Current Events in August 2013

BMW's Mini Cooper has hit the sweet spot with American drivers, with sales approaching 300,000 in recent years.

But the shine wears off the little cars all too quickly in some cases, with timing belt failures causing catastrophic engine damage in some models, according to a class action lawsuit and numerous complaints posted to ConsumerAffairs and elsewhere on the Internet.

Elizabeth of Deer Park, Texas, bought a used 2007 Mini with the money she got from her insurance company after her Honda was wrecked. Soon her finances were wrecked too.

"I got it home and two months later, the oil light came on," she said. The head gasket had failed, causing $2,000 worth of damage. A few months later, the timing belt failed. All told, Elizabeth said she spent $5,000 on repairs in less than a year. 

Things didn't turn out much better for Peter of Riverside, Calif. 

"My 2007 clutch had to be replaced on February 2012. I had to replace the valve cover, gasket, and hose at 37,500 miles. It cost $718.00. Then in March at 40,000 miles, I have to replace the timing chain at $2200.00 and a thermostat at $675.00. I have to pay out of my pocket for all the repairs since February 2012," Peter said. "I think that Mini does not build a car to last past 35,000 miles before you have serious problems."

What did BMW know?

Joshua Skeen and Laurie Freeman had similar problems. They're now the named plaintiffs in a class action lawsuit that argues BMW has known of the defect since 2008 but hasn't warned purchasers, offered a recall or made any attempt to reimburse vehicle owners for the repairs costs.

The models specified in the suit filed in U.S. District Court in New Jersey are the 2007-09 Mini Cooper R56 and the 2008-09 Mini Cooper R55.

A BMW spokeswoman told ConsumerAffairs the company could not comment on pending litigation.

The lawsuit claims there is a defect in the Mini's timing chain tensioner, which maintains an appropriate tension of the engine's timing chain. The timing chain controls the timing of the engine's valves, but when the chain doesn't have proper tension or synchronization, the engine's pistons and valves collide with great force and the engine components suffer so much damage that the engine seizes and must be rebuilt. 

Rob of Stamford, Conn., has reached a similar conclusion. He took his 2007 Mini Cooper S in for service after the engine started making rattling sounds during cold starts.

The timing chain guide (plastic) had cracked in pieces and scattered though the engine and oil pan," Rob told ConsumerAffairs. "The dealer replaced timing chain, timing chain tensioner (broke too!), and guide. It's been less than 6 months, and the same sounds are coming back!" Rob said in December 2011.

"There is obviously a timing chain mechanism design flaw. Mini should correct this on all affected vehicles. MINI is responsibile for their design mistake regarding a substandard timing chain box," he said.

The named plaintiffs, Skeen and Freeman, both bought new Mini Cooper S models in 2007 and allege that while the timing chains used in the Mini Cooper are meant to last about 10 years or 120,000 miles, they encountered problems with their engines far sooner than expected.

Skeen said he had to spend $3,288 in January to replace his car's engine, which had about 74,000 miles on it. Freeman said her timing chain tensioner was replaced twice -- under warranty in July 2009 and again in February 2013, 14,000 miles later, at a cost of $1,381.

"Maintenance-free"

The lawsuit says that BMW falsely claims the Mini timing chains are maintenance-free. It cites complaints to the National Highway Traffic Safety Administration (NHTSA) from consumers who say their Mini Coopers unexpectedly stopped dead on highways and, in one case, on the on-ramp to a busy freeway.

Perhaps one of the most extreme complaints comes from Julie of Snoqualmie, Wash., who told ConsumerAffairs of her experiences with her 2008 Mini Cooper Clubman, which she bought new and babied with frequent doses of synthetic oil and other recommended maintenance.

Then, one day, the engine light came on. The diagnosis: blown turbo. The cost to repair: $3,400. 

"This was a hard pill to swallow ... but it was the best option considering I owe $17K on the car and it's only worth $17K with a good turbo. So I said okay on the repair," Julie said. But Julie's troubles weren't over.

"The shop called me on the day it was supposed to be done and said they had bad news. When they went to get the car started, the timing belt busted when it turned over and the engine is toast and needs to be replaced."

The lawsuit alleges breach of express and implied warranty claims and New Jersey Consumer Fraud Act and Georgia and Illinois law violations. William J. Pinilis of PinilisHalpern LLP, Morristown, N.J., is representing the plaintiffs. 

Ford has paid a $17.35 million fine to settle claims that it took too long to recall 2001 through 2004 Escape SUVs with accelerator pedals that could stick to the floor.

The fine ties that paid by Toyota in December 2012 to resolve claims that it dragged its feet in recalling models plagued by accelerator pedals that could get stuck under carpets.

The Wall Street Journal and Automotive News reported details of the settlement today. The settlement document was dated June 28 but neither the National Highway Traffic Safety Administration nor Ford made any public announcement at the time.

NHTSA has been criticized by safety advocates for holding secret talks with Chrysler executives to broker a deal over allegations that certain Jeep SUVs are fire-prone. In that case, former Transportion Secretary Ray LaHood met with NHTSA and Chrysler executives at O'Hare International Airport to work out a compromise that lets Chrysler install trailer-hitch attachments on some of the allegedly fire-prone Jeeps. 

The trailer hitches supposedly will reduce the risk of a rear-end crash rupturing the gas tank and starting a fire. Chrysler initially refused NHTSA's request that it recall the Jeeps.

There was no immediate explanation for why the Ford deal was not made public by the agency, which is never shy about trumpeting its supposed accomplishments, like its current campaign to prevent heatstroke. 

Inadequate clearance

Ford issued the recall of about 423,000 Escapes last July, saying that "inadequate clearance between the engine cover and the speed control cable connector could result in a stuck throttle when the accelerator pedal is fully or almost-fully depressed." Earlier in July 2012,  On July 16, Ford issued a recall of thousands of 2013 models, saying the positioning of carpet padding could lead to the risk of a crash.

The Escape's sibling vehicle, the Mazda Tribute, was also recalled because of the same problem.

Regulators felt that the Escape recall "may have been untimely," and thus could have justified an enforcement action, according to a settlement document with the National Highway Traffic Safety Administration.

Ford agreed to the settlement but did not admit fault.

"We take the safety of our customers seriously and continuously evaluate our processes for improvements. While we are confident in our current processes for quickly identifying and addressing potential vehicle issues, Ford agreed to this settlement to avoid a lengthy dispute with the government," a Ford spokeswoman said.

There's a lot of free software and apps out there that could come with some frustrating strings attached – if you aren't careful. They can result in your browser suddenly displaying a new home page or toolbar. They can even skew your search results.

They are called Potentially Unwanted Programs, or PUPs. They're unwanted even though you agreed to download them. You agreed because you may have been in a hurry and missed some fine print.

The term PUP was coined by McAfee Internet Security. The programs are not technically viruses but often behave like a virus. They can include spyware, adware and dialers. In most cases they get downloaded in the process of a consumer downloading a program they do, in fact, want.

Trying to sell stuff

PUPs are usually produced by marketing companies that use them to display advertising on the affected computers. These companies point out that all the information necessary to opt out of the PUP download is right there in the user agreement. However, the consumer must first read the information and then act. Many times, they overlook it.

Instead of an “opt in,” a PUP is always presented as an “opt out.” For example, when you are prompted to update Java on your PC, you might get a pop-up screen from Oracle during the process that says “We recommend installing the free browser add-on from Ask.

There are two checked boxes, one that says “Install the Ask toolbar in Google Chrome.” The other says “Set and keep Ask as my default search provider in Google Chrome.” Unless you uncheck those boxes, you will make those changes to your browser. It might be something that you would like and find useful, but it might not. The point is you have to pay attention during a download to make an informed decision.

When searching for a free download, such as Yahoo Messenger, the search results may offer a number of download sites that are not affiliated with or operated by Yahoo. In addition to downloading Messenger, you are likely to end up with a few PUPs if you aren't careful.

Matter of semantics

McAfee coined the term PUPs after marketing companies objected to being lumped in under the term “spyware.” But it may be just a matter of semantics.

“Today a significant number of programs are using aggressive marketing techniques, akin to those long employed by spammers, to create more intrusive and, the developers would say, more effective products and services,” McAfee says on its website. “The clear gap between malicious code written by anti-social teenagers and non-malicious code written by legitimate corporations is rapidly dwindling, where it exists at all. This aggressive marketing stance is even touted as “viral marketing,” a term perhaps more appropriate than intended. Viral marketing can be defined as using a consumer's resource to generate more interest than could be achieved by direct marketing, with or without the consumer's knowledge or consent.”

Some PUPs may be clearly malicious while others are not – they are simply unwanted. Malicious PUPs may modify your computer's system so that the code runs every time the computer starts up. It may hide its presence, making it harder to remove.

Hard to remove

When you download one of these programs they might be a chore to eliminate. An anti-virus scan may identify the PUPs and remove some of them. However, other elements may remain and be more difficult to remove. You should check the “help” section of your anti-virus vendor's website.

Of course, it's best to avoid PUPs in the first place. Remember that they are generally installed as bundles with a free program you want. You must remain alert to any opt-out messages during the installation.

You can also minimize your PUP exposure by making sure you are downloading your desired program only from a trusted site. If you are at the software provider's official download page your safety odds improve. Be leery of look-alike sites that might give you more than you bargained for.

During summer break, a lot of kids stay away from things like textbooks, essays and math problems, but another thing they're staying away from is their asthma medicine, says Dr. Kirstin Carel of National Jewish Health in Denver.

Carel says that a good number of asthmatic children are able to take breaks from their medicine, and many do it during summer vacation, which makes them more susceptible to having a flare up at the beginning of the school year.

"This time of year, it's a perfect storm to set many kids up for asthma attacks," says Carel. "You've got this triple whammy of conditions, with viruses going around, because the kids have all gone back to school and they're sharing them. There are allergens feeding into their asthma, and they may not have been as consistent with their medications over the summer as they should have been."

Carel says that while it may be okay for some kids to stop taking their medication during the summer, the sooner they get back on their routine the better.

"For those who can, it's nice to have a break from the medications over the summer," she said. "I always want them to re-start taking medications at least two weeks before going back to school. Fortunately, we have great medications that can help keep their inflammation down as much as possible, but it's a matter of them having the medicine in their system when it needs to be in their system."

Obviously, parents should speak to their child's doctor to see if he or she can take breaks from their medication.

Missed days

According to the Centers for Disease Control and Prevention (CDC), kids who have asthma miss a combined total of 14.4 million school days each year, and the bulk of these absences are at the start of each school year.

But what else can trigger an asthma attack? A bunch of different things, says the CDC, and here are just a few:

Bad weather, certain foods, mold, dust in the home, tobacco smoke, pets and roach droppings just for starters. And anxiety and extreme worry can cause an asthma attack too.

But it's the brand-new school year that has a lot of parents and doctors worried, so it's suggested children get back on their medication before the school year starts.

And parents should make sure their child's school is prepared for an asthma emergency, by having an asthma action plan on file.

"An asthma action plan is a document that is created between a doctor and a patient with directions as to what to do, based on asthma symptoms or peak flow readings," the American Lung Association advises. "A copy of a student's asthma action plan should be filed in the school nurse's office. It's recommended that teachers and school staff have copies of an asthma action plan for those students they see on a regular basis."

Serenity Williams-Fregia, a 13-year old with asthma, says her condition makes her miss a lot of school.

"It happens every year, I always get sick" she said. "Very sick, actually, and I feel like just as school begins, I'm already falling behind."

"When people are coughing, I get really defensive because I don't want to get sick either, because then my asthma acts up really bad and I can't handle it."

Make a plan

So to help prevent this from happening, Carel says parents should have a new back-to-school asthma plan for each new school year. And parents should make sure their child's medication hasn't expired, especially if she's lowered the amount of medicine she's taken during the summer.

And meeting with your child's school nurse is important as well, to make sure all the necessary paperwork is filled out and to make sure the school has all of your child's medications on hand. Plus, parents should remind their asthmatic child to wash his or her hands and practice good hygiene, both at home and in school. 

This of course will decrease the chance of your child passing any germs on to somebody else.

Carel says it's all about planning when it comes to making sure your asthmatic child starts of the school year right, and the better you plan, the more likely your child will avoid an attack at the beginning of school.

 "A little planning can go a long way in making sure your child is safe, especially at a time of year when the conditions are most likely to cause problems," she says.

As August gets underway, gas prices are hovering around the third-highest prices on record for the summer driving season, with possible weather disruptions likely to make matters worse.

AAA says the national average price of gasoline increased 14 cents per gallon (3.9%) in July from $3.49 to $3.63, which was the largest monthly increase since February. The average price of gas in July was $3.58 per gallon, which was the third-highest average on record for the month. By comparison, the average was $4.06 per gallon in 2008, $3.65 per gallon in 2011 and $3.42 per gallon in 2012.

“July was a volatile month for consumers with gas prices reeling from the lowest to the highest averages seen in months.” said Avery Ash, AAA spokesman. “A combination of expensive crude oil costs, refinery glitches and rising summer demand resulted in sharp price spikes for many motorists.”

Average gas prices increased nearly 20 cents per gallon from a summer low of $3.47 per gallon on July 7 to a summer high of $3.67 per gallon on July 19. The national average has now dropped 12 out of 13 days for a total of four cents due to slightly lower oil costs and increased refinery output.

Third-highest

Motorists are paying the third-highest gas prices on record for the summer driving season, which runs Memorial Day through Labor Day. The average so far this summer is $3.59 per gallon, which is less than the average of $4.04 per gallon in 2008 and $3.67 per gallon in 2011 through July.

Gas prices may go higher duringAugust due to the potential for late-summer hurricanes and refinery problems. These types of issues can disrupt production, distribution and gasoline supply at a time when many Americans are filling up their tanks for summer travel. Conversely, gas prices could remain flat or even drop if refineries run smoothly and no major hurricanes threaten the Gulf Coast.

“Millions of Americans take long road trips in August and any unexpected production problems can result in serious supply and demand issues,” Ash said. “We often see refinery problems and major hurricanes drive up prices this time of year, which means motorists could be in for a rough time at the pump in the coming weeks if something goes wrong.”

Fewer pink slips were handed out last month.

According to the tally by outplacement consultancy Challenger, Gray & Christmas, employers announced plans to reduce payrolls by 37,701 workers, a drop of 4.2% from the 39,372 planned layoffs in June. Still last month’s total was 2.3%t higher than a year ago, when 36,855 planned job cuts were recorded.

So far this year, 296,633 job cuts have been announced -- 7.3% fewer than the 319,946 job cuts announced in the first seven months of 2012. At the current pace of downsizing, which is averaging 42,376 job cuts per month, 2013 will come in below the 2012 year-end total of 523,362, which was the lowest annual total since 1997 (434,350).

The July terminations were somewhat offset by employers plans to hire 9,728 new workers in the coming weeks and months. These include at least 5,000 new positions created by online retail giant Amazon.com to meet increasing demand.

Health care leads the cuts

Workforce reductions last month were led by the health care sector, which announced 6,843 planned job cuts -- the highest number of cuts for the sector since 9,558 jobs disappeared were recorded in November 2009. Health care organizations have now cut 29,794 jobs this year, 59% more than the 18,770 planned cuts announced by this point in 2012.

“Cuts in Medicare reimbursements brought about by sequestration and health care reform are hurting hospitals’ bottom line,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. “Some states are also cutting Medicaid funding, which adds to the financial challenges.

Challenger also points out that hospitals are reporting fewer patients as high-deductible insurance policies discourage would-be patients from seeking health services. “As a result of these factors,” he says, “health care providers, which had been one of the country’s best job generators in recent years, are being forced to reduce their headcounts.”

Defense industry faces challenges

Meanwhile, aerospace and defense saw the second largest job-cut total in July, as firms in this sector announced plans to reduce payrolls by 4,889. That brings year-to-date job cuts for the sector to 22,750, fourth among all industries and a 20% increase from the 19,026 job cuts announced by these employers in all of 2012

The July figure for aerospace and defense is the highest monthly total since July 2011, when these firms announced 6,704 job cuts. “If there is any silver lining, it is that less than 1,000 of last month’s cuts were attributed to sequestration,” Challenger said. “Yet, this industry is always at high risk for restructuring due to the fact that it relies on a steady flow of government contracts. If there is ever any ebb in that flow, companies are forced to adjust their workforce levels. Between sequestration, general federal spending cuts, the conclusion of two wars and shifting strategies in the use of our military, there are many challenges facing this industry”  

The unemployment line was a lot shorter last week.

Figures released by the government show there were 326,000 first time applications for state jobless benefits during the week ending July 27 -- a drop of 19,000 from the previous. That's the lowest number of claims filed since January 2008, and comes in well below the 345,000 forecast by economists surveyed by Briefing.com.

The Labor Department says “seasonal adjustment” problems from the auto industry are responsible for recent volatility in the initial claims numbers. Automakers have historically shut down their plants this time of year for new model year retooling.

However, in the past few years, increasing demand and low inventories have kept that from happening, artificially deflating the jobless claims numbers. Analysts believe this latest report is a statistical anomaly and not an improvement in labor market conditions.

The 4-week moving average, which is less volatile and considered a more accurate gauge of the labor market, was 341,250 -- a decrease of 4,500 from the previous week.

The full report  is available on the Labor Department website

July jobs forecast

Separately, in advance of Friday's release of the government's July employment figures, the ADP National Employment Report is projecting an increase of 200,000 private-sector jobs from June to July.

According to the forecast goods-producing industries added 22,000 jobs, construction payrolls rose by 22,000 in July, while manufacturing payrolls fell 5,000.

Service-providing industries added 177,000 jobs in July -- the largest increase since last November. Gains were broad-based across industries, with professional/business services adding 49,000 jobs, Trade/transportation/utilities services contributing 45,000 jobs and financial activities showing a modest gain of 4,000 jobs, after a surge of 10,000 jobs in June.

The forecast from economists surveyed by Briefing.com is for the addition of 175,000 jobs and a dip of 0.1% in the unemployment rate -- to 7.5%.

Traditions of Pearl, Miss., is recalling 2,486 pounds of frozen chicken meals because of misbranding and an undeclared allergen.

The products contain milk, a known allergen, which is not declared on the label. There have been no reports of adverse reactions due to consumption of these products.

The products subject to recall include:

• A three-compartment tray containing “Lemon Pepper Chicken Breast Filet with Rib Meat Smoke Flavor Added / Mixed Vegetables / Basil and Garlic Fettuccine” bearing the establishment number “P-13850” inside the USDA mark of inspection. The products were produced and packaged on Oct. 5, 2012, Dec 19, 2012 and Jan. 28, 2013

The products were distributed to food service institutions nationwide.

Consumers should contact Sherry Goodwin, Traditions customer service representative, at (601) 420-8847.