to consume whole grains, vegetables, fruits, nuts or yogurt, and lack of these foods caused them to gain an average of 3.93 lbs every four years.

Calories not everything

"For diet, conventional wisdom often recommends 'everything in moderation,' with a focus only on total calories consumed," said Dr. Dariush Mozaffarian, associate professor of medicine at Harvard Medical School, and chief author of the study. “Our results demonstrate that the quality of the diet and the types of food and beverages that one consumes is strongly linked to weight gain."

The researchers also detailed just how exercise and other lifestyle habits impact weight gain.

Those who exercised gained 1.76 fewer lbs. than those who didn't increase their fitness regimen, and adults who slept only six hours also gained more weight. Those participants who received over eight hours of sleep also had a weight increase compared to those with different sleep patterns.

The participants who smoked cigarettes and quit during one of the four year intervals gained 5.17 more lbs., compared to those who never smoked during their lifetime.

After the 20-year study was completed, the volunteers gained 3.35 lbs. of their body weight, and increased their overall size by 17 lbs.

"It's not that calories don't count; indeed they do," said Marion Nestle, a nutrition professor at New York University. "But it's a lot easier to control calories by eating healthfully and avoiding junk foods and sodas than it is to delude yourself into thinking you can count them accurately," she explained.

Make no mistake. We're living through an incredibly harsh economic environment. But a new study shows some families cope better than others and it doesn't necessarily have to do with the size of a paycheck.

A report compiled by the Consumer Federation of America (CFA) and Certified Financial Planner Board of Standards, Inc. (CFP Board) shows that those who have prepared a personal financial plan feel more confident and report more success managing money, savings and investments than those who have not.

About 38 percent of the 1,508 household financial decision-makers surveyed said they live paycheck to paycheck, while fewer than one-third indicated they felt comfortable financially and only about one-third think they can afford to retire by age 65. According to several measures of financial well-being, those with a financial plan report faring better than those without one.

The survey found that by a margin of 50 percent to 32 percent, and for all but the lowest income bracket -- people earning less than $25,000 -- where few have a comprehensive plan, planners are more likely to feel they are on pace to meet all of their financial goals, such as saving for retirement or for emergencies.

Across all income brackets planners, by a margin of 52 percent to 30 percent, are more likely to feel "very confident" about managing money, savings and investments. By a 48 percent to 22 percent margin, those who plan are more likely to describe themselves as “living comfortably.”

Manage credit cards better

Consumers with a financial plan are also less likely to be buried in credit card debt. Of consumers in the two lowest income brackets, planners with credit cards report being much more likely to pay credit card bills in full each month.

"Our survey clearly shows that having a personal financial plan helps both rich and poor achieve their financial goals," said Stephen Brobeck, CFA's Executive Director. "Having a financial plan increases one's confidence and effectiveness in managing, borrowing and saving money."

However, only 31 percent of respondents said they had a comprehensive financial plan, while about two-thirds -- 65 percent --indicated they follow a plan for at least one of their savings goals.

A financial plan starts with a monthly budget, accounting for all expenses and measuring them against anticipated income. The goal is to have money left over each month -- even a small amount -- that can be saved and invested.

If you are a typical consumer, you are buying more products and services using your mobile phone or tablet.

The IBM Retail Online Index, a cloud-based analysis of the online retail sector, reported that retailers saw a 15 percent growth in sales from mobile devices in the second quarter of the year. Sales traced to social media declined 20 percent, suggesting social media are becoming a less persuasive force.

“Shoppers today are shifting from a singular online approach to a multi-channel experience that includes both mobile and social media,” said Craig Hayman, General Manager, IBM Industry Solutions.

Hayman said as the holidays approach, consumers should look for an increase in mobile-based promotions as retailers make it easier for them to purchase on the go.

Brave new world

Retailers are already struggling with the growing trend of consumers using their mobile devices to comparison shop when they are in a store. A German study released in May shows that of those shoppers with a tablet or smartphone, 50 percent used a mobile device to compare prices while shopping in stores, 44 percent were seeking out coupons, 33 percent "liked" a certain store on Facebook, and 17 percent actually purchased something using a phone app.

It's very possible that a portion of that 15 percent increase in mobile sales recorded in the second quarter came from consumers shopping in one store choosing to make the purchase online at another after comparing prices.

At the same time, retailers appear to be struggling to sustain substantial success with their social media efforts, evidenced by a more than 20 percent drop in social shopping. IBM thinks one reason for this could be that consumers aren't finding nearly the deals they did through social media sites in the first three months of the year.

And there may be a good reason for that. In the first quarter, retailers were holding sales in hopes of clearing inventory left over from the holidays. That produced attractive bargains for savvy shoppers.

Where are the bargains?

In the second quarter, retail prices went back to normal levels and there were fewer promotions. Thus consumers were disappointed with the lack of deals.

“Retailers must be prepared to connect with their customers on all fronts, or lose them to the competition,” Hayman said.

As a result, Hayman says consumers may see a return to aggressive promotions and creative use of online strategies as the holiday shopping season approaches.

Productos Tita Corp (Trade Name of Tita Products), located in Glendale, NY, is voluntarily recalling certain fresh cheese products due to the improper pasteurization of the milk used to make the cheese.  

Proper pasteurization heats milk in order to effectively eliminate all pathogenic bacteria, such as Listeria and Salmonella. 

The recalled fresh cheese products are all sold in plastic pouches, or rectangular clear plastic tubs and are marketed under the brand name “Tita.” The package labels bear the plant code 36-8440. The products also possess a stamped ink date code beneath the label bar code. 

The recall applies to all date codes of these products found in the marketplace -- the metropolitan New York area. The cheese products involved in this recall are labeled: Quesito Colombiano Colombian Cheese. 

The problem was detected by a New York State Department of Agriculture and Markets’ milk inspector during an inspection on July 17, 2012. The inspection found a failure to follow proper pasteurization procedures by the Productos Tita Corp. cheese plant. 

While the recalled products have not been found to be contaminated with any harmful pathogens, the company is recalling all production date codes of this product, as a precautionary measure. 

No illnesses have been reported to date. Consumers are warned not to use or consume the recalled product, even if it does not appear or smell spoiled. 

Consumers who have purchased any of the recalled products should return them to the place of purchase or discard them. Anyone with questions may contact Productos Tita Corp directly at 718-381-4393.

Mass transit is getting a much-needed shot in the arm. 

U.S. Transportation Secretary Ray LaHood has announced $787 million to modernize and replace aging transit facilities and vehicles to meet the growing demand from millions of riders across the country. 

This third round of federal funding will support 255 projects in 48 states, the District of Columbia and Puerto Rico. 

“By investing in the transit infrastructure people depend on to get where we need to go each day,” LaHood said, “we will keep our economy moving forward well into the future.” 

Demand for dollars 

Demand for the Federal Transit Administration’s (FTA) funds was overwhelming with requests from 836 projects totaling $4 billion in requests. In FY2010 and FY2011, FTA awarded a total of more than $1.8 billion in grants for hundreds of repair projects, primarily involving buses and bus facilities. 

“For millions of Americans,” said Federal Transit Administrator Peter Rogoff, “these investments mean that they may more reliably and safely get to work to earn a paycheck or get to daycare to pick up their children on time, or simply have new choices to enjoy the communities in which they live.” 

Projects 

Examples of projects selected include: 

• New Jersey Transit: $76 million to upgrade its statewide bus fleet, to improve commuting times, improve air quality for state residents, and save on fuel by doubling the fleet of fuel-efficient buses. In addition, the state will put new hybrid coach buses on the road to improve the commute to New York City and start a new Bus Rapid Transit service between Camden County and downtown Philadelphia.
• Maryland Department of Transportation: $40 million to replace Baltimore’s 65-year old Kirk Division Bus Facility with two sustainable “green” buildings that will help reduce operating costs, create local construction jobs in Northeast Baltimore, and help more than 350 local transit employees maintain a growing fleet of new, energy-efficient buses that are now serviced elsewhere.
• Los Angeles County Metropolitan Transportation Authority: $15 million to replace aging buses with new buses that will use compressed natural gas. These new buses will improve reliability for riders, leave a smaller environmental footprint and reduce fuel costs.
• Capital Area Transportation Authority in East Lansing, Michigan: $6.3 million to redevelop a former Amtrak station near Michigan State University into the Capital Area Multi-Modal Gateway Project, which will improve bicycle and pedestrian access and connections to local bus and rail service.
• City of Charlotte, North Carolina: $4 million to replace Charlotte Area Transit System diesel buses that have met or exceeded their useful lives with new hybrid technology buses that will reduce emissions, save on fuel costs, and reduce long term maintenance costs.

A new drug combination for treatment of breast cancer will soon be on the market. 

The U.S. Food and Drug Administration (FDA) has approved Afinitor (everolimus) for use in combination with Aromasin (exemestane) to treat certain postmenopausal women with advanced hormone-receptor positive, HER2-negative breast cancer. 

The drug combination is intended for use in women with recurrence or progression of their cancer after treatment with Femara (letrozole) or Arimidex (anastrozole). 

“This is the first approval from the class of drugs known as mTOR inhibitors for the treatment of postmenopausal women with advanced hormone-receptor positive breast cancer,” said Richard Pazdur, M.D., director of the Office of Hematology and Oncology Products in the FDA’s Center for Drug Evaluation and Research. “Afinitor is another example of the value of continuing to study drugs in additional types of cancer after their initial approval.” 

Breast cancer is the second leading cause of cancer-related death among women. An estimated 226,870 women will be diagnosed with breast cancer this year, and 39,510 will die from the disease. 

Rigorous testing 

The safety and effectiveness of Afinitor was evaluated in a clinical study of 724 patients with advanced breast cancer. All patients had experienced menopause, had estrogen receptor-positive, HER2-negative breast cancer that had spread, and had previously received treatment with Femara or Arimidex. 

Patients were selected to receive either Afinitor in combination with Aromasin or Aromasin with a placebo (sugar pill). Patients received treatment until their cancers progressed or side effects became unacceptable. 

The study was designed to measure the length of time a patient lived without the cancer progressing, or progression-free survival (PFS). Patients who were assigned to receive Afinitor plus Aromasin combination had a 4.6 month improvement in the median time to disease progression or death compared to patients receiving the placebo plus Aromasin. 

The most common side effects observed in patients receiving Afinitor for breast cancer were mouth ulcers, infections, rash, fatigue, diarrhea and decreased appetite. Patients aged 65 years and older should be monitored closely as these patients experience a higher rate of serious side effects than younger patients receiving the treatment. 

Other uses 

The FDA has previously approved Afinitor to treat patients with advanced renal cell carcinoma that has progressed after treatment with other cancer therapies, in adult patients with progressive advanced neuroendocrine tumors of pancreatic origin, for patients with renal angiomyolipoma and tuberous sclerosis complex (TSC) not requiring immediate surgery, and for adults and children with subependymal giant cell astrocytoma associated with TSC who require treatment but are not candidates for curative surgery. 

Afinitor is marketed by East Hanover, N.J.-based Novartis Pharmaceuticals Corporation.

More than one-third of U.S. adults are obese, and obesity contributes to a number of health conditions, including high blood pressure, type 2 diabetes, and high cholesterol. 

To help obese and overweight Americans who have been unsuccessful in getting their weight under control with diet and exercise, the Food and Drug Administration (FDA) has approved two new medications -- the first drugs for long-term weight management that FDA has approved in 13 years. 

Life-long meds 

Marketed as Belviq and Qsymia, these prescription medications would be taken for the rest of a person’s life. “For many people, obesity is a life-long condition, but we don’t always think of it -- or treat it -- as such,” says Amy Egan, M.D., M.P.H., deputy director for safety in FDA’s Division of Metabolism and Endocrinology Products (DMEP). 

“Qsymia and Belviq are considered life-long therapies in patients who respond to and tolerate them,” says Egan. 

The drugs are meant to be used in conjunction with a balanced diet and exercise, says Mary Roberts, M.D., a medical officer in DMEP. “These drugs are another tool to be used by someone trying to reach and stay at a healthy weight,” she says. 

Are they for you? 

You may be a candidate for taking Belviq or Qsymia if you are at least 18 and: 

• your body mass index (BMI) is 30 or greater (obese); or
• your BMI is 27 or greater (overweight) and you have at least one other weight-related condition. 

Women who are pregnant or thinking of becoming pregnant should not take either of these medications, Egan says, because weight loss offers no potential benefit to a pregnant woman and can cause fetal harm. Qsymia carries a risk for birth defects (cleft lip with or without cleft palate) in infants exposed during the first trimester of pregnancy. 

How they work 

Belviq -- the trade name for the drug lorcaserin -- is a 10 mg tablet taken twice a day that works by activating a part of the brain that controls hunger. It was tested in three clinical trials that lasted from 52 to 104 weeks and included nearly 8,000 obese and overweight patients. 

The average weight loss for patients taking Belviq ranged from 3 to 3.7 percent over those taking a placebo.

In studies of patients without type 2 diabetes, about 47 percent of patients lost at least 5 percent of their weight compared with 23 percent of patients treated with placebo.

Belviq should be discontinued if a patient fails to lose five percent of their weight after 12 weeks of treatment, as it is unlikely that continued treatment will be successful. 

Qsymia is a combination of two FDA-approved drugs: phentermine, an appetite suppressant, and topiramate, used to treat epilepsy and migraines. It is taken once a day, with patients starting at the lowest dose (3.75 mg phentermine/23 mg topiramate extended-release), then increasing to the recommended dose (7.5 mg/46 mg). In some circumstances, patients may have their dose increased to the highest dose (15 mg/92 mg). 

It was tested in two clinical trials which included nearly 3,700 obese and overweight patients treated for up to one year.

The average weight loss of patients taking Qsymia ranged from 6.7 percent (lowest dose) to 8.9 percent (recommended dose) over those taking a placebo. 

Sixty-two percent of patients on the lowest dose and 70 percent on the recommended dose lost at least 5 percent of their weight compared with 20 percent treated with placebo. 

If after 12 weeks, a patient has not lost 3 percent of his or her weight on the recommended dose of Qsymia, FDA recommends that treatment be discontinued or increased to the highest dose.  If after an additional 12 weeks on the highest dose, a patient does not lose at least five percent of weight, Qsymia should be discontinued gradually. 

The history

Why has it been 13 years since the last diet drug was approved? 

Eric Colman, M.D., deputy director of DMEP, says drug companies have been testing potential new weight loss drugs, but none had proven effective and safe for consumers until now. 

Before Belviq and Qsymia, the only prescription drug currently approved for long-term treatment of obesity was orlistat, marketed as Xenical. Orlistat is also sold over the counter in a lower dose as Alli. 

But Colman explains FDA has a long history with weight-loss drugs, one set against a backdrop of changing attitudes towards obesity. It wasn’t that long ago, he says, that vanity was considered the only reason to lose weight. That mindset has shifted over the last 20 years with recognition that obesity is a serious health concern. 

FDA approved the first prescription obesity medication in 1947, an appetite suppressant called desoxyephedrine or methamphetamine. Over the next few decades, several more appetite suppressants were approved. In 1973, FDA limited all weight loss drugs to short term use, reflecting concerns about an epidemic of amphetamine use, Colman says. 

In 1997, two diet drugs were removed from the market because of concerns about damage to heart valves. They were fenfluramine (part of the popular fen-phen) and dexfenfluramine (Redux). In 2010, the drug sibutramine (Meridia) was also removed because of concerns about an increased risk of heart attacks and strokes. 

The manufacturers of both Belviq and Qsymia will be required to perform long-term trials to examine the effect of these products on the risk for heart attacks and strokes.

New information from the U.S. Consumer Product Safety Commission (CPSC) shows that 90 children younger than 15 were reported to have drowned in swimming pools since Memorial Day. 

An additional 106 children of that age required emergency response for near-drowning incidents, according to media reports, providing a sobering reminder of how a fun day at the pool can quickly turn tragic. 

The figures show that young children and toddlers are especially vulnerable to drowning. Seventy-two percent of the children reported to have drowned since Memorial Day were younger than five years old. 

Pool Safely Day 

In light of this information, CSPC’s Pool Safely: Simple Steps Save Lives campaign is encouraging water parks, municipal swimming pools and other indoor and outdoor aquatic facilities to celebrate Pool Safely Day, an annual event promoting water safety that encourages all Americans to pool safely every day. 

Participants from all around the U.S. will be participating in Pool Safely Day activities this week (July 22-29).  More than 70 facilities in 30 states have registered events with CPSC during the week.  Events will range from free swimming lessons, to CPR training, to distributing Pool Safely information materials to parents and caregivers. 

"Making sure their children learn how to swim is one of the most important steps parents can take," said CPSC Chairman Inez Tenenbaum. "Swimming is a fun activity to help keep cool in the summer and it also can be a lifesaver." 

Texas leads the way 

Texas had the highest number of drownings (13) in this time period with California, New York, North Carolina, Ohio and Pennsylvania each reporting five drownings.  

CPSC's latest submersion report shows on average 390 pool or spa-related drownings occur each year for children younger than 15, based on statistics from 2007-2009. About 5,200 pool or spa-related emergency department-treated submersion injuries occur on average each year for children younger than 15. 

"This information tells a heartbreaking story," said Tenenbaum. "Behind each one of these incidents are grieving family members and communities. These are preventable tragedies, so we must continue to share the simple safety steps that parents and caregivers should take both before and during time spent in or near the water. That's what we mean when we say America needs to learn how to pool safely."

Staying safe 

The Pool Safely campaign provides information on the simple steps that parents, caregivers and pool owners can take to ensure that children and adults stay safe around pools and spas: 

• Stay close, be alert and watch children in and around the pool. This means never leave children unattended in a pool or spa; always watch children closely around all bodies of water; teach children basic water safety tips; and keep children away from pool drains, pipes and other openings.
• Learn and practice water safety skills.  This means every family member should know how to swim and learning to perform CPR on children and adults.
• Have appropriate equipment for your pool or spa. This include fencing, a lockable safety cover, proper drain covers to avoid entrapments, and lifesaving equipment such as life rings and a reaching pole. 

Pool Safely campaign 

The Pool Safely campaign was launched in 2010 to raise awareness about pool and spa safety, as mandated by the Virginia Graeme Baker Pool and Spa Safety Act. 

This year, the campaign is increasing its focus on populations most at risk of drowning, including children younger than five years old who represent 75 percent of child drowning fatalities on average, and black and Hispanic children between the ages of 5 and 14 who drown at higher rates than white children, according to the Centers for Disease Control and Prevention.  

Data from USA Swimming indicate that 70 percent of black children and 62 percent of Hispanic children cannot swim, making them especially vulnerable to drowning.

Seniors who have trouble getting a good night's sleep may be headed for a nursing home sooner than their sounder-sleeping peers.

That's the conclusion of a new study by researchers at the Johns Hopkins Bloomberg School of Public Health. They say fragmented or interrupted sleep could predict future placement in a nursing home or assisted living facility.

“Sleep disturbances are common in older people,” said Adam Spira, PhD, lead author of the study and an assistant professor with the Bloomberg School’s Department of Mental Health. “Our results show that in community-dwelling older women, more fragmented sleep is associated with a greater risk of being placed in a nursing home or in a personal care home.”

Compared with women with the least fragmented sleep patterns, those who spent the most time awake after first falling asleep were three times more likely to end up in a nursing home or assisted living facility. The linkage may have something to do with disease.

Linked to diseases

In previous research the Centers for Disease Control and Prevention (CDC) has found not getting enough sleep is associated with a number of chronic diseases and conditions -- such as diabetes, cardiovascular disease, obesity and depression.

Research has established that lack of sleep is responsible for an increased risk of motor vehicle and other accidents. Previous studies have also linked disturbed sleep with disability in older adults and impairment in activities of daily living and mobility.

The latest study found that senior adults who suffer from insomnia are at risk of requiring institutional care within five years.

More research needed

“It’s important to remember that this is an observational study, so our findings cannot demonstrate a conclusive causal link between sleep disturbance and placement in long-term care facilities,” Spira said. “We need more research to explain how sleep disturbance might lead to this outcome, and whether interventions to improve sleep might prevent it.

Here are some tips for increasing your chances of a full night's rest:

• Get on a regular schedule: Varying your bedtime radically will disrupt your sleep pattern
• Don't eat or drink a lot just before bedtime: When you go to sleep your stomach should not be full but it shouldn't be empty either.
• Avoid alcohol and tobacco: Using tobacco is never a good idea, but especially in the evening. Having a drink just before bedtime is also to be avoided.
• Keep the room dark: Exposure to light may disrupt your sleep.
• Consider a white noise generator: Many people find this sound restful, plus it helps disguise other sounds that may be in the house.

If sleep disruption consists, discuss it with your doctor.

It can happen to any couple, not just Tom and Katie.

When people get married and utter those famous vows of matrimony, most convey those words with heartfelt sincerity.

Sure it's all good when the rice is being thrown, and the soda cans are dangling from the car's rear, but for some, it goes completely downhill from there.

It doesn't take much research to find that consumers generally regard divorce as being on a par with death and taxes. We surveyed nearly 7 million comments posted on social sites like Twitter and Facebook over the last year and found divorce trending barely above a zero percent approval rating.

 Aside from a few who said the experience was "worth it," most of those commenting saw more bad than good in the divorce process:

How many?

And just how many U.S. marriages end in either separation or divorce?

It's actually hard to pinpoint specific figures as there are conflicting statistics from both surveys and government reports, but according to the National Center for Health Statistics, one-third of new marriages will end in divorce within ten years, and 43 percent within 15 years, but those numbers vary and heavily depend on the couple's age.

To get a proper sense of how couples should proceed when getting a divorce, ConsumerAffairs spoke with Tennessee lawyer John Hollins, Jr., who is author of the informational guide, and book "Surviving Divorce."

"Divorcing couples must spend less time worrying about who is right and more time worrying about what is right," Hollins said.

"Do the right thing, and always take the high road," he said." Using the divorce process simply to punish your spouse is likely to boomerang and hurt the punisher."

Easier said ...

But those who have been through a bitter split know all too well that it's easier said than done to remain on that high road, especially when things like finances, insurance and property are at stake.

Thankfully, there are tangible things that couples can do to get through a divorce with the least amount of anger or contention.

"Divorce lawyers understand that people are not their best under the pressures of divorce," said Hollins.

"The lawyer is there to help you keep your case on track, guide you through the process, and make the experience as quick and painless as possible. As long as you understand there are no real winners in contested litigation, divorce has a devastating effect on the parties and their children. The emotional and legal costs of lengthy trials are substantial," he said.

According to the divorce website Divorcestatistics.com, the average cost to end a marriage is in the neighborhood of $20,000, and the entire divorce industry is a $28 billion-a-year business, so obviously a strong piece of advice would be to make sure you really want to split, while making sure your finances are equipped to take on such high costs.

And of course having children adds to the level of difficulty when ending a marriage and putting them first should be your first goal amidst your feelings of hurt and anger, says Hollins. 

"When children are involved, parents must always honor their children by placing their best interest first," he says. "You must love your children more than you dislike your spouse and put what is important for them ahead of any animosity."

Counseling helpful

Parents should be "involving an experienced and qualified counselor to advise a couple as to how, when and where to break the news to the children, he added.

“Children naturally blame themselves and must be told that they are not responsible for the demise of the marriage. They need to know that they will go to the same school, have the same friends, and, if possible, see both parents frequently."

However, ending a marriage if you don't have children can be just as taxing on your emotions, finances and the other people around you. Hollins says trying not to blame yourself or even your partner will make you better off in the long run.

"If you have no children, you must remember that we all have shortcomings; it is human nature to try to hide them. We tend to look at things the way we want to see them, and not the way they really are. Each spouse must accept responsibility for his or her conduct, good or bad. Admit your mistakes and be honest with yourself," Hollins explains.

He also says that keeping the details of the divorce a secret should be a high priority, which can be a great challenge for many, as it's easy to vent frustrations and sadness to close friends or family, but that may not be the best thing to do.

Keeping secrets

So how does one keep quiet when they're in a vulnerable and expressive state?

"The attorney/client privilege requires lawyers to preserve as confidential all information, written and oral, communicated on or behalf of the client except under limited circumstances, said Hollins.

”Disclosures to anyone other than your attorney are typically not protected unless it is made to a psychologist and/or health care professionals, he said"

Also "many people tend to trust their pastors, friends, and family. Unfortunately this can backfire because those individuals could also be talking to your spouse without your knowledge. When in doubt, keep your mouth shut!".

But sometimes couples aren't sure if they want a divorce, and decide a brief separation is needed to gauge if a final split is really in the marital cards. What are the legalities people should be aware of when they just want a break from the marriage?

"Unless a complaint for absolute divorce or a complaint for legal separation is filed with the court at the time of the separation, the courts offer no real protection to either party other than existing criminal laws in that jurisdiction," Hollins said.

“If couples do separate without any court filings, agreements must be reached with respect to the children, payment of all expenses, and boundaries with respect to each party's residence."

Hollins also says that nickel and diming each other isn't going to assist either person during the divorce, and couples should really decide what's important as well as what's not important to them, as it will not only speed up the process, it will save you from additional heartache.

"Choose your battles wisely," he says. Determine on the front end if this is an issue you are 'prepared to die for.'"

Emotional issues

Back up Hollins' view was divorce lawyer Neil T. Magner, of Magner, Hueneke, Smith & Borda LLP.

Magner says sure there are emotional holes to eventually repair and fill, but getting your paperwork and legal documents together should be ahead of anything else.

"One of the most important things for client's to concentrate on is their Financial Disclosure Statement, which reflects their assets, liabilities and monthly income and expenses," he said.

"For example, client's need to figure out what their monthly expenses are for transportation, food, insurance (including automobile, health, dental, vision, propter, renter's, etc.), minimum monthly credit card payments."

"In addition," Magner said, "Clients should make sure they get their retirement statements and tax returns organized because their attorney will need copies. If minor children are involved, the parties should have clear understanding of any school fees and costs for extracurricular."

Since there are a countless number of portable devices for music listening, there's also a countless number of headphones. Whether the white flimsy kind that accompanies the iPod, or the over-the-ear bulky variety, there's no shortage of selections.

Of course headphones are easily distinguishable by their design, but unless you listen to different models side by side, it's hard to tell which ones sound the best.

So instead of listening to a particular headphone and assessing its quality of sound, I compared some of the most popular ones on the market today, in a side by side, beat for beat, note for note sound comparison.

First up are the Beats by Dre Headphones made by Monster. There are a few different models of these headphones. The one I checked out was the "Beat Mixer Over-The-Ear" model for $299.

There's been a lot of hype about these headphones, and ConsumerAffairs previously did a quick review, but this was the first time these headphones were compared directly against the competition.

I was reminded of how powerful these headphones are, and how much they're specifically designed for bass-heavy music. With bass sound you usually either get power or clarity, but Beats By Dre gives you both... loud bass, but with crispness and accuracy. No muffled bass sound here.

Within seconds of listening to a Rap tune, I was completely enveloped by the fullness and attention-grabbing-nature of the Beats by Dre headphones.

As far as the design, nothing special, but that might be a good thing. If you're looking for more musical wallop than fancy design, these headphones are just right for you.

Dre's headphones do have a somewhat futuristic look and appeal to them, and the soft leather felt quite light and comfortable around my ear, but as far as sound, they're extremely high quality.

Bose Audio

Next up was the Bose Audio Headphones for 149.99, which also sounded pretty darn good. If not known for anything else, Bose is widely known for its sound clarity, and that reputation is very well deserved.

Compared to Beats by Dre, the Bose headphones scored high in the sound test, but just average on picking up and properly distributing bass sounds. But that's kind of Bose's claim to fame. The company provides a smooth clean sound that picks up the high parts of a melody, as opposed to only picking up its bottom foundation.

If Beats by Dre are ideal for listening to Rap or Rock Music, the Bose Oe2 are perfect for Jazz, Classical, or Ambient music.

The kind of music you listen to most should directly affect the type of headphones you buy.

Roc Nation

I then tried out the Roc Nation Aviator Headphones, made by Skullcandy, that cost $149.99. The first thing I noticed was how gorgeous these headphones were. They should really be called eye candy rather than Skullcandy.

The headphones I tested were brown and gold with see through ear pieces and brown soft leather ear-cups. The head band was made of soft leather on the outside and a suede or rawhide material on the inside. And the sound?

On my phone, I brought up a song by the Doors to test out the Aviators. I can never get enough of Mr. Morrison so I was hoping the Skullcandys would do his haunting voice some justice. They really didn't though.

The sonic output was just okay, nothing spectacular, nothing horrible. It shot out mediocre amounts of sound quality, and didn't really separate each instrument by highs, lows, or mid-range. The Doors' classic tune "Crystal Ships" seemed to be at all one level, which really took away from the song.

Those who like some flash in their headphone design will love the Aviators, but consumers will give up a bit of high quality sound for prettiness.

Another thing I didn't care for in the Aviators was the cord attached to the headphones. Instead of a thick strong wire that plugs into your device, the Skullcandys uses a flimsy string.  If you're using these headphones in the rain, the cord will more than likely get wet. Then you'll have to plug a soggy cord into your device.

Soul 

The last headset I checked out was Soul, which is designed by Atlanta rapper Ludacris. If you know anything about Ludacris and his music, you know his songs are filled with in your face beats, coupled with a strong and clear vocal delivery.

Well, his headphones sound just like that. Somehow Luda was able to design a pair of headphones that sort of mimic his style.

Similar to the Beats by Dre headphones, Soul sucks you in upon first listen, and clearly picks up each individual level of sound. At $199.99 the headphones are not a bad buy, considering there are other brands for the same price that don't deliver the same quality of sound.

As far as the design, the headphones are pretty straightforward. They have large earcups and a headband that's made of a fiberglass type of material. They also feel very comfortable and light, and have an overall look that’s very similar to Dr. Dre's headphones.

The winner

Out of the four tested, which headphones were the best?

By far, Beats by Dre won for its quality of sound. The legendary Los Angeles producer says he made the headphones so consumers can hear the music just like it sounds in the studio when the music is being made.

Producers spend hours and hours, sometimes days, tweaking a snare drum sound for example, or adjusting a guitar lick to get it at just the right level in relation to the rest of the instruments.

It sounds like Dre's headphones accomplished this feat, as each individual sound seemed to come through quite loud and clear.

The runner up was Soul by Ludacris. The headphones were just a couple of notches under Beats by Dre in terms of sound quality, but didn't capture the music's fullness in the same way.

The headphones are $100 less than Dre's, and you can actually hear that $100 difference in the sound. But if you don't want to spend nearly $300 for the Dre headphones, Soul by Ludacris is certainly worth the $199.99 price tag.

The Bose Oe2s were third on the rating chart, but could also be first depending on the type of music you typically listen to. It seems as if the Bose company made the headphones for an older audience who may not choose Rock, Rap, or Dance music as their first musical choice.

Bose's headphones are ideal for those who prefer a quieter brand of music.

Last on the list were the Aviators. Although they scored the highest in the best design category, the sound quality didn't match the headphones' slick design. The music didn't sound terrible or distorted, but all of the sounds seemed to mesh together. You can get the same listening results with much cheaper priced headphones.

So the next time you shop for a pair of headphones do an extended side by side listening test. Also, plug the headphones into your own device, as opposed to using the ones on the display wall that will play only one song.

That way you can decide if the headphones you're getting will suit you and your particular brand of music.

All is well again in TV Land for DIRECTV subscribers upset that Viacom yanked 17 channels from the satellite service in a contract dispute. The two sides have announced agreement on a long-term contract.

On July 10 the Viacom channels, including Nickelodeon, Comedy Central, MTV, BET, Spike, CMT, TV Land and ten other channels disappeared from the system, leaving many viewers upset.

"DIRECTV dropped Viacom and yet they are charging me as if I am receiving them," Patricia, of Estill, SC, wrote in a ConsumerAffairs review. "It is totally unfair for them to continue charging the consumers when we are actually not able to watch these channels."

Phyllis, of Norfolk, VA, also viewed it as a reduction in service without a reduction in price.

"When I signed on eight years ago with DIRECTV, it included all these channels that have been taken away and they still want me, the consumer, to pay the same amount," she wrote to ConsumerAffairs.

Financial terms of the agreement that restored the channels were not disclosed but Businessweek quotes source close to the negotiations as saying Viacom will receive $600 million over seven year. Previously, DIRECTV said Viacom wanted $1 billion.

DIRECTV suggested the subscriber revolt that appeared on sites like ConsumerAffairs didn't play into the final agreement and that the satellite provider held its ground.

Standoff 'unfortunate'

“It’s unfortunate that Viacom took the channels away from customers to try to gain leverage, but in the end, it’s clear our customers recognized that tactic for what it was,” said Derek Chang, executive vice president of Content Strategy and Development for DIRECTV. “The attention surrounding this unnecessary and ill-advised blackout by Viacom has accomplished one key thing: it serves notice to all media companies that bullying TV providers and their customers with blackouts won’t get them a better deal. It’s high time programmers ended these anti-consumer blackouts once and for all and prove our industry is about enabling people to connect to their favorite programs rather than denying them access.”

Chang said the new agreement will also give DIRECTV customers will also gain the ability to see Viacom programming on tablets, laptops, handhelds and other personal devices via the DIRECTV Everywhere platform.

The dispute called attention to the growing tension between content providers and companies that distribute content to consumers. Currently rival Dish Network is embroiled in a similar contract dispute with AMC Network, which airs the popular series "Mad Men," "Walking Dead," and "Breaking Bad."

DIRECTV says the standoff with Viacom helped generate significant public support from high-profile DIRECTV competitors. The 850 small and independently owned local cable systems that make up the American Cable Association lent public support, the company said, as did Cox Communications, Time Warner Cable and Mediacom.

Gasoline prices headed higher for another week, with the average price gaining six cents a gallon over the last seven days.

The national average price of self-serve regular today is $3.447 per gallon, compared with $3.388 last Friday, according to AAA's Fuel Gauge Survey. Gas prices now are only four cents a gallon cheaper than a month ago.

The average price of diesel fuel today is $3.710 per gallon, versus $3.683 a week ago.

Oil prices have been rising over the last two weeks in spite of concerns about slowing economic growth. Prices edged up on data showing U.S. crude oil supplies have fallen this month. In its most recent report the Energy Information Administration reports crude stockpiles dipped 809,000 barrels in the week ending July 13 after a significant decline the week before.

Familiar pattern

Arvery Ash, AAA's manager of federal relations, says July's price action is following a pattern set last year.

"Rising gas prices in July also occurred last summer after prices fell 44 cents per gallon from a high of $3.98 on May 5 to a summer low of $3.54 on June 30," Ash said. "Last year prices increased 17 cents in July and remained elevated through Labor Day before declining following the busy summer driving period. This year, just more than halfway through July, the price at the pump has increased seven cents."

This year the decline may be strengthened if the Federal Reserve holds off on another stimulus round. That would keep the dollar stronger and oil prices lower.

Among the states this week, prices remained fairly stable with drivers in Arizona and New Mexico enjoying a drop in prices at the pump, propelling both states into the top 10 cheapest gas price states.

The states with the highest gas prices this week are:

• Hawaii ($4.186)
• Alaska ($4.011)
• Connecticut ($3.782)
• California ($3.751)
• New York ($3.735)
• Washington State ($3.638)
• Illinois ($3.614)
• North Dakota ($3.611)
• Oregon ($3.604)
• Colorado ($3.546)

The states with the lowest gas prices this week are:

• South Carolina ($3.117)
• Mississippi ($3.148)
• Alabama ($3.182)
• Tennessee ($3.199)
• Arkansas ($3.233)
• Louisiana ($3.237)
• Virginia ($3.281)
• Texas ($3.305)
• New Mexico ($3.314)
• Arizona ($3.322)

The Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Education today released a report that describes the risky practices and debt that stemmed from the boom and bust of the private student loan market in the past ten years. 

According to the CFPB’s estimates, outstanding student loan debt in the United States topped $1 trillion in 2011 -- $864 billion of federal student debt and approximately $150 billion of private student loan debt. 

“Our findings reveal that students were yet another group of consumers that were hurt by the boom and bust of the financial crisis,” said CFPB Director Richard Cordray.  “Too many student loan borrowers are struggling to pay off private student loans that they did not understand and cannot afford.  Moving forward, we must do our best to leave the next generation in a better place than we are today, rather than buried under a mountain of debt.” 

“Subprime-style lending went to college and now students are paying the price,” said U.S. Education Secretary Arne Duncan. “We still have some work to do to ensure that students who take out private student loans have the same kinds of protections offered by federal loans. In the meantime, if you have to take out a loan to pay for college, federal student aid should be your first option.”

Significant changes

Private student loans were originally designed to supplement federal student loans, and still serve that role in most cases,but there were significant changes in lending in the years leading up to the financial crisis. 

Funded in large part by the asset-backed securities market, many lenders made money by originating and then selling private student loans with less regard for borrowers’ creditworthiness. The market grew from less than $5 billion in 2001 to over $20 billion in 2008, and then rapidly contracted to less than $6 billion in 2011. After the financial crisis, underwriting standards tightened as investors pulled out of the market.

In the Dodd-Frank Wall Street and Consumer Protection Act, Congress mandated that the CFPB and the U.S. Department of Education conduct a detailed study to determine where there might be consumer protection gaps in the private student loan market.  For this report, the CFPBreceived loan data from nine lenders on over five million loans made between 2005 and 2011, as well as data from five nonprofit lenders.

Three major findings of the joint report are:

• Private student loans are riskier: Used appropriately, private student loans have a role to play in financing higher education.  However, compared to federal student loans, private student loans often lack repayment flexibility and other protections when borrowers are struggling to make ends meet.  Most private loans have few options for payment modification or forbearance.  Federal loans have a fixed interest rate and most private loans have variable rates, making estimates about future debt payments difficult.  Prior to 2010, federal law did not require a disclosure showing the actual interest rate on a borrower’s loan until after the lender documented the loan, approved the credit, and readied the check for mailing.

• Lax underwriting practices rise during boom:  Some lenders bypassed school financial aid offices and marketed loans directly to students.  As a result, in many cases, the school could not review the borrower’s financial need, compare it to the loan amount, or even verify that the borrower was enrolled.  Many lenders also lowered the minimum credit score required to receive a private student loan so that they could originate and then sell off more loans.  Many students did not understand the differences and features between federal and private loans.  They ended up using riskier private loans before exhausting their safer federal options.  

• Borrowers are trapped after bust: Defaults on private student loans have increased since the financial crisis.  Based on the CFPB’s sample, there are now over $8.1 billion in defaulted private loans, representing more than 850,000 distinct loans.  Congress amended the bankruptcy code in 2005 to make it tougher to discharge private student loans.  There is little to no evidence that there was an improvement in price and it is unclear that there was an increase in access to credit as a result of these changes.  Borrowers reported their lenders were unable or unwilling to modify or adjust repayment terms.

Since 2008, lending standards in the private student loan market have tightened.  Lenders are not able to easily sell off the student loans they originate, so they have more “skin in the game” when it comes to the borrower’s ability to repay. 

In 2011, 90 percent of private student loans had a creditworthy co-signer, compared to only 67 percent in 2008. The credit scores of those obtaining student loans in the past few years have risen.  More than 90 percent of loans are now reviewed by a school financial aid office to make sure that loan amounts match financial need.

Recommendations 

As part of the study, the CFPB and Department of Education each offered common-sense recommendations to reform the private student loan market to ensure that the bad practices of the past are not repeated.  

They recommended that lenders and school financial aid counselors work together in everyone’s best interest.  Borrowers should have the information they need to have a full picture of their debt obligations, and lenders need to maintain careful underwriting standards. 

They also articulated the need to take a second look at how borrowers might be able to restructure their debt in the bankruptcy process.

The CFPB launched a tool to help borrowers once they have missed monthly payments on their private or federal student loans.  The Student Loan Debt Collection Assistant is designed to help these borrowers understand their options, communicate effectively with their servicer or debt collector, and bring their loan out of default.

Because student loans are not generally dischargeable in bankruptcy, and because federal student loans have specific consumer protections guaranteed by law, it is very important for borrowers to understand their rights and responsibilities.