Current Events in November 2012

Although there was little movement in gasoline prices during the week, a couple of price thresholds were crossed. For the first time this year the average price of diesel fuel fell below $4 a gallon. And only one state -- Hawaii -- has an average price above the $4 mark.

The national average price of self-serve regular today is $3.430 per gallon, compared with $3.456 last Friday, according to AAA's Fuel Gauge Survey. That's 32 cents lower than a month ago and only three cents higher than the price a year ago.

The average price of diesel fuel today is $3.994 per gallon, versus $4.011 a week ago.

Gasoline prices are returning to their normal levels for this time of year as states switch over to less-expensive winter-grade blends. But other factors are at work that may give consumers an even bigger break in the weeks to come.

The political stand-off in Washington over the so-called “fiscal cliff” means oil markets are extremely nervous. Failure to resolve the issue would mean taxes would rise for everyone at the end of the year and the government would be required to initiate deep spending cuts. Most economists think such a scenario would bring on a recession. Look for oil prices to fall as that end of the year deadline approaches.

However, geopolitical events in the Middle East could counter-balance that effect. Israel's strike against Hamas this week and the growing concern it could get sucked into the Syrian conflict might raise concerns about supply problems in that region of the world.

In the states this week, prices were fairly stable. The average price even fell in New York, still recovering from the effects of Hurricane Sandy.

The states with the most expensive gas prices this week are:

• Hawaii ($4.147)
• Alaska ($3.982)
• New York ($3.957)
• California ($3.811)
• Connecticut ($3.848)
• Vermont ($3.697)
• Utah ($3.681)
• Idaho ($3.677)
• Nevada ($3.656)
• Massachusetts ($3.641)

The states with the lowest gas prices this week are:

• Missouri ($3.107)
• South Carolina ($3.112)
• Oklahoma ($3.144)
• Tennessee ($3.156)
• Texas ($3.170)
• Arkansas ($3.175)
• Mississippi ($3.186)
• Alabama ($3.204)
• Kansas ($3.211)
• Georgia($3.229)

If you own a smartphone, you have a very handy tool when you go shopping. If you're in a store and find an item you'd like to buy, you can very quickly learn whether that merchant has a competitive price or if you can do better elsewhere.

Retailers hate it but for consumers, it saves both time and money. You don't have to physically visit a competitor's store, you simply go to its Website and find the price for the item.

Not surprisingly, more of us are now shopping with our phones. A survey by Aprimo, in collaboration with Forrester Research analyst Sucharita Mulpuru, found that one in five consumers is now "showrooming" -- the practice of visiting retail stores to try products -- but then checking a mobile device for the best price online.

A third of showroomers buy elsewhere

Of those consumers already showrooming, 33 percent say they ultimately used the information to buy elsewhere. For retailers, that means they've wasted the advertising money to get consumers in the door. Because consumers can quickly learn their price is higher, they lose the sale.

The trend is only expected to continue growing, too, as 96 percent say they plan to use their smart phone to research prices the same way or more in the future.

"This research confirms what many in the retail industry have suspected -- showrooming is here to stay," said Sucharita Mulpuru, vice president and principal analyst for Forrester Research, who helped develop the survey questions and analyze results. "Retailers must seriously consider ways to avoid losing sales this way by using strategies such as price matching, personalized in-store service and loyalty programs."

In other words, retailers have to be more competitive. But that may present challenges for brick and mortar stores, who must maintain vast areas of retail space while their online competitors just need a warehouse.

Advantage, consumer

The advantage, of course, is all on the consumer's side. And for that reason showrooming as a trend may just be getting started. One third of those who have not used their smartphones for in-store research haven't done so simply because the idea hadn't yet occurred to them.

Showrooming isn't just for big-ticket items. While consumer electronics are the most popular items price-checked in store at 39 percent, groceries are the second-most researched and apparel/footwear came in third.

The question is how are retailers going to respond to this? Are they going to make shoppers check their smartphoness at the door? Probably not.

Instead of getting defensive, Aprimo believes stores can turn this trend to their advantage. This means that in order to preserve sales and sustain pricing levels, today's physical-store retailers need to become more customer-centric, giving consumers good reasons, in addition to price, to spend their money there.

If that happens, both the retailer and the consumer win.

Consumers may want to head for their keyboards rather than toy stores this holiday season, as Amazon.com has the cheapest prices for toys compared to places like Target, Walmart and Kmart, a Bloomberg Industries study finds.

On November 8 of this year, researcher Poonam Goyal compared the prices of 125 different toys and found that 44 percent of Amazon’s selections were lower in price compared to other retailers, even Toys “R” Us.

The study also showed that Amazon never ran out of online stock, compared to Target that had 3 percent of its toy stock missing, and Wal-Mart which had 8 percent of its toys unavailable for purchase.

Toys “R” Us also didn’t have any stock problems during the study, as the company fully expects that legions of consumers will flock to its virtual doors like they do every year during the holidays.

It's still Us

Although Amazon won the prize for best toy prices, many consumers will still be heading to Toys "R" Us for gifts, as the New Jersey-based company is practically synonymous with the holiday season itself.

Also, the holidays are one of the few times of year that many people opt for a brick and mortar experience rather than shop online, so it will be interesting to see if people respond to the findings of Amazon being the cheapest place for toys.

And although Toys “R” Us is arguably the most-visited place for toy shopping, many consumers still take issue with the company’s gift card services, some of its products and its overall pricing.

“First I had picked up several Crayola Crayon travel packs,” wrote Martha of Kansas about Toys “R” Us.

“On the shelf they said $6.99 and all over the aisle, it said buy one get one half off. Well, not only did they ring up $10.99, I was informed they were not part of the sale. Next, I had bought some lunch boxes out of a bin that said $4.99 to $6.99 (there were several so not put there by mistake). Well, these rang up at $9.99 and I was told they were there by mistake.

“I went back to the Crayola aisle and got an employee off the floor and showed her the stack of packs I bought and where it was $6.99. Also, I pointed out the buy one get one half off. Her reply was ‘Well, I don’t know what to tell you, they are what they ring up,’”  explained Martha.

There have been similar complaints from readers about the toy store having confusing sale offers. We sent an email to Toys “R” Us for a statement and are awaiting a reply.

Maximizing dollars

Luckily, there are tons of other places besides Toys “R” Us that people can go to when searching for holiday toys, and according to Goyal’s research, Amazon should be the first place one should start if they’re looking to maximize their shopping dollars on popular items.

For example, a highly coveted PlayStation 3 game showed a price difference of almost $20 compared to Walmart, and if you tack on the convenience of being able to shop from your computer or mobile device, it makes Amazon seem like the better option hands down--but of course that’s not considering the associated shipping costs.

Some consumers have said they’ve been lured into using Amazon by a free shipping offer, but later found out there was a substantial charge.

“Amazon touts their free shipping, but nothing could be further from the truth,” wrote John of Massachusetts in a ConsumerAffairs posting.  “I placed a small order for three small items with Amazon (mistake). Amazon turned it into three separate orders with hefty freight on 2 out of the 3.”

80% less expensive

Although the digital retailer faired well in the Bloomberg survey, Walmart scored pretty well too.

According to Goyal, 80 percent of its toys were less expensive than the ones at Toys “R” Us and Kmart. In addition, 13 percent of Wal-Mart’s toys were lower priced than Amazon.

Goyal also suggested that consumers need to pay keen attention to the different shopping options for toys this year, because the sheer competiveness of the industry during the holidays makes retailers likely to lower prices just to get you away from other stores.

“Toys are important because they are the top category for the holiday, along with electronics, and are the most competitive,” he said in an interview.

As more and more stores are joining Black Thursday it seems that even more people are also starting to voice their opposition.

Target’s employees, customers and shareholders have joined a petition that already has over 200,000 signatures and many are protesting the fact that Target’s workers have to leave their families early on Thanksgiving Day to handle the crowds of shoppers that are likely to visit stores.

Target recently announced it was opening on Thanksgiving this year in addition to Black Friday.

Other retailers like Walmart and Toys "R" Us have also joined the Black Thursday trend, where doors open almost a day earlier than they normally would, and many believe stores are putting profit over people and forcing employees to cater to those customers who prefer not to wait until Black Friday to do their shopping.

Consumers don't seem wild about the idea. A sentiment analysis of nearly 9,000 social media postings over the last year finds consumers holding mostly extreme opinions, i.e., they either really like the idea or really hate it.

 These wide fluctations may, of course, be due to the relatively small sample size. 

More shopping days

Rojeh Avanesian, who is the Vice President of Marketing and Analytics at PriceGrabber--a company that deals with retail cost comparison--says Black Thursday is beneficial to those customers who are looking to maximize the number of days they are able to shop and take advantage of deals.

“Black Thursday gives shoppers an opportunity to take advantage of deep discounts for a longer period of time,” he said in a ConsumerAffairs interview.

“Some retailers are offering additional sales to promote the extended hours and really push to get consumers in the door during Thanksgiving weekend. Since shoppers were preoccupied with the election, consumers will hit Black Friday/Cyber Monday weekend hard with holiday shopping.”  

Avanesian also says the inclusion of Black Thursday should push holiday sales over the top this year compared to 2011.

“According to our survey, more than 60 percent of consumers are planning to spend about the same or slightly more money this holiday season than in 2011,” he explained. “Over half of the consumers we surveyed said that they plan to spend over $500 or more.”

Widespread dislike

A handful of recently released surveys show that a large number of people will avoid shopping on Black Thursday, which could indicate a widespread dislike for the controversial shopping day.

These survey results could also show that many consumers are in no rush to deal with the legions of people, the busy stores and the long lines. But experts say there are still some people who are solely focused on good deals, and if consumers believe there is a way to save a dollar or two-- they are willing to get up from the Thanksgiving table and head to a store that’s open for business.

According to a PriceGrabber survey, about nine percent of consumers plan to head to the stores on Black Thursday, which is a small number of people compared to those who still see Black Friday as the best day to shop and get deals.

“Consumers are largely focused on one major theme this holiday season—deals, deals, and more deals,” said Avanesian.

“Our survey results indicate that 71 percent of consumers believe the best deals can be found on Black Friday, and in order to capitalize on retailer incentives that day, 64 percent of shoppers are planning to take advantage of Black Friday extended store hours this year.”

Family shopping adventure

But some store executives are sticking to their point that Black Thursday was created with the customer’s shopping interests in mind. There was even a Target vice president that said Black Thursday was a way that households can participate in a family shopping outing after dinner is finished.

“We heard from our guests that they look forward to kicking off their holiday shopping with deal hunting on Thanksgiving night,” said Target’s Vice President Kathee Tesija in a statement. “Opening at 9 p.m. gives Target’s Black Friday guests a more convenient way to create an after dinner shopping event that the entire family can enjoy.”

However, many consumers would probably disagree with this logic, because anyone who believes that entire families are dying to leave the coziness of Thanksgiving dinner to pile into a car for late night shopping, has probably been in the retail business a little too long.

But some retailers are using exclusive deals to attract shoppers to leave their homes on Thanksgiving night and many  believe this sales tactic just might work.

Walmart is offering an Emerson 32-inch television set for $148, an Apple iPad 2 for $399 and a Blu-ray player from LG for $38 for those consumers who are in the store between 10 p.m. and 11 p.m. Thanksgiving night.

It will be interesting to see if consumers take this type of bait and head to stores on Thanksgiving or if they’ll exercise a little patience and just visit retailers on the following Friday and over the Thanksgiving weekend.

Of course 2012 isn’t the year that Black Thursday was invented, as many retailers have opened their doors on Thanksgiving in the past, but Avanesian said that most consumers still see Black Friday as the official start of the holiday shopping season--and according to PriceGrabber’s research-- consumers will spend more this Black Friday than last year.

“We expect Black Friday sales to increase slightly this year compared to 2011,” he says. “We predict sales will fall in-line with the industry projections of an approximate 4 percent increase. “Black Friday sales are also a good indication for how the rest of the holiday season will shape up.”

“According to our survey, more than 60 percent of consumers are planning to spend about the same or slightly more money this holiday season than in 2011. Over half of the consumers were surveyed said that they plan to spend over $500 or more,” said Avanesian.

It was hard not to view footage of the automotive devastation caused by Hurricane Sandy and not conclude that the impact on the used car market would be significant.

Indeed, a number of automotive sources, including the National Automobile Dealers Association, issued reports suggesting the huge need for replacement vehicles would lead to a shortage on the used car market and drive up prices as much as $1,000.

Now, two automotive sources are disputing that. Experts at both AutoTrader.com and Kelley Blue Book (KBB) say they have examined the available data and estimate between 200,000 and 300,000 new and used vehicles were destroyed as a result of the storm.

That's significantly lower than the initial estimate of more than 600,000 and the two auto sources point out that only represents 0.1 percent of the more than 240 million registered vehicles on the road.

This interpretation is not without its skeptics, however. ConsumerAffairs has heard from many consumers whose cars were totally submerged in salty water, rendering them a total loss but who are only beginning the claims process because vast swaths of the the New York-New Jersey area remain without power and shortages of gas are keeping adjusters from traveling to inspect damaged cars.

Thus, attempts to lessen the expected severity of the total loss should be taken with a grain of salt, many observers suggested. 

"No national impact'

"There's absolutely no question that Superstorm Sandy has had a devastating impact on those who live in the Northeast," said Chip Perry, president and CEO, AutoTrader Group. "I've personally visited the area and spoken with many of our field sales representatives and customers, and it's clear that this event changed many of their lives. But when you look at the impact on the automotive industry, the fact is, the number of vehicles lost is too small of a fraction to significantly move the national market."

Data and analysis from the November Kelley Blue Book Market Report tends to back up that conclusion. Since the storm hit so late in the year, KBB analysts believe increased demand on the East Coast will only mute the market's typical decline through this time period.

Usually at this time of year, there's a one to two percent drop in demand for used cars, the KBB analysts say. Instead of the drop, they now think demand will remain flat.

From a used car pricing perspective, KBB.com Senior Market Analyst Alec Gutierrez anticipates only modest market increases, $200 to $300 at most, isolated mainly in the Northeast region.

Katrina comparison

"When Hurricane Katrina hit, Kelley Blue Book values increased more than two to three percent in the affected area from the time the storm hit until year-end," Gutierrez said. "This year, we believe that while we may see some price appreciation on the East Coast, from a national perspective, values will remain relatively flat."

That means used car shoppers should compare prices carefully and not be pressured into a hasty decision by a salesperson's claim that prices are rising due to a shortage.

Both KBB and AutoTrader analysts agree that Sandy's impact is just now starting to be felt in the market and it will take months before the total effects will be fully comprehended.

"It's going to take time for impacted consumers to get back in the market," Gutierrez said. "Some may have been able to get a replacement vehicle immediately, but many others could be waiting for their insurance check or unfortunately have to focus on repairing damage to their home. We're going to be keeping a close eye on this in the months ahead."

Consumers may be familiar with the “fruit of the month club” concept. Once signed up for membership, they receive a monthly shipment of a different fruit for one monthly price.

Walmart is borrowing the concept for the launch of its new Goodies Co., a monthly food subscription service for consumers who want to sample new or gourmet products. The membership costs $7 a month and entitles the member to receive a gift box with five to eight food samples. The cost of shipping is included in the $7.

3,000 test users

Walmart says it has been testing the concept for the last few months with about 3,000 users in the U.S. The food arrives in a gift box with an information card that describes the food items in detail.

"With Goodies Co., subscribers have the pleasure of opening a box filled with delicious treats every month that they like or may never have tried before,” said Ravi Raj, vice president of products, WalmartLabs. “Great value combined with a community of food lovers and the sheer surprise of what a box might hold makes Goodies Co. a compelling offering."

Besides being a product, Goodies Co. is also a marketing program. Walmart gets to distributes new samples of food product lines to consumers who, the company hopes, will like what they get and become regular purchasers.

Is it worth it?

But should consumers be spending $7 a month in order to participate in this marketing program? Yes, the company says, because it's not only fun, but a bargain.

Walmart says Goodies Co. is the first to offer a large assortment of products for a total price that is almost half of the total value of the items if they were purchased separately. The total price for all of the items in the November box would be approximately $15 compared to the Goodies Co. $7 price, the company said.

When subscribers discover a product they like, Walmart hopes they will purchase full-size versions from the Goodies Co. website.

Users can sign up for the service online. After they sign up their name is placed in line to receive an invitation to join the Goodies community. Once an invite is received and the user completes the subscription, they can receive their first Goodies Co. box within weeks.

Oregon Attorney General Ellen Rosenblum today announced that pharmaceutical giant GlaxoSmithKline has agreed to pay $90 million to Oregon and 37 other states to settle claims that it unlawfully promoted its diabetes drug, Avandia.

The 38 Attorneys General claimed lawsuits filed Nov. 15 that GlaxoSmithKline misrepresented the cardiovascular risks posed by Avandia. A negotiated consent judgment was filed shortly thereafter.

As the co-leader of the lawsuit, Oregon will receive $3.9 million of the settlement.

“It's fine to promote a product; it's not fine to misrepresent a drug's potential health risks,” said Attorney General Rosenblum. “When pharmaceutical companies cross the line, the Oregon Department of Justice will hold them accountable.”

Avandia was a blockbuster drug for GlaxoSmithKline. First approved by the Food and Drug Administration in 1999, annual sales peaked at more than $2.5 billion in 2006.

Insulin sensitivity

The drug made cells more sensitive to insulin, a seeming boon for diabetes sufferers. Type 2 diabetes results from the body’s failure to produce enough insulin or to properly process the hormone, the substance needed for the body to convert sugar and other food into energy. Without insulin, sugar builds up in the bloodstream leading to numerous health dangers, heart attack and stroke chief among them.

Diabetes is the seventh leading cause of death in the U.S.

A 2007 study linked Avandia to increased risk of heart attacks, one of the very conditions diabetics are predisposed to.

Consumers filed thousands of lawsuits. Avandia sales plummeted.

The Oregon Department of Justice launched its investigation two years ago. Oregon and the 37 other states claim GlaxoSmithKline made safety claims about Avandia not supported by the scientific evidence. The states allege the company failed to disclose negative information about Avendia’s cardiovascular health effects.

Marketing reforms

As part of the consent judgment between the parties, GlaxoSmithKline agreed to reform how it markets and promotes diabetes drugs. It agreed to several conditions:

• To refrain from making false, misleading, or deceptive claims about any diabetes drug;
• To refrain from making comparative safety claims not supported by substantial evidence or substantial clinical experience;
• To refrain from presenting favorable information previously thought of as valid but rendered invalid by contrary and more credible recent information;
• To refrain from misusing statistics or otherwise misrepresenting the nature, applicability, or significance of clinical trials.

Other states participating in the Avandia action were Illinois, Washington, Arizona, Florida, Maryland, Pennsylvania, Tennessee, Texas, Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Vermont, and Wisconsin.

Unemployment rose quickly after the financial meltdown of October 2008, when a normal recession turned into the Great Recession. Joblessness has fallen slowly and many who have jobs have fallen into the category of “underemployed.”

That means they aren't able to find a job with full-time hours or one that pays very well. One group in particular is heavily represented among the underemployed -- younger workers.

“While on the decline, these rates have yet to return to their pre-recession levels. Moreover, as the recession and other economic forces keeps older workers in the economy, openings for full-time jobs for younger workers might remain limited in the short-term,” said Justin Young, a doctoral student in sociology at the University of New Hampshire and a research assistant at the Carsey Institute.

Young's research finds workers aged 30 and under are particularly affected. Usually they are just beginning careers and have borne the brunt of job cuts.

Untapped economic capital

“These workers represent a source of untapped economic capital, as their jobs do not allow them to maximize their output or skills. This has consequences for both the economy as a whole and the well-being of the underemployed and their families,” Young said.

Young people without a college education are most likely to be relegated to part-time work, lowering their already lower-than-average wages. Those with no more than a high school diploma had the highest rates of involuntary part-time employment and experienced a larger increase in this form of underemployment during the recession,” Young said.

Young found that underemployment, or involuntary part-time work, doubled during the second year of the recession, reaching roughly 6.5 percent in 2009. This increase was equally steep in both rural and urban areas.

It's not easy being under 30

Workers under age 30, as well as women, black and Hispanic workers, experience higher levels of underemployment. Underemployment is strongly linked with education, with the least educated workers experiencing higher rates of underemployment compared with more highly educated workers. This relationship is somewhat weaker in rural places.

“The longer workers are underemployed, the more difficult it becomes to move into better jobs as their skills and employers’ perceptions of their skills deteriorate or remain stagnant,” Young said. “Further, if those entering the job market bear the financial ‘scars’ of the current recession for years to come, economic recovery may be that much slower and the quality of life for these workers lower.”

While policymakers try to devise ways to reduce unemployment, now just under eight percent, Young said efforts should also be made to reduce underemployment.

The Federal Trade Commission (FTC) is going after scammers promising job opportunities and the chance “be your own boss” to people are unemployed or underemployed.

The agency is taking seven new law enforcement actions -- six of which are the first cases brought under its recently updated Business Opportunity Rule -- which requires business opportunity sellers to provide specific information to help consumers evaluate a business opportunity and provides a simple, one-page disclosure form.

As part of a continuing federal-state crackdown, “Operation Lost Opportunity” targets scams that took millions of dollars from more than two million consumers. The defendants in the FTC’s cases allegedly lured consumers with deceptive offers to help them start businesses as mystery shoppers, credit card processors, Website operators, and government insurance refund processors.

Widespread action

This joint effort by the Consumer Protection Working Group of the Financial Fraud Enforcement Task Force also includes 22 actions brought by the Department of Justice, 15 administrative actions by the U.S. Postal Inspection Service, and 20 actions by state attorneys general in Indiana, California, Arizona, Colorado and Ohio.

Earlier federal-state enforcement efforts against consumer financial fraud include Operation Empty Promises, Operation Bottom Dollar and Operation Short Change.

“The scam artists the FTC shut down lied to people trying to make an honest buck, and robbed them of their money as well as their hopes,” said David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection. “We brought these cases on behalf of millions of people who wanted to jumpstart their incomes and rebalance their budgets -- people who placed their hopes in a business opportunity so they could better provide for their families.”

The defendants in the FTC cases allegedly committed multiple violations of the FTC Act, including misrepresenting how much money people could make through the business opportunity. The defendants in six of the cases also allegedly violated the amended Business Opportunity Rule.

FTC law enforcement actions

The agency took actions against the following companies

• Shopper Systems, LLC; Revenue Works, LLC, also doing business as Surplus Supplier; EMZ Ventures, LLC; The Veracity Group, LP; Brett Brosseau; Michael Moysich; and Keith R. Powell allegedly sold the business of providing mystery shopping services to retailers, offering lists of merchants seeking mystery shoppers in the buyer’s area.
• American Business Builders LLC; ENF LLC, also doing business as Network Market Solutions; UMS Group LLC; United Merchant Services LLC; Universal Marketing and TrainingLLC; Unlimited Training Services LLC; Shane Michael Hanna, also known as Shane Michael Romeo; and Stephen Spratt took tens of thousands of dollars from consumers, allegedly falsely promising that they would set up a profitable credit card processing business for the consumers.
• The Online Entrepreneur Inc., also doing business as The Six Figure Program and Ben and Dave’s Program; Ben and Dave’s Consulting Associates Inc.; Benjamin Moskel; and David Clabeaux allegedly sold consumers a no-risk, money-back guaranteed opportunity to make money via their own Website.
• Career Advancement Group. According to the FTC’s complaint, the defendants have operated a nationwide job scam by placing ads in classified sections of newspapers and on job search Websites that appear to be postings for jobs with the U.S. Postal Service.
• Smart Tools LLC and Kirstin Hegg allegedly sold a home-based business opportunity thatpromised purchasers they could become “Government Insurance Refund Processors.”
• Rebate Data Processor. Christopher Andrew Sterling, doing business as rebatedataprocessor.com, sterlingvisa.com, and creditcardworker.com, and via links to those Websites from other Websites, allegedly claimed consumers could earn from $200 to more than $1,000 per day by processing applications for rebates or credit cards offered by certain marketers.
• The Zaken Corp. and Tiran Zaken allegedly used direct mail and a Website to sell a plan that, for a fee of $148 or more, supposedly would enable consumers to earn thousands of dollars per month.

Is it news or is it a commercial. Sometimes it's hard for the average consumer to know. The Federal Trade Commission (FTC) is trying to help you tell the difference.

As a result, the Clickbooth affiliate network has agreed to pay $2 million to settle FTC charges that its affiliate marketers deceived consumers through bogus weight-loss claims on fake news sites about acai berry supplements and so-called “colon cleansers.”

The FTC will seek to use the $2 million judgment to provide refunds to consumers who were allegedly deceived by the defendants’ marketing. The settlement also bars the defendants from a wide range of deceptive marketing practices, including making misleading or unsupported claims; misrepresenting any material fact in the sale of any product; failing to adequately disclose a material connection to the seller of any product, service, or program; and misrepresenting the existence or result of a test or study.

Deceptive ads

According to the complaint, Sarasota, Florida-based Clickbooth has been paid by merchants since 2008 to market supposed weight-loss products to consumers, and recruited a network of affiliate marketers who deceptively advertised those products.

The complaint also alleges that the defendants prepared and designed Websites for Central Coast Nutraceuticals, a merchant that agreed to pay $1.5 million to settle FTC charges of deceptive advertising and unfair billing related to the sale of weight loss and colon cleanse products.

According to the commission, the defendants recruited affiliate marketers to advertise the merchants’ so-called weight loss products online. Clickbooth then monitored the ads that its affiliates used, suggested certain claims for the affiliates to make, and even designed some websites for the affiliates to use, according to the complaint.

Slick marketing

Marketing products such as Acai Pure, Acai Max, Pure Berry Max, Acai Advanced Cleanse, Acai Ultraberry Slim, TriSlim, Slimberry, HCG Extreme, ColoThin, Tone DeTox, and ColoPure, some Clickbooth affiliates designed their websites to look like news reports, using domain names such as channel5healthnews.com, dailyconsumeralerts.com, and online6health.com.

The supposed news reports had titles such as “Acai Berry Diet Exposed: Miracle Diet or Scam?” and “1 Trick of a Tiny Belly: Reporter Loses her ‘Belly’ using 1 Easy Tip,” according to the FTC. The sites often included the names and logos of major broadcast and cable television networks, falsely representing that the reports on the sites had been seen on the networks.

The defendants named in the complaint -- John Daniel Lemp and two companies he controls, Clickbooth.com, LLC and IntegraClick, LLC -- violated the FTC Act by making false or unsupported claims about weight loss products, the FTC alleges. The Clickbooth defendants also are responsible for their affiliates’ misrepresentations that the affiliate marketers’ websites are objective news reports, that objective reporters have performed independent tests of the products, and that “comments” in the affiliate marketers’ ads have expressed views of actual consumers, according to the complaint.

The defendants’ affiliates failed to disclose that the contents of their advertisements actually were paid advertisements, and that consumers who sign up for a “free trial” would be billed on a recurring basis for additional shipments of the product, according to the FTC.

Two other recent settlements involving online affiliate network marketers of acai berry supplements and other weight loss products that made allegedly deceptive claims include the affiliate network Coleadium, Inc., which does business as Ads4Dough, and IMM Interactive, Inc., which operated the affiliate network Copeac.

No matter how much we resolve not to over-do it at Thanksgiving, most of us take a second helping of everything. We eat more than usual and we consume food we don't eat all that often.

The result can be a bad case of indigestion. Because so much is being consumed so quickly, symptoms can be quite unpleasant. Gloria Grice, associate professor of pharmacy practice at St. Louis College of Pharmacy, advises taking a closer look at what products are in the medicine cabinet before the parties or special meals start.

Some of the most heavily advertised heartburn medicines, she says, will not provide much relief. That's why you need to read the labels carefully.

Old-fashioned relief

“Products with sodium bicarbonate or calcium carbonate work well for occasional heartburn,” Grice said. “They neutralize stomach acid, which is usually the cause of the burning sensation. And they can be taken as soon as symptoms begin, or up to an hour after a meal that you think may cause heartburn.”

Grice also recommends heartburn products that contain magnesium hydroxide.

“It acts quickly and neutralizes acid,” she said. “However, patients with kidney disease should avoid this product. Also, it can have a laxative effect for any patient who takes multiple doses in a day.”

To avoid these negative side effects, Grice says aluminum hydroxide could be a possibility, but it can cause constipation if not taken with something that also contains magnesium hydroxide.

Controlling behavior

You can probably avoid these symptoms by simply slowing down, consuming small portions and showing restraint when seconds are offered. But Grice has some other advice that might help you avoid day-after gastric distress.

For example, avoid caffeine. It stimulates appetite, which could cause you to overeat, and it also overstimulates the normal processes of the digestive system causing poor absorption of nutrients.

Chew your food slowly. Grice says that's actually the best advice for preventing bloating. There are also products to take before the meal, or up to 30 minutes after, which will cut down on intestinal gas.

Go easy on cocktails. Drinking too much alcohol can inflame the lining of the stomach and intestines. Alcohol can also kill beneficial intestinal bacteria leading to indigestion and even diarrhea.

Take a small piece of pie. When sugar, fruit or fruit juice, and starch mix in the stomach, they ferment and cause bloating. You should also avoid fruit muffins and low-fat cookies sweetened with fruit juice.

Green Gear Cycling, dba Bike Friday, of Eugene, OR, is recalling about 3,800 Tikit folding bicycles.

The bike’s handlebar stem can break and cause the rider to lose control, posing a fall hazard to the consumer. The firm has received six reports of breaking handlebar stems, resulting in two reports of injuries including scrapes, bruises and a head laceration that required stitches.

This recall involves all models of Tikit brand folding bicycles. The 16-inch wheel custom bicycles were sold in various colors. The Bike Friday Tikit brand decal is affixed to the bike frame.

The bikes, manufactured in the U.S., were sold by Bike Friday direct and dealers nationwide from January 2007 through September 2012 for between $900 and $5,000.

Consumers should immediately stop riding the bicycle and contact Bike Friday to schedule a free repair.

Consumer may contact Bike Friday; (800) 777-0258, from 8 a.m. to 5:30 p.m. PT Monday through Friday.

If you're a normal person and happen to find yourself lined up in the early morning hours after Thanksgiving waiting for a store to open, you may ask yourself, “what am I doing here?”

It turns out a lot of other people are asking the same thing. Among them is Laura Brannon, a psychology professor at Kansas State University who has studied people who are willing to wait in line for the latest iPhone or for a store to open on Black Friday.

"People who are very motivated to have scarce items tend to have a high need to be unique," Brannon said. "On the other hand, people who are motivated by social proof tend to want to fit in with everyone else. You might see a bunch of people waiting in line, but different things might be going through all their minds. It's a little more complicated than it might first appear."

Why people wait

From Harry Potter midnight shows to smartphones and video games, waiting in line for the latest product or experience is not a new phenomenon. Brannon traces the most famous waiting incident back to the mid-1980s, when the Cabbage Patch Kids doll frenzy occurred.

Parents promised the dolls to their children, but the demand greatly exceeded availability, she said. Although the dolls were fairly inexpensive, people still paid hundreds of dollars to obtain them.

People lined up a few weeks ago for the release of the iPhone 5, and the lines will happen again with the arrival of Black Friday on Nov. 23. Although Brannon said there might be good deals on Black Friday, there is also a lot of clever marketing involved because marketers are aware of social influence practices on the consumer.

"I think the quality of the deals offered will obviously vary by store," Brannon said. "Many stores have a few very good deals to get consumers into the store, hoping that they'll buy other things as well."

Wanting things that are rare

It's true that people naturally want things that are rare and hard to get. Brannon says marketers know this and play it to their advantage with Black Friday. That why a retailer may only have a limited number of computers or big-screen TV sets at a “door-buster” price.

"Marketers create a demand by imposing an artificial scarcity on an opportunity," Brannon said. "Research shows that people tend to react against limits on opportunities and reassert their freedom to have and do what they want."

Even though people could wait an extra week for a new smartphone or a few extra days to see a movie, the scarcity principle motivates people to buy the smartphone or see the movie because they are difficult to obtain.

Taking a cue from the crowd

The other reason you may find yourself standing in line, shivering in the cold, is something called “the social proof principle.” That's the concept that if other people are doing something, we use that as evidence that it must be good, Brannon said.

Advertisers emphasize when their products are the best-selling or leading brand. It is usually the case that the reason a product or experience is very popular is because people realize it is of good quality or value.

"Once the lines form, there's a tendency to assume that's a cue to the value of the experience or opportunity, and people want to join in," Brannon said.

With the social proof principle, there also is an element of normative influence. That's when people want to fit in with what other people are doing.

And not all waiting is the same, Brannon points out. You might complain bitterly about waiting in line for two hours at the DMV but not complain about waiting for Target to open its doors.

Project Catalyst, an initiative designed to encourage consumer-friendly innovation and entrepreneurship in markets for consumer financial products and services, is on the launch pad. The project, a creation of the Consumer Financial Protection Bureau (CFPB) is seen as “an important means of fulfilling its (CFPB's) mandate under the Dodd-Frank Wall Street Reform and Consumer Protection Act to give all consumers access to fair, transparent, competitive, and innovative markets.

“We want to collaborate with innovators seeking to advance consumer-friendly innovation,” said CFPB Director Richard Cordray. “These collaborations help us better understand what works and does not work to improve life for consumers in the marketplace.”

Through Project Catalyst, the CFPB will engage more closely with companies and entrepreneurs who are at the front lines of innovation, according to a press release. The agency says it has already conducted early outreach to the innovation community, and is now establishing a Website dedicated to boosting access and communication between the bureau and those in that community.

The plan

With Project Catalyst, CFPB says it will work to:

• Establish firm lines of communication with innovators: The bureau wants to be accessible to all those who may be affected by its regulations, including those on the front lines of innovation. Direct communication will allow the bureau to better understand the current situations in the market.
• Understand new and emerging products in the market: Current regulations were written to address existing products. CFPB says as products evolve, regulations may need to evolve as well and it wants to be prepared.
• Engage with innovators: The agency says it wants to engage with innovators who have new ideas that beget consumer-friendly innovation. These collaborations, the bureau says, will help it better understand what works and does not work for consumers.

Private sector involvement

In the inaugural phase of Project Catalyst, three companies have agreed to share anonymous data about consumer behaviors and trends with the CFPB. The data sharing, according to the bureau, will not contain personally identifiable information and appropriate precautions will be taken to ensure that individual consumers cannot be identified through the data. The agency will use that data gathered to better inform policy decisions. The three companies are:

• BillGuard, a company that alerts consumers to questionable charges on their debit and credit cards and helps them resolve billing disputes quickly. BillGuard will share billing dispute data with the bureau, which will allow it to observe trends in consumer complaints and complaint resolution.
• Plastyc, which is designed to be an alternative to traditional banking. Plastyc’s data sharing will focus on the value consumers place on easily depositing and obtaining immediate access to their funds.
• Simple,  a firm designed to be an alternative to traditional banking. This collaboration will explore how consumers can gain insight into their spending habits and help the CFPB understand what tools can encourage saving.

Ever since a study showed bisphenol A (BPA), a major molecule used in the plastic industry, was an endocrine disruptor that could exert negative effects on human health, it has been the focus of even more health studies.

The latest, by researchers in France, has found that an unborn child exposed to BPA can be at increased risk of lowered thyroid function. The findings are based on a study of newborn sheep.

Hypothyroidism is characterized by poor mental and physical performance in human adults and in children can result in cognitive impairment and failure to grow normally.

A new direction

The French study is actually a departure from more recent investigations, that have focused on reproductive functions. It points to evidence that BPA might have negative effects on other endocrine systems including thyroid function.

The current study used sheep, which researchers said was a relevant model for human pregnancy and thyroid regulation and ontogeny. It analyzed the internal exposures of the fetuses and their mothers to BPA and determined to what extent those exposures may be associated with thyroid disruption.

“Our study is the first to show that BPA can alter thyroid function of pregnant animals and their offspring in a long-gestation species with similar regulation of thyroid function as humans,” said Catherine Viguié, PhD, of Toxalim, Research Centre in Food Toxicology in Toulouse, France and lead author of the study.

Further study

Because of the potential consequences of maternal/fetal thyroid disruption on neural and cognitive development, Viguié thinks her study warrants the need for further investigations on the effect of BPA on thyroid function.

Though BPA once was in nearly every kind of plastic container, it's being found in fewer these days. In the wake of studies raising health questions, many manufacturers have eliminated their use of the substance, even though the food industry continues to back it.

Most recently many beverage companies have begun using plastic bottles made without BPA, which is a hardening agent. Other manufacturers have also removed it from many brands of infant formula bottles.

Previous research

Most of the recent studies point to BPA’s ability to interfere with the body’s hormone system, potentially leading to a variety of health problems, including damage to the reproductive system and the brain, particularly in children. Eleven states have banned the chemical’s use in certain products, typically baby bottles and other children’s goods; Canada, China and the European Union have similar restrictions.

An industry group, the American Chemistry Council, says BPA has been used safely for decades and there is no evidence that it causes harm as it is currently used. A key component of many plastic products, BPA is found in everything from the lining of food cans to the paper used in store receipts.

There are very few things that rival the intensity and pain of a migraine headache.

Maybe a bad toothache or a gut-curling stomachache can compare to the pain, but most times when people develop a migraine whatever they’re doing has to stop, as a migraine or bad headache can force you into immediate inaction and make you seek out refuge through medication, hospital visits or just turning out the lights and lying down.

If there is one positive for adults suffering from migraines it’s the fact that most can properly communicate to their physicians just what type of symptoms they’re experiencing.

But unfortunately for children it’s a whole different story, as many times they’re too young to articulate what they’re feeling so migraines go untreated for long stretches of time. And in a lot of cases excessive crying, lack of focus and poor grades in school are attributed to other things besides the actual problem, experts say.

A recent study conducted by researchers found that children who develop episodic migraines were 30 percent more likely to perform poorly in school compared to kids who don’t suffer from migraines at all.

Early detection

Dr. Lenora Lehwald, a neurologist in Columbus Ohio told Fox News that it’s imperative for migraines to get diagnosed immediately in children, as early detection will have a direct impact on the effectiveness of future treatments.

“Children with migraines need immediate treatment or their meds won’t work as well,” she said. “Having the school understand the significance of the headache helps move the treatment more quickly along. For years, we’ve had few studies that have linked the symptoms of migraines to the burden on children and families.”

Dr. Andrew Hershey, of the Cincinnati Children’s Hospital Medical Center agrees and suggests that many parents don’t take children’s headaches as seriously as they should, and once the illness impacts school attendance or academic achievement the migraine has been untreated for far too long.

“In many areas people just don’t think kids can get migraines,” said Dr. Hershey in a New York Times interview. “But kids shouldn’t be missing activities and having trouble at school because they’re having headaches. If it happens, it shouldn’t be ignored.”

Brazilian study

Researchers at Merck & Co. in Whitehouse Station, N.J., examined over 5,600 Brazilian children ages 5 through 12 and learned that 0.6 percent had chronic migraines, 9 percent had occasional migraines and  17.6 had possible migraines.

Lead author of the study Marcelo Bigal says both parents and school administrators need to add the issue of child migraines and headaches to the general school discussion as it pertains to poor academic achievement and students having problems in school.

“Studies have looked at the burden of migraine for adolescents, but less work has been done to determine the effect of migraines on younger children,” Bigal says.

“With approximately one-fourth of school-age children having headaches with migraine features, this is a serious problem, especially for those with frequent, severe attacks that do not subside quickly. Parents and teachers need to take these headaches seriously and make sure children get appropriate medical attention and treatment,” said Bigal.

What’s challenging sometimes for children, who suffer from migraines or any other episodic illness, is convincing their parents that they’re really sick.

Whether it’s due to the child falsely crying wolf in the past or kids seeming to be ill one minute and perfectly well the next, parents can easily get skeptical and not take the illness seriously.

Not always crying wolf

So the next time your child says they’re suffering from a headache or stomachache it may be something that needs quick medical care.

A separate study found that certain types of migraines can cause abdominal pain, and many times if children are complaining of constant and severe stomach discomfort, it could be more than the child wanting to stay home from school.

Researchers in this study examined the medical records of 450 kids suffering from chronic stomach pain, and found that four out of 100 children suffered from abdominal migraine and 11 out of 100 had probable cases of it.

Although the number of children with abdominal migraine wasn’t high, the study authors believe that many cases go undiagnosed and a lot of parents aren’t attributing their children’s stomach pain to anything severe or migraine-related.

“There are lots of kids that have recurring unexplained abdominal pain,” said Dr. Donald Lewis, co-author of the study.

“And when a kid is continually having these bouts of pain, sometimes there’s not obvious cause found. Hopefully, this will alert people who take care of kids that maybe the reason that the fifteenth antacid hasn’t worked is that it might be something else.”

It’s hard to believe the holidays season is here it again but it is.

Weeks before Halloween this year, retailers and advertisers starting rolling out sales and limited offers, and before you had time to sew your new Dracula costume for trick or treat, it was time to think about what you’ll be buying  your friends and family this season.

As many children will look for the latest toys this year--that they’ll probably get tired of by New Year’s Day--a good portion of consumers will be looking at what type of gadgets and electronics will be wrapped up in colorful paper for them.

The new iPad Mini will undoubtedly be on many people’s wish list this year, along with Microsoft’s Surface Tablet. But for parents who are looking to buy their kids the latest mobile devices but who don’t want to fork over hundreds of dollars, they may be interested in some new tablets that are being sold for well under $100.

Companies catching on?

A handful of gadget companies seem to be aware that there’s a portion of consumers that haven’t fully dived into the world of mobile devices yet.  Also, since many consumers have yet to buy a tablet for themselves, it is somewhat unlikely that they’ll spend high amounts of money on an Apple or Microsoft Tablet for somebody else.

Typically, expensive electronics are given as gifts when the gadgets have already been used and approved by the gift giver, so for those who don’t know a lot about tablets but want to surprise someone this year, they may want to look at these lower priced options.

Kmart is offering the X-treme Tab 7-inch tablet for just $40 that comes with 1.2 GHz, 1GB of RAM and 800 x 480 pixels resolution.

Mind you, the $40 tablet is short on RAM, has a slow chip and pretty crude resolution. It's also made by a pretty unknown company based in India, so it will definitely not have the bells and whistles one is used to getting with more expensive tablets, but for such a low price it might be a good gadget for a smaller child who has yet to own a mobile device.

Also, cheaper electronics are ideal for kids so they can learn the gadget’s basic functionalities and also learn how to care for a device before parents buy a more expensive one.

Mach Speed

There’s also the Mach Speed Trio 4.3-inch tablet that will go for $49.99 this holiday season, and it comes with 4GB of storage space and a six-hour battery life. It also has built-in speakers a digital camera and camcorder and a touch screen color display.

Again, the inexpensive device will be a far cry from Apple and Microsoft tablets, but for $50 how much regret can one have if it doesn’t work as expected?

Consumers could opt for the 4Sight 9-inch tablet for $89.99 that comes with 1.1 GHz and 4GB of memory, and as far as its design, the tablet appears to be built pretty sturdily upon first glance, but everyday use and owning it for long periods will be the ultimate test to see if the device is durable. 

All of these tablets will be sold at Kmart beginning this Black Friday.

Then there’s the Maylong 7-inch Android 4.0 tablet for $99.99 that’s equipped with built in speakers and microphone, a four hour battery life, and holds a processing speed of 1GHZ with 512 MB of RAM. 

Again, it might be a good purchase for those still testing the tablet waters, and whether these devices will remain at these low prices remains to be seen.

Next wave

But many experts say that tablets being offered for under $100 will stretch far beyond Black Friday, as these kinds of electronics seem to be the next wave of gadgets that are destined to come down in price within the next year or so.

Also, with Apple and Microsoft charging a lot more for their name, reputation and array of features, other companies will market newer and cheaper products to those consumers that don’t necessarily want or need the latest gadget releases.

Of course the whole you-get-what-you-pay-for-reasoning will heavily apply with these cheaper tablets, but the fact that other companies are starting to undercut the Apples and the Microsofts of the world is a good thing, because not everyone wants to break the bank or their budget this holiday season, and now consumers may not have to.

It wasn't long ago that the U.S. Presidential contenders were complaining about American firms that shelter international revenue in tax-free and low-tax havens, shielding it from tax collectors at home.

Now it's the British Parliament that's taking aim at Amazon, Google and Starbucks. The firms underwent a three-hour grilling yesterday about their tax avoidance policies. Among the testimony:

• Google funnels profits to a subsidiary in the tax haven of Bermuda;
• Starbucks buys coffee that is taxed in Switzerland, even though it goes to the UK;
• Amazon, which claimed not to now how much revenue it collects in Britain, said it based its European operations in Luxembourg because of the favorably tax treatment it gets there.

"We're not accusing you of being illegal, we're accusing you of being immoral," MP Margaret Hodge told representatives of the companies who testified before her public accounts committee.

Besides Parliament, the companies may face the wrath of a UK protest group calle Uncut. It is vowing to shut down some of Starbucks' 700 UK outlets on December 8. 

"It is an outrage that the government continues to let multinationals like Starbucks dodge millions in tax while vital services like refuges and rape crisis centres face the axe," Sarah Greene, a UK Uncut activist, said. "The government could easily bring in billions that could fund vital services by clamping down on tax dodging, but are instead making cuts that are forcing women to choose between motherhood and work, and trapping them in abusive relationships."

Uncut said the Dec. 8 action "will see Starbucks stores transformed into refuges, crèches and homeless shelters to highlight the disproportionate impact of the government's spending cuts on women."

Anti-austerity protests

Foreign corporations were also targeted by protestors who took to the streets as millions of workers struck in Italy, Spain, Portugal and elsewhere in Europe today, protesting austerity measures aimed at getting the nations' budgets back in balance.

Trains, airline flights and ferries were canceled across much of Europe as workers staged a general strike. There were at least 60 injuries reported.

In Florence, Italy, protestors called for expropriation of property owned by American corporations and urged higher taxation of foreign companies doing business in Italy. 

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Staff photo

Consumers have been doing a good job of paying down their credit card debt over the last couple of years so it would be a shame to see them fall into a high-interest trap at the stores where they shop.

With most holiday shoppers planning to spend an average $750-$1000 this holiday season, it's easy to be tempted by those “90 days same as cash” offers at a retail store. Odysseas Papadimitriou, CEO of CardHub.com, says that can be a trap.

While deferred interest payment plans provide an interest-free period during which customers can make payment and may therefore seem awfully similar to those zero percent introductory interest rates that credit cards offer, there’s a crucial difference: if you don’t pay off your entire balance by the end of the deferred interest period, interest is retroactively applied to the entire original balance, rather than simply whatever balance remains at that time.

Taking these offers at face value

“When consumers see a no-interest offer, they tend to take that at face value, thinking they’re gaining a true respite from finance charges for the advertised length of time,” Papadimitriou said. “That’s why deferred interest is both so dangerous and reminiscent of the ‘gotcha’ type practices that were prevalent prior to the Great Recession and subsequently outlawed by the CARD Act.”

If you don't read the fine print of the credit agreement -- and most of us don't -- you might not know that you are on the hook for full interest charges until you get the bill.

“The average household already has $6,700 in credit card debt, we’re expected to incur $43.5 billion in new debt this year, and the economy is still on shaky ground,” Papadimitriou said. “We don’t need hidden costs adding to our problems.”

More than 80 percent of retailers offer a financing option. Keep in mind, and agreement to defer interest if you pay it off in a set period of time means exactly that. If you don't pay it off in the allotted time, you will own full interest on the entire amount of the purchase.

Lack of transparency

Papadimitriou says more than half of the retailers who offer some type financing plan are not transparent about the policies, meaning the consumer must carefully read the fine print before signing anything. Even companies like Apple and Amazon, he says, offer deferred interest, which he calls a “decidedly misleading and potentially harmful financing option.”

Maybe you are aware of the terms and conditions of a store's deferred interest plan -- here's another reason to exercise caution. You may think you will be able to pay off the balance in the alloted time.

But things happen. Suppose an unexpected expense prevents you from doing that. That will mean that you will have to pay the interest -- and it can be at a steep rate -- on the entire purchase, not just the balance when the time allotment expires.

Papadimitriou, a fomer executive at Capital One, says he thinks deferred interest plans should be abolished or regulators should require more disclosures.