Current Events in October 2013

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    Verily: the magazine promising freedom from Photoshop failure

    Beauty standards and biological realities should not contradict each other

    Verily, ladies, we say unto you: no matter how much money you spend and how many cosmetics you buy, you’ll never look as good as the model in the makeup ad. Even the model in the makeup ad doesn’t actually look as good as the model in the makeup ad because, pre-publication, her picture was Photoshopped, airbrushed and otherwise altered to the point where her own mother would be hard-pressed to recognize her.

    The problem with “beauty” advertising aimed at women (well, one problem with “beauty” advertising aimed at women), is that, thanks to the use of such alterations, the beauty industry often promotes standards that aren’t merely implausible, but biologically impossible. This has become so pervasive, there’s an entire subcategory of Internet meme known as the “Photoshop Fail,” with countless blogs dedicated to it.

    In 2006, Dove tried turning this trope on its head with a well-regarded TV commercial/“short film” called “The Evolution of Beauty,” showing how an ordinary, attractive young model was transformed into an impossible billboard goddess: not just through the use of artful makeup and hairstyling techniques, but also by manipulating her final photo to lengthen her neck, move her cheekbones, make her eyes twice as large as reality, and other tricks that would be impossible even for a plastic surgeon to accomplish.

    Eye of the needle

    But the rest of the beauty and fashion industry paid no attention. One of the more notorious examples of Photoshop failure came in 2009, when Ralph Lauren released an infamous catalog photo of a fashion model altered to look so skinny, the model ended up with a waistline narrower than her head.  

    Now, though, a new women’s magazine is hoping to reverse this unrealistic trend by promising to use only genuine, un-manipulated photos. Last week, on Oct. 10, the Huffington Post’s Style section first took notice of Verily, a new women's magazine which promises its readers: "Whereas other magazines artificially alter images in Photoshop to achieve the so-called ideal body type or leave a maximum of three wrinkles, Verily never alters the body or face structure of the Verily models."

    Should you doubt that such a policy (or magazine) is really necessary, it’s worth noting that on Oct. 11, barely 24 hours after HuffPo first made notice of Verily’s existence, the Photoshop Disasters blog displayed an actual fashion-catalog photo showing a model whose legs had been stretched to at least twice their actual length.

    Perhaps the advertiser actually intended to portray the message “Hey, ladies, buy our dress if you want to look like a woman who’s had her ankles surgically replaced with subcutaneous circus stilts,” but we have yet to meet the fashionista willing to adopt this trend herself.

    Verily, ladies, we say unto you: no matter how much money you spend and how many cosmetics you buy, you’ll never look as good as the model in the mak...

    Does pollution make you fat?

    Reputable research studies suggest it does

    Americans—along with everybody else in the industrialized world—have been growing fatter over the last couple of generations. But why? Dozens of different causes have been suggested: It’s because food is less expensive and more readily available than ever before in history, so we generally eat more than our ancestors did. Or it’s because of sedentary lifestyles—our televisions, computers, desk jobs, lengthy car commutes and all the other reasons people sit still for hours at a time, rather than move around and burn calories.

    These factors surely contribute to our expanding waistlines. But might environmental pollution also be a culprit? Because it’s not just people getting fatter in the modern world—animals are, too. Our pets, our laboratory animals, even the unwanted feral rats infesting our cities are all bigger than they were in our grandparents’ day, and maybe some of this comes from chemical pollutants that imitate various “fat” hormones naturally produced by our bodies.

    Unlikely though this might sound, over the past decade and more there’s been a wide variety of research studies which seem to support the theory. Over at ProPublica, reporter David Epstein collected and summarized a sample range of these reports in a thought-provoking investigative article titled “Do These Chemicals Make Me Look Fat?”

    Pet obesity

    To share just a couple of statistics: the National Pet Obesity Survey claims that over 50 percent of American cats and dogs are obese. Also, there exists a “National Pet Obesity Survey.”

    Despite having pretty much the same diet and lifestyle as they ever did, American laboratory rats have grown steadily fatter over the last 30 years (which is several generations, for rats). This might, possibly, be blamed on other factors present in a laboratory environment (including exposure to antibiotics), except that feral rats studied in Baltimore have also grown fatter—without exposure to antibiotics or other factors present in a lab-rat lifestyle.

    But today’s environments—whether natural, urban or laboratory—are all contaminated by trace amounts of various pollutants, including growth hormones fed to livestock, and toxic ingredients in widely used insecticides, fungicides and other anti-pest poisons. These pollutants, in turn, can affect people’s (or animal’s) bodily systems in a variety of ways, either mimicking or suppressing the functions of various hormones.

    As obesity researcher Emily Dhurandhar said to ProPublica, “Obesity really is more complex than couch potatoes and gluttons.”

    Americans—along with everybody else in the industrialized world—have been growing fatter over the last couple of generations. But why? Dozens o...

    Kids a pain? Send them to bed

    A new study finds irregular bedtimes are linked to behavioral problems

    Is there anything more annoying at the end of a busy day, or in the grocery store -- or anywhere for that matter -- than a cranky kid? Maybe he needs more sleep.

    Researchers from University College London (UCL) have found that children with irregular bedtimes are more likely to have behavioral difficulties.

    According to the study, published in the journal Pediatrics, irregular bedtimes could disrupt natural body rhythms and cause sleep deprivation, undermining brain maturation and the ability to regulate certain behaviors.

    "Not having fixed bedtimes, accompanied by a constant sense of flux, induces a state of body and mind akin to jet lag and this matters for healthy development and daily functioning," said UCL Epidemiology & Public Health Professor Yvonne Kelly. "We know that early child development has profound influences on health and well-being across the life course. It follows that disruptions to sleep, especially if they occur at key times in development, could have important lifelong impacts on health."

    Bed-check

    Analyzing data from more than 10,000 children in the UK Millennium Cohort Study, the team collected bedtime data at three, five and seven years, as well as incorporating reports from the children's mothers and teachers on behavioral problems.

    The study found a clear clinical and statistically significant link between bedtimes and behavior as irregular bedtimes affected children's behavior by disrupting circadian rhythms, leading to sleep deprivation that affects the developing brain.

    As children progressed through early childhood without a regular bedtime, their behavioral scores -- which included hyperactivity, conduct problems, problems with peers and emotional difficulties -- worsened. However, children who switched to a more regular bedtime had clear improvements in their behavior.

    Cumulative, but reversible

    "What we've shown is that these effects build up incrementally over childhood, so that children who always had irregular bedtimes were worse off than those children who did have a regular bedtime at one or two of the ages when they were surveyed,” said Kelly. "But our findings suggest the effects are reversible. For example, children who change from not having to having regular bedtimes show improvements in their behavior."

    Irregular bedtimes were most common at the age of three, when around one in five children went to bed at varying times. However, by the age of seven, more than half the children went to bed regularly between 7:30 and 8:30 pm. Children whose bedtimes were irregular or who went to bed after 9:00 pm came from more socially disadvantaged backgrounds, and this was factored into the study findings.

    "As it appears the effects of inconsistent bedtimes are reversible, one way to try and prevent this would be for health care providers to check for sleep disruptions as part of routine health care visits,” Kelly concluded. “Given the importance of early childhood development on subsequent health, there may be knock-on effects across the life course. Therefore, there are clear opportunities for interventions aimed at supporting family routines that could have important lifelong impacts."

    Is there anything more annoying at the end of a busy day, or in the grocery store -- or anywhere for that matter -- than a cranky kid? Maybe he needs more ...

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      JC Penney sued on behalf of investors

      But while investors may be unhappy, consumer complaints have died down

      A San Diego law firm has filed a class action suit against J.C. Penney, accusing the beleaguered retailer of federal securities fraud.

      The action, submitted by Robbins Arroyo LLP, alleges that the company and certain of its officers violated the Securities and Exchange Act of 1934. Specifically, the suit focuses on events of September 27, when Penney's stock suffered a huge one-day loss.

      Previously, the company had announced it was issuing additional stock, using the proceeds to fund operations through the end of the year.

      Misrepresentation?

      The suit claims that was a misrepresentation. In fact, it says the company would have insufficient liquidity to get through year-end and would require additional investments to make it through the holiday season. The suit further claims Penneys was concealing its need for liquidity so as not to add to its vendors' concerns.

      The suit says a September 26th analyst's report found the company would need to take on additional debt to ensure that it had enough cash to keep its business operations going. The following day Penney's common stock fell 13% on the New York Stock Exchange.

      While the suit seeks to sign up unhappy Penney's stockholders, the heavy stream of complaints from unhappy consumers – so prevalent beginning with Penney's radical make-over in early 2012 – seems to have died down. A recent Penney's review at ConsumerAffairs, from a young bride-to-be shopping for a ring, was positively glowing.

      Glowing review

      “Other jewelry retailers and department stores just didn't have what I wanted, and they definitely didn't offer much when it came to prices,” wrote Jamie, of Broken Arrow, Okla. “I found my ring after taking my mom's advice to check JC Penney's site, and there it was! The ring was unique but somehow still classic in style, it was of excellent quality, and it was totally affordable. I showed my fiancé and, needless to say, a few months later I was wearing the ring and planning our wedding! At the proposal, it was the first time I had ever seen my ring in "real life" and it was even better and sparklier (sic) than I had imagined. He was even able to get it on sale and afford the lifetime care package! I have never been happier and I love my ring so much.”

      A year ago the retailer was getting very few positive reviews as consumers objected to the change in course the store had taken under new CEO Ron Johnson, a former Apple executive installed at the urging of major board member Bill Ackman.

      "Ackman officially exits stage left, having brought an American retailing icon to its knees," Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, wrote in a note to clients in August.

      Radical changes

      Consumers rate J.C. Penney

      In January 2012 J.C. Penney, which had steadily been losing money and had the reputation as a rather conservative and stodgy retailer, attempted to remake itself as younger and hipper, hoping to pull customers from Target and other more contemporary retailers. In the process, they managed to alienate – some analysts think by design – the core J.C. Penney customer base.

      The old customers didn't like the new pricing structure, which did away with sales and coupons. It didn't like the make-up of the stores, which jettisoned traditional brands and turned over floor space to vendors for kiosks. The old customers left and the new customers never showed up.

      Now the old J.C. Penney is back, doing things the way they did before. Will it be enough to save the brand? Perhaps it's too early to tell.

      But the fact that the store gets an online review from a happy consumer – and a young one at that – has got to give the retailer some hope.

      JC Penney sued on behalf of investorsA San Diego, Calif., law firm has filed a class action suit against J.C. Penney, accusing the beleaguered retailer o...

      Postal Service defaults, but the mail still goes through

      USPS is profitable but bankrupt -- how is that possible?

      The United States Postal Service is sort of like Congress -- everybody complains about it. On the other hand, it's sort of not like Congress -- it is, after all, still delivering the mail while Congress fails in its duty to keep the government functioning.

      Both USPS and Congress figure prominently in occasional surveys of which federal agencies consumers trust and admire. USPS is generally near or at the top while Congress is near or at the bottom.

      Beyond that, both the Postal Service and Congress have been dealing with the issue of default lately: the Postal Service defaulted on a $5.6 billion payment last month, and Congress appears to be unable to find a way to avoid letting the United States default on its obligations.

      USPS -- an independent government corporation (admittedly an oxymoron but legally accurate) -- is a favorite target of angry consumers whose mail gets lost, drenched, shredded or otherwise mishandled, although for the most part, United States mail service remains generally affordable and reliable. It's also a favorite target of conservatives in Congress and elsewhere, who would like to take a meat axe to its budget and its operations and would like to weaken the power of its unionized workforce.

      The real problem

      Consumers rate USPS - Lost Mail

      What is really going on here? Like so many things involving Washington, the answer is somewhat murky. The most benign explanation is that back in 2006, USPS was very profitable and a roomful of great Congressional minds decided it would be a good idea to burn off some of that extra cash by funding retiree health benefits far into the future. How far? Well, would you believe 75 years?

      In fact, so quickly were the profits piling up that it was decided to require the Postal Service to make those 75 years of payments in 10 years.

      As has been true of so many debacles, it seemed like a good idea at the time. What no one foresaw was the 2008 financial collapse that has come to be known as the Great Recession. Mail volume plummeted and so did the excess profits that were earmarked to pay down future health benefits.

      The result is that the Postal Service is still profitable -- by the thinnest of margins -- on a day-to-day basis, i.e., the money it takes in from postal customers pays its operating costs but can't cover the yearly health benefit paydown.

      This year, for example, USPS was supposed to pay $4.2 billion in prefunding. Its red ink for the year is $3.9 billion. In other words, the Postal Service is profitable to the tune of about $330 million, if you don't count the health benefit costs of retirees who haven't retired and, in some cases, haven't even been born yet.

      Friends in Congress

      While the Postal Service has plenty of enemies in Congress, it also has some friends. One of them is Democratic Rep. Gerald Connolly, from Fairfax, Va., a Washington surburb that is home to thousands of federal workers of all kinds.

      Connolly and Rep. Don Young, an Alaska Republican, last year urged Congress to relieve the prefunding obligation, saying that would be the best way to "protect the infrastructure of a $1 trillion mailing industry while maintaining universal service for all Americans — rural, suburban, and urban.”

      Connolly and Young suggested there are alternatives, such as restructuring the Retirement Health Benefit prefunding requirement, refunding USPS overpayments into federal retirement programs, and permitting USPS to adopt new business practices that would allow USPS to forgo these drastic cuts in service. 

      Congressional Republicans, meanwhile, were pushing legislation that would require USPS to eliminate Saturday mail delivery, close rural post offices and end next-day mail service.

      Nothing much happened

      As is not unusual on Capitol Hill, nothing much happened. The issue is up for discussion again this year and again there is talk of relieving USPS of the prefunding obligation. Doing so would reduce the  amount USPS spends on health care from 20 cents of every revenue dollar to 8 cents — or about $8 billion annually through 2016, Postmaster General Pat Donahoe told a Senate Homeland Security and Governmental Affairs Committee hearing in September.

      "Today, the Postal Service and its employees are paying for benefits we do not use," Donahoe said. "We are, effectively, buying insurance we do not need and we're overpaying for it."

      "There is no single easy solution to this problem," said Sen. Tom Carper (D-Del.), the committee chairman and the co-author, along with the committee's ranking member Tom Coburn (R-Okla.) of the Senate's draft reform bill. "It's been a problem years in the making and will take years to fully address. But with urgent action from Congress, the collapse of the Postal Service is avoidable." 

      In the Republican-controlled House, there is more emphasis on cost-cutting and delivery cutbacks. The House Oversight and Government Reform Committee in July passed a measure drafted by Rep. Darrell Issa (R-Calif.), the committee chairman. It would require elimination of door-to-door delivery, replacing it with neighborhood "cluster-box" service.

      Of course, there are hundreds -- maybe thousands -- of urgent matters awaiting Congress' attention but the likelihood of anything getting done in the midst of the ongoing Capitol Hill train wreck is slim, creating an ongoing cliff-hanger that appears unlikely to end well. 

      Business is brisk

      News reports and politicians' bombast often paint the Postal Service as being old, tired, irrelvant and unnecessary in the Internet Age. But some USPS union insiders paint a different picture: they say the Internet has actually been good for the Postal Service.

      That may sound odd, and it is true that the volume of first-class mailings is down as consumers increasingly switch to email and online banking to handle routine tasks. But package delivery -- driven largely by online shopping -- is up 9% this year and is rising five times faster than first-class mail.

      Donahoe doesn't buy this argument. He recently described the Internet's disruption as "unrelenting."

      "If we hadn’t lost the volume of bill payment to online, we wouldn’t have defaulted on our prefunding obligations. We wouldn’t have had to close the plants, and we’d be profitable with no debt," he told Businessweek in August, calculating the loss in first-class mailings at $14 billion annually.

      What the Postal Service has that no one can match is its network. Of course, no private company in its right mind would want to match that network, much of which is unprofitable, so that the USPS network is at once a great asset and a great liability.

      Since by law it can't retreat from serving remote and sparsely-populated areas, the Postal Service is limited to cutting back the frequency of service, raising rates, looking for new cost savings and trying to bolster other lines of service, like package delivery.    

      But with Amazon and other online giants working to develop their own same-day delivery arms in urban areas, USPS faces the prospect that, a few years down the road, its package delivery service will be losing large swaths of its most profitable service areas while having to continue serving unprofitable rural areas.

      It's tempting to throw up your hands and say, "Just privatize it and be done with it." And that's just what the Brits are doing -- the Royal Mail is going private. But with all of Britain amounting to less land area than Oregon, it's hardly a comparable situation.

      That isn't stopping some postal worker union leaders from accusing Donahoe of angling to privatize the USPS -- a charge that Donahoe says makes no sense.

      "Even in a no-tax world, we would still have razor-thin margins and universal service at a universal price. Any private company would be afraid to sign up for a deal like this," he said in the August Businessweek interview.

      What's left? The only apparent solution is to keep trimming costs, raising prices and getting out from under the burdensome healthcare payments. And all that takes is immediate action from, who else, Congress. It's not a situation that inspires confidence.

      The United States Postal Service is sort of like Congress -- everybody complains about it. On the other hand, it's sort of not like Congress -- it is still...

      Emotionally investing in the world's most-loved companies

      As if intra-human personal relationships weren't complicated enough

      Any reputable psychologist will tell you that “emotional connections” are the key to happy, healthy interpersonal relationships. Indeed, a complete inability to make emotional connections with other people is a severe flaw and the defining characteristic of a sociopath.

      But what about an inability to forge emotional connections with wealthy multinational corporate brands who are trying to make money off of you? I apparently suffer from this condition, and was brutally reminded of my emotionally stunted state when I read this update from the world of marketing news:

      Washington, D.C. (Oct. 10, 2013) - APCO Insight, the global opinion research consultancy at APCO Worldwide, revealed today its list of the 100 Most Loved Companies. The Walt Disney Company tops the list followed by Yahoo!, Google and Sony respectively.

      APCO's proprietary Emotional LinkingSM model served as the basis for evaluating the companies by measuring consumers' emotional attachment to brands along eight dimensions, providing companies with a roadmap to understanding consumer expectations in an actionable way.

      Um … okay. Maybe their definition of “love” differs from my own? Because love does not focus on value, quality and convenience, but consumers dealing with companies should.

      I’d never dump my One True Love in exchange for a newer model just because the latter offers to reduce my monthly transportation costs by five percent, but if a new car could do that I’d discard my old one without so much as a Dear John letter. I’ll put up with a boring weekend if my OTL is sick abed, even spend extra time, money and effort to buy my OTL some medicine and fruit juice if necessary, but one boring, costly, inconvenient weekend at a vacation resort is enough for me to tell the resort company “We’re through.”

      "The best brands are those that build a strong, enduring emotional attachment with consumers," said Bryan Dumont, president, APCO Insight. "In addition to acting as a highly predictive tool for consumers' purchase choices, the Emotional Linking model has proven to be an excellent way to help companies retool their campaigns to build stronger emotional attachments between their key audiences and their brands."

      Any reputable psychologist will tell you that facial expressions are an important means by which human beings forge emotional links with others—Baby smiles for the first time, Mama’s heart melts in response and blah blah blah strengthening the emotional link ‘twixt mother and child, for example.

      So it’s probably ironic that, on the same day Disney made APCO-generated headlines for being the most loved and emotionally linked company in the world, Disney also got a headline in the Christian Science Monitor when writer Mark Sappenfield published a fascinating article titled “New Disney princess outrage: Is ‘Frozen’ only for ‘pretty’ girls?”

      The story immediately generated online controversy, but the bulk of the uproar wasn’t over the unsurprising revelation that Disney princesses tend to be pretty; instead, attention focused on a Disney animator’s admission that the company will downplay characters’ facial expressions to emphasize its standards of beauty.

      Slate’s Double X blog summarized it as, “Women are hard to animate because they have emotions, says Disney,” while Opposing Views gave it the headline “Disney animator admits to sacrificing emotional range in princesses to ‘keep them pretty’.”

      So maybe that’s why I haven’t made a deep emotional connection with the Disney corporation. Or maybe it’s because my emotional wellspring is already flowing toward actual people I know—friends, family, neighbors, OTL—and the idea that consumers are supposed to have deep emotional attachments with the companies who make their stuff is just a cynical marketing ploy.

      Any reputable psychologist will tell you that "emotional connections" are the key to happy, healthy interpersonal relationships. Indeed, a comp...

      Study: Ethanol not a major factor in reducing gas prices

      An MIT economist says it doesn't affect what you pay at the pump

      Remember all those years ago when we were told that adding an ethanol blend would cut dependence on imported oil and bring down the price of gasoline? Didn't happen, at least on the price end of it, according to a paper co-written by an MIT economist.

      In the study, Christopher Knittel seeks to rebut the claim -- broadly aired over the past couple of years -- that widespread use of ethanol has reduced the wholesale cost of gasoline by $0.89 to $1.09 per gallon. He says whatever the benefits or drawbacks of ethanol, price issues are not among them right now.

      “The point of our paper is not to say that ethanol doesn’t have a place in the marketplace, but it’s more that the facts should drive this discussion,” says Knittel, the William Barton Rogers Professor of Energy and a professor of applied economics at the MIT Sloan School of Management.

      The 10% solution?

      Most of the ethanol sold in the U.S. is made from corn and constitutes 10% of U.S. gasoline, up 7% from 2003.

      Whether that increase in ethanol content produces serious savings at the pump, as some claim, is another story. Knittel and his co-author, economist Aaron Smith of the University of California at Davis, contest such an assertion in their paper, which is to be published in The Energy Journal.

      Crack ratio

      The claim that ethanol lowers prices derives from a previous study on the issue, which Knittel and Smith believe is problematic. That prior work involves what energy economists call the “crack ratio,” which is effectively the price of gasoline divided by the price of oil.

      The crack ratio is something energy analysts can use to understand the relative value of gasoline compared to oil: The higher the crack ratio, the more expensive gasoline is in relative terms. If ethanol were a notably cheap component of gasoline production, its increasing presence in the fuel mix might reveal itself in the form of a decreasing crack ratio.

      So while gasoline is made primarily from oil, there are other elements that figure into the cost of refining gasoline. Thus if oil prices double, Knittel points out, gasoline prices do not necessarily double. But in general, when oil prices -- as the denominator of this fraction -- go up, the crack ratio itself falls.

      The previous work evaluated time periods when oil prices rose, and the percentage of ethanol in gasoline also rose.

      But Knittel and Smith assert that the increased proportion of ethanol in gasoline merely correlated with the declining crack ratio, and did not contribute to it in any causal sense. Instead, they think that changing oil prices drove the change in the crack ratio, and that when those prices are accounted for, the apparent effect of ethanol “simply goes away,” as Knittel says.

      “In the very short run, if ethanol vanished tomorrow, we would be scrambling to find fuel to cover that for a week, or less than a month,” Knittel says. “But certainly within a month, increases in imports would relax or reduce that price impact.”

      Knittel acknowledges that policy decisions about gasoline production are driven by a complex series of political factors, and says his study is not intended to directly convey any policy preferences on his part. Still, he suggests that even ethanol backers in policy debates have reason to keep examining its value.

      “Making claims about the benefits of ethanol that are overblown is only going to set up policymakers for disappointment,” Knittel says.

      Remember all those years ago when were were told that adding an ethanol blend would cut dependence on imported oil and bring down the price of gasoline? Di...

      T-Mobile eliminates international roaming charges for data in 100+ countries

      It's the latest T-Mobile kick in the shins for the Big Two and a Half

      Ever since its merger with AT&T went south, T-Mobile has been on a roll. It's eliminated long-term contracts, subsidized phones and in the process says it has signed 685,000 new customers in the second quarter of 2013 -- more than AT&T, Verizon and Sprint combined.

      While these mildly revolutionary changes have been popular with consumers, they've infuriated T-Mobile's big competitors, who had things set up just the way they liked them.

      Now, T-Mobile -- which has taken to calling itself "the Un-carrier" -- has delivered another kick to the shins of the Big Two and a Half by eliminating international data roaming charges in more than 100 countries. Just to make sure it has everyone's attention, it has also signed Shakira as its newest "collaborator." 

      Or as T-Mobile puts it, it's "delivering unlimited global data at no extra charge in 100+ countries -- making the company's home data coverage area larger than AT&T's and Verizon's combined."

      "The cost of staying connected across borders is completely crazy," said John Legere, president and CEO of T-Mobile US, Inc., at an outdoor concert in New York a few nights ago. "Today's phones are designed to work around the world, but we're forced to pay insanely inflated international connectivity fees to actually use them. You can't leave the country without coming home to bill shock. So we're making the world your network -- at no extra cost."

      Americans take about 55 million trips to destinations outside the U.S. every year, Legere noted. When U.S. customers use their phones abroad the way they normally do at home, their costs often total $1,000 a day or more. So more than 40 percent of customers turn off data roaming completely. Another 20 percent more say they would if they knew how.

      "It doesn't have to be this way," Legere said. "The truth is that the industry's been charging huge fees for data roaming. But what's most surprising is that no one's called them out -- until now."

      Details, details

      Consumers rate T-Mobile Billing Disputes

      As T-Mobile explains it, it's expanding the home data coverage for most Simple Choice customers to include more than 100 countries, at no extra charge. Starting Oct. 31, these Simple Choice individual and business customers automatically get unlimited data and texting in more than 100 Simple Global countries worldwide; they will pay a global flat rate of 20 cents per minute for voice calls when roaming in the same countries.

      Eligible customers on T-Mobile's popular Simple Choice plan won't have to activate anything or pay an extra monthly fee.

      T-Mobile also announced a new plan for calling between the U.S. and other countries -- the Stateside International Talk & Text feature. It said customers never pay more than 20 cents a minute to any number in any Simple Global country, including mobile to mobile.

      Calls to landlines in more than 70 of these countries are unlimited and included at no extra cost. Unlimited texting is also included to all countries. Stateside International Talk & Text is available to most Simple Choice customers for $10 a month.

      In network news, T-Mobile announced that its latest-generation 4G LTE network is now nationwide, reaching more than 200 million people in 233 metros across the United States.

      Shakira, T-Mobile's new "collaborator"Ever since its merger with AT&T went south, T-Mobile has been on a roll. It's eliminated long-term contracts,...

      Want to see your name in digits? Just praise a product on Google Plus

      Google announces its version of Facebook's "Sponsored Stories"

      Want to make big bucks by endorsing products in Google ads? It's easy, as long as you omit the big bucks part. Following in the footsteps of Facebook, Google plans to start selling its users' endorsements to advertisers.

      This means that if you give five stars to a movie or coffee concoction on Google Plus or YouTube, your name, photo and comments may wind up in ads shown to your friends and just about everybody else on Google's network of about two million affiliated sites.

      Facebook pioneered this practice, which many users find creepy or downright predatory, and found itself in hot water, not to mention a class action lawsuit. Google is proceeding with a little more caution, however. It is serving notice in advance of the Nov. 11 start date, thorugh changes to its terms of service and says it will post notices on its home page and elsewhere. Users will be able to opt out, Google promises. 

      Google also says that only adults -- those over 18 -- will be featured in the endorsements. No kids allowed.

      High praise

      Advertisers love these endorsements. They're considered the highest form of praise -- basically your friends (or people who would be your friends if you ever met them) passing on inside tips on what's hot and what's not.

      They're like the reviews on Yelp, ConsumerAffairs and other peer review sites, except -- hey -- they're all positive.

      Want to make big bucks by endorsing products in Google ads? It's easy to do as long as you omit the big bucks part. Following in the footsteps of Facebook,...

      Is it time to reinvent the PC?

      Sales figures show the machine is losing favor with consumers

      Personal computers, and the companies that make them, are not feeling the love lately. Consumers have swooned over tablets and now use their smartphones for most of the things for which they once used a desktop computer.

      The evidence is in black and white in Gartner, Inc.'s report on third quarter PC shipments. Worldwide 80.3 million units shipped, down 8.6% from the same period in 2012. The third quarter is especially important to computer makers, much like the fourth quarter is to retailers.

      "The third quarter is often referred to as the 'back-to-school' quarter for PC sales, and sales this quarter dropped to their lowest volume since 2008," said Mikako Kitagawa, principal analyst at Gartner. "Consumers' shift from PCs to tablets for daily content consumption continued to decrease the installed base of PCs both in mature as well as in emerging markets. A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets."

      Lenovo and HP lead

      Consumers who did purchase PCs favored both Lenovo and HP, which both had more than 15% of the third quarter market. Dell, the one-time leading PC manufacturer, was in third place with 11.6% of the market and Acer Group and Asus rounded out the top five.

      Has the PC gone the way of the VCR and the printed telephone book? It may be on that track unless some innovator comes up with a way to make it new and exciting. How can they do that? For starters, how about making it smaller?

      There are already a number of small PCs a fraction of the size of the traditional tower CPUs you normally think of. The Lenovo IdeaCentre Q190 Desktop PC – model number 57313339 – measures about six by seven and a half inches and is less than an inch thick. It's not an especially powerful workhorse, as the $395 price tag would suggest, but it sports an Intel Celeron 887 1.50GHz processor, 4GB DDR3, 500GB HDD, DVD-rewritable drive, Windows 8 64-bit, and comes with a keyboard.

      While the CPU is small, there isn't much you can do to shrink a functional keyboard, unfortunately. Then there's the matter of a monitor. While flat screens have replaced the clunky tube-based monitors of yesteryear, size is usually seen as an advantage with a monitor.

      Small screen

      But if you are trying to take up less space on your desk Double Sight makes a nine-inch display, weighing only a pound and a half and selling for $130.

      Earlier this year Xi3 Corporation introduced a tiny desktop, the Z3RO Pro – a desktop computer small and light enough to fit in your pocket. Initial reviews were mostly positive though reviewers mostly saw its utility in entertainment systems or to power digital signage – applications where its compact size would make it attractive.

      Because as small as the Z3RO Pro is, to make it useful for a consumer it still requires a screen and keyboard – two items that likely will never be small enough to fit in your pocket.

      That, of course, is why there are notebook computers – portable PCs that have consistently gotten smaller and lighter over the years. A few years ago the “netbook” was introduced as an alternative to the notebook – smaller and lighter. The new Chromebooks are an update and refinement of that.

      Workhorses

      They, and PCs in general, are and probably always will be needed by people who want a machine to help them work, not play games, watch movies and post to Facebook. Mobile devices are fine for that, but if you have to knock out a term paper or cover a story for the Daily Eagle, chances are you'll find a tablet not up to the job. Unless you're really good at one-finger typing, you'll need a PC.

      There may be a developer somewhere trying to reinvent the PC, to breathe new life into the machine that started the technology revolution. Those of us who depend on these machines for our livelihood can only hope it will still have a keyboard.

      Personal computers, and the companies that make them, are not feeling the love lately. Consumers have swooned over tablets and now use their smartphones fo...

      Real estate market sending mixed signals

      Sales and prices are falling but so is inventory

      After months of a strong and stable recovery, U.S. home sales have slowed going into Autumn and prices have dipped. Even so, inventory remains tight in many markets, according to a number of industry sources.

      Though prices and conditions will vary by market, Zip Realty's Housing Trends Report shows home prices are moderating nationwide.

      "The fall's cooler temps are being matched by a cooling off in the housing market's red-hot trends," said Lanny Baker, CEO and President of ZipRealty. "For the month ended Sept. 15, median homes sale prices in the 24 metropolitan areas surveyed were up 14% year-over-year, compared to a nearly 16% gain one month earlier. Median sale prices were higher than a year ago in all cities studied, but the year to year median price increases shrank in 19 out of 24 markets. The median sale price of about $272,000 in mid-September was also about twp percent lower than in mid-August 2013."

      Further moderation

      The report said sold-to-list price ratios, new listings volume, pending sales volume, and days on market data for mid-September also all suggested further moderation.

      Redfin, another online real estate brokerage, says its data suggests sellers are losing control of the market, with buyers once again gaining the upper hand. However, its survey of agents found many believe that limited inventory and bidding wars remain the biggest challenges for buyers.

      Redfin says a slowing of sales and price rises heading into fall is not surprising. In September, it said home sales, prices, and inventory all dropped from August.

      However, in September prices had their third consecutive month-over-month drop, falling 2.2%. Home sales dropped 18.8% from August, and inventory fell 3.4%. Year over year, the housing market is still showing strength, the company said, with prices up 15.9% and home sales up 8.1%.

      The National Association of Realtors (NAR) also noted a cooling in the market with a report that pending home sales – contracts signed but not yet closed – dipped 1.6% in August. NAR chief economist Lawrence Yun said much of the buying occurred earlier in the summer.

      Lower sales expected

      “Sharply rising mortgage interest rates in the spring motived buyers to make purchase decisions, culminating in a six-and-a-half-year peak for sales that were finalized in August,” he said. “Moving forward, we expect lower levels of existing-home sales, but tight inventory in many markets will continue to push up home prices in the months ahead.”

      And there is little to suggest the tight inventory conditions will change anytime soon. CoreLogic, a property data firm, reports the inventory of foreclosed homes is down 33% from a year ago, meaning there are fewer distressed properties competing with homeowners trying to sell.

      According to the report there were 48,000 completed foreclosures in the U.S. in August of 2013, down from 72,000 in August 2012. That's a year-over-year decrease of 34%. On a month-over-month basis, completed foreclosures increased 1.3 percent, from 47,000 in July 2013.

      Putting it in context

      However, the numbers should be viewed in context. CoreLogic notes that the 48,000 completed foreclosures are sharply lower that at the height of the housing crisis, but they are still sharply higher than before the crisis began. Between 2000 and 2006 completed foreclosures averaged 21,000 per month. Still, for the health of the housing market, the numbers are running in the right direction.

      “The foreclosure inventory continues to improve, as exhibited by these recent numbers,” said Dr. Mark Fleming, chief economist for CoreLogic. “A surge in completed foreclosures and a rise in the foreclosure inventory is unlikely given continued house price improvements and shortages of supply in many markets.”

      What it means is the housing market may maintain some balance heading into the end of the year, which should turn out to be good for everyone.

      After months of a strong and stable recovery, U.S. home sales have slowed going into Autumn and prices have dipped. Even so, inventory remains tight in man...

      What's really in that nutritional supplement you're taking?

      Only 2 of 44 products studied actually contained what they claimed to

      Many people have a lot of faith in so-called "natural" health products and nutrition supplements, despite a lack of regulation and evidence that the substances are actually beneficial.

      And now a study finds that of 44 herbal products tested, only two actually contained what they claimed to contain with no substitutes, contaminants or fillers.

      The study, conoducted by researchers at the University of Guelph, was published today in the open access journal BMC Medicine. It used DNA barcoding technology to test 44 herbal products sold by 12 companies.

      Overall, nearly 60 per cent of the herbal products contained plant species not listed on the label. Researchers detected product substitution in 32 per cent of the samples. More than 20 per cent of the products included fillers such as rice, soybeans and wheat not listed on the label.

      "Contamination and substitution in herbal products present considerable health risks for consumers," said lead author Steven Newmaster, an integrative biology professor and botanical director of the Guelph-based Biodiversity Institute of Ontario (BIO), home of the Canadian Centre for DNA Barcoding.

      "We found contamination in several products with plants that have known toxicity, side effects and/or negatively interact with other herbs, supplements and medications."

      Allergy risks

      One product labelled as St. John's wort contained Senna alexandrina, a plant with laxative properties. It's not intended for prolonged use, as it can cause chronic diarrhea and liver damage and negatively interacts with immune cells in the colon.

      Several herbal products contained Parthenium hysterophorus (feverfew), which can cause swelling and numbness in the mouth, oral ulcers, and nausea. It also reacts with medications metabolized by the liver.

      One ginkgo product was contaminated with Juglans nigra (black walnut), which could endanger people with nut allergies.

      Unlabelled fillers such as wheat, soybeans and rice are also a concern for people with allergies or who are seeking gluten-free products, Newmaster said.

      "It's common practice in natural products to use fillers such as these, which are mixed with the active ingredients. But a consumer has a right to see all of the plant species used in producing a natural product on the list of ingredients."

      DNA evidence

      Until now, verifying what's inside capsules or tablets has posed challenges, Newmaster said. His research team developed standard methods and tests using DNA barcoding to identify and authenticate ingredients in herbal products.

      "There is a need to protect consumers from the economic and health risks associated with herbal product fraud. Currently there are no standards for authentication of herbal products."

      Medicinal herbs now constitute the fastest-growing segment of the North American alternative medicine market, with more than 29,000 herbal substances sold, he said.

      More than 1,000 companies worldwide make medicinal plant products worth more than $60 billion a year.

      Study: Herbal products omit ingredients, contain fillersConsumers of natural health products beware. The majority of herbal products on the market contai...

      Heidi Klum stroller flunks Consumer Reports safety test

      Safety harness failed to stay securely latched during tests

      It's a little hard to figure out why Heidi Klum's name would be attached to a baby stroller. To lend an aura of German precision maybe? Sadly, that turns out not to be the case with the "Heidi Klum Truly Scrumptious Travel System" stroller, which was judged a “Don’t Buy” Safety Risk by Consumer Reports.

      The magazine's testers said the stroller's safety harness failed to stay securely latched during tests. Of the more than 100 strollers in Consumer Reports’ Ratings, the Truly Scrumptious Travel System -- made by the Dorel Juvenile Group -- was the only one with this problem.

      Falls are the biggest stroller risk by far: Roughly 75 percent of the estimated 46,200 stroller-related emergency-room visits between January 2008 and December 2011 happened because children tumbled out of their stroller, according to the Consumer Product Safety Commission. A stroller’s harness is supposed to prevent falls by staying securely latched when in use, according to the voluntary industry safety standard.

      But on the Truly Scrumptious Travel System TR252BQR by Heidi Klum, $220, one side of the buckle released intermittently on three samples in Consumer Reports’ latest stroller tests.

      Sold at Babies "R" Us

      Consumers rate Babies R Us

      The Truly Scrumptious is part of a line of strollers and other baby products marketed by the supermodel and TV star and sold exclusively at Babies “R” Us. Like other travel systems designed to accommodate children from birth up to four years, this one includes the stroller and a detachable infant car seat with its own restraint system and base.

      Consumer Reports tested the product as part of its regular travel system tests. The car seat and its restraint system performed well in its separate car-seat tests. But when Consumer Reports testers applied force where the harness attaches to the buckle itself, the buckle’s right side released 10 out of 15 times on three separate samples—three times during five tests with one sample, in two of five tests with a second sample, and in all five tests with a third sample.

      The buckle also released in Consumer Reports’ impact test. Patterned after the voluntary standard, this test simulates a stroller hitting a curb and is designed to evaluate the stroller’s frame and its folding, locking, and latching mechanisms—not its restraint system. This time, the buckle’s right side released one out of five times on each of two samples, and five out of five times on a third sample.

      Consumer Reports doesn’t know of any injuries associated with the Truly Scrumptious Travel System. But the organization believes it poses a safety concern and has designated the Truly Scrumptious Travel System TR252BQR by Heidi Klum a Don’t Buy: Safety Risk as a result of its tests.

      Consumer Reports contacted the Dorel Juvenile Group, which makes the stroller. Dorel said it disagrees with Consumer Reports’ conclusions, based on its own internal and outside testing, and has had no reports or complaints about buckle releases.

      It's a little hard to figure out why Heidi Klum's name would be attached to a baby stroller. To lend an aura of German precision maybe? Sadly, that turns o...

      Status symbol for seniors: a hybrid

      A new study suggests it's good for the image and the environment

      Feeling old and uncool? A Baylor University study says "going green" in a hybrid car may raise your self-esteem and image, in addition to giving a healthy boost to the environment.

      That's significant, researchers say, because some segments of the older-consumer population control a considerable share of the discretionary income in the U.S., and the population size of the so-called “mature market" is growing rapidly.

      "If I want to pay $5 for a 'green' detergent or sponge, I'll know that I'm helping the environment,” said Jay Yoo, Ph.D., an assistant professor of family and consumer sciences in Baylor's College of Arts & Sciences. “But those things aren't highly visible. Other people aren't going to notice."

      Wooing the senior consumer

      In the study, published in the journal Human Factors and Ergonomics in Manufacturing and Service Industries, researchers analyzed a national cross-sectional survey of 314 consumers age 60 and older who had bought hybrid cars.

      It showed that their satisfaction was influenced by social values -- including pride and prestige -- as well as quality and price, not only in vehicle purchase but in future savings on gasoline expenses.

      Those three variables -- social value, price and quality --are significant in enhancing senior citizens' customer loyalty as shown by repurchase intention and positive word-of-mouth, Yoo said. Emotional values -- such as excitement -- did not significantly influence their purchase intention or satisfaction, according to the study.

      Image burnishing

      "The findings suggest that elderly consumers are concerned about how they appear to others when driving a hybrid car," the researchers wrote. "They believe that driving a hybrid car builds a positive self-image of the people who drive them."

      "This knowledge can help as a marketing tool," Yoo said. "Hybrid cars have increased in visibility because of their environmental consciousness. So people may be willing to pay an extra $5,000 or so in order to think, 'I'm great, and this is good for the environment.'"

      Previous research has shown that older consumers are more inclined to behave in a pro-environment way than younger generations are, Yoo said.

      Feeling old and uncool? A Baylor University study says "going green" in a hybrid car may raise your self-esteem and image, in addition to giving a healthy ...

      California sues Corinthian Colleges

      The suit claims the for-profit college engages in predatory schemes

      California Attorney General Kamala D. Harris is suing Corinthian Colleges, Inc. (CCI) and its subsidiaries, charging false and predatory advertising, intentional misrepresentations to students, securities fraud and unlawful use of military seals in advertisements.

      The complaint alleges that CCI and the subsidiaries that operate Everest, Heald and WyoTech colleges intentionally targeted low-income, vulnerable Californians through deceptive and false advertisements and aggressive marketing campaigns that misrepresented job placement rates and school programs.

      CCI deployed these advertisements through persistent Internet, telemarketing and television ad campaigns, according to the suit. The complaint further alleges that Corinthian executives knowingly misrepresented job placement rates to investors and accrediting agencies, which harmed students, investors and taxpayers.

      “The predatory scheme devised by executives at Corinthian Colleges, Inc. is unconscionable. Designed to rake in profits and mislead investors, they targeted some of our state’s most particularly vulnerable people -- including low income, single mothers and veterans returning from combat,” Harris said.

      Targeting the vulnerable

      According to the complaint, CCI’s predatory marketing efforts specifically target vulnerable, low-income job seekers and single parents who have annual incomes near the federal poverty line. In internal company documents obtained by the Department of Justice, CCI describes its target demographic as “isolated,” “impatient,” individuals with “low self-esteem,” who have “few people in their lives who care about them” and who are “stuck” and “unable to see and plan well for future.”

      The complaint maintains that CCI advertised job placement rates as high as 100% for specific programs when, in some cases, there is no evidence that a single student obtained a job during the specified time frame. The complaint further alleges that CCI runs millions of online and mobile ads offering ultrasound, x-ray, radiology, and dialysis technician programs at their California campuses -- when, in fact, CCI does not offer those programs. CCI’s call center agents are disciplined if they tell callers that CCI does not offer these programs, the complaint maintains.

      Additionally, according to the complaint, CCI includes official Army, Navy, Air Force, Marine Corps, and Coast Guard seals in mailings and on web sites without authorization and in violation of California law.

      Exaggerated job placement claims

      The complaint contends that CCI committed securities fraud by reporting a nationwide job placement rate of 68.1% in presentations to investors, when senior executives knew this percentage was false. The complaint describes internal audits emailed to CCI executives that show job placement data error rates between 53% and 70%.

      The complaint references an email from a CCI executive which explains that in 2011, two Everest College campuses (Hayward and San Francisco) paid a temporary employment agency “to place students to meet the accreditation deadline and minimum placement %.” The complaint also states that CCI double-counted job placements and failed to maintain required records of reported job placements.

      Myneisha of Southfield, Mich., who enrolled in an Everest Institute Pharmacy Technician program, has a score to settle on that matter. "They say they help you with job placement," she writes in a ConsumerAffairs post, "when in actuality all they do is give you a list of places that are hiring and tell you to apply. It has now been 5 years, and I am back in school enrolled in a pharmacy technician program. Now, I am stuck with a nice bundle of student loans, and I work for a financial institute."

      According to a recent CCI securities filing, the average tuition for an associate’s degree is $40,000 and the average tuition for an online CCI associate’s degree is $34,000. The average tuition for CCI’s non-degree healthcare programs is $17,000.

      CCI is based in Santa Ana and currently operates 24 Everest, Heald and WyoTech campuses in California, 111 total campuses in North America and three online programs. Out of the 81,000 students who attend CCI colleges, approximately 27,000 (33%) are in California.

      An effort by ConsumerAffairs to reach CCI for comment was unsuccessful.

      Attorney General Kamala D. Harris is suing Corinthian Colleges, Inc. (CCI) and its subsidiaries, charging false and predatory advertising, intentional misr...

      Foster Farms California plants remain open

      New processes and technology are being added to the operations

      Foster Farms' three California facilities in Livingston and Fresno will remain open amid continuing daily USDA Food Safety and Inspection Service (FSIS) inspections of the firm's chicken, according to the company.

      The decision to allow the plants to remain in operation follows Foster Farms' implementation of several new food safety controls over the last two months and its commitment to install added processes during an enhanced inspection period over the next 90 days.

      "We started this process more than two months ago and this officially validates our progress, but we are not stopping here," said Ron Foster, president and CEO of Foster Farms. "We are putting every resource and all of our energy toward food safety with the confidence that Foster Farms plants will be the most stringent in the industry."

      No recall

      The California Department of Public Health has determined there is no need for a product recall in California. Dr. Ron Chapman, director of the CDPH and state health officer, says a recall has not been requested, “because, with proper handling and preparation, this product is safe for consumption. Chicken is a raw animal protein that is expected to have some level of naturally occurring bacteria present,” he added, “Cooking chicken fully to 165 degrees Fahrenheit will kill the bacteria present. Provided that consumers do not cross-contaminate fully cooked chicken with raw chicken juices, it is safe to consume."

      Earlier this week, FSIS issued a health alert regarding Foster Farms products, and in May there was a recall of more than 6,000 pounds of ready-to-eat grilled chicken strips.  

      Consumers with questions may call Foster Farms at at 800-338-8051.

      Foster Farms' three California facilities in Livingston and Fresno will remain open amid continuing daily USDA Food Safety and Inspection Service (FSIS) in...

      Gasoline prices: silver lining to the Washington mess?

      Worries about economic turmoil may be sending fuel prices lower

      Consumers might be looking at the standoff in Washington, where a last attempt to block implementation of the Affordable Care Act (ACA) has led to a government shutdown, and feel a sense of disgust.

      They get quite another feeling, however, when they pull up to a gas pump. The price of gasoline is falling and is now about 50 cents a gallon cheaper than it was at this time last year.

      Could the two feelings be somehow linked? Consider this; as worries have intensified that the government shutdown could make it harder to reach agreement on raising the debt ceiling, oil prices have fallen. Not a plunge, but consistent declines each day.

      Hedging their bets?

      Traders probably still expect the two sides to reach an 11th-hour agreement that would prevent the U.S. from defaulting on its debt but many are hedging their bets. That means getting rid of assets that could suffer if the unthinkable happens. So they're selling, not buying, oil futures.

      So in what might be a first, consumers could actually be benefiting – at least in the short term – by what's happening in Washington. A report by the Chinese news agency Xinhua links petroleum price declines to default fears. 

      Of course, there are other explanations for consumers' good fortune at the gas pump. The AAA Fuel Gauge Survey shows the national average price of self-serve regular is around $3.35 a gallon, compared to $3.81 at this time last year.

      Not the whole story

      But that average price doesn't tell the whole story. Some states, mostly in the west and northeast, are still paying relatively high prices for fuel. In a number of states – mostly in the southeast – the average price has dipped close to $3 a gallon.

      In Missouri, the statewide average price is $3.06 a gallon. In South Carolina it's $3.08 and $3.12 in Mississippi. Within 18 of the lowest-priced states, there are areas where pump prices are $2.99 a gallon or less, according to Gas Buddy. 

      California drivers, however, are paying an average of $3.83 a gallon and in New York, the average pump price is $3.67. Hawaii remains the only state where the average price of gasoline is over $4 a gallon.

      Part of consumers' good fortune has less to do with Washington brinkmanship and more to do with supply and demand. In it's weekly report Wednesday, the Energy Information Administration said U.S. oil supplies rose sharply – much more than the market anticipated. Stockpiles for the week ended Oct. 4 rose 6.8 million barrels. The supply of gasoline increased by 100,000 barrels.

      No aberration

      The abundance of U.S. oil is not exactly an aberration. Domestic oil production has surged in the last six years and Canadian production is also sharply higher. That's led to something of a glut that some experts think should have pushed gasoline prices even lower than they are.

      T. Boone Pickens, a long-time energy entrepreneur, says building the XL pipeline from Canada to the U.S. would make OPEC “obsolete.”

      "Canadians say they have 250 billion barrels of oil,” Pickens said in an interview with CNBC. “That's exactly what the Saudis claim they have. You're sitting there with the same amount of oil available to the United States from Canada as Saudi Arabia."

      Where do gasoline prices go from here? It's hard to say but as long as there are concerns about the future of economic growth, there is little to push them higher – especially when there is a glut of oil. But the payoff for consumers is unmistakable. The Royal Bank of Canada projects that if gasoline prices were to remain at $3.30 a gallon, it would put $30 billion in consumers' pockets.

      Consumers might be looking at the standoff in Washington, where a last attempt to block implementation of the Affordable Care Act (ACA) has led to a govern...

      Trilegiant, Webloyalty to pay $30 million on charges of misleading consumers

      Consumers found it difficult if not impossible to cancel services pushed by the companies and their affiliates

      A family of companies that specialize in "negative option" marketing has agreed to pay $30 million to settle allegations that they misled consumers and trapped them into paying for services they didn't want and, in some cases, didn't know they had ordered.

      The attorneys general of 45 states and the District of Columbia reached the settlement with Connecticut-based Affinion, and its subsidiaries Trilegiant and Webloyalty, which will pay over $30 million to settle allegations that they misled consumers. 

      Affinion and its subsidiaries run multiple discount clubs and membership programs offering a variety of services such as credit monitoring, roadside assistance, and discounted travel.  Affinion markets these programs through a series of agreements with “marketing partners” that present these programs to consumers, often immediately after the consumer has engaged in a transaction with that partner.  Affinion charges a monthly fee. which continues until the consumers affirmatively cancel.

      This is what is known in marketing circles as a "negative option" or, as Mark Huffman put it in a 2005 ConsumerAffairs story: "Negative Option: When No Means Yes."

      Negative option

      "Simply put, negative option turns the sales transaction around. Instead of the merchant having to 'sell' you a product or service, it starts with the assumption that you've already bought it. Its up to you, the consumer, to contact the merchant and cancel the order if you don't want to complete the transaction," Huffman wrote.

      The practice has been hugely profitable but also highly controversial and has resulted in a steady stream of class action lawsuits and actions by various state and federal agencies.

      A 2011 class action charged that Danielle Stryker of Winchester, Va., who was 15 years old at the time, wound up inadvertently signing up for a “membership” that cost her $12 a month, even though she did not intend to sign up for it, had no use for it and never used it.

      Danielle's suit charged that the business practice at issue is “as simple as it is deceptive and devious” and is used on a wide network of Web sites that subscribe to Webloyalty's e-commerce services.

      In Danielle's case, she was on the Woman Within site looking for a gift for her mom when a pop-up offered her a $10 discount on her next purchase. When Danielle filled out the form, her credit card number and other information were transferred to Shopper Discounts, which began charging her $12 a month, supposedly as part of a 30-day trial.

      Stryker said she did not discover the charge on her debit card until $168 had been taken from her account. The suit says Webloyalty failed to refund the payments, even after being informed via an affidavit that Stryker was a minor and thus unable to enter into a legally-binding agreement.

      Largest penalty

      Today's settlement is thought to be the largest action aimed at reining in negative option sschemes.  

      The agreement includes several changes to Affinion’s business model, including requirements that Affinion provide "clear and conspicuous" information to consumers after enrollment regarding their membership, periodic reminders of their enrollment, and  of changes to Affinion’s cancellation practices. Further, Affinion is prohibited from any activities that enroll consumers in membership programs without express authorization.

      Affinion is establishing a fund of approximately $19 million to provide refunds to some consumers who received unauthorized charges for Affinion’s programs.  Consumers who believe they were improperly charged by Affinion, Trilegiant, or Webloyalty should contact their state's attorney general if they are in one of the states participating in the settlement (full list below).

      You can find the contact information simply by going to a search engine and typing "[state name] attorney general."

      Consumers should check their credit card and bank account statements for the names of Affinion’s membership programs, as often that is how the company’s charges appear on their bills.  A complete list of Affinion’s membership programs is available on the Nevada attorney general's site. 

      States participating

      The states included in the settlement are Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.  The states that led the investigation were California, Texas, Tennessee, Iowa, Vermont, Washington, Oregon, Maine, and Illinois. 

      A family of companies that specialize in "negative option" marketing has agreed to pay $30 million to settle allegations that they misled consumers and tra...

      A new kind of drug problem threatens young people

      It's not just recreational drugs like marijuana and cocaine

      In recent years the sports pages have contained more than box scores and game highlights. There have been stories of professional athletes whose careers and reputations have been derailed after it was revealed they used banned appearance and performance enhancing drugs (APED).

      There are different kinds of these drugs but among the most common are anabolic steroids that are supposed to increase muscle mass and strength. The main anabolic steroid hormone produced by your body is testosterone. Human Growth Hormones (HGH) make up another class of APED.

      To maintain the integrity of their sports, professional and amateur leagues have banned these substances. But beyond giving an athlete a physical edge, these drugs are prohibited because they carry health risks.

      Many athletes have been known to take these drugs at doses much higher than those prescribed for medical reasons. The long-term effects are simply unknown.

      Pressure to excel

      So why would athletes risk their careers and their health by taking these banned substances? The pressure to excel – which can be worth millions of dollars – is one likely reason. Most serious athletes, amateur and professional, will tell you that the competitive drive to win can be fierce. And unfortunately this pressure is being felt at an early age.

      A survey conducted for the Internet safety group, Digital Citizens Alliance (DCA), found eight percent of males between 18 and 25 have admitted taking APEDs. The findings were disturbing enough, but DCA went a step further. It attempted to order some APEDs online. The group was shocked at how easy it was.

      DCA tried to buy four APEDs – three anabolic steroids and one shipment of Human Growth Hormone (HGH)-- online that investigators found during a search on YouTube. When the drugs arrived they were sent to Microtrace LLC, a testing facility in Elgin, Ill.

      The results

      The first report came back positive. The lab found that the steroid was what the sellers claimed it to be – Deca Durabolin, a powerful drug that is illegal to possess without a valid prescription from a doctor. The second package – which the seller claimed to be HGH – was a fake.

      DCA placed two other orders but said the drugs never arrived.

      "The recently closed online drug black market, Silk Road, was a billion dollar enterprise – and it had nowhere near the traffic that YouTube does," said Tom Galvin, the executive director of DCA. "We applaud the crackdown on the dark web's worst operators, but many of those same operators do the same things on the open web that our children use every day. The brilliant minds at YouTube and Google are doing amazing things. If they can build a car that parks itself, why can't they build a wall protecting children from drug dealers?"

      Taylor Hooton was a teen who took steroids to try and boost his baseball performance. Instead, the drugs cost him his life. Today, his father, Don Hooton, travels the country speaking to youth groups, preaching against the use of any kind of drug designed to boost athletic performance.

      "We talk to children everyday who know where to find this stuff," Hooton said. "My son Taylor obtained his steroids from a 19-year-old drug dealer who he met at our local YMCA. Now, kids don't even have to leave the couch to find anabolic steroids, Human Growth Hormone, and other Appearance and Performance Enhancing Drugs. Today's dealers come right to the playground where kids live – the Internet."

      Ancient roots

      While technology may have made the problem worse, turning to drugs to boost performance is as ancient as the Greeks. The National Center for Drug Free Sport says the use of enhancement substances for sporting events dates back to both the Greeks and the Maya. Performance potions were utilized by the Greeks to increase their abilities, and cocoa leaves where thought to be used by the ancient Maya to increase their abilities.

      Unfortunately, today's ADEPs carry more risks. The Mayo Clinic says many athletes take anabolic steroids at doses that are much higher than those prescribed for medical reasons, and most of what is known about the drugs' effects on athletes comes from observing users.

      Even more worrisome is a new class of anabolic steroids called designer drugs, synthetic steroids, have been illegally created to be undetectable by current drug tests. They are made specifically for athletes and have no approved medical use. That's why they haven't been tested or approved by the Food and Drug Administration (FDA) and, according to the Mayo Clinic, represent a particular health threat to athletes.

      In recent years the sports pages have contained more than box scores and game highlights. There have been stories of professional athletes whose careers an...

      Post Office to destroy print run of "Just Move" stamps

      Stamps destroyed over fears they promote unsafe messages to kids

      As if the U.S. Post Office didn’t have enough financial problems already, it has to destroy the entire print run of its not-yet-released “Just Move” pro-exercise stamps, because some unnamed “sports figures on the President’s Council on Fitness, Sports & Nutrition” worried that three of the fifteen stamps – those showing stylized human figures either performing a cannonball dive, skateboarding without knee pads, or doing a headstand without a helmet – promote unsafe activities.

      This is a sensible reaction—indeed, the only possible good-person response—if you believe children are natural philatelists heavily influenced by postage stamps.

      We’re more disturbed by the fact that the stamps show people without faces, which is fine for adults-only postal activities but might give impressionable children the wrong ideas about healthy bodily self-image.

      And, while we’re looking for reasons to criticize the stamps and urge their destruction, we may as well point out that the cannonball-dive stamp clearly shows a male rather than female figure, which either promotes self-destructive “go endanger yourself” messages to little boys, or misogynistic “athletics aren’t for you” messages to little girls.

      Whatever it is, it must be bad.

      As if the U.S. Post Office didn’t have enough financial problems already, it has to destroy the entire print run of its not-yet-released “Just ...