Current Events in January 2013

It's no surprise that lots of older people own their homes free and clear but would you believe that more than a third of 20- to 24-year-old homeowners are free of mortgages?

That's the surprising finding of a survey by Zillow, an online real estate service. It found that almost 21 million Americans, or 29.3 percent of homeowners, own their homes outright, unencumbered by a mortgage.

Analyzing data through the third quarter of 2012, Zillow found that 20.6 million homeowners nationwide own their homes free and clear of mortgage debt.

Zillow found that 65- to 74-year-olds are most likely to be free-and-clear (20.5 percent), followed by 74- to 84-year-olds (17.9 percent). This is attributed to the fact that the longer someone owns a home, the longer they have to pay off their mortgage.

Interestingly, when examining free-and-clear ownership rates as a percentage of homeowners in various age groups, Zillow found 34.5 percent of 20- to 24-year-old homeowners are free of mortgages.

Good credit

Among homeowners who own their homes outright, 44 percent have a high VantageScore – representing their credit rating – between 800 and 900. Only 15.5 percent of homeowners with the highest credit rating of 900-990 are free-and-clear.

Among the nation's 30 largest metro areas included in the study, Pittsburgh (38.6 percent), Tampa (33.2 percent), New York (29.7 percent), Cleveland (29.4 percent) and Miami (28.9 percent) had the highest percentage of free-and-clear homeowners.

Washington, D.C. (15.5 percent), Atlanta (17.7 percent), Las Vegas (18.3 percent), Denver (18.5 percent) and Charlotte (20 percent) had the lowest percentage.

A number of elements influence the percentage of free-and-clear homeowners in a given area, including median home values. Zillow found that areas with lower home values generally have higher outright homeownership rates, as smaller loan amounts are easier to pay back more quickly.

Google's Chromebook got off to a slow start but has been steadily gaining ground, bringing simplicity, durability and low cost to the laptop market.

The latest addition to the line-up comes from Chinese giant Lenovo, which today announced the ThinkPad X131e Chromebook -- which the company describes as a fast booting, highly customizable laptop PC built with rugged features for the daily rigors of K-12 education.

Throughout the course of a typical school day, students’ laptops are often subject to extreme wear and tear, the company noted. To help school-proof them, the ThinkPad X131e has rugged features including a rubber bumper around the top cover and stronger corners to protect the system in the case of an accidental drop. The hinges and hinge brackets are also strengthened to last more than 50,000 open and close cycles.

“The ThinkPad X131e has proven to be very successful in education environments,” said Jerry Paradise, executive director of product marketing, ThinkPad Product Group. “With the rugged features we added to the X131e, we’ve seen reduced failure rates in the field. This is a huge benefit to schools and students. We’re pleased to be able to offer this hardened ThinkPad Chromebook as a great computer for schools.”

The $429 11.6-inch X131e laptop features an Intel processor, a 1366x768 HD LED anti-glare screen, and three USB ports. At less than four pounds¹ and battery life for the entire school day, students can easily carry the laptop between classes without the need to recharge.

Third manufacturer

Lenovo becomes the third Chromebook manufacturer, joining Samsung and Acer. The machines run the Chrome OS operating system, a variant of Linux. They contain a small hard drive that is used primarily to boot up, relying on the cloud for programs and data storage.

“Chromebooks are in use today by more than 1,000 K-12 schools, and they make an ideal one-to-one device because they’re more cost effective, easier to manage and maintain than traditional laptops or tablets,” said Caesar Sengupta, director of product management, Chrome OS, Google. “Lenovo has a great reputation in schools for making durable and reliable laptops, so we’re excited to partner with them to introduce the ThinkPad X131e Chromebook.”

In another indication that the homebuilding sector is on the comback trail, the Commerce Department reports new home construction shot up 12.1 percent last month to a seasonally adjusted annual rate of 954,000.

That total was nearly 37 percent above the December 2011 rate of 697,000. All told, an estimated 780,000 housing units were started last year -- 28.1 percent above the 2011 figure of 608,800.

Single-family housing starts last month were up 8.1 percent -- to a rate of 616,000. The December rate for units in buildings with five units or more was 330,000.

Building permits

Building permits, an indication of what builders are planning in the months ahead, rose 0.3 percent in December -- to an annual rate of 903,000. That's 28.8 percent the estimate of 701,000 a year earlier.

Permits for single-family homes were up 1.8 percent from November, while authorizations of units in buildings with five units came in at a rate of 301,000.

Jobless claims

In other economic news, the Labor Department reports a seasonally-adjusted 335,000 people filed initial claims for unemployment benefits last week -- a drop of 37,000 from the previous week's revised figure of 372,000.

The 4-week moving average, considered a more accurate gauge of jobless benefit claims because it is less volatile, fell by 6,750 -- to 359,250.

A figure below 400,000 is considered by many economists to be a sign that the labor market is strengthening.

Flublok, the first trivalent influenza vaccine made using an insect virus (baculovirus) expression system and recombinant DNA technology, has been given the green light by the U.S. Food and Drug Administration. The vaccine is approved for the prevention of seasonal influenza in people 18 through 49 years of age.

Unlike current flu vaccines, Flublok does not use the flu virus or eggs in its production. Its novel manufacturing technology allows for production of large quantities of the influenza virus protein, hemagglutinin (HA) -- the active ingredient in all inactivated influenza vaccines that is essential for entry of the virus into cells in the body.

The majority of antibodies that prevent influenza virus infection are directed against HA. While the technology is new to flu vaccine production, it is used to make vaccines that have been approved by the FDA to prevent other infectious diseases.

“This approval represents a technological advance in the manufacturing of an influenza vaccine,” said Karen Midthun, M.D., director of the FDA’s Center for Biologics Evaluation and Research. “The new technology offers the potential for faster start-up of the vaccine manufacturing process in the event of a pandemic, because it is not dependent on an egg supply or on availability of the influenza virus.”

Worldwide surveillance

Each year, the FDA, World Health Organization, the Centers for Disease Control and Prevention and other public health experts collaborate on the review of influenza disease surveillance and laboratory data collected from around the world in an effort to identify strains that may cause the most illness in the upcoming season.

Based on that information and on the recommendations of the FDA’s Vaccines and Related Biological Products Advisory Committee, the FDA selects the different influenza strains each year that manufacturers should include in their vaccines for the U.S. population for the upcoming influenza season. The closer the match between the circulating strains causing disease and the strains in the vaccine, the better the protection against influenza.

Flublok contains three, full-length, recombinant HA proteins to help protect against two influenza virus A strains, H1N1 and H3N2, and one influenza virus B strain.

Annual evaluation

As it does with all influenza vaccines, the FDA will evaluate Flublok annually prior to use by the public each flu season. The recombinant HA proteins produced in the baculovirus expression system and included in Flublok will be assessed by the FDA.

The effectiveness of Flublok was evaluated in a study conducted at various sites in the United States that compared the use of Flublok in about 2,300 people to a placebo that was given to a control group of similar size. Flublok was about 44.6 percent effective against all circulating influenza strains, not just the strains that matched the strains included in the vaccine.

Flublok’s safety evaluation was conducted in a study of about 2,500 people who were vaccinated with it. The most commonly reported adverse events included pain at the site of injection, headache, fatigue and muscle aches, events also typical for conventional egg-based, inactivated influenza vaccines.

The vaccine has a shelf life of 16 weeks from the date of manufacture. Health care providers should check the expiration date before administering it.

Flublok is manufactured by Protein Sciences Corp, of Meriden, Conn.

Want to know where your great-great grandfather -- who died in the Battle of Gettysburg -- is buried? That information may soon be just a mouse click away.

The Department of Veterans Affairs  is teaming up with the Internet-based genealogy research firm Ancestry.com to bring burial records from historic national cemetery ledgers into the digital age. The effort will make the collection -- predominantly of Civil War interments -- accessible to researchers and Ancestry.com subscribers doing historical and genealogical research.

“We are excited to be able to share this wealth of primary documentation,” said VA’s Under Secretary for Memorial Affairs Steve L. Muro. “With the help of Ancestry.com, we have opened the doors to thousands of service members’ histories through the information contained in these burial ledgers.”

Gaining access

From the 1860s until the mid-20th century, U.S. Army personnel tracked national cemetery burials in hand-written burial ledgers or “registers.” Due to concern for the fragile documents and a desire to expand public access to the ledger contents, VA’s National Cemetery Administration (NCA) duplicated about 60 hand-written ledgers representing 36 cemeteries using a high-resolution scanning process.

The effort resulted in high quality digital files that reproduced approximately 9,344 pages and 113,097 individual records. NCA then transferred the original ledgers to the National Archives and Records Administration (NARA) where they will be preserved. In addition to the NCA’s ledgers, NARA was already the steward of at least 156 military cemetery ledgers transferred from the Army years ago.

In 2011, NCA initiated a partnership with Ancestry.com to index its cemetery ledgers, allowing the data to be searched or browsed in a variety of ways. Ancestry.com spent more than 600 hours indexing NCA’s records at no charge to the government.

Ancestry.com has assembled the digitized and indexed NCA burial ledgers with those at NARA into a new collection, "U.S. Burial Registers, Military Posts and National Cemeteries, 1862-1960." The burial records contain information such as name, rank, company/regiment, date of death, age at death, date of burial and grave number.

No charge

A large number of Civil War soldiers were buried where they fell in battle or in temporary cemeteries, and sometimes that information, along with religious affiliation, can be found in the ledgers.

The collection was posted on the Ancestry.com Website on Veterans Day 2012. The information can be accessed free of charge by VA personnel as well as by employees of the other federal agencies that maintain national cemeteries, the Departments of the Interior and Defense.

Ledger data will also be available for free at all NARA facilities, and at public libraries that subscribe to Ancestry.com. NCA cemetery staff will use the database to answer requests from the public. The general public will have access to the database on their personal devices through Ancestry.com’s regular subscription service.

VA operates 131 national cemeteries in 39 states and Puerto Rico and 33 soldiers' lots and monument sites. Seventy two of VA’s national cemeteries date from the Civil War.

More than 3.7 million Americans, including Veterans of every war and conflict -- from the Revolutionary War to the operations in Iraq and Afghanistan -- are buried in VA’s national cemeteries on approximately 20,000 acres of land.

According to the Centers for Disease Control and Prevention, over 61,000 people in the U.S. were diagnosed with melanomas of the skin in 2009, and in that same year a total of 9,199 people died from the disease.

Researchers have been trying to find better ways to catch the disease in its early stages, when it's more treatable.

Recently we reported about a new handheld skin cancer detector called the Molemate, which allows doctors to run a device along a part of the body to test for cancer, without having to cut a piece of the skin off.

Now, pushing technology even further, there's a smartphone app called UMSkinCheck, one of several apps that claim to be adept at identifying dangerous skin conditions.

For some, it may be hard to think of an app as something one can use for skin cancer detection, but since most consumers have become extremely comfortable using apps these days, it makes sense for developers to create a user friendly kind of technology--like a phone app--that people will have at their fingertips to use regularly if they wish.

The smartphone app was created by the University of Michigan’s Health System and it lets users snap photos of a mole or lesion that could be cancer or could become cancerous over time.

Experts cautious

Not everyone is sold on the idea, though. In a study published today, researchers at the University of Pittsburgh Medical Center said the accuracy of smartphone applications in assessing melanoma risk is "highly variable."

Three of four applications incorrectly classified 30 percent or more of melanomas as unconcerning, according to a report published Online First by JAMA Dermatology, a JAMA Network publication.

Sensitivity of four applications tested ranged from 6.8 percent to 98.1 percent. The highest sensitivity for melanoma diagnosis was observed for an application that sends the image directly to a board-certified dermatologist for analysis, while the lowest sensitivity for melanoma diagnosis were applications that use automated algorithms to analyze images.

Supplement, not replacement

The app is intended primarily for people who are at higher risk of getting skin cancer, due to family history or other reasons, and health experts say these people should conduct skin tests on a regular basis--and, just to state the obvious, should stay in close touch with their dermatologist and use the app to supplement, not replace, regular doctor visits.

Besides storing images, the UMSkinCheck app presents a series of questions that will help you estimate how likely the mole or lesion you have is potentially cancerous.

By no means do the creators of UMSkinCheck expect people to use the app in place of a dermatologist, and they emphasize the app should be used under the supervision of a dermatologist or other physician who specializes in skin cancers.

The hope is that the app helps consumers make skin tests a routine part of their lives. People who are prone to skin cancer--including fair-skinned people, those who've spent a lot of time in the sun and anyone with a family history of skin cancer--should be seeing a dermatologist regularly, at least twice a year. 

Reminders and videos

Besides letting users conduct a full-body survey and track individual lesions, the UMSkinCheck gives  reminders about when to begin the next self-examination. The app also comes with a series of informational videos on skin cancer prevention, so users can remain educated about the illness.

Dr. Michael Sabel, who was one of the physicians in charge of creating the phone application, said it can be especially useful for those who need body photos for cancer detection, but don’t have the insurance to cover regular doctor visits.

“Whole body photography is a well-established resource for following patients at risk of melanoma,” he said. “However, it requires a professional photographer, not always covered by insurance, and it can be an inconvenience. Now that many people have digital cameras on their phones, it’s more feasible to do this at home.”

Users of the app will not only be able to trace a lesion to determine if it’s growing or not, they can also share those photos with a dermatologist to get their insights, to determine if more tests and treatment are needed.

Dr. Sabel emphasized that allowing people to test themselves should dramatically increase the chance of cancers being caught early, which not only raises the chance of survival, but also may allow patients to undergo procedures that are far less intrusive.

“We recommend skin self-exams for everyone in order to detect skin cancer at the earliest stages, when treatment is less invasive and more successful, he said in a published interview.

“If you have fair skin or burn easily, have had sunburns in the past or used tanning beds, or have a family history of melanoma, you are considered high-risk, and so it’s even more important.”

The UMSkinCheck can be downloaded for free in the iTunes app store.

Sometimes it's better to quit when you're just a little bit behind, but if you believe in your product that's easier said than done.

When a finding went against POM Wonderful 100% Pomegranate Juice, the company appealed and now the Federal Trade Commission has come down ever harder on the company.

In May 2012, Chief Administrative Law Judge D. Michael Chappell found that POM marketers made deceptive or false health claims in 10 advertisements.

POM Wonderful appealed to the FTC, which not only upheld Chappell's ruling but extended it, finding that POM made false and deceptive claims in 36 ads and promotional items for POM Wonderful and POMx supplements.

The agency said POM did not have adequate support for claims that the products could treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction, and that they were clinically proven to work. 

The Commission issued an order that bars the POM marketers from making any claim that a food, drug, or dietary supplement is “effective in the diagnosis, cure, mitigation, treatment, or prevention of any disease,” including heart disease, prostate cancer, and erectile dysfunction, unless the claim is supported by two randomized, well-controlled, human clinical trials. 

POM fights back

“POM Wonderful categorically rejects the FTC’s assertion that our advertisements made any misleading disease treatment or other health claims," the company said in a statement. "POM has always communicated with our consumers in a transparent, honest and often humorous manner, delivering valuable information about the health benefits of our products.

POM also disputed the FTC's finding that it did not have scientific backing for its claims.

"This order ignores what $35 million of peer-reviewed scientific research, centuries of traditional medicine and plain common sense have taught us: antioxidant-rich pomegranate products are good for you," the company said.

"With this ruling, the FTC is taking the unprecedented step of holding food companies like POM Wonderful to the same standards as pharmaceuticals. Their new legal standard would require food companies to conduct double-blind, placebo-controlled studies in order to talk about potential health benefits of fruits and vegetables," POM said. 

Argument rejected

The order also prohibits misrepresentations regarding any test, study, or research, and requires competent and reliable scientific evidence to support claims about the “health benefits, performance, or efficacy” of any food, drug, or dietary supplement. 

The commission rejected the POM respondents’ arguments that the commission’s actions would violate their First Amendment rights, or their Fifth Amendment right to due process.

The challenged ads appeared in national publications such as Parade, Fitness, The New York Times, and Prevention magazines; on Internet sites such as pomegranatetruth.com, pomwonderful.com, and pompills.com; on bus stops and billboards; in newsletters to customers; and on tags attached to the product.   

Mortgage rates remain near all-time lows but millions of homeowners with higher interest loans still have not refinanced. Many can't, because their homes are worth less than they owe.

What about the rest? Those who hope to take advantage of today's rock-bottom rates had better have an impeccable financial past and be prepared to answer a lot of questions.

“As a homeowner who wants to refinance, the first thing you have to have is equity in your home, a minimum of five to ten percent,” said Pat Esswein, an editor at Kiplinger, a personal finance publication. “Secondly, you're going to have to show that you've been a diligent borrower.”

That means no late payments, not just on your mortgage but your bills in general. The rules in home finance have changed.

Traditional banking

“What we've really done is return to very traditional, conservative rules of lending,” Esswein said.

If you last took out a loan in 2005, for example, you'll find the process is very different. Lenders will look at your credit history, analyze your credit score, look for consistency of income and employer over the last two years and determine whether you can cover the closing costs. They will also look at your assets, even if you aren't drawing income from them.

And, they will demand lots of documentation to prove everything you've told them. Esswein discovered this first hand when she recently refinanced a home.

“I was shocked because I had to send the lender all the most recent statements for our retirement accounts and investments because they wanted to see how risky our investments were," Esswein said.

What it takes

The bottom line, the better your financial profile, the more equity you have, the better your credit score, the lower your household debt, the better your chances of getting a loan, and one with an attractive interest rate.

You should also be prepared for delays. Raena, of Ashburn, Va., writes that she and her husband are in the process of refinancing a mortgage with Bank of America, an undertaking that began four months ago.

“There have been excuses along the way (one being Superstorm Sandy), but over the months we've basically just been asked over and over to update our application file with bank statements that continuously expire because this process is dragging along,” Raena wrote in a ConsumerAffairs post. “We've asked if there is a manager to discuss our application with. In the end, it seams that they want to string us along to keep paying at the much higher rate we currently have with our 30 year fixed loan through them. Maybe they're just waiting for the quoted rate we signed for to expire. Either way, there doesn't appear to be an end to this process.”

Reason for the restrictions

Lenders, of course, tightened their restrictions in response to the housing market meltdown. Risky loans to borrowers with little or no money down have led to increasing foreclosures and homes that have lost tens of thousands in equity.

That loss of equity can make for a nasty surprise when a homeowners, who put 20 percent down when they bought their home during the housing boom, tries to refinance their mortgage. They find their home has lost so much value they only have five to ten percent equity.

“They then have to make up the difference by bringing cash to the closing table or buy private mortgage insurance,” Esswein said.

New rules might help

The Consumer Financial Protection Bureau (CFPB) recently published proposed new rules for lenders that essentially codified what lenders have been doing recently. Because the lenders didn't know what kind of rules the CFPB was going to come up with, they were imposing even more stringent requirements for the loans that they made.

“For example, if Fannie and Freddie said to get a loan you had to have a credit score of 660 to 680, many of the lenders were imposing their own rules, requiring a credit score of at least 740. If you look at the statistics of loans that have been made the last couple of years the average credit score is somewhere in the 740 ballpark.”

Esswein says knowing what the rules, are lenders may now relax a little bit. It might even get easier to get a mortgage.

If you were one of the borrowers who lost your home to foreclosure between January 1, 2008 and December 31, 2011, you may be eligible to receive a payment under the national settlement worked out between five major lenders and 49 states and the federal government.

But you don't have much longer. The deadline for filing a claim is Friday, January 18, 2013. Attorneys general around the country have spent the week reminding their constituents there is no time to lose.

“With the deadline looming, I hope affected Mississippians will take advantage of this opportunity for some relief,” said Mississippi Attorney General Jim Hood.

$1.5 billion in funds

The 2012 settlement earmarked approximately $1.5 billion in payments for approximately two million borrowers nationwide who lost their homes to foreclosure during 2008 to 2011 and had their loan serviced by one of the five settling servicers. The exact payment each borrower receives will depend upon the total number of borrowers who participate by filing a claim but the estimated payment is $840.

“The deadline to submit a claim is just days away,” said Illinois Attorney General Lisa Madigan. “We know there are still thousands of eligible Illinois borrowers who haven’t stepped forward. I urge anyone whose mortgage was serviced by one of these five banks and who lost their home to foreclosure to contact the settlement administrator immediately.”

The settlement resolved allegations that major borrowers took illegal shortcuts to foreclose on homes whose owners were in default or behind on payments. In some cases people executing foreclosure documents signed them without reading them, even though they also signed an affidavit swearing they had read them.

The big five

Eligible borrowers had mortgages serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo, the nation’s five largest mortgage servicers that agreed to the settlement with the federal government and attorneys general for 49 states and the District of Columbia.

Those who qualify must make at least one of the following claims through a simple form: they were unable to pay; their mortgage servicing company mishandled the process involving their loan modification or foreclosure alternative; or the servicer made errors during the foreclosure process.

“This is partial compensation for the mortgage servicers’ illegal conduct and servicing abuse,” said Iowa Attorney General Tom Miller, who led the settlement negotiations on behalf of state attorneys general.

How to file

Your first step should be to find the letter that was sent to you in the mail. If you want to file your claim online, you will need it.

Next, go to the special website that has been set up to administer the settlement. You can get there by clicking here. 

Once you are on the site, read the directions carefully. You will see a warning not to fall for the many anticipated scams in which companies or individuals may offer to do “the paperwork” for you for a fee. It costs nothing to file a claim. If you have questions or need help filing your claim, you may call the Settlement Administrator toll free at 1-866-430-8358.

Review the pre-printed name and address at the top of the form and make any corrections to your current mailing address on the following screens.

Next, confirm your eligibility and sign the form. You can file your claim online or send it by U.S. Mail. However, if you do that it must be postmarked no later than January 18, 2013.

If your loan is owned by Fannie Mae or Freddie Mac you should have not received a letter. Those loans are not part of the settlement.

Also, if you live in Oklahoma you are not entitled to participate. Oklahoma elected not to join the lawsuit and settlement.

If you have a home-based business or work from home, this will likely make you sit up and take notice.

The Internal Revenue Service is implementing a simplified option that you may be able to use to figure the deduction for the business use of your home.

In tax year 2010 -- the most recent year for which figures are available -- nearly 3.4 million taxpayers claimed deductions for business use of a home, commonly referred to as the home office deduction.

The new optional deduction, capped at $1,500 per year based on $5 a square foot for up to 300 square feet, will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours annually.

"This is a common-sense rule to provide taxpayers an easier way to calculate and claim the home office deduction," said Acting IRS Commissioner Steven T. Miller. "The IRS continues to look for similar ways to combat complexity and encourages people to look at this option as they consider tax planning in 2013."

An easier path

The new option gives eligible taxpayers an easier path to claiming the home office deduction. Currently, they are generally required to fill out a 43-line form (Form 8829) often with complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the optional deduction will complete a significantly simplified form.

Though homeowners using the new option cannot depreciate the portion of their home used in a trade or business, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions need not be allocated between personal and business use, as is required under the regular method.

Business expenses unrelated to the home, such as advertising, supplies and wages paid to employees are still fully deductible.

Current restrictions on the home office deduction, such as the requirement that a home office must be used regularly and exclusively for business and the limit tied to the income derived from the particular business, still apply under the new option.

Kicks in with next year's filing

The new simplified option is available starting with the 2013 return most taxpayers file early in 2014. Further details on the new option can be found in Revenue Procedure 2013-13, which is effective for taxable years beginning on or after January 1, 2013. The IRS welcomes public comment on this new option to improve it for tax year 2014 and later years. There are three ways to submit comments.

• E-mail to: Notice.Comments@irscounsel.treas.gov. Include “Rev. Proc. 2013-13” in the subject line.
• Mail to: Internal Revenue Service, CC:PA:LPD:PR (Rev. Proc. 2013-13), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044.
• Hand deliver to: CC:PA:LPD:PR (Rev. Proc. 2013-13), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, between 8 a.m. and 4 p.m., Monday through Friday.

The deadline for comment is April 15, 2013.

Sooner or later, we all get that email that we don’t want, or receive something posted on our social network page that we wish we never got, and whether the message is from a company, an overzealous salesperson or from a personal acquaintance, they can be annoying and even upsetting at times.

But at what point do these unwanted messages go from being just annoying to becoming full-on harassment?

The month of January is Annual Stalking Awareness Month, and according to the Stalking Resource Center of the National Center for Victims of Crime, stalking someone online has a lot to do with repeated attempts of harassment and a certain level of deliberateness, which isn’t always the case with someone occasionally sending you a message that you don’t want.

Michael Kaiser who is the executive director of the National Cyber Security Alliance (NCSA) says cyber-stalking is nothing that consumers should take lightly, and as soon as you notice a pattern or receive just one threatening message, you should contact your local police department as soon as possible.

“In order to effectively combat unwanted contact, it is important to know the signs of stalking and how to deal with such related incidents,” said Kaiser in a statement.

“Aggressive outreach such as persistent emails, harassing posts or text messages are not acceptable forms of online communication and NCSA encourages affected individuals to contact local law enforcement or victim service agencies to report such activities and get help.”

Take action

Experts say if you ever find yourself a victim of cyber-stalking you should immediately suspend your account whether it’s your email or social network page, and consumers should always make sure all of their contact pages have the correct privacy settings, so it’s difficult for cyber-stalkers to locate you in the first place.

Experts also say that Internet stalkers and other online criminals will more than likely pass up the person who makes it more difficult for them to commit their wrongdoings, and even though it can be tempting at times, people should keep the sharing of their personal information to a minimum, like announcing you’ll be out of town for the next two weeks.

Safety experts also stress for people to create usernames that aren’t gender specific, and be sure not to publicize any information that may give a cyber-stalker an idea where you live.

So posting that photo of you standing next to your new car in the driveway, that also happens to show a street sign or a familiar landmark in the background is a great big no-no, say experts.

Go Google yourself

Anupama Srinivasan, who is a program director for a non-profit organization that deals with violence against women, says that people should Google themselves just to get an idea of what personal information is already out there.

And just because you may see your name and address online, doesn’t mean that you have to accept it being there, because obviously the more personal information you’re able to remove from cyber space, the harder it will be for someone to stalk or harass you.

“If you locate personal information like address, phone numbers or pictures or information you don’t want to be out there, speak to the people involved and get it deleted,” said Srinivasan in a published interview.

“Write to the website that lists your phone number without your permission and get it removed. Use your full name and/or the name you go by generally to Google yourself, and be sure to add ‘plus photographs’ in your Google search.”

According to the NCSA one in five people in the U.S. have experienced cyber based crimes that include the stealing of personal information, stealing of identities, bullying and of course cyber-stalking, and over 29 percent of consumers said they know someone who was a victim of an Internet crime.

In all 50 states in the U.S. cyber-stalking is a crime, but some say it doesn’t get the same amount of attention that other Internet crimes do, like identity theft or pilfering money, and for this very reason experts say that consumers need to be even more vigilante when it comes to sharing too much information online and “friending” people they may not know.

The NCSA also says that removing old Internet posts or entries is a smart idea, and just like any other kind of stalker, cyber-stalkers will look under every stone until they can piece together your whereabouts or the necessary information to harass you or even locate where you are.

Be discreet

Also, consumers should not be posting their whereabouts online, as it’s now commonplace for people to let everyone know which restaurant they’re eating at or which movie they're attending, and for someone willing to sit by a computer to learn all of your daily movements, you’ll just be making it that much more easier for them to accomplish whatever bad deed they’re intending to commit.

Experts also say as parents use some of these safety measures in their own Internet use, they should also continually remind their children of what to do in order to diminish the chances of them getting stalked or bullied online.

“Adults are not the only ones at risk when it comes to cyber-stalkers,” said Gary Davis in a statement, who is the vice president of global consumer marketing at the software security company McAfee.

“Parents need to communicate with their children about such Internet dangers and promote Internet safety. Be sure to secure your devices with strong passwords and frequent updates, connect only with people you know, and be careful not to share contact information or your location,” he said.

Delta Airlines is not on musician Dave Schneider's good guy list, but Gibson Guitar is.

Delta worked overtime to get on Schneider's bad side. First airline employees refused to let Schneider bring his 1963 Gibson ES-335 TD guitar on a flight to Detroit not long ago. They told him he had to check it.

Then on landing, Schneider discovered that his guitar had been crushed between a service elevator and loading dock at the gate.

Dave turned down Delta’s offer of $1,000 for his $10,000 vintage guitar.

Luckily, Gibson came to the rescue by giving Dave a new ES-335, which he picked up a few days ago at Gibson’s New York showroom.

“As soon as we saw the picture of the crushed guitar case and heard Dave’s story, we felt immense sympathya for him,” said Gibson CEO Henry Juszkiewicz. “For musicians like Dave, instruments are practically members of their family. It was only right to replace his guitar, and we are happy to have him at our showroom."

Dave Schneider is the lead singer of the Zambonis and lead guitarist of a Jewish band called The LeeVees. He says he’s happy to be able to continue performing, thanks to Gibson's gift.

Small businesses may dread getting a negative review on Yelp, ConsumerAffairs or any of the other review sites but they really fear getting a complaint email from the Federal Trade Commission (FTC).

Well, there are good reasons for that fear, the chief one being that the email is almost certainly  scam.

The FTC says small businesses have been getting emails with a subject line reading “NOTIFICATION OF CONSUMER COMPLAINT.” 

The email falsely states that a complaint has been filed with the agency against their company.  The FTC advises recipients not to click on any of the links or attachments with the email.  Clicking on the links may install a virus or other spyware on the computer.

Such scams are not at all unusual. In December, the FTC shut down a bogus robocall operation that allegedly tried to trick consumers into turning over their bank account information and other sensitive personal data.

In a complaint filed in federal court, the FTC charged that the operation run by The Cuban Exchange, Inc., also doing business as CrediSure America and MyiPad.us, and its principal, Suhaylee Rivera, deceptively claimed it could help consumers get refunds from the agency, in an effort to trick them into providing their personal information and bank account numbers.

A decline in gasoline prices helped keep inflation on the retail level in check during December.

Figures released by the the U.S. Bureau of Labor Statistics show the Consumer Price Index (CPI) was

unchanged in December on a seasonally adjusted basis. Over the last 12 months, the CPI rose just 1.7 percent before seasonal adjustment.

Energy and food

The gasoline index declined again in December, but other indexes, notably food and shelter, increased, resulting in the seasonally adjusted all items index being unchanged. Gasoline was the only major

energy category to decline, with prices for natural gas and electricity both increased.

Within the food category, five of the six major grocery store food groups increased as the food at home index rose for the third consecutive month.

The index for all items less food and energy -- the so-called “core rate” -- increased 0.1 percent in December, the same increase as in November. Those categories are stripped out because of the tendency to be volatile.

Other prices

Besides shelter, prices for airline fares, tobacco, and medical care increased. The cost of recreation, household furnishings and operations, and used cars and trucks all declined in December.

The 1.7 percent increase in the CPI over the last 12 months follows a rise of a 1.8 percent figure in November. The core rate was up 1.9 percent for the year, matching the November increase. The price of food rose 1.8 percent over the last 12 months, while energy was up 0.5 percent.

It’s safe to say that just about everybody had a business idea at one point or another.

Whether it’s opening a restaurant based on Mom’s recipes, starting a landscaping company with your buddies, or beginning some sort of Internet business, many people have taken that leap from dreaming of owning a business to actually getting it off the ground, or at least trying to.

Vistaprint says it can help market your business by getting you off to a strong start with its printed business cards, banners, promotional t-shirts and other things to make your company look professional.

Vistaprint’s customer base also includes consumers who may want to print invitations for a party or wedding. Some like to use the company to personalize holiday cards, which is a nice touch if it's done right.

Also, Vistaprint alludes to charging low prices for stellar work, which is what the company has to say, I guess. This isn't what every consumer experiences, however, as a perusal of the reviews posted to ConsumerAffairs shows.

Whenever discussing our complaints and review section, it’s always our goal to find any similarities in the comments, whether positive or negative, which gives consumers a general idea of how the company is received, and helps them decide whether it sounds like what they're looking for.

We reached out to VistaPrint for a comment on this story but did not receive a reply.

Good news

First the good news: Michelle of Sarasota, Fla. said her experience with Vistaprint was a positive one and the company kept its promises to her.

“I’ve used Vistaprint for years and think that they are a great value,” Michelle said. “Recently, I called because I had not received one of two items that I ordered and they immediately put a replacement in the mail, no questions asked.”

“I received the item (and then my husband handed me my original order two weeks later, he had picked it up from the mailbox and failed to give it to me. I feel terrible). But I would totally recommend this company and will continue to use them for business and personal needs,” she wrote.

Lebron of Ohio was also happy, despite the negative comments he read on our site.

“For starters, Vistaprint has excellent customer service,” he wrote. “I was a bit worried after reading the reviews here, but all my items were shipped in a timely fashion on schedule. I couldn’t be happier with the quality of the t-shirts, business cards, notebook, return address labels and stamps. Great low prices for exceptional merchandise! I highly recommend Vistaprint.”

Lebron was so happy with the company he gave it a personal satisfaction rating of five stars, which pretty much says he felt Vistaprint couldn’t do any better. It’s always great when a company makes you feel like that.

However, he did mention being “a bit worried” about the high number of negative reviews the company received -- and rightfully so, because Vistaprint has done a pretty good job of frustrating a lot of its customers. But we’ll get back to that part in a little bit.

Personally, I used the company only one time — many years ago, when I wanted to be the kind of writer that hands out business cards left and right,  pridefully showing what I do and where my passions lie. 

Since I only used the company once, and my order was pretty straightforward, my experience was non-eventful, which is really what consumers expect. We all want to order a product or service — then forget we ordered it and have everything finalized before any feelings of dread creep in.

Repeated users

Based on the majority of the reviews in the comments section, it seems Vistaprint has frustrated customers that went beyond using the company just once for business cards.

Something else to take note of is that many customers posting to our site seemed to have good first experiences with Vistaprint, but ran into problems thereafter.

If any company can make your first experience, they’ve accomplished a very important and needed task. But when you return to that company and it doesn’t provide you the same level of service, it’s not only baffling, but disappointing, and you think it’s sort of your fault for letting your  guard down and trusting that company.

Lynette, of Australia, wrote about being unhappy with Vistaprint when she continued to deal with the company after her first order.

“I owed $79 and they (Vistaprint) popped another digit on, equaling $790,” she said. “They also accessed my savings account as well as my credit card to the value of $1,200, making as many as 10 orders a day (supposedly from me). It took me 10.5 months to get the money returned and I was totally unable to contact them.”

 “Vistaprint never returned any e-mails nor was their supposed contact number ever manned except for an annoying recording. This made it totally impossible for me to contact them, obviously exactly what they wanted. The result, PayPal came to my rescue and my bank,” she said.

Anything else?

It’s unfortunate that Lynette suffered billing issues with the company, as have many of the others we hear from. But besides the billing issues, how are the overall printing jobs? I mean, the company is supposed to be there for the little guy, right? Which gives the idea that Vistaprint is mindful of tight budgets and having to get things correct on the first shot?

For the most part many of the consumer complaints aren’t related to what the business cards, posters, or sweatshirts looked like.

In fact, a good portion of readers said the final product was either good or fair. Sure there are some who complained about Vistaprint using cheap quality paper for its business cards, and a few people said certain logos looked better on the company’s website than they did once they were  downloaded.

But many of the complaints, which far outweigh the positive comments, were related to consumers' names and contact information being passed along to other companies.

Robert of Lakeville, Mass. said that after ordering 1500 business cards, along with a few other items, his name was sold to other companies, and soon after, he was sent magazines with his name and address on the covers although he had never ordered them -- at least as far as he knew.

“Over the phone, I was told that I ordered those magazines,” said Robert.  “This is far-fetched since I am looking at my invoice and there is nothing about subscribing to any magazines. Bottom line is they sold my name probably multiple times. My email box is getting more spam as we speak.”

In some cases, consumers may have agreed to take a survey or clicked on a special offer during the ordering process. By doing so, they may have unwittingly supplied their personal and credit card information to third parties.

So, if it's business cards you want, be sure that's all you order. Don't agree to take a survey, sign up for a free offer or jump at a discount on an unrelated item.

The first rule of public relations and crisis management is, basically, to round up all the lemons and make lemonade. Turn your weakness into your strength, in other words.

This is what Coca-Cola is hoping to do with a new ad campaign that expresses its supposed deep and undying concern about obesity. What, you didn't think a sugar-water bottler cared about obesity?

Well, think again. Coke cares, and it will be spending millions to air two new ads -- one on news shows aimed at regulators and what are called opinion leaders, and another on entertainment shows aimed at consumers. Both, in the words of Coca-Cola, "encourage everyone to be mindful that all calories count in managing your weight."

Here's the news-show ad:

Coke would like for us to think that it has been tossing and turning at night, worried sick about what it calls "the complex challenge of obesity."

Have fun, move around

It says the purpose of the ads "is to highlight some of the specifics behind the company’s ongoing commitment to deliver more beverage choices, including low- and no-calorie options, and to clearly communicate the calorie content of all its products."

The consumer-focused ad, called "Be OK," debuts on American Idol tomorrow (Wednesday) night. It notes that a can of Coca-Cola says right up front that it has 140 calories -- and the ad suggests some fun ways to burn off those calories.

Like what? Well, walking the dog, dancing. You know, moving around.

“We are committed to bring people together to help fight obesity,” said Stuart Kronauge, general manager of sparkling  beverages. “This is about the health and happiness of everyone who buys our products and wants great-tasting beverages, choice and information. TheCoca-ColaCompany has an important role in this fight. Together, with willing partners, we will succeed.”

Critics say this is all too cute by half.

Michael F. Jacobson, executive director of the Center for Science in the Public Interest, said the commercials are "just a damage control exercise and not a meaningful contribution toward addressing obesity."

As far as we know, New York City Mayor Michael Bloomberg hasn't yet chimed in. He has been on a campaign to get his city's residents to lighten up and New York last year banned the sale of super-sized soft drinks in some public places.

I remember the first time my Dad brought home a microwave oven back in 80s, which easily had to be the size of one of those college foot lockers.

The first thing he told my siblings and me, as we gathered around this massive strange-looking box was, “Don’t touch it, any of you, until I say when.”

Looking back, that was the right kind of instruction, as all of us kids, especially me, had a penchant for breaking things that were shiny, interesting looking and newly brought into the house.

Of course it only took a few weeks until my father saw that microwaves were safe and an easy contraption for us to use, so he quickly gave us free rein, which in retrospect he shouldn’t have, since I remember putting a bunch of things in the microwave that probably had no business going in there. What were they? Well, let's not go into that.

Back then, microwaves were new to many of us and the very idea of not having to warm food in the oven or stovetop seemed nothing short of miraculous.

And although a lot of consumers around that time started hearing of this new miracle machine that heated foods in minutes, the microwave was still an appliance of mystery in terms of how useful it would be and whether it would just be a trendy kitchen tool that we used for a short period time.

Taken for granted

It’s certainly safe to say that most people didn’t expect the microwave to become the everyday kitchen appliance that it is today.

And just like many other everyday household products that we use, a lot of consumers don’t really think about how they differ from each other, in terms of functionality and overall safety, which is why certain government agencies spend a great deal of time regulating certain products, to set standards of performance and to ensure safety for the general public.  

The U.S. Food and Drug Administration (FDA) tells consumers not to just randomly select a microwave when shopping for one, and each person should really understand how microwaves work, how to properly use them, and how to give them the proper maintenance.

It’s safe to assume that a lot of people associate microwave ovens with radiation waves and are also aware that these waves are what heat up foods.

Once these waves reach the water or fat content in the food, these contents vibrate, which in turn heats or cooks whatever is inside the microwave.

The FDA says the good thing about microwaves, is there have been very few cases surrounding people becoming injured by radiation, aside from just a few instances. In these rare cases the microwaves weren't serviced correctly or people had somehow managed to get body parts where they didn't belong.

Dangerous to kids

The government regulators also point out that most microwave injuries are related to people becoming burned by containers or other hot receptacles placed inside, and many people heat items for too long, especially liquids that can explode and cause scalding.

And since some small children can reach a low-placed microwave and open its door, they could potentially expose themselves to those hot liquids or overly heated foods and suffer a serious injury.

Parents should definitely place microwaves out of the reach of small children who may grab a hot item out of sheer curiosity, experts say.

To decrease the chances of liquids exploding in the microwave, the FDA says to add whatever contents you were planning to use beforehand, like cocoa mix, sugar or instant coffee.

And many of us don’t like to actually do it, but reading the manual from cover to cover when purchasing a microwave is extremely important, stresses the FDA, since it outlines the right operating procedures and advises how to avoid any mishaps which may be specific to that particular microwave.

Close the door

The FDA also says not to use a microwave if the door doesn’t close securely, and if a piece of the door is bent, chipped or damaged in any way, it should no longer be used.

And if for some reason the microwave is able to function with the door still open, which happens more than one may think among older and heavily used microwaves; consumers should immediately stop using it and replace it if possible.

The government agency also says that certain microwaves shouldn’t be in use while empty, since the waves can shoot back and forth inside the oven, which can cause damage if there’s nothing to absorb those waves.

The United States Department of Agriculture Food Safety and Inspection Service, reminds consumers to be extra mindful when using the microwave when reheating fish, poultry and eggs, and to make sure foods have no “cold spots”, which happens if plates aren’t rotated properly within the oven.

Also, just as you would when cooking meat in a conventional oven, the USDA says consumers should use a food thermometer to make sure bacteria and other potential disease-carrying microorganisms aren’t present in your food.

And both the USDA and the FDA dispel the common belief that microwaved foods are cooked from the inside out, and confirm that radiation waves pass through food and cook it about 1 to 1 ½ inches deep.

Fast cooking

A few months back we ran a story on canned, fresh and frozen vegetables, and asked an expert if cooking veggies in the microwave takes away some of the nutrients.

Perhaps surprisingly, the food expert and nutritionist said cooking vegetables as quickly as possible preserves most of the nutrients, so using a microwave is your best bet since it heats veggies faster than most other foods.

The USDA says when cooking meats in the microwave, it's best to remove all of the bones first, especially with thicker cuts of meat, as this will better ensure it’s cooked evenly and prevent the bones from blocking the waves.

It’s also wise to stop foods in the middle of the cooking cycle to turn or stir it so each side is cooked equally.

There’s no doubt that microwave ovens have gone from that weird mystery box that my Dad brought home over 30 years ago, to an everyday kitchen staple that seems a little crazy not to have.

But just because microwaves are extremely commonplace to own these days, doesn’t mean that consumers still shouldn’t be mindful of how each one works best, and how each one is properly maintained.

Also, be sure to read that pesky manual. It’s never good to assume that you know everything about an appliance just because you’ve had one since childhood.

Millions of consumers would like to get out from under their crushing credit card debt but don't know where to start. It just might start with having the right credit card.

For example, if your debt is on a card with a very high interest rate, it will take a long time to pay off the balance. But if you can transfer that balance to a card with a lower rate, it's a little easier. If you can transfer to a card with zero percent interest for a limited time, all the better.

Zero percent interest? Do such cards exist? Yes they do, says Odysseas Papadimitriou, a former executive at Capital One and the founder and CEO of credit card comparison website CardHub.com.

No brainer

“The zero percent interest rate offers are not getting any better, but they're much better than they have been in the last few years,” Papadimitriou said. “Taking advantage of these offers is a no brainer, since every penny of your payment goes toward paying down your credit card debt.”

So, off the bat having the right credit card can help you pay down debt quicker, but how do you find out exactly which card is best? A credit card calculator can help. The calculator at CardHub is helpful because there's an added dimension.

When you enter your data -- the amount of debt, the interest rate and the length of time you want for the payoff -- it matches you up with the current credit card offer that will best help you reach that goal.

Using the calculator, we entered a debt amount of $6,700 at 14 percent and said we wanted to pay it off in 24 months. The calculator showed we could reach that goal by paying $322 a month. The calculator also shows that if we transferred the balance to the Slate from Chase card, we could pay it off two months earlier and save $950.

That particular card has a zero percent interest rate for 15 months and no transfer fee. Its regular rate is between 11.99 and 21.99 percent. The key factor, however is that for the first 15 months 100 percent of your payment is going to pay down the balance.

You need a good credit score

Not everyone can qualify for the card, however, because it takes a credit score of 700 or better. But that's no reason not to apply. In fact, chances are 50-50 that your credit is good enough.

“The misconception that exists here is a lot of people think, when they hear 'excellent credit,' that it doesn't include them,” Papadimitriou said. “But we have data that shows more than 50 percent of consumers have what is considered excellent credit.”

Once you've transferred your balance to a low or no interest card, you'll need at least two other credit cards. One for everyday purchases that you will pay off at the end of every billing cycle and one for an emergency purchase, which might require up to six months to pay off.

The last thing you want to do, Papadimitriou says, is mix new purchases with the balance you are paying off.

“When you do not pay a credit card in full every month you do not have a grace period,” he said. “When you don't have a grace period you pay interest on the purchase from the day you make the purchase. And that interest compounds daily.”

Paid in full

The card with everyday expenses – like gas and groceries – should be paid in full every month. If you find you are unable to pay the full amount each month, it's a sign you're living above your means and adjustments are in order.

Papadimitriou calls this method of segregating expenses on different cards the “island approach.” It should be part of your plan for getting out of debt. Trying to pay off debt without devising a plan to do so, he says, is very hard to do.

Finally, budgeting is key. Paying down debt takes a bite out of your monthly expenses so it is very important to account for every dollar and eliminate luxuries for a while.

“If everything in your life looks like a necessity and you cannot identify anything as being a luxury, then you know that there is an issue there,” Papadimitriou said.

Debt settlement

Paying down debt is doable but rarely easy and consumers should be leery of anyone who says it is. So a final word here about so-called debt settlement companies that advertise on radio, TV and the Internet.

“There's a lot of scams out there,” Papadimitriou warned. “What these companies do, and they won't tell you this, they make you default on your credit cards. They make you make payments to them instead of the credit card company so you can accumulate a significant position. Then they go to the credit card company and offer to settle your debt for less than what you owe. The credit card company sometimes accepts those offers.”

But can you stand up to the pressure of having the credit card company's debt collectors calling you several times a day, sometimes threatening legal action? Because that's what happens.

Some people can't deal with it and cave in, promising to pay back what they owe. Meanwhile, they've already made several payments to the debt settlement company, which has collected its fee off the top. So they're actually deeper in the hole.

Better to craft a plan and a budget that allows you to pay off the debt over time. It's rarely easy but in some cases, having your debt on the right credit card can make it a little more manageable.

For many reasons, a lot of people who have worked most of their careers for a paycheck have thought lately about going into business for themselves.

Of course, one of the great secrets of modern life is that most people who own their own business work like dogs, waste endless hours performing government-imposed drudgery and spend sleepness nights asking why they ever put their personal assets at risk to finance a business.

But your average aspiring small-business owner doesn't know that and thinks that with the right idea and a little work, he or she will soon be the next Donald Trump.

So, leaving aside the question of whether buying or starting a business is such a great idea, let's look at the options.

Most work-at-home enterprises and “business opportunities” turn out to be scams and starting a real business from scratch can be a daunting task. A middle ground, for those who have the funds to invest, is a franchise business.

Almost every type of business sector has franchise opportunities, from fast food, to health clubs, to car repair shops. Despite a down economy – or maybe because of it – franchises seem to be growing.

One franchisor even advertises on national radio for new franchisees. Sport Clips is a franchise barber shop for men and boys, a place to get a haircut while watching sports on TV. The ad declares that the franchisee doesn't need to know how to cut hair or run a barber shop – the franchise is a turnkey operation. This might be OK if all your customers are bald.

If you've thought about purchasing a franchise, there's a lot to consider. Perhaps the first thing to consider is why you are thinking about buying a franchise. There can be good reasons and bad reasons.

Stupid reason to buy a franchise

Joel Libava, a consultant who calls himself “The Franchise King,” says in his blog there are “Eight Stupid Reasons That People Buy Franchises.” Number one on his list is “you can't get a job.”

“Don’t buy a franchise, or any type of business, because you have to,” he writes. “Buy a franchise because you want to.”

But there's a whole lot more to consider before deciding you want to buy a franchise. First, what exactly is a franchise and what sets it apart from another business?

A franchise is both an established brand and a proven business support system. You as an owner benefit from millions of dollars of advertising and a production system that has been refined over the years.

And you pay a lot of money for that.

A franchise enables you, the investor or franchisee, to operate a business and get up and running quickly. You pay a franchise fee and you get a format or system developed by the franchisor. More importantly, you get the right to use the franchisor’s name for a limited time, and at least some assistance in getting started.

Independent or franchise?

Suppose you've decided you want to open a pizza restaurant. You could open “Joe's Pizza” and put it in the location of your choice. You could have anything on the menu that you could make and sell. Your hours of operation would be up to you.

Or, you could purchase a Pizza Hut franchise. Pizza Hut would have a say in where you locate the business. They would determine what the restaurant looks like, how much space it has, what kind of equipment is used in the kitchen and what is offered on the menu.

But someone driving past your location will be familiar with Pizza Hut and may have actually eaten at one or at least seen some clever Pizza Hut ads. They may not know anything about Joe's Pizza unless you've done a lot of advertising and have built up a lot of good word-of-mouth referrals.

What someone starting a business might view as expensive interference might be viewed as valuable assistance by another would-be business person. It all comes down to how much money you have and how confident you are that you can successfully run a business.

Assistance or interference?

The franchisor may provide you with help in finding a location for your outlet; initial training and an operating manual; and advice on management, marketing, or personnel. The franchisor may provide support through periodic newsletters, a toll-free telephone number, a website, or scheduled workshops or seminars.

But the franchise fee can be substantial. And you also will have other costs: for example, you may be required to give up significant control over your business while you take on contractual obligations with the franchisor.

The ready-made business system is something that most new business owners appreciate about franchise businesses. With the system already in place, the business owner does not need to worry about finding out what will work and what won't. They are able to avoid the costly trial and error period that nearly all new businesses must go through in order to be successful.

Brand recognition

But probably the biggest benefit of buying a franchise is the recognition that comes with the brand. The marketing and advertising that it takes to get a brand widely recognized and trusted can cost a company millions of dollars. With a franchise, this brand recognition is already a given and thus the business owner does not need to shoulder this expense.

For example, your franchise might purchase advertising to air during the Super Bowl. What locally-owned business can afford that?

But as with any business, there are many pitfalls with starting a franchise. For starters, it requires a lot more start-up capital than a business you are “bootstrapping” in your basement.

While many people choose to purchase a franchise to minimize risk, the legal website Nolo.com says buying a franchise carries plenty of risk, starting with questionable profitability.

Downside risk

“Most franchise owners don't provide much information to potential buyers regarding earnings possibilities,” the site warns. “Even the franchisors who do supply this information usually give only average sales figures and profits before expenses are deducted, numbers that aren't very helpful when trying to determine whether your individual franchise will be successful.”

You might also be required to purchase supplies from the franchisor, at inflated prices. And of course, there are those ongoing royalty payments.

“Before you decide to franchise, you need to do your research,” advises the Small Business Administration. “You could lose a significant amount of money if you do not investigate a business carefully before you buy.”

By law, franchise sellers must disclose certain information about their business to potential buyers. It's vital that you get all the information you need first before entering into this form of business.

For consumers considering the purchase of a franchise business, the Federal Trade Commission (FTC) provides extensive information about franchises here.