Current Events in September 2013

Browse Current Events by year


Browse Current Events by month

Get trending consumer news and recalls

    By entering your email, you agree to sign up for consumer news, tips and giveaways from ConsumerAffairs. Unsubscribe at any time.

    Thanks for subscribing.

    You have successfully subscribed to our newsletter! Enjoy reading our tips and recommendations.

    Marketers agree: Taking women seriously is seriously hard to do

    Color it pink and it's good to go

    I’m sure MediaPost meant well when it published this article but even so -- my fragile, delicate, ladylike shoulders slumped when I read that “Marketers Should Take Women Seriously as Consumers,” because every time marketers attempt to take us womenfolk “seriously” they make utter asses of themselves.

    Item one: “Bic For Her” pens. Remember those? Last year, some guy (it had to be a guy) high in the ranks of the Bic corporation decided traditional ballpoint pens were too manly and aggressive for the female half of the human race, so they came out with “Bic Cristal For Her” pens  which, according to the ad copy on Amazon, features an “Elegant design: just for her!” (translation: the plastic outer casings come in various pastel colors) and a “Thin barrel to fit a woman’s hand.” On Amazon, Bic Cristal For Her ladylike writing implements cost $9.04 for 16 pens, compared to only $1.71 per dozen for the standard, manly Bic Cristal.

    Why are Bic’s ladypens for her over four times more expensive than standard manpens? Maybe Bic thinks women won’t notice the differential because we’re all so bad at math. Or perhaps Bic, like MediaPost, sought advice from Michael J. Silverstein of the Boston Consulting Group, and learned that one way to tell the difference between ordinary “consumers” and exotic “women consumers” is that women “are willing to pay more across many categories for products and services.”

    A car for women

    Item two: A decade ago, the Volvo car company decided to kick in the new millennium by introducing a special concept car “for women.” What does Volvo think women want—reliability, good mileage, extra safety features? Nope. The concept car featured interchangeable upholstery, because – actual quote – there’s “No need to trade in your car just because you have grown tired of its colour scheme!”

    The car also had a hood that cannot be opened, because Volvo quoted an actual woman who said “The only time I ever open my [car’s hood] is when I need to fill up with windscreen washer fluid.” (Does she never even check her car’s oil levels? Of course not; checking the oil requires handling the dipstick and a proper woman never touches any dipstick unless it’s attached to her lawfully wedded husband.)

    Item three: Pastel-colored tools “for women.” Hammers, screwdrivers, paintbrushes and sundry other hand tools just like the menfolks’, except they’re vastly more expensive and come in feminine colors like pink. Or mauve.  Or floral patterns.

    According to Silverstein and other deep, manly thinkers in the Boston Consulting Group, the two things women dislike most about various products is “poor product design for women” and “clumsy sales and marketing.” I can’t argue with that premise; I just wish companies would stop deciding the antidote to poor design and clumsy marketing is “Color everything pink, add the words ‘for women’ in a frilly-script font and then charge at least double for everything.”

    Here’s an idea: unless you’re selling actual gender-specific medicines, undergarments or hygiene/grooming products, why don’t you forget about marketing “to women” or “to men,” and just try marketing to people?

    Women aren't as exotic as market researchers think...

    New bill would toughen food labeling standards

    But imposing new regulations on the food industry is treacherous work, often unsuccessful

    Food labels are notoriously hard to read and often difficult to understand. A newly-proposed bill in Congress seeks to change all that. It would create a single, standard front-of-package label, require greater disclosure of sugar and caffeine content, and define how common claims such as "natural" and "healthy" can be used. 

    The Food Labeling Modernization Act is being introduced by three Sen. Richard Blumenthal (D-Conn.), Rep. Rosa DeLauro (D-Conn.) and Rep. Frank Pallone, Jr. (D-N.J.), with backing from the Center for Science in the Public Interest (CSPI).

    "In the Bizzaro world of Superman comics, up is down, day is night, and things are generally the inverse of what they are in reality," said Michael F. Jacobson, CSPI's executive director in a prepared statement. "Regrettably, when harried dads and moms plow their shopping carts down supermarket aisles, they encounter a similar, strange world: One where 'whole grain' waffles can be made mostly of white flour, where 'all natural' granola bars can have factory-refined high maltose corn syrup, and where artery-clogging ice cream bars can cheerfully boast of their lack of trans fats."

    The bill's sponsors argue that major labeling requirements, last updated in 1990 and, in some cases, the 1930s, are in need of major changes to deliver the consistent, clear information that Americans need to combat the obesity crisis and make healthier choices.

    The bill would direct the Secretary of Health and Human Services to establish a single, standard front-of-package nutrition labeling system for all food products that are required to carry nutrition labeling.

    Children at risk

    “Childhood obesity has nearly tripled in the past 30 years and is a huge public health problem in this country that puts millions of American children at risk. Healthy eating is critical to combating this epidemic," said Rep. Pallone. "That is why it is so important that when families make the effort to eat nutritious, healthy food, the labels on food products help them make the right choices—not confuse or mislead them.” 

    Sen. Blumenthal said food labels are often "deceptive."

    “Grocery stores throughout the country are filled with products that bear labels with deceptive dietary information,” Blumenthal said. “The Food Labeling Modernization Act updates laws that haven’t been touched since 1930s, ensuring that consumers will know what they’re eating and parents will know what they’re feeding their kids.”

    Terms defined

    The bill would established definitions for the terms "healthy" and "natural" and would require that any product using the "whole grain" claim conspicuously post the amount of whole grain (as a percentage of total grain) on the label. 

    It would also:

    • Require the daily values for calories and sugar, as well as the amount of any artificial sweeteners, to be listed on the Nutrition Facts Panel.
    • Require any product containing an amount of food reasonably consumed on a single occasion to state on the label that a single package contains one serving size.
    • Require disclosure of the amount of caffeine in the product, if it exceeeds 10 milligrams. 
    • Require the Secretary to issue comprehensive guidance for industry clarifying the scientific support needed to prevent false or misleading information.

    Industry's counter-campaign

    No one expects anything to happen anytime soon. Any attempt to impose new regulations on the food and drug industries turns into a long process. The food industry is expert and experienced at getting its way and has already launched its own program to simplify and standardize food labels.

    Called Facts Up Front, the industry program is supported by a $50 million marketing campaign that touts it as an easy way for consumers to pick out healthy foods. But critics say it actually makes matters worse by allowing companies to highlight positive, marketable nutrients like fiber and protein, rather than listing only calories, saturated and trans fats and sodium content.

    Many observers see the industry campaign as an effort to head off legislation like that introduced by Blumenthal et al.

    A mock-up of the proposed new labelFood labels are notoriously hard to read and often difficult to understand. A newly-proposed bill in Congress seeks ...

    Allegiant Air grounding planes for inspection

    The low-cost carrier said about half its fleet will be out of service

    Saying it discovered a "compliance issue" involving emeregency slides, Allegiant Air says it will take about half its fleet out of service for inspection.

    Las Vegas-based Allegiant operates 64 airplanes, including 57 older MD-80s, the aircraft affected by the issue. Taking the airplanes out of service will cause major disruptions for its passengers. 

    "We apologize for the disruption to our passengers and ask that they please remain patient as we work to correct the issue, reschedule affected flights and accommodate any passengers impacted," said Andrew Levy, Allegiant Travel Company President. "Allegiant is committed, above all else, to the safety of our passengers and crew, and we are dedicated to working around-the-clock to ensure that all of our fleet meets the highest standards."

    Allegiant said it doesn't know how long the disruptions will last but said it has added call center staff to contact affected travelers directly. Customers may also sign up for flight alerts for individual flights at or call 702-505-8888.

    Allegiant flies mostly to tourism spots in Florida, Hawaii and the Southwest. It charges low fares but piles on fees for such things as assigned seats, refreshments and bagge. It also sells hotel rooms, rental cars and tickets to tourist attractions.

    Saying it discovered a "compliance issue" involving emeregency slides, Allegiant Air says it will take about half its fleet out of service for inspecti...

    Get trending consumer news and recalls

      By entering your email, you agree to sign up for consumer news, tips and giveaways from ConsumerAffairs. Unsubscribe at any time.

      Thanks for subscribing.

      You have successfully subscribed to our newsletter! Enjoy reading our tips and recommendations.

      A colonoscopy can stop colon cancer before it starts

      Harvard researchers say more colonoscopies would result in fewer deaths

      Colorectal cancer, also known as colon cancer, is caused by tumors growing in parts of the large intestine. In the past a colon cancer diagnosis was very often fatal. By the time it was discovered, it was usually too late.

      But since these tumors almost always start out as benign polyps growing in the large intestine, doctors believed they could drastically reduce colon cancer deaths if they could just discover – and remove – these polyps before they transformed into cancerous tumors.

      Thus was born the colonoscopy, a procedure by which a tiny camera is inserted through the patient's rectum for a look around the large intestine. The probe is equipped with a surgical instrument that can remove most polyps that are discovered.

      With this screening tool, doctors expressed confidence they could significantly reduce the rate of colon cancer. But first, patients had to agree to submit to a colonoscopy and the public, it turned out, was a bit squeamish about this rather invasive procedure. Having to drink the unpleasant colon-cleansing cocktail the night before didn't help.

      The Couric effect

      Then there seemed to be a rather abrupt shift in the public attitude. In March 2000 NBC Today Show host Katie Couric underwent a very public colonoscopy on network television. Couric had become a strong advocate of the procedure after her husband Jay died of colon cancer.

      Suddenly, more people were making appointments for colonoscopies, a result of what many doctors call “the Couric effect.” A later Archives of Internal Medicine study documented a 20% spike in colonoscopies in the wake of her broadcast.

      For her part, Couric remains a strong advocate of the colonoscopy and, when it was time for her next one, once again invited the cameras in, resulting in a video that is both humorous and serious.

      The American Cancer Society estimates there will be more than 102,000 new cases of colon cancer in the U.S. in 2013. At the same time, the group notes the death rate from the disease has been dropping over the last 20 years.

      “There are a number of likely reasons for this,” the group says. One is that polyps are being found by screening and removed before they can develop into cancers. Screening is also allowing more colorectal cancers to be found earlier when the disease is easier to cure.

      New evidence

      A new study from the Harvard School of Public Health (HSPH) maintains 40% of all colorectal cancers could be prevented if people of average risk underwent a colonoscopy every 10 years. 

      "Colonoscopy is the most commonly used screening test in the U.S. but there was insufficient evidence on how much it reduces the risk of proximal colon cancer and how often people should undergo the procedure," said Shuji Ogino, co-senior author and associate professor in the Department of Epidemiology at HSPH. "Our study provides strong evidence that colonoscopy is an effective technique for preventing cancers of both distal and proximal regions of the colorectum, while sigmoidoscopy alone is insufficient for preventing proximal cancer."

      The study also found that people who get a clean bill of health after a colonoscopy have a significantly reduced risk of colorectal cancer for up to 15 years after the procedure, although the data support repeat screening at shorter intervals among individuals with a personal history of adenoma -- a benign tumor of glandular origin that can become malignant over time -- or a family history of colorectal cancer.

      When to get one

      Unless you happen to be 50 years old or older, you may not have to worry about a colonoscopy for a while. It's generally recommended that people of average risk undergo their first procedure at age 50 and then, assuming no polyps are found, follow up with another 10 years later.

      Who is at risk for colon cancer? According to the Mayo Clinic, age is the greatest risk factor. The majority of people diagnosed with colon cancer are over age 50. African-Americans have a greater risk than other races and you might be more likely to develop the disease if you have a parent, sibling or child with the disease. If more than one family member has colon cancer or rectal cancer, your risk is even greater. 

      There is some research suggesting colon cancer and rectal cancer may be associated with a diet low in fiber and high in fat and calories. Some studies have found an increased risk of colon cancer in people who eat diets high in red meat.  

      Colorectal cancer, also known as colon cancer, is caused by tumors growing in parts of the large intestine. In the past a colon cancer diagnosis was very o...

      Dog food additive may prevent disabling chemotherapy side effect

      Johns Hopkins researchers say the substance fights neuropathy in mice

      Many consumers have become wary of dog food because it contains so many additives. But researchers at Johns Hopkins have discovered that a common pet food preservative may prevent the painful nerve damage that afflicts many cancer patients taking the drug Taxol.

      The preservative, an antioxidant called ethoxyquin, was shown in experiments on mice to bind to certain cell proteins in a way that limits their exposure to the damaging effects of Taxol, the researchers say.

      Four out of five patients taking Taxol develop painful nerve damage in their hands and feet. The researchers hope that with what they've learned about ethoxyquin, they can develop a drug that could prevent the nerve damage.

      While half of Taxol users recover from the pain damage, known as peripheral neuropathy, the other half continue to have often debilitating pain, numbness and tingling for the rest of their lives.

      "Millions of people with breast cancer, ovarian cancer and other solid tumors get Taxol to treat their cancer and 80 percent of them will get peripheral neuropathy as a result," says Ahmet Höke, M.D., Ph.D., a professor of neurology and neuroscience at the Johns Hopkins University School of Medicine and director of the Neuromuscular Division. "They're living longer thanks to the chemotherapy, but they are often miserable. Our goal is to prevent them from getting neuropathy in the first place."

      A report on Höke's research is published online in the Annals of Neurology.

      Many consumers have become wary of dog food because it contains so many additives. But researchers at Johns Hopkins have discovered that a common pet food ...

      BMW recalls passenger cars with taillight problems

      Rear lamps could malfunction, increasing the risk of a crash

      BMW is recalling 134,100 model year 2008 through 2010 528i, 535i, 550i, and M5 passenger cars manufactured from March 1, 2007, through December 31, 2009.

      Over time, increased resistance at the taillight electrical contact points may cause damage to the ground terminal and housing of the connector resulting in an intermittent or permanent loss of functionality of one or more rear lamp functions (tail, brake, turn-signal, reverse). Intermittent light operation reduces the ability to warn other motorists of the driver's intentions, increasing the risk of a crash.

      BMW will notify owners, and dealers will replace the rear lamp bulb carriers free of charge. The recall is expected to begin during October 2013.

      Owners may contact BMW customer relations at 1-800-525-7417 or email BMW at

      BMW is recalling 134,100 model year 2008 through 2010 528i, 535i, 550i, and M5 passenger cars manufactured from March 1, 2007, through December 31, 2009. ...

      Shimano American recalls disc brake calipers

      The calipers on the disc brakes can fail

      Shimano American Corporation of Irvine, Calif., is recalling about 7,300 sets of disc brake calipers in the U.S. and Canada.

      The calipers on the disc brakes can fail, posing a collision hazard. No incidents or injuries have been reported.

      This recall includes all Shimano BR-CX75 aftermarket disc brake calipers and BR-R515 disc brake calipers installed on road and cyclocross bicycles sold by other manufacturers including BMC, Giant, Ibis, Raleigh, Shinola, Specialized and Volagi. “Shimano,” “China” and the model number are embossed on the outside of the brake caliper. Both models have either black or silver finishes.

      The calipers, manufactured in China, were sold at bicycle specialty stores and dealers nationwide from February 2012, through May 2013, for about $75 for the BR-CX75 model disc brake calipers and the BR-R515 model disc brake calipers price was included in the cost of the bicycles where installed.

      Consumers should immediately stop using the bicycles with recalled Shimano brakes and contact a Shimano authorized dealer to receive a free installation and replacement of the calipers.

      Consumers may contact Shimano American at (800) 353-4719 from 8 a.m. to 5 p.m. PT Monday through Friday.

      Shimano American Corporation of Irvine, Calif., is recalling about 7,300 sets of disc brake calipers in the U.S. and Canada. The calipers on the disc brak...

      Google baking up a replacement for cookies

      Reports say the search giant is developing a proprietary tracking method to replace cookies

      So this is how the cookie crumbles -- Google crushes it and sweeps the crumbs off the table.

      Consumers, parents, regulators and privacy advocates have complained for years about the tiny pieces of code called "cookies" that websites and advertisers place on users' computers, objecting to their use in "tracking" consumers around the web.

      Google is said to be baking up an alternative -- something that would provide better security and anonymity for users while presumably improving the advertising and marketing functions that keep websites in business.

      No one likes advertising -- or at least few people admit to liking it -- but it does pay the bills, after all. Creating the content and managing the increasingly complex task of keeping websites operating smoothly is by no means cheap. Take away the anonymous tracking that now enables advertisers to target ads that likely to be, well, on target to specific audiences and you pretty much take away the Internet as we know it.

      Tighter control

      If Google, which after all has more Ph.D. engineers than most companies have paper clips, can perfect its still-secret new system, advertisers would have to come to Google to get the marketing informatiion that they now get from cookies.

      There have been attempts to limit the use of so-called "third-party cookies" but so far none has succeeded. Just a few days ago, the ad industry pulled out of a group effort to impose new Do Not Track protocols. 

      Just to be clear: A "first-party cookie" is one that is placed on your computer by a site you visit frequently -- Amazon, let's say.  It's basically your name tag when you return to that site. The first-party cookie makes it unnecessary for you to go through the log-in process each time you visit and it also enables Amazon to show you what amounts to a customized site -- one that features the types of products you've bought in the past and browed for recently.

      Third-party cookies, on the other hand, are placed by advertisers whose ads you see in the course of clicking around the web each day. They enable the advertisers to see where you go -- what sites you visit and, perhaps, what items you order. Again, this enables the advertiser to show you ads based on your apparent shopping preference.

      Sex toys & cigars

      This sounds harmless but if you go shopping for, let's say, sex toys, you don't really want your screen festooned with ads for such gadgets the next time your spouse or significant other sits down to use your computer. Of if you promise your spouse you have quit smoking but your screen is full of ads for mail-order cigars, domestic disharmony may result.

      If Google can get a lock on the tracking business, it could enforce privacy rules that would satisfy many of the objections that are floating around today. Of course, saying it could doesn't necessarily mean it would but it's at least a possibility.

      The advertising industry is not exactly in a state of bliss over the possbility that it might have to bow down to the mighty Google and already is quibbling over the name that Google is said to have assigned to the project: AdID.

      AdID, it turns out, is the trademark of the Association of National Advertisers and the 4As -- the American Association of Advertising Agencies. It's a digital coding technology for identifying and managing ads across various platforms.

      OK, so maybe Google can't use the AdID name. It's easy enough to think up alternatives. At the moment, the problem is not a shortage of snazzy names, it's a surplus of cooks in the bakery -- and we all know the result of that. 

      So this is how the cookie crumbles -- Google crushes it and sweeps the crumbs off the table.Consumers, parents, regulators and privacy advocates have com...

      Chase ordered to refund $309 million to consumers

      Credit card customers were charged for credit monitoring service they didn't receive

      Chase Bank and JPMorgan Chase Bank have been ordered to refund $309 million in illegal credit card charges to more than 2.1 million consumers. The Consumer Financial Protection Bureau (CFPB) said Chase engaged in unfair billing practices for certain credit card “add-on products” by charging consumers for credit monitoring services that they did not receive.

      “At the core of our mission is a duty to identify and root out unfair, deceptive, and abusive practices in financial markets that harm consumers,” said CFPB Director Richard Cordray. “This order takes action against such practices and requires Chase to fully refund more than $300 million to consumers who were charged illegal fees.”

      According to the CFPB order, Chase enrolled consumers in credit card “add-on” products that promised to monitor customer credit and alert consumers to potentially fraudulent activity even though many never actually received the service.

      In order for consumers to obtain credit monitoring services, consumers generally must provide written authorization. Chase, however, charged many consumers for these products without or before having the written authorization necessary to perform the monitoring services. Chase charged customers as soon as they enrolled in these products even if they were not actually receiving the services yet.

      The agencies found that Chase engaged in these practices between October 2005, when Chase first offered the products, and June 2012, when Chase stopped billing consumers who were not receiving the promised benefits.


      Consumers rate Chase Credit Cards

      To ensure that Chase honors its obligation to repay all affected consumers and that consumers are no longer subject to these unfair billing practices, the CFPB’s order requires that Chase Bank USA, N.A. and JPMorgan Chase Bank, N.A.:

      • End unfair billing practices:  Consumers will no longer be billed for these products if they are not receiving the promised benefits. Chase also must take steps, subject to the Bureau’s approval, to ensure these unlawful acts do not occur in the future.
      • Complete repayment, plus interest, to more than two million consumers: Chase must pay a full refund, approximately $309 million, to more than two million consumers who enrolled in the credit monitoring product and were charged for services that were not received. In addition to the amount paid for the product, Chase must refund interest and any over-the-limit fees resulting from the charge for the product.
      • Conveniently repay consumers: If the consumers are still Chase customers, they received a credit to their accounts. If they are no longer a Chase credit card holder, they received checks in the mail. Consumers were not required to take any action to receive their credit or check. Most consumers should have received refunds by November 30, 2012.
      • Submit to an independent audit: Chase has engaged an independent auditor to help ensure the refunds have been provided in compliance with the terms as set forth in the CFPB’s order.
      • Improve oversight of third-party vendors: The CFPB is also requiring that Chase strengthen its management of third-party vendors who manage these identity protection products.
      • Pay a $20 million penalty: Chase will make a $20 million penalty payment to the CFPB’s Civil Penalty Fund.

      Chase Bank and JPMorgan Chase Bank have been ordered to refund $309 million in illegal credit card charges to more than 2.1 million consumers. The Con...

      The US Post Office is in trouble again (yet)

      Postmaster General's Senate testimony surprises nobody

      We’ve been getting lots of complaints about the US Postal Service lately – like the Manhattan man who, along with his two roommates, went for five weeks without receiving a single piece of mail – so we were not surprised by the latest news stories warning that the USPS is, once again, in financial trouble. Here’s some of what Postmaster General Patrick Donahoe said before a Senate committee meeting on Sept. 19:

      "By mid-October 2013, the Postal Service projects it will have a cash balance on hand of approximately five days of average daily expenses. For an organization the size of the Postal Service – which has revenues of $65 billion and a total workforce of approximately 490,000 career employees – that is a razor-thin margin. By way of comparison, most private sector companies usually have available liquidity of at least two months of operating expenses."

      (On the other hand, most private sector companies would go out of business if they lost their customer’s property every day for five weeks and then protested that they can’t possibly be expected to know who was responsible.)

      And, speaking as an American taxpayer who’s had sundry important things lost or misdelivered by the post office,  when we read that Donohue said “In no uncertain terms, the Postal Service does not want to become a burden on the American taxpayer,” we could not avoid rolling our eyes and thinking “It’s waaaaay too late to worry about that, now.”

      Not all its fault

      But we admit: this attitude is not entirely fair. For all the customer service complaints which the USPS legitimately deserves, it’s also true that many of the postal services’ financial problems are not its fault. As our colleague Truman Lewis reported last March:

      “[U]nlike private companies, the Postal Service can't sell any products below cost, even if doing so would enable it to snag contracts that would be profitable overall. 

      “Who would impose such an onerous and unbusinesslike restriction on what is supposed to be a semi-independent government corporation? Congress, of course.

      “The Postal Service has much in common with Amtrak and the District of Columbia. All are hamstrung by Congressional micromanagement that leaves them often unable to pursue simple initiatives that would improve their fortunes and provide better service to their clients [….] while the Postal Service is forbidden from, say, granting a big discount on one service that would let it sell additional, profitable services, it is also hamstrung by a Congress that continues to require Saturday delivery and other anachronisms that waste millions of dollars while doing little or nothing to generate profits.”

      So Postmaster General Donohue was perfectly correct when he told the Senate that “We have the responsibility to provide and to fund universal service for our nation, but we do not have sufficient authority or flexibility to efficiently carry out that mandate. Postal reform legislation is urgently needed. In its absence, continued significant net losses are inevitable.”

      What does this mean for you, the average USPS customer? There’s probably nothing you can do to prevent a possible tax increase intended to cover USPS costs, but you can at least protect yourself from eventual rate increases: next time you buy a roll or book of first-class stamps, get the stamps that say “Forever” rather than the ones printed with a 46-cent value.

      "Forever" may not really be forever but it's a lot longer than a few months.

      USPS down to five days' operating expenses...

      When to use a credit card and when not to

      Often, cash or a debit card is the more prudent choice

      For many consumers, credit card debt is an obstacle to prosperity. Every month you have to pay on the balance, leaving less money for other things.

      While it's true you have to write a check for your monthly rent or mortgage, or to make a car payments, those are expenses that buy you something each month. The rent payment gives you a place to live. The car payment gives you transportation.

      A credit card payment, on the other hand, gives you nothing, except maybe a case of heartburn at bill-paying time.  If you carry a balance, you are making payments on that dinner out with friends four months ago, a vacation from two years ago, and that expensive piece of exercise equipment you bought last January that is now gathering dust in the corner.

      High interest rates

      On top of that, a credit card balance carries the highest interest rate of any of your debt, unless you have taken out a payday loan. Low credit card interest rates are around 9% and they can be as high as 30%.

      There is a school of thought that says you should charge everything on a credit card that offers a generous rewards program, so that you can benefit from cash back, discounts on travel or other perks. There is something to be said for that, but it requires firm discipline in paying off the balance each month. Otherwise, you could be paying on a couple of years' worth of gasoline purchases at 14.9% interest.

      That, in a nutshell, is the danger in using a credit card for all your purchases. Deployed as a component of your budget plan, a credit card can be a powerful and useful tool. Used indiscriminately, without a plan, it can wreck your financial future.

      The problem with charging everything is you lose track of what you've charged. You have every intention of paying off the balance at the end of the month. But when the bill arrives, you are shocked at how much you owe. As a result, you pay only a portion, telling yourself you'll pay the rest next month.

      But next month the bill arrives and the balance is even bigger. That's how five-digit credit card balances start.

      Not as rich as you think you are

      Using a credit card for all or most of your purchases also makes you feel wealthier than you really are. You might not worry about whether you can pay for a purchase at that particular moment because the plastic has it covered. Then, of course, the reality of your financial condition returns when the bill arrives.

      A good rule of thumb is to avoid using a credit card to pay for consumables. Groceries and gasoline are good examples. Many consumers purchase both more than once a week so, if you are using a credit card, you can quickly lose track of your total spending.

      Instead, use cash or a debit card – which is the same a cash, since it comes directly out of your bank account. Once you make the purchase you no longer have the money. It's literally pay as you go.

      There are some purchases where security may dictate using a credit card, however. In a restaurant, it's probably best not to let your debit card out of your sight, whereas your liability for fraudulent charges on your credit card is limited. The same is true for making online purchases – using a credit card instead of a debit card is probably safer.

      When it makes sense

      There are, however, times when using a credit card makes sense. New furniture for the family room might cost more than you can swing in this month's budget. But if you think you can pay it off over three months, a credit card allows you to make the purchase now. Just be sure that you can make those three payments and not add any additional purchases that will derail your payment plan.

      If you feel you need to use a credit card for everyday purchases, it is best to have more than one card and use them for their intended purposes only. For example, have one card that is only used to purchase gasoline and nothing else. Just be sure you pay the balance, in full, at the end of each month.

      Having credit cards and paying off the balances also helps you improve your credit score, something a debit card doesn't provide. The key is to not over-use it, carefully monitoring your spending, and using a credit card the way it was first intended – quick access to credit for a special purchase.

      For consumers, credit card debt is an obstacle to prosperity. Every month you have to pay on the balance, leaving less money for other things.While it's...

      Use your psychic powers to become a millionaire ... or not

      The James Randi Educational Foundation pays $1,000,000 for proof of the paranormal

      Here at Consumer Affairs we’re acutely aware of our own limitations which is why, when investigating various claims or complaints made by our readers, we generally stick with the standard mainstream, scientifically-accepted human senses: things we can see, hear, touch, taste or smell. Claims of psychic phenomena or extra-sensory perception (ESP) are, by definition, excluded from this list because if psychic talents do exist, they have not been bestowed upon us.

      We mention this because, when we checked our email today, we found a press release offering a review copy of a self-published book claiming to discuss psychic phenomena. “Author warns of government harnessing the ‘God Spot’,” read the email’s subject heading, and the text assured us that “many people today experience psychic phenomena and have no real way to talk about or document them,” which means that “government intervention and destruction of privacy could eventually take place not only on social media and telephones but also psychic abilities targeted in the brain.”

      A new plateau in surveillance

      In other words, the author is warning that, besides eavesdropping on our telephone calls, emails and social media activities, the government may soon be looking inside our minds to see what we're thinking. 

      You can, of course, find people roaming the streets of any big city, already claiming that the government is reading their thoughts. Our editor once narrowly escaped being stabbed by a butcher-knife-wielding woman who accused him of broadcasting her dreams on the local all-news radio station.

      Nevertheless, this does pique our interest. After all: if psychic, supernatural or extrasensory powers can be proven to exist, that would arguably be the greatest scientific discovery in history. Unfortunately, as we said already, we’re utterly unqualified to investigate such claims ourselves.

      However, there is an established non-profit organization that not only investigates psychic or supernatural claims under controlled laboratory conditions, but has established a million-dollar trust fund payable to anyone capable of demonstrating genuine psychic or extra-sensory abilities under these conditions.

      The James Randi Educational Foundation (JREF) is “an educational resource on the paranormal, pseudoscientific and the supernatural” which for several years now has sponsored the One Million Dollar Paranormal Challenge. (Actually, JREF’s financial records show that, thanks to compound interest, the account balance had grown to over $1.4 million by March 2013.)

      The ground rules for the million-dollar challenge are pretty straightforward. JREF’s website says:

      “The Foundation is committed to providing reliable information about paranormal claims. It both supports and conducts original research into such claims.

      “At JREF, we offer a one-million-dollar prize to anyone who can show, under proper observing conditions, evidence of any paranormal, supernatural, or occult power or event. The JREF does not involve itself in the testing procedure, other than helping to design the protocol and approving the conditions under which a test will take place. All tests are designed with the participation and approval of the applicant. In most cases, the applicant will be asked to perform a relatively simple preliminary test of the claim, which if successful, will be followed by the formal test. Preliminary tests are usually conducted by associates of the JREF at the site where the applicant lives. Upon success in the preliminary testing process, the ‘applicant’ becomes a ‘claimant.’”

      The application form and a more detailed copy of the rules can be found on JREF’s website here. We're not recommending this, mind you. Merely passing it along for what it's worth. 

      We can’t investigate paranormal claims, but we know someone who can ...

      Critics say Facebook privacy changes endanger teens

      The changes would expose teens to the same data collection adults now face

      Over 20 public health, media, youth, and consumer advocacy groups have written to the Federal Trade Commission (FTC) objecting to Facebook’s recent proposed changes to its privacy policy. The groups raised concerns about the potential negative impact of these changes on teens, saying the changes would expose teens to the same problematic data collection and sophisticated ad-targeted practices that adults currently face.

      “The FTC, which has acknowledged that teens require special privacy safeguards, must act now to limit the ways in which Facebook collects data and engages in targeted marketing directed at adolescents,” the organizations say in a letter to FTC Chairwoman Edith Ramirez.

      The groups—including the American Academy of Pediatrics, Consumers Union, Public Citizen, Consumer Watchdog, Pediatrics Now, and the National Collaboration for Youth—challenged changes to the “Statement of Rights and Responsibilities” that give Facebook permission to use, for commercial purposes, the name, profile picture, actions, and other information concerning its teen users.

      "Unfair terms"

      The groups also objected to new language directed at 13-to-17-year-old users that states that teens “represent that at least one of their guardians or parents have given consent for this use of their personal information on their behalf.”

      “[The FTC] should prevent Facebook from imposing unfair terms on teens and their parents that place them in a position of having to say they secured informed, affirmative consent from a parent or guardian,” the letter said. 

      “These new changes should raise alarms among parents and any groups concerned about the welfare of teens using Facebook,” said Joy Spencer, who runs the Center for Digital Democracy’s digital marketing and youth project. “By giving itself permission to use the name, profile picture and other content of teens as it sees fit for commercial purposes, Facebook will bring to bear the full weight of a very powerful marketing apparatus to teen social networks.”

      Dr. Gwenn O’Keefe at Pediatrics Now also expressed concern. “Given the number of teens who are legally on Facebook and pre-teens who are on there posing as teens,” she declared, “it’s in everyone’s interest that Facebook create an environment that is appropriate and healthy for the development of teens.”

      Consent decree

      Citing the FTC’s 2011 Consent Decree with Facebook, the letter asked the agency to hold Facebook accountable, redress the changes, and protect the interests of teens.

      Facebook recently settled a class-action lawsuit about sponsored stories by promising to change some of the language in its terms of service, in order to reflect how the program operates. Among other revisions, Facebook said it would add language requiring minors to represent that their parents agreed to the terms of service -- including the use of their children's names and photos in sponsored stories ads. 

      Facebook also said it would give users more control over their appearance in sponsored stories, and would pay $15 each to around 600,000 people who objected to their appearance in prior sponsored-stories advertisements.

      Over 20 public health, media, youth, and consumer advocacy groups sent a letter to the Federal Trade Commission (FTC) today objecting to Facebook’s r...

      Recession's end hasn't helped everyone

      Many businesses have recovered, consumers not so much

      Five years after the financial meltdown, triggered in part by the Lehman Brothers bankruptcy in September 2008, a lot of attention has been paid to the business sector and how it has recovered.

      AIG, the insurance giant that was saved from bankruptcy by a taxpayer bail-out, has repaid the government, with interest. Fannie Mae and Freddie Mac are now both profitable. So are the nation's largest banks, which have benefited from the Federal Reserve's low-to-no interest rate policy.

      The average consumer, on the other hand, hasn't fared nearly as well. This week the U.S. Census Bureau reported that the average American family earned $51,689 – in today's dollars – in 1989 but in 2012 earned $51,017. In 2011 the median income was $51,100, showing that wage-wise, the American family is still losing ground.

      Distraction at work

      The Great Recession, which started in December 2007, officially ended in mid 2009. But for millions of consumers, it hasn't felt like it. Wayne Hochwarter, a business professor at Florida State University, has just completed a study that documents the recession's lingering impact. He found that the effects of the recession remain a “distraction at work” for about 40 percent of workers.

      His survey of more than 600 blue and white collar workers this year found a common theme; frustration, feelings of isolation, pessimism about the future of their companies, career disappointment, job anxiety and burnout.

      “I view the recession as a traffic accident,” said a plant manager who responded to the survey. “The crash may be over, but the car will never be the same even after we did our best to fix it.”

      In the immediate aftermath of the financial meltdown the private sector reacted with massive workforce reductions. Overnight millions found themselves unemployed. Those who remained were sometimes faced with increased responsibilities and had to live with the concern that they might be next.

      Working harder

      More than four years after the recession officially ended, Hochwarter’s study found 44% of respondents said “they still must work harder as a result of the recession in their organization.” Nearly half said “they still must do more with less due to the recession.” Thirty percent worried about their job security.

      The study also seemed to expose a divide among managers and employees. Forty-six percent said management is “stingier” than it used to be.

      “Management just doesn’t see how bad it is because it really isn’t all that bad for them,” an industrial salesperson told Hochwarter. “But it is for the rest of us.”

      The feelings of slipping backward economically may not go away anytime soon. Bloomberg BNA this week released its Wage Trend Indicator (WTI) and it suggests the slow pace of annual wage increases in the private sector likely will continue in the coming months.

      Plenty of people seeking work

      "Although we are continuing to see slow but steady job growth, there is still a very large pool of unemployed workers, which tends to lower the pressure on employers to raise wages," economist Kathryn Kobe, a consultant who maintains and helped develop Bloomberg BNA's WTI database, said.

      The Index projects wage gains in the private sector to remain anemic – at around 1.9%.

      Economic frustrations in the workplace boiled over into public view last month when fast food restaurant employees in several large cities went on strike for higher wages. Many restaurants pay the government's minimum wage, which a number of employees complained was not a living wage.

      While most fast food restaurants attempt to hire high school students looking for extra spending money, the realities of today's job market may mean older workers – with more economic responsibilities – are now taking these jobs.

      The nation's largest labor organization, the AFL-CIO, says America remains in what it calls a “jobs crisis.” While the pace of hiring since the beginning of 2013 has picked up momentum, many of the jobs have been part-time. Also worrying economists is the fact that the unemployment rate is falling for all the wrong reasons. It fell in August to 7.3%, in part because more than 300,000 people dropped out of the labor force.

      Five years after the financial meltdown, triggered in part by the Lehman Brothers bankruptcy in September 2008, a lot of attention has been paid to the bus...

      Existing-home sales surge in August

      The sales level is the highest since early 2007

      Buyers continue to gobble up previously-owned homes.

      Figures released by the National Association of Realtors (NAR) show sales of existing homes rose 1.7% in August to a seasonally adjusted annual rate of 5.48 million houses. That's the highest level in six-and-a-half years and 13.2% above the year-agolevel of 4.84 million units.

      At the same time, the median price shows nine consecutive months of double-digit year-over-year increases.

      At a plateau?

      A temporary peak may be in the offing, though. “Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,” said NAR Chief Economist Lawrence Yun. “Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.”

      Total housing inventory at the end of August rose to 2.25 million existing homes available for sale, which represents a 4.9-month supply at the current sales pace. Unsold inventory is 6.3% below a year ago, when there was a 6.0-month supply. “Limited inventory in some areas means multiple bidding remains a factor; 17 percent of all homes sold above the asking price in August, although 63 percent sold below list price,” Yun said.

      Data from the NAR’s listing site shows large declines in inventory from a year ago in Naples, Fla., (-23.5%); the Detroit area (-23.3%) and the greater Boston area (-20.7%).

      Prices on the rise

      The national median existing-home price for all housing types was $212,100 in August, up 14.7% from August 2012. It's the strongest year-over-year price gain since October 2005 when the median rose 16.6%, and marks 18 consecutive months of year-over-year price increases.

      All-cash sales made up 32% of transactions in August, up 1% from July and 27% in August 2012. Individual investors, who account for many cash sales, purchased 17% of homes in August, compared with 16% in July and 18% in August 2012. Last month, three out of four investors paid cash.

      Regional breakdown

      • Existing-home sales in the Northeast were unchanged at an annual rate of 710,000 in August but are 12.7% above August 2012. The median price in the Northeast was $268,800, up 7.6% from a year ago.
      • In the Midwest, sales increased 3.1% to a pace of 1.32 million, and are 18.9% higher than a year ago. The median price in the Midwest was $166,100 -- 10.0% above August 2012.
      • In the South, existing-home sales rose 3.8% to an annual level of 2.19 million in August and are 13.5% above August 2012. The median price in the South was $181,000, up 14.6% from a year ago.
      • Existing-home sales in the West declined 2.3% to a pace of 1.26 million in August but are 7.7% higher than a year ago. With the tightest regional inventory conditions, the median price in the West rose to $287,500, which is 18.8% above August 2012.

      Buyers continue to gobble up previously-owned homes. Figures released by the National Association of Realtors (NAR) show sales of existing homes rose 1.7%...

      TV drug ads: Is what you see what you get?

      Not all the information in commercials is on the up-and-up

      If you watch any TV at all, you know there's no escaping the constant barrage of commercials for drugs claiming to cure whatever ails you.

      You'd do best to take a healthy dose of skepticism before trying any of the treatments being peddled. In an article published in the Journal of General Internal Medicine, researchers say six out of 10 claims could potentially mislead the viewer

      Adrienne E. Faerber of The Dartmouth Institute for Health Policy & Clinical Practice and David H. Kreling of The University of Wisconsin-Madison School of Pharmacy found that potentially misleading claims are prevalent throughout consumer-targeted prescription and non-prescription drug TV ads.

      Creating a need?

      Over the past 15 years, researchers and policymakers have debated whether drug advertising informs consumers about new drugs, or persuades consumers to take medicines that they may not need. "Healthcare consumers need unrestricted access to high-quality information about health," said Faerber, "but these TV drug ads had misleading statements that omitted or exaggerated information. These results conflict with arguments that drug ads are helping inform consumers."

      Pharmaceutical companies spent $4.8 billion in 2009, surpassing consumer promotion for nonprescription products of $3 billion that year, the researchers said.

      Viewing the ads

      Content for this study came from the Vanderbilt TV News Archive, an indexed archive of recordings of the nightly news broadcasts (the news and commercial segments) on ABC, CBS, and NBC since 1968 and on CNN since 1992. Researchers viewed commercials in the 6:30 pm EST period because the nightly news is a desirable time slot for drug advertisers because of the older audience.

      The researchers reviewed 168 TV ads for prescription and over-the-counter drugs aired between 2008 and 2010, and identified statements that were strongly emphasized in the ad. A team of trained analysts then classified those claims as being truthful, potentially misleading or false.

      The findings

      They found that false claims, which are factually false or unsubstantiated, were rare, with only 1 in 10 claims false. False advertising is illegal and can lead to criminal and civil penalties.

      Most claims were potentially misleading, with 6 in 10 claims leaving out important information, exaggerating information, providing opinions, or making meaningless associations with lifestyles, the researchers said.

      False or potentially misleading claims may be more frequent in over-the-counter drug ads than ads for prescription drugs. Six of 10 claims in prescription drug ads were misleading or false, while 8 of 10 claims in OTC drug ads were misleading or false.

      The Food and Drug Administration (FDA) oversees prescription drug advertising while the Federal Trade Commission (FTC) oversees advertising for nonprescription drugs.

      The two agencies have different definitions of false and misleading claims. For example, the FDA interpretation says prescription drug advertising must include information about the harms of the drug, but information on harms is left out of most OTC drug ads.

      The researchers said there were some limitations in the study method: the sample was drawn from a 30-minute period of the TV broadcast day on four major networks, and does not represent all ads on TV. Also, they only analyzed what they determined as the most-emphasized claim in each advertisement and the coders need to interpret the meaning of claims to facilitate analysis, which did introduce subjectivity.

      "Healthcare consumers need unrestricted access to high-quality information about health, "said Faerber. "Consumers may see up to 30 hours of television drug advertising each year, while only spending 15 to 20 minutes, on average, at each visit with their primary care physician."

      If you watch any TV at all, you know there's no escaping the constant barrage of commercials for drugs claiming to cure whatever ails you. You'd do best...

      Computer problems continue to affect jobless claims report

      Officials hope to have the problem resolved shortly

      The government reports first time claims for state jobless benefits shot up by 15,000 in the week ending September 14 to a seasonally adjusted initial total of 309,000. But analysts say it's hard to gauge how accurate that number really is.

      According to economists at, computer glitches in California and Nevada prevented many claimants from filing for benefits. Those problems created a backlog of filings, which resulted in a temporarily lower initial claims level. The Department of Labor says it expects the backlog to be processed over the next week or two before the claims level returns to normal.

      When the mess is cleaned up, Briefing says it expect the initial claims level to settle back to its previous 330,000 trend.

      The 4-week moving average, which is less volatile than the weekly number and considered a more accurate gauge of the labor market, totaled 314,750 -- down 7,000 from the previous week.

      The full jobless claims report may be found on the Labor Department website.

      The government reports first time claims for state jobless benefits shot up by 15,000 in the week ending September 14 to a seasonally adjusted initial tota...

      Text spammers settle FTC charges

      The defendants allegedly peddled bogus offers for 'free' gift cards

      An outfit that allegedly sent out more than 42.5 million unwanted and deceptive text messages to consumers has agreed to settle charges leveled by the Federal Trade Commission (FTC).

      The case against Rentbro, Inc., and its principals, Daniel Pessin and Jacob Engel of Ft. Lauderdale, is part of the FTC’s continuing crackdown on spam text messages. The settlement prohibits them from sending unwanted texts to consumers, and from misleading consumers about whether they have won gifts or prizes and whether a product is “free” or without cost or obligation.

      “FTC action in cases like this one have dramatically reduced the amount of illegal text message spam, especially as it relates to bogus gift card offers” said FTC Midwest Region Director C. Steven Baker. “Not only are spam texts annoying and illegal, but they can also cost consumers money.”

      You're a winner!

      According to the FTC’s complaint, the defendants sent deceptive text messages to millions of consumers telling them they had been selected to receive $1,000 gift cards to major retailers such as Best Buy, Target, and Walmart. A typical message stated, “Your entry in our drawing WON you a FREE $1,000 Target Giftcard! Enter “312” at to claim it and we can ship it to you immediately!”

      The hyperlink included in the text message brought consumers to a website the defendants created to reinforce the deceptive gift card message and then to a variety of third-party websites where consumers were asked to submit personal information under the guise of claiming their gift cards. After their personal information was collected, consumers were told they had to sign up for more than a dozen risky trial offers, none of which was free, to qualify for the promised “free” gift card.

      In addition to prohibiting the unlawful conduct, the stipulated order against the defendants requires them to turn over all of their remaining assets and imposes a partially suspended monetary judgment of $377,321, which is all of the money received in connection with the scam.

      This case is the second settlement stemming from an FTC enforcement sweep initiated earlier this year against 29 defendants responsible for sending more than 180 million spam text messages.

      An affiliate marketing company and its two principals have agreed to settle Federal Trade Commission charges for An outfit that allegedly sent out more t...

      Yes, you can avoid paying bank fees

      But it requires some trade-offs and shopping around

      Once upon a time you chose your bank mostly out of convenience. If it had a branch in your neighborhood or where you shopped, that was where you did your banking. One bank was pretty much like the other.

      Today, if you are choosing your bank out of convenience, chances are you are paying a number of fees each month. Twenty years ago, nearly all banks offered a free checking account. Today, very few do. What's changed?

      “The competitive environment that banks find themselves in since deregulation began in the mid 1980s, some of the regulatory requirements and just the nature of the way banks are viewing their business have made them really heavily dependent on fee income,” said Brian Davis, associate professor of finance at the Smeal School of Business at Penn State University. “They will charge fees as long as they can get fees.”

      Changes in last five years

      The financial crisis five years ago also sent a shock wave through the banking industry. Making loans – the way banks historically earned profits – was viewed as somewhat risky. Besides, interest rates were so low the profit didn't always seem to be worth the risk.

      But there was something else at work. Davis, who previously served as a management consultant in the banking industry, says banks started looking at their customers differently.

      “One of the things they started to do was to say, 'there are some customers that are highly unprofitable. They put just a small amount of money in the bank, they write a lot of checks and have a lot of overdrafts.' So in order to make their overall customer base more profitable, they started charging fees,” Davis said.

      Overdraft fees are the fees consumers are probably most familiar with. If you write a check and have insufficient funds, the bank charges a fee. But most people, these days, use a debit card instead of a check.

      Opting in will cost you

      The good news for consumers is banks cannot charge an overdraft fee unless you “opt-in” to their “overdraft protection.” If you opt-in, the bank covers your purchase when you are overdrawn, but charges a fee. Unless you opt-in, your purchase will be declined if you don't have enough money in your account – but there is no fee.

      Though banks will encourage you to opt-in, consumers who want to avoid paying overdraft fees should not do it. Better to have a purchase declined than rack up fees that can run $35 a pop.

      When considering a bank, Davis says your first step should be to analyze the bank's fees.

      “They have to disclosure whatever fees they charge in any marketing materials and on their statements,” Davis said. “Your statement is about five pages long now. All the fee information is in there.”


      Shopping for a bank, then, is a lot like shopping for anything else. You are looking for the best deal and the product that best suits your needs. And to avoid fees, there may be some trade-offs.

      “Convenience – having a bank just a block from your house – can no longer be a deciding factor,” Davis said. “As a consumer, if that bank's fees are worrisome to you, you have to compare the convenience to the money you would save at a less convenient bank.”

      And that most likely comes down to not using one of the big, national banks for your everyday banking needs. They may be a good choice for a mortgage or car loan, but if they view you as less than their ideal customer you are likely to pay some fees. For everyday banking needs, Davis suggests thinking small.

      Credit unions

      “My first stop is a credit union,” he said. “If I can, I'll do business at a credit union because most won't charge as many fees and the fees they do charge tend to be lower.”

      Small community banks are also a competitive choice. Some might have special “rewards checking” accounts that pay you interest and waive certain fees if you meet a number of monthly requirements. It's very possible your bank could end up paying you instead of you paying it. The secret, says Davis, is being a savvy shopper for banking services.

      “You have to shop around and ask very direct questions at the bank before you open an account,” he said. “Ask up front how they can save you money.”

      Once upon a time you chose your bank mostly out of convenience. If it had a branch in your neighborhood or where you shopped, that was where you did your b...