Current Events in September 2013

Based on the number of readers writing us from all over the country with almost the exact same complaint, we suspect that a thieving hacker somewhere in New York City is enriching himself at the expense of Walmart MoneyCard holders. Even worse, Walmart appears to have done nothing about this.

Linda P. of Farmington, Missouri, wrote us on Sept. 2 to complain: “[S]ome man in Brooklyn, New York, got my Walmart card number and made a duplicate card through Walmart's system. That man stole every penny I had on my card and Walmart allowed it to happen. He spent MY money that I earned at a Target in Brooklyn, New York [….] When I called Walmart, I explained to them that the money on that card was all I had for another month. I asked them if they could give me a voucher for food, or drinks. They said NO! […] I may lose everything I have and all Walmart has to say is ‘wait until the posted date’? This is unacceptable. Thank you, Walmart, for ‘guaranteeing’ my money.”

Kelly L. of Canton, Ohio, posted a similar complaint on Sept. 13: “I have had my Walmart money card for almost a year now [….] on 09-09-2013 I woke up to check my account and the balance was $1.41 […] the day before, there were 5 purchases from a Target store in New York [….] I am waiting for [Walmart] to send me a new card so I can get the amount owed to me, then I am closing my account.”

Similar problems

Two Californians reported similar problems on Sept. 15: Paul H. from Downey said “I just got paid Friday and deposited most of my check on my Walmart money card. Bought a few groceries with the card, went home and paid my Sprint bill, all was well. The next day on the way to the park I stopped at the Walmart neighborhood market to pick up some things for the grill, at check out my card was declined [….] I thought I would check my account on my phone. After signing in I saw a balance of zero, I thought, what the hell? I checked my transactions and saw the swipe reload, groceries, Sprint and three charges from Target. [….] Once they saw those New York charges and saw that that same day I was making charges in California they should have stepped up and said we know this is a problem and we will get it resolved. But we'll see what happens; I've got a feeling it's not gonna turn out good for me.”

The same day, Jackie S. of Citrus Heights reported: “I have had a Walmart money card in Sacramento California for the past 7 years [….] this past Friday I used my card at Starbucks early Friday morning; by the time I went to pay for my lunch my whole account was wiped clean. After calling Walmart, they said that somebody in New York, New York used it at a Target when clearly I'm in Sacramento, California; they say I can file a claim but it's going to take probably 45 days to get my 1,500 dollars back.”

Despite the frequent mention of Target, there’s no evidence suggesting that company has anything to do with this scam; it’s simply where the hacker or hackers chose to spend their ill-gotten money (there being no Walmart stores in New York City).

What to do

Walmart has not yet responded to a request for comment. 

If you’re a Walmart MoneyCard holder whose account has been hacked, you should immediately contact Walmart (via email rather than over the phone, so you’ll have an electronic paper trail of your complaints), and also contact your local police department to determine how to file a fraud complaint. 

There is a school of thought that holds the mystery of rising obesity rates is no mystery at all. The reason Americans are packing on pounds is obvious. We eat too much food, not just between meals but during meals.

Pay attention the next time you watch TV and see an advertisement for a restaurant chain. Is the portion the commercial shows you small or large? Silly question. What restaurant chain is going to purchase air time to suggest it's going to serve a small portion?

Restaurants compete for customers by promising bigger servings than their competitors. The extra food doesn't cost all that much but it justifies higher menu prices. So consumers are conditioned to seek out restaurants that “give them their money's worth.”

A day's worth of calories

Except the amount of food on your plate or serving tray might contain enough calories to last you all day – or a couple of days. It's no secret portion sizes have increased dramatically in the last 40 years. Think about that the next time you order a steak in a restaurant.

Restaurants typically offer steaks that are eight to 12 ounces. A “petite” steak might be six ounces. But the government's recommended portion size is closer to three ounces.

Let's assume you visit your favorite Italian restaurant and order the spaghetti and meatballs. While you are waiting for your food to arrive you eat two slices of garlic bread. Let's forget calories for a moment and just focus on servings – what the U.S. Department of Agriculture (USDA) sets out as a serving, or portion size.

Estimate the size of the serving of spaghetti and meatballs. After surveying your plate you may decide that there are two cups of spaghetti, a cup of tomato sauce and about six ounces of meatballs.

Totaling it up

It might seem like a reasonable meal and you probably don't feel like you are overindulging. But according to USDA, you consumed four servings of spaghetti, two servings of tomato sauce, two servings of garlic bread and two to three servings of meatballs. 

USDA doesn't just make up these serving sizes. They use surveys, analyze nutrition content and reach back to previous food guides. And they don't use this formula the same way for each food group. Nutritional content was the determining factor for the serving size of milk but ease of use was considered most important for serving sizes of fruits and vegetables. 

With restaurants piling on the food, weight-conscious consumers need to learn how to size up food portions so that they don't overeat. That isn't always easy.

One reason pre-packaged diet systems work, at least initially, is because they provide all the food the users consume. The portion control is done for you. That doesn't work in restaurants, although some chains have recently taken steps to provide more nutrition information on their menus.

Consumers increasingly aware

A 2011 study by the NPD group found consumers are becoming more aware of portion size and its importance in maintaining a healthy weight. Out of the 30 healthy eating attributes, eating smaller portions ranked 11th in importance among adult consumers across all generations as a healthy eating characteristic.

Interestingly, younger consumers see it as more important than their elders. It ranks highest among Generation X – second-highest among Generation Y. Because of that, you might see restaurants begin to reduce their portion sizes – or at least, provide more options.

"Based on the interest in smaller portions among the younger age groups and the size of these age groups,portion control is an area of opportunity for food manufacturers," said Dori Hickey, director, product management at NPD and author of the report. "As they move through their life, these generations may continue the healthy eating behaviors they adopted in their younger years, making portion-control a long-term opportunity."

In the meantime you can eat in restaurants and not fall into the super-size trap. Consider sharing a dish instead of ordering two entrées. Don't fill up on the hot bread sticks they bring to the table before they serve the meal, no matter how delicious they are.

Finally, stop eating once you are full, no matter how much food is still left. No one is making you clean your plate.

With credit card and student loan debt climbing at breath-taking rates, and starting salaries far from keeping pace, being smart about money has never been more important for a young person.

It's no surprise that so many organizations, from credit card companies to non-profit institutions, are offering financial literacy education, imparting the knowledge and skills consumers will need to make the most of their money. The task may not be so easy, however.

A survey conducted for Genworth Financial has found that more than half of Americans questioned think they know a lot about money. More than 50% gave themselves an A or B when it comes to financial literacy. At the same time, they gave their fellow Americans, on average, a D.

Don't bother to learn

It's not that the information is hard to find. Experts say it's not that hard to learn about money – most of us just don't bother to do it.

“Despite having more financial education resources available than ever before in the form of books, TV shows, websites, blogs, etc. we don’t take advantage of them and, if we do, we don’t apply what we learn. Why? Financial decisions, behaviors, and actions are highly motivated by emotional and psychological factors,” said Dr. Barbara Nusbaum, a New York-based psychologist and money coach. “If we can better understand our personal feelings about money, we will be more able to educate ourselves and, most important, better apply this knowledge to secure our own and our families’ futures.”

Visa has been offering financial literacy education for more than ten years and is among the world's largest providers. In 2008 the financial services company pledged to reach 20 million people worldwide with its financial literacy program by this year.

While consumers of all ages can probably benefit from financial literacy education, there is strong feeling that it is particularly important for teens and young adults. Even Wall Street is taking up the cause.

Knowing the 'wrong information'

Mark Fisher, Chairman of MBF Clearing Corp, is working with the Logical Institute on the launch of a new online financial literacy program, aimed primarily at young people.

“If you go around today and talk to students and say to them, 'what's your interest rate on your credit card,' they'll say 'is there an interest rate?' They have no idea,” Fisher said in an interview on CNBC. “Budgeting, credit decisions, insurance, cash flow, they have no idea. If you ask the same kids 'who won seven Grammies at the last Grammy Awards,' they can tell you you. They have the wrong information.”

Maybe young people don't find financial information interesting enough to hold their attention. Then again, maybe there is so much information that falls under the umbrella of financial literacy it's hard to know where to begin and what to focus on.

Finding the knowledge you need

For example, many young people may find the whole idea of learning about life insurance a turn-off. But they might be very interested in learning how to save money on their credit card payments each month. If they could learn which credit cards allow a balance transfer with a 0% interest rate for a few months – and understand that the absence of interest for a few months would help them pay off their balance quicker – financial literacy education might suddenly become very attractive.

Financial education is most effective when you start with children. There are online games, such as Save Perry's Pennies, that introduce kids to the concept of saving money.  Money Memory is a game of memory and knowledge of various currency demoninations. Hip Pocket Change Games is a collection of games for kids and teams that teach about collecting coins, money designs, and other activities.

In addition to children, financial literacy education for adults may also produce positive results, assisting families with setting up budgets and savings plans. The Federal Deposit Insurance Corporation operates the Money Smart program for consumers outside the financial mainstream. The government says it's served 2.75 million consumers since 2001.

There’s two levels of irony beneath the recent Change.org petition  begging the Walt Disney Company to clean up its Disneyland park in Paris: one, many Americans have this idea that anything in Paris (or Europe in general) must surely be better and more sophisticated than its American counterpart; and two, the Disney name has become so associated with clean, shiny, family-friendly fun that “Disneyfied” has become an actual slang term referring to a sanitized, family-friendly version of something.

But if the Change.org petition is to be believed, Disneyland Paris has become a most-unDisneyfied place during its 20 years of existence.

The petition starts out by flattering Disney in general and CEO Bob Iger in particular:  “When Disneyland Park (then Euro Disneyland) opened its gates back in 1992, it truly was Disney's greatest achievement; a technological and artistic marvel. Its high quality shows, rides and theming proved successful with European audiences, and its guest experience was similar, if not superior, to that of Disneyland and Walt Disney World.”

So what went wrong? “[D]ue to constant financial problems, the overall quality of the experience has slowly deteriorated over the years. The many years of budget cuts in maintenance, entertainment and food and beverage, have left the resort in an unacceptable neglected state.”

Neglected state

The petition divides its complaints into four sub-categories: Maintenance (“Many themed elements are decaying and crumbling, while others are literally falling apart”); Budget Cuts (resulting in shuttered theaters and under-utilized rides); Food (“the quality is never as good as what’s offered in your American parks”); and Walt Disney Studios Park (described as “the only park to open without a traditional Disney [p]ark ride, the park that is struggling with its identity; in short the park that never met the ‘Disney standard’”).

 Semi-related anecdote: since at least 2006, psychologists have noted the existence of a rare, but real, psychological disorder known as “Paris syndrome.” Japanese tourists who visit the city are particularly prone to suffering from the disorder, a form of depression that strikes when visitors expecting to see a beautiful, idealized version of Paris experience brutal disillusionment upon visiting the actual city.

Thus far there is no official psychological disorder known as “Disneyland Paris syndrome,” but it sounds like Change.org petitioners are getting close.

Last week we told you the story of Matthew P., a Manhattan resident who, along with his two roommates, went for more than a month without receiving a single piece of mail from the US Postal Service.

Repeated calls and visits to his local Gracie Station post office did nothing to resolve the issue, though just before our story went to press, Matthew told us that he’d received a robo-email from the USPS promising him that his “recently submitted inquiry was forwarded to an office that is better suited to address [his] needs.”

So how did that work out? Matthew emailed us with an update: he is receiving mail again but there’s still no way of knowing what happened to his month’s worth of missing mail, especially since the “more suitable office” to solve his problem turned out to be—the same Gracie Station office that lost his mail in the first place.

What’s really sad is that Matthew is relatively lucky, so far as these things go: as a U.S. citizen whose mail’s gone missing, he does have the right to make formal complaints (even if said complaints are routinely ignored). Another reader, Tony F. of Sydney, Australia, can’t even do that much.

Hearing aids go missing

Tony wrote us on Sept. 16 to report that a package containing some badly needed hearing aids was shipped from Louisiana to his Down Under home on Sept. 4, but “as of 16 Sep 2013 it is still in Miami, FL [….] I note that unless you are in the USA you cannot inquire or complain through USPS channels. From what I read here it seems that USPS is a postal service in name only and is totally failing in providing the services it charges for. In this case, $50. The people who shipped the package have also been told there is no way of finding out what is happening and when, if ever, it will leave the US for Australia. USPS is a JOKE!”

Indeed, and the joke is on its customers. So what can you do to ensure your mail will actually be delivered? Conventional wisdom says it’s worth spending a little extra money to send packages or documents via certified mail or return receipt requested. Unfortunately, we know from personal experience that even this won’t necessarily work: in the summer of 2009 we were living in central Connecticut and waiting for our first-ever passport to arrive in the mail.

The U.S. Department of State sent our passport via Priority Mail, with a tracking number. On July 7 we typed that tracking number into the USPS website and were horrified to discover that the passport had allegedly been delivered on June 29. On July 9, we formally reported the passport as “missing,” and the very next day, the now-invalidated passport (which, you recall, had allegedly been delivered to us two weeks before) finally arrived in our mailbox.

Carolina or Connecticut

Our birth certificate, which the USPS swore had also been delivered to our central Connecticut mailbox on June 29, turned up in a Charleston, South Carolina, passport office a couple of weeks later. (To be fair, though: Connecticut and South Carolina are at least in the same time zone,)

So, when federal officials working for the Department of State can’t even get their official national-security documents properly delivered, what’s an ordinary civilian to do?

Short of frequent and fervent prayer, perhaps the best course is to spend a few extra dollars and go with FedEx whenever possible. It's generally regarded as having the best overall record of reliability.

High school seniors are a hard-drinking bunch, a new study finds. Many think nothing of putting away five or more drinks in a single session. And truly excessive binge drinking -- defined as 15 or more drinks -- is becoming more common, according to a study published by JAMA Pediatrics, a JAMA Network publication.

While drinking bouts may be regarded as a rite of passage, they're also a serious public health problem, the researchers said. Binge drinking, commonly defined as four or more drinks for women and five or more drinks for men, can cause injury, impaired driving and alcohol poisoning, as well as long-term risks such as liver damage, alcohol dependence and alterations to the developing brains of adolescents.

According to the study, 20.2 percent of seniors reported binge drinking in the past two weeks, while 10.5 percent reported consuming 10 or more drinks and 5.6 percent reported consuming 15 or more drinks.

Megan E. Patrick, Ph.D., of the University of Michigan, Ann Arbor, and colleagues looked at a nationally representative sample of 16,332 high school seniors (52.3 percent female, 64.5 percent white, 11 percent black, 13.1 percent Hispanic and 11.5 percent of other race/ethnicity). A drink was defined as 12 ounces of beer, four ounces of wine, a 12-ounce wine cooler, a mixed drink or a shot glass of liquor.

Young men were more likely than young women to engage in all levels of binge drinking, as were white compared with black students. Students whose parents were college educated had greater odds of binge drinking but lower odds of extreme binge drinking (15 or more drinks), the results indicate.

No decrease in extreme binge drinking

The authors note that while binge drinking, specifically, and the frequency of drinking, generally, have decreased among adolescents since record high levels in the late 1970s and early 1980s and have continued since 2005 to decrease, extreme binge drinking has not shown such declines since 2005, the study notes.

The authors suggest that further research may consider a broad range of family, school and community risk factors, as well as genetic and mental health indicators for binge drinking.

“The documented rates of extreme binge drinking, and the fact that they have not changed across recent historical time, support the need for additional research to develop effective prevention and intervention strategies to reduce high-risk alcohol behaviors of youth,” the study concludes.

The study was funded by a grant from the National Institute on Drug Abuse. 

Want to know where that ground beef came from?  The meat industry would rather you didn't but a federal judge has turned aside those objections, at least for now.

Earlier this year, the U.S. Department of Agriculture adopted new regulations that require Country Of Origin Labels -- COOL in meat-packer parlance -- on meat. That pretty much dooms the common practice of commingling meat from animals of different origins.

While that saves meat packers and retailers time and money, it also makes it difficult to track meat that may have been contaminated in one country or another.

The meat industry has been fighting the new rule and recently the American Meat Institute filed suit saying the labeling requirement amounts to forced speech.

But U.S. District Judge Ketanji Jackson took a meat cleaver to the industry's arguments and dismissed the suit.

"Imported livestock are a critical supply for American processing plants, particularly those near the Canadian and Mexican borders," the meat men's stated. "These processing plants produce meat products for domestic consumption and for export to a number of countries including Canada and Mexico," Courthouse News Service reported. 

Trying to do anything, other than eating and sleeping, on a daily basis gets a little old after awhile. Also, if you're trying to sell stuff, one day doesn't exactly give you a lot of time to shove the merchandise out the door or dish up all those fish taco specials.

All of which may help explain why daily deals site LivingSocial is reportedly planning to move to a more traditional web-based business model. Instead of blsting out emails hawking the day's best deals, LivingSocial would become a website and mobile app where consumers can browse through thousands of offers at local merchants whenever they feel like it.

LivingSocial's problem is basically that it was so successful at pushing deals on restaurant, spas and local retailers that it has had trouble replicating its success in other areas.

The new model would theoretically make both merchants and consumers happier. Merchants would get to display more products for a longer period of time and consumers would have a lot more goods and services to browse through.

It's sort of the reverse of what LivingSocial does now. Currently, it tries to generate demand. It dangles stuff out there and hopes consumers will slap their foreheads and say, "Wow, that's just what I need." Under its new model, consumers would already know they wanted a new hair-curling iron when they came to the site and would, it is hoped, be delighted to find just what they were looking for.

It's also thought the new model would be easier for businesses to manage. Currently, if a restaurant offers a great deal for just a day or two, the place is swamped for a short time, then deserted again. By advertising deals and products for a longer period of time, it's thought, the new traffic would be easier to manage.

The new model is expected to be rolled out this week, the Washington Post reports.

The finishing touches have been put on amendments and clarifications to the Consumer Financial Protection Bureau's (CFPB) January 2013 mortgage rules.

The idea, according to CFPB, is to help industry comply and to better protect consumers. In addition, it's hoped the changes will answer questions that have been identified during the implementation process.

“Our mortgage rules were designed to eliminate irresponsible practices and foster a thriving, more sustainable marketplace,” said CFPB Director Richard Cordray. The new rule, he added, “amends and clarifies parts of our mortgage rules to ensure a smoother implementation process, which is helpful to both businesses and consumers.”

Part of a process

The CFPB finalized several mortgage rules in January 2013. Among these, the Ability-to-Repay rule protects consumers from irresponsible mortgage lending by requiring that lenders generally make a reasonable, good-faith determination that prospective borrowers have the ability to repay their loans.

The mortgage servicing rules establish strong protections for homeowners facing foreclosure, and the loan originator compensation rules address certain practices that incentivized steering borrowers into risky or high-cost loans.

The CFPB also finalized rules that strengthened consumer protections for high-cost mortgages, and instituted a requirement that escrow accounts be established for a minimum of five years for certain higher-priced mortgage loans.

In June 2013, the bureau proposed several amendments and clarifications to the mortgage rules that are being adopted by this final rule. This new final rule is intended to clarify interpretive issues and facilitate compliance. Among other things, the modifications:

• Clarify what servicer activities are prohibited in the first 120 days of delinquency: The CFPB’s servicing rule prohibits servicers from making the “first notice or filing” under state law during the first 120 days a borrower is delinquent. Under the final rule, servicers will be allowed to send certain early delinquency notices required under state law to borrowers that may provide beneficial information about legal aid, counseling, or other resources.
• Outline procedures for obtaining follow-up information on loss-mitigation applications: The new rule provides specific procedures for servicers to follow if they fail to identify and inform a borrower upon an initial review that certain information is missing from the borrower’s loss mitigation application.

             -- The procedures require the servicer to notify the borrower of the information gap and provide a reasonable amount of time for the borrower to supply the missing information.

           -- The procedures also specify how the regulations’ protections from foreclosure and various procedural rights apply to borrowers during the time period for gathering the additional information and once the information is provided.

• Facilitate servicers’ offering of short-term forbearance plans: The modifications make it easier for servicers to offer short-term forbearance plans for delinquent borrowers who need only temporary relief without going through a full loss-mitigation evaluation process. Under the final rule, a servicer may, upon reviewing an incomplete loss mitigation application, provide a six-month forbearance to a borrower who is suffering a short-term, temporary hardship.
• Clarify best practices for informing borrowers about the address for error resolution documents: The January servicing rules allowed servicers to establish an exclusive address for consumers to send error complaints and information requests. The new rule provides more specificity on how to inform borrowers about the address by listing it on certain documents, such as an initial notice and a periodic statement or coupon book if applicable.
• Facilitate lending in rural or underserved areas: Some of the Bureau’s mortgage rules contain provisions applicable to certain small creditors that operate predominantly in “rural” or “underserved” areas. The Bureau recently announced that it would reexamine the definitions of rural or underserved over the next two years.

           -- While the reexamination process is underway, today’s changes will exempt all small creditors, even those that do not operate predominantly in rural or underserved counties, from a new ban on high-cost mortgages featuring balloon payments so long as the loans meet certain restrictions.

          -- The rules will also make it easier for certain small creditors to continue qualifying for an exemption from a requirement to maintain escrows on certain higher-priced mortgage loans. Because of an update in Census data, some creditors otherwise might have lost their eligibility for this exemption in 2014 or 2015 while the Bureau was reexamining the underlying definitions.

• Make clarifications about financing of credit insurance premiums: The bureau’s loan originator compensation rule adopted the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition on creditors financing credit insurance premiums in connection with certain mortgage transactions.

        -- In response to interpretive questions, today’s final rule makes clear that credit insurance premiums are “financed” by a creditor when the creditor allows the consumer to defer payment of the premium past the month in which it is due.

        -- The final rule also explains how the rule applies to “level” or “levelized” premiums, where the monthly premium is the same each month rather than decreasing along with the loan balance.

• Clarify the definition of a loan originator: Under the CFPB’s new rules, persons classified as loan originators are required to meet qualification requirements and are also subject to certain restrictions on compensation practices. Creditors and loan originators have expressed concern that tellers or other administrative staff could be unintentionally classified as loan originators for engaging in routine customer service activities. The modifications clarify the circumstances under which a loan originator’s or creditor’s administrative staff acts as loan originators.
• Clarify the points and fees thresholds and loan originator compensation rules for manufactured housing employees: For retailers of manufactured homes and their employees, the revisions clarify what compensation must be counted toward certain thresholds for points and fees under the Ability-to-Repay and high-cost mortgage rules. The revisions also clarify when employees of manufactured housing retailers may be considered loan originators.
• Revise effective dates of many loan originator compensation rule provisions: Prior to these changes, the provisions of the bureau’s loan originator compensation rule that have not yet gone into effect were scheduled to take effect on January 10, 2014. The new rule changes the effective date for certain provisions of the rule to January 1, 2014, in order to simplify compliance since compensation plans, training, and licensing and registration are often structured on an annual basis.

Galant Food Company of San Leandro, Calif., is recalling approximately 420 pounds of Chicken Provance French puff pastry product.

The products are formulated with an egg wash glaze that contains egg, a known allergen, which is not declared on the label. There are no reports of adverse reactions due to consumption of these products.

The product subject to recall includes:

• 4-oz. of “Chicken Provance French Puff ” bearing the establishment number “EST. 9014” inside the USDA mark of inspection on the label. Identifying case codes are: 7193, 9053 and 9093.

The products were produced on July 19, September 5 and September 9, 2013 and shipped to restaurants and cafes in the San Francisco Bay area.

Consumers with questions about the recall should contact Richard Fairchild, the company’s recall coordinator, at 415-552-5475.

Acne sufferers beware: Proactiv products might or might not clear up your skin problems, but they’ll clear out your bank account, our readers tell us.

Numerous consumers have written to us with complaints that Proactiv mail orders are well-nigh impossible to cancel.

Don’t believe us? Check out this random sampling of complaints we’ve received in just the past few weeks: 

Andy P. of Riverside, California wrote on Aug. 1 to say: “They will automatically send additional shipments and charge your credit card or bank account with multi-month orders and exorbitant fees (tax, s/h, overpriced merchandise)! You will regret it and will be faced with so much frustration just trying to return the merchandise and get your money back! This is guaranteed!”

Another Californian, Silvia Y. of Culver City, warned on Aug. 24: “Do not be persuaded by their ‘Money Back Guarantee’ and promos, unless of course you don't mind receiving a refund after 5 months and several phone calls to remind them because you've ‘fallen through the cracks’ twice (as one rep put it) [….] Proactiv misrepresents themselves and neglects customers who choose to opt out of their program.”

Stick to the mall

Annette H. of Lakewood, Colorado wrote on Aug. 22 to say that she liked the Proactiv products she bought from a local mall kiosk, so when that kiosk closed she ordered more from the Proactiv website. That’s when her problems started: “I discovered after ordering that it was automatically set up to re-send product every three weeks. They had already shopped a second batch before I realized and was able to call in and cancel [….]When I called to cancel my account I was told that I didn’t need to cancel entirely; they could just put it on ‘hold’ indefinitely and that would preserve my account in case I chose to make a future order. I agreed and everything was fine for six months. Suddenly, this past July, a box of Proactiv showed up on my doorstep [….]  I was told that my account had been suspended for six months but was now reactivated. The kit they sent was a 90-day supply, not even what I had ordered in the past, and they didn’t send me any notice that they were billing my card or sending the product.”

After numerous calls and complaints, the company did eventually refund Annette the initial cost of the products—but not the additional $11 shipping fee. So Annette is currently $11 out of pocket with nothing to show for it except vast frustration. Her conclusion? “Proactive is a good product, but their system of forcing you to receive scheduled shipments sucks. They are clearly trying to rip people off by sending them product and hoping they don't bother to complain and that they'll just keep it.”

Myra D. of Worthington, Ohio, wrote on Aug. 29 with a similar complaint: “After cancelling my order, I continued to receive Proactiv products. I called AGAIN after I received more products and a bill, only to discover my previous cancellation never happened [….] Upon speaking to someone, I was told to return the product to cancel out my outstanding balance. So I mailed it/ returned it. Next thing I found out I received a letter from a collection agency.”

Cancel online?

Deanna P. of Honolulu, Hawaii reported on Sept. 12 that she too is finding it impossible to cancel her Proactiv subscription. “Any site that allows you to sign up online should allow you the decency to cancel online as well. Waiting on hold for 15+ minutes to get a customer service representative for something that you can sign up for easily online is not acceptable.”

Even less acceptable was the revelation that Deanna still couldn’t cancel her account: “[The customer service representative] assured me verbally that I would not receive any more product, and I received a confirmation email the next day stating that I was indeed cancelled and my account had a $0 balance [….] I soon forgot about Proactiv and several months went by. Until 3 days ago, when a new box showed up at my door. WHAT? How did this happen when I was told by email and verbally that I had cancelled?” Proactiv eventually offered Deanna the same dubious deal as Annette in Colorado: a refund if she ships the products back at her own expense, but no offer to pay for those shipping fees.

You might not even need to open an account with Proactiv to experience difficulty canceling it. An anonymous complaint we got on Aug. 26 simply said: “My underage son called the 800 number after seeing a commercial on Proactiv. You need to look into this company fast. This is nothing but a credit card scam. Have a child call in to order, tell the customer rep that you are 15 and give them what they think is your parents’ credit card and watch what happens.”

We didn’t actually try that, but we did try calling the customer service number on Proactiv’s website in hope of learning how customers could cancel their accounts. Unfortunately, we had no success. After climbing through Proactiv’s phone tree for awhile we eventually found a human to speak to; he did not give us any complaint or cancellation phone numbers, only a customer service email address.

Direct marketing

Oddly enough, that email wasn’t for an @proactiv account; instead, we were told to email the customer service department of of a company called Guthy-Renker. A quick online search shows that Guthy-Renker is a “direct marketing company” that’s generated numerous customer complaints of its own, including “Guthy-Renker Proactiv solutions sold my private cell phone number!” and “Guthy Renker –Wenhair is deceitful about auto refill” (just like Proactiv, maybe?), and several more in the same vein.

As of presstime, Guthy-Renker has not responded to our emailed request for comment.

What to do

So if you have a Proactiv account that refuses to die, what should you do? In theory, you could try emailing Guthy-Renker (though in practice, we doubt that’ll accomplish anything). Since all of this happens on the Web, it falls under the jurisdiction of the Federal Trade Commission, which has an online complaint form you can use to recount your experience, besides letting us know about it, of course. 

In the meantime, your only option for stopping unwanted Proactiv shipments might be the nuclear option: cancel whatever credit card you have on file with the company.

If you dream of earning your living as an author—or simply of publishing a book that’ll be seen by people other than immediate friends and family—established writers recommend you not waste your time with vanity press publishers like PublishAmerica.

Novice writers are quick to learn this expensive lesson. David B. of Cleveland, Ohio, wrote us on Sept. 12 to describe how he became the latest writer to learn this the hard way. Last year he wrote a children’s book and submitted it to several publishers. “The only one that responded positively was PublishAmerica [….] It is true they will publish your manuscript for free, but for any other kind of marketing that they do there is a cost involved.”

David knew better than to pay any marketing fees, but still lost money to the company: “So far I have not received any royalties from Publish America, and I know for a fact that my book has been sold through Amazon, and other companies.”

Another children’s book author—we’ll call her “S”—had the same complaint about PublishAmerica: every royalty period, PublishAmerica told her she’d earned no royalties.

“That is a lie, because I know multiple people who bought my book off Amazon and I never saw one penny for those sales,” she told us on Sept. 1. “I wrote and inquired about that and they had some weak excuse that it was Amazon's fault. Yeah, right! I inquired with Amazon and everything was hunky-dory with them.”

The difference between legitimate publishing houses and so-called “vanity presses” like PublishAmerica can be summarized in a single sentence: legitimate publishers make money by selling books to readers, while vanity presses make money from their authors.

Only sign the back

Professional writers belonging to the SFWA (Science Fiction and Fantasy Writers of America) have spent almost a decade warning fellow writers away from PublishAmerica and other vanity presses. Three such writers—James D. Macdonald, Victoria Strauss and the late AC Crispin—founded an advice and discussion forum called Absolute Write to warn writers away from vanity press companies.

Visit the forum and you’ll see a bold-print reminder across the top of every page: “A publisher or agency using Google ads to solicit your novel probably isn't anyone you want to write for.”

MacDonald, author of 35 novels, also coined what he calls “Yog’s Law,” which states that “Money flows toward the writer” or “The only place an author signs a check is on the back.”

MacDonald explains this in more detail: “[T]hat doesn't mean that the author should get paper and ink for free, or that he won't pay for postage. It does mean that when someone comes along and says, ‘Sure, kid, you can be a Published Author! It'll only cost you $300!’ the writer will know that something's wrong. A fee is a fee is a fee, whether they call it a reading fee, a marketing fee, a promotion fee, or a cheese-and-crackers fee.”

However, PublishAmerica claims not to charge fees; its website [indeed, its very logo] makes the bold claim “We treat our authors the old-fashioned way—we pay them,” and authors who go with PublishAmerica aren’t asked for fees until after the contract has already been signed.

How to know?

So how can an aspiring author know how to weed out the vanity press publishers? The easiest way is to look at the publisher’s website and ask: “Who are they trying to sell to here—readers, or writers?” Look at the websites of legitimate publishers such as Random House or Simon & Schuster:  the sites are designed to convince would-be readers to part with some money in exchange for a good book.

By contrast, PublishAmerica’s website tries to convince authors to publish with them: “Become a published author for FREE!”

Face it: legitimate publishers—those who make their money selling books to readers—don’t need advertising to find aspiring writers, anymore than legitimate movie studios need advertising to find aspiring movie stars. In both cases, the number of people who dream of earning their living that way is exponentially greater than the number of positions available.

Which is why the Absolute Write forum reminds aspiring authors: “A publisher or agency using Google ads to solicit your novel probably isn't anyone you want to write for.”

Starting in October people who pay for their own health insurance can start signing up for policies through health care exchanges, operated by states and the federal government. It's part of the Affordable Care Act, also known as Obamacare.

While a number of people may be looking forward to getting better health coverage than they have now, scammers are already capitalizing on the confusion surrounding the new program to steal money and identities. Law enforcement officials worry it's about to get a lot worse.

For example, do you know what you need to do to get enrolled in a new policy? Do you even know if you are required to take any action? Perhaps not. There has not been a vigorous information campaign associated with the roll out, though it's likely we'll hear more once October arrives. Again, that could be part of the problem.

Not enough information

Scammers often take advantage of high-profile news events to trick their prey. People may have heard something about the topic but lack complete information or understanding. When a smooth-talking scammer gets them on the phone, it's often no contest.

The Federal Trade Commission (FTC) has already been besieged with complaints from consumers, reporting similar variations on the scheme. Usually a caller claims to be from the government and offers to register the victim over the phone. In the process they collect vital information, like Social Security and bank account numbers.

Here are some of the things a scammer might tell you and here's the truth:

You don't need a new ID card

The scammer will say you must have a new medical ID card under the new Affordable Care Act and will offer to register you over the phone. In truth, there is no medical ID card. The only insurance card you will need is one issued by your insurance provider.

The scammer might also offer to take a credit card payment over the phone to allow the victim to opt out of the requirement to have health insurance. That's not how it works. If you do not meet the individual mandate to buy health insurance, you will pay an extra tax. However, that tax is paid to the Internal Revenue Service when you file your tax return.

But complicating matters is the fact that not everyone who you might speak on the phone with about Obamacare is necessarily a scammer. That's because each health exchange will develop a network of “navigators,” whose job it will be to educate people about the new law and answer questions.

Don't pay a fee

The navigators are supposed to be drawn from a list of established community organizations and the service is to be provided at no charge. Someone identifying themselves as a navigator, but who asks for personal or financial information – and who requests a fee – should be considered a bad guy.

Bogus websites can be expected to proliferate. Already federal and state regulators have shut down sites seeking to use Obamacare as a pretext for fleecing victims. Some of these sites are not operated by criminals but by businesses stepping way over ethical boundary lines.

Recently a site claiming to be the Pennsylvania Health Exchange was shown to actually be operated by a private insurance broker. After media exposure and a state investigation, the site disappeared.

Further complicating matters is the fact that each state is responsible for operating a health care exchange for its citizens and each exchange may be different. A consumer's best defense against scammers will be awareness that they are out there and taking the initiative – contacting your state's exchange directly, not responding to telephone calls.

How do you find your state's exchange. The official Obamacare website, HealthCare.gov, offers some guidance. You can find your state's exchange at the bottom of this page. 

Meanwhile, if you get a phone calls from someone you suspect of being an Obamacare scammer, the FTC says it would like to hear about it. If you have caller ID on your phone, write down the caller's number and give it to the FTC at 1-877-FTC-HELP.

The Federal Trade Commission has been cracking down on illegal robocallers and today it announced that two more companies have agreed to settle charges that they used prerecorded calls to trick consumers into deceptive credit card interest rate reduction scams.

Under separate proposed settlements, the defendants behind Treasure Your Success andAmbrosia Web Design will be banned from telemarketing and delivering robocalls.  They also will be permanently prohibited from advertising, marketing, promoting, or offering to sell any debt relief product or service, or assisting others in doing so.

Treasure Your Success

In its original complaint against Treasure Your Success, the FTC alleged that the defendants tricked consumers into paying up-front fees of as much as $1,593, using deceptive offers for credit card interest rate reduction services.

The complaint named two individuals, Willy Plancher and Valbona Toska, as well as their three companies, WV Universal Management, Global Financial Assist, and Leading Production.  The defendants began marketing credit card interest rate reduction services in 2010.  

According to the FTC’s complaint, the defendants lured consumers by telling them they could substantially reduce their credit card interest rates, down to as low as three percent, in many instances.  After collecting the upfront fees, however, consumers typically failed to get any interest rate reduction or any savings at all.

In November 2012, at the FTC’s request, a federal court halted the scheme and froze the defendants’ assets pending further court proceedings.  The proposed order holds the defendants liable for $2,032,626, based on the amount of consumer injury in the case.  Due to the inability of the individual defendants to pay redress, the monetary judgment has been suspended.  However, if the defendants misstate or fail to disclose any of their material assets, the full amount of the judgment will be immediately due and payable.

Ambrosia Web Design

According to the FTC’s complaint, the Ambrosia Web Design defendants delivered prerecorded calls that urged consumers they called to “press one” if they were interested in credit card interest rate reduction services.  Consumers who pressed one were connected to a telemarketer who promised to get them very low interest rates or, in some cases, specific amounts of interest savings. 

The defendants often deceived consumers into thinking defendants were affiliated with a government program.  If consumers agreed to sign up, the telemarketer got their credit card information, often charging an illegal advance fee before providing any service, the FTC alleged.

The FTC alleged that defendants then typically failed to deliver on their promises. In addition, the FTC charged defendants with failing to disclose their purported no-refund/no cancellation policy and billing some consumers without their express authorization.  Finally, the FTC alleged defendants illegally called many phone numbers on the National Do Not Call Registry.

In addition to the bans on outbound telemarketing and robocalling, the proposed settlement order:

• Bans the defendants from using certain payment processing methods, such as remotely created checks, that are often used to conduct fraud;
• Prohibits the defendants from making misrepresentations regarding any “financial products or services;” and
• Prohibits the defendants from misrepresenting the efficacy of a product or service.

The proposed settlement requires the defendants to liquidate virtually all of their assets, including a valuable watch and a sports memorabilia collection.  It also includes a judgment of $8.3 million, which will be suspended if defendants comply with the terms of the settlement.

There's a lot of talk about a financial recovery but for many Americans, that's all it is -- talk. So says the Consumer Reports Index, an overall measure of Americans’ personal financial health, which found that Americans reported a sharp rise in financial difficulties and a weaker view of their overall financial health in the past 30 days.

“The economy is staggering along. This recovery remains the weakest since World War II. Uncertainty hangs over the lower-income consumers like a veil of smoke fed by the lackluster recovery in jobs, “said Ed Farrell, director of consumer insight at Consumer Reports.

The Consumer Reports Index’s trouble tracker climbed to 46.0 in August from 34.7 the prior month. This significant rise was driven by a surge in financial troubles among lower-income consumers (households earning $50,000 or less) and Americans with a high school education or less.

The trouble tracker measure addresses both the proportion of consumers that have faced difficulties as well as the number of hurdles they have encountered.  Affluent and college-educated consumers showed little change in the amount of financial trouble they faced in the past 30 days.

It flows downhill

Lower-income households continue to be disproportionately affected by the economy’s crawling recovery. Twenty-seven percent of them reported they were unable to afford medical bills or medications in the past 30 days—that’s 11 percentage points higher than the national average. Missed bill payments and lost or reduced healthcare coverage also remain among the most prevalently reported financial troubles overall.  

The Consumer Reports Index’s sentiment measure dropped into negative territory for the first time in five months, falling to 48.6 from 50.8 the prior month. After three straight months of decline, sentiment is at its lowest level since October 2012. The greatest decline in sentiment was also among lower-income households and those that have a high school education or less.

The level of stress that consumers felt was up from the prior month, 58.0 versus 53.7, respectively. The most stressed Americans: women (59.6), those in households earning under $50,000 (62.0), aged 35-64 (60.9), and those in the Northeast (61.5).

The Consumer Reports Index, conducted by the Consumer Reports National Research Center, is a monthly telephone and cell phone poll of a nationally representative probability sample of American adults.

Everyone denies having quotas. The police insist they don't but ask yourself how often you've gotten tickets late in the month. Telephone solicitors say they don't have quotas but how often have you been signed up for something you never heard of?

David E. Douglas says Wells Fargo Bank is up to the same shenanigans. In a lawsuit in Los Angeles County Superior Court, Douglas charges that employees of three different Wells Fargo branches opened new accounts in his name and his business' name without his knowledge.

Douglas says branch employees are under so much pressure to sign up new customers that they use the information they already have on existing customers to open phony new accounts. Douglas claims the individual defendants opened at least eight accounts in his name and forged his signature on the applications without his knowledge, Courthouse News Service reported.

Given the demands Wells Fargo makes on its employees, it "should have known that its employees and bank managers routinely use the account information, date of birth, and Social Security and taxpayer identification numbers of defendant Wells Fargo's existing bank customers to use the existing bank customers' money to open additional accounts in the existing customers' names without their knowledge or consent and by forging the signature of their existing customers without their knowledge or consent to open said additional accounts, including purported business accounts for businesses that do not exist," Douglas' suit charges.

Even after being alerted to the issue, Wells Fargo did nothing, Douglas alleges. He says in the suit that when he found out about the unauthorized accounts, he contacted a fraud investigator at the bank's Beverly Hills branch. She assured him that Wells Fargo would "conduct a thorough investigation and make him whole," but he never heard back from her or anyone else at the bank, so he was forced to sue, Douglas says in the complaint.

Retail sales rose a tepid 0.2% in August, disappointing analysts, including those at Briefing.com who were looking for a much stronger showing of an 0.4% gain. Sales in July were revised higher to show an advance of 0.4% rather than the 0.2% initially reported.

The August advance was paced by a rise of 0.9% in Auto sales following the July drop of 0.5%. Analysts at Briefing.com say they expected a better number, given the August motor vehicle report, which was the strongest for that month since 2003.

Excluding autos, overall retail sales were up just 0.1%.

Other areas of strength in August were furniture and home furnishings (+0.9), electronics and appliances (+0.8%) and health and personal care (+0.6).

Those were partially offset by declines in sales of building materials and garden supplies (-0.9%)., clothing and accessories (-0.8%) and sporting goods, hobbies and books (-0.5).

Lindsey Piegza, chief economist Sterne Agee, calls the August report “disappointing.” And she isn't particularly optimistic about the future. “Consumption has been lackluster volleying at a near 2% rate through the first half of the year,” she notes. “With income growth of less than 1% and waning momentum in the jobs market, consumption is likely to falter further.”

The complete retail sales report for August can be found on the Census Bureau website.

After taking a break in July, prices for goods one step shy of the consumer were on the rise again.

The government says its Producer Price Index (PPI) for finished goods, which was unchanged in July, rose 0.3% in August. For the 12 months ended last month, prices are up 1.4% -- the smallest advance since a 0.5% rise in April 2013.

Energy and food increases

Nearly two-thirds of the August increase came from an 0.8% surge in energy prices. In that sector, gasoline prices shot up 2.6%, while liquefied petroleum gas and residential electric power were also higher.

Food costs, which were unchanged in July, jumped 0.6% as fresh and dry vegetables surged 26.9%.

Stripping out the volatile food and energy categories, the “core rate” of wholesale inflation was unchanged in August after nine consecutive increases.

The full PPI report for August  can be found on the Labor Department website.