Current Events in November 2013

Easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer are on the way.

The Consumer Financial Protection Bureau's (CFPB) new “Know Before You Owe” mortgage forms, which will replace the existing federal disclosures, are designed to help consumers understand their options, choose the deal that’s best for them, and avoid costly surprises at the closing table.

“Taking out a mortgage is one of the biggest financial decisions a consumer will ever make,” said CFPB Director Richard Cordray. “Our new ‘Know Before You Owe’ mortgage forms improve consumer understanding, aid comparison shopping, and help prevent closing table surprises for consumers.” The rule, he said, “is rule is an important step toward the consumer having greater control over the mortgage loan process.”

Sweeping changes

For more than 30 years, federal law has generally required that within three business days after receiving a mortgage application, mortgage lenders must deliver two different, overlapping disclosures to consumers. At the closing stage, federal law again generally requires two forms. All of these forms contain duplicative and sometimes confusing information. The Dodd-Frank Wall Street Reform and Consumer Protection Act recognized the need to simplify and streamline this information for consumers and transferred responsibility for the forms to the CFPB.

The final rule requires that lenders use the CFPB’s new disclosures, puts in place rules about when the new forms are given to the consumer, and limits how the final deal can change from the original loan estimate. They are available in English and Spanish.

The Mortgage Bankers Association (MBA) applauds the CFPB's goal of creating mortgage regulations that protect consumers and strengthen the real estate finance system. "We are pleased that they recognized the enormity of change being implemented in the mortgage systems," said MBA President and CEO David Stevens. "The August 2015 deadline is a clear recognition by the CFPB of  how significant the change is and the time needed to implement this new rule. MBA continues to support clear disclosure forms for consumers that allows them time to review their loan and comparison shop.”

The forms

The Loan Estimate: This form will be provided to consumers within three business days after they submit a loan application. It replaces the early Truth in Lending statement and the Good Faith Estimate, and provides a summary of the key loan terms and estimated loan and closing costs. Consumers can use this new form to compare the costs and features of different loans.

The Closing Disclosure: Consumers will receive this form three business days before closing on a loan. It replaces the final Truth in Lending statement and the HUD-1 settlement statement, and provides a detailed accounting of the transaction.

Improved consumer understanding

An extensive study confirmed the benefits of the new CFPB forms. Consumers of all different experience levels, with different loan types -- whether focused on buying a home or refinancing -- were able to understand CFPB’s new forms better than the current forms. Testing showed that 29% of participants who used the new forms were better able to answer questions about a sample loan and were better able to decide whether they can afford the loan -- including the cost of the loan over time.

Specifically, the forms help consumers better understand key information:

• Risk factors: Because information on the CFPB forms is disclosed in an easy-to-read format, consumers can more easily identify risky loan features. In addition, lenders will have to tell homebuyers about prepayment penalties, larger-than usual periodic payments, and complicated loan structures.
• Short-term and long-term costs: By putting the important information in a clearer format than the current forms and in plain language, both the Loan Estimate and Closing Disclosure more easily explain the total costs of the loan. This includes an important breakdown of the loan amount, the principal and interest payment, and how it could change, and closing costs.
• Monthly payments: The new forms state in bold font what a consumer’s monthly principal and interest payments will be. If it is an adjustable-rate loan, the forms say the projected minimum and maximum payments over the life of the loan.

Better comparison shopping

When consumers understand their loan offers, they can better compare competing offers. In testing, the CFPB’s new forms performed better than the current forms when it comes to comparing competing offers by as much as 42%. This leads to better consumer choice. The forms enable better:

• Comparisons of competing loan offers: The new forms use formatting that clearly breaks down the costs of the loan, such as the interest rate, mortgage insurance costs, and closing costs. As a result, would-be-homebuyers and those refinancing their existing mortgage are better able to distinguish between two different loan offers.
• Shopping for closing costs: Closing costs are the costs of completing a mortgage transaction, including origination fees, appraisal fees, title insurance, taxes, settlement services, inspections, and homeowner’s insurance. Consumers can save money if they shop around for their own service providers for some of these costs. The CFPB forms plainly outline what closing services a consumer will need and which ones they can shop around for.

Avoiding costly surprises

With the current forms, consumers can have a hard time comparing their original loan terms to their final loan offer. Consumers need to be reasonably sure that the mortgage they signed up for is the one they are getting. The CFPB’s rules curtail “bait and switch” tactics, where the terms change at closing, by implementing several new consumer protections:

• Easier comparisons of the estimated and final terms of the loan: By making the Loan Estimate and Closing Disclosure very similar in format, consumers are better able to compare their estimate with the final terms of the loan. In testing, the CFPB’s new forms performed better than the current forms when it comes to comparing estimated and final numbers by as much as 28%.
• More time to consider choices: By providing the Closing Disclosure three days before closing, consumers can review their final loan terms and costs in an unpressured environment rather than at the closing table. This allows consumers time to confirm whether they are getting what they expected. It also gives consumers time to ask questions and negotiate over changes that have occurred. This is especially true for consumers who are refinancing and can more easily delay the closing of the loan.
• Limits on closing cost increases: The new rule restricts circumstances in which consumers can be required to pay more for settlement services than the amount stated on their Loan Estimate. Lenders cannot impose new or higher fees on the final loan unless there is a legitimate reason.

The new rule takes effect Aug. 1, 2015. The CFPB is already working with industry and consumers toward effective implementation.  

Divorce happens. Staying together “for the sake of the children,” belongs for the most part to another era.

While psychologists are divided over whether staying in a rocky marriage is the right thing to do, economists are nearly universal in their opinion that divorce is bad economically.

First, there's the actual cost of getting a divorce. In most cases, both spouses hire their own lawyers. Both parties end up with legal bills.

$20,000 divorce

The web site Maritalstatus.com recently reported the average cost of a divorce in the U.S. to be about about $20,000. Throw in alimony payments that one party might get stuck with and the costs can grow even higher.

Next comes the settlement. When living as a couple, a husband and wife might both be earning incomes. But they pool their money to pay for a mortgage, buy groceries and make car payments. There's an economy of scale that works in their favor.

When they become single again, it's two households to maintain, with all their expenses. In the settlement, one party might get stuck with the lion's share but often both parties take a financial hit.

Women may take the bigger hit

More often than not, women come up short. A recent Census Bureau report found that 21% of recently divorced women were living below the poverty line – more than twice the rate for men.

Sometimes one party will get the house, but increasingly, that asset has to be sold off to divide property in an equitable manner. If one party owns a business, they might be forced to sell, or take on a significant loan, in order to pay off a divorced spouse.

If one spouse has dropped out of the work force to take on more child-rearing responsibilities they will usually find they have lost significant earnings power when they re-enter the work force.

Avoiding divorce

None of this is to argue that couples should remain in bad marriages. But avoiding the point where a marriage goes off the rails could make everyone happier – and wealthier – in the long run.

Something as simple as talking to each other might go a long way toward heading off a divorce, according to research compiled by YourTango.com, a relationship website. It surveyed mental health professionals to learn what is most likely to lead to irreconcilable differences.

“Communication problems” was cited by 65% of respondents, making it the most common response. Not far behind was “couples unable to resolve conflict,” at 43%.

Women are from Venus, Men are from Mars

As you might expect, men and women see the communication problem differently. Seventy percent of men blamed the problems on nagging and complaining, and their spouse not expressing enough appreciation.

Eighty-three percent of women said their partners didn't validate their feelings and opinions and 56% complained he didn't listen or talked too much about himself.”

If any of these things sound familiar, you might want to get acquainted with the traits of a successful marriage. According to the mental health experts in the poll, successful couples pursue individual interests and hobbies and don't try to do everything together. They also learn to argue in a healthy way.

They point out that listening, appreciating and supporting can go a long way toward saving, not just a marriage, but a lot of money too.

It may be embroiled in a safety controversy driven largely by the over-the-top bluster of its manfacturer's CEO but the Tesla Model 6 all-electric sports sedan is first in the hearts and minds of its owners, according to the Consumers Reports annual owner-satisfaction survey.

Owners of the Tesla Model S gave it the highest owner-satisfaction score Consumer Reports has seen in years: 99 out of 100. While the $89,650 Model S isn’t for everyone, CR collected more than 600 survey responses from owners of 2012 and 2013 models. Moreover, its owner-satisfaction score matches the near-perfect 99 overall test score the Model S earned in Consumer Reports’ performance ratings.

“In testing, the Model S stands out for its innovative design, outstanding performance, and surprising practicality. These results suggest Tesla owners are very, very satisfied,” said Jake Fisher, Consumer Reports’ director of automotive testing.

Other winners

Other models that topped their categories in Consumer Reports’ latest owner-satisfaction ratings are the Porsche Boxster sports car (which was second overall), Audi A6 luxury sedan, Mazda6 midsized sedan, Subaru Forester SUV, Dodge Charger (V8) large sedan, and the diesel-powered Volkswagen Golf TDI compact car.

Luxury and high-performance cars tend to do well in CR’s owner-satisfaction ratings, and Audi had more high-scorers than any other luxury brand. But models without a prestige brand or a sporty focus also made a mark. The redesigned Mazda6 and Subaru Forester, for example, are moderately priced, mainstream vehicles that outscored all models from BMW, Lexus, and Mercedes-Benz.

“Novelty can play a big role in launching a car into the top ranks, which isn’t surprising because brand-new designs can generate a lot of excitement. But enthusiasm can wane quickly if a car turns out to be not very special,” said Anita Lam, Consumer Reports automotive data program manager.

That’s the case with the Toyota Prius C hybrid, a smaller version of the regular Prius. It garnered one of the highest scores in its 2012 debut year but dropped a significant 10 points this time around. Other cars that faded significantly in their owners’ estimation were the Chrysler 200, Hyundai Sonata, and Subaru Impreza hatchback.

Consumer Reports’ annual owner-satisfaction survey, conducted by the Consumer Reports National Research Center, generates ratings by asking subscribers a key, revealing question, “Considering all factors (price, performance, reliability, comfort, enjoyment, etc.), would you get this car if you had it to do all over again?” A model’s score is based on the percentage of respondents who answered “definitely yes.”

This year, Consumer Reports received responses on about 350,000 vehicles and more than 285 models and variants spanning the 2011 through 2014 model years.

Complete car owner satisfaction scores and ratings tables appear on www.ConsumerReports.org today, and in the January issue of Consumer Reports, on newsstands December 3. 

The cost of goods one step shy of the consumer level fell again in October.

According to the Labor Department (DOL), the Producer Price Index (PPI) declined 0.2% following a 0.1% decline in September. For the 12 months ended October 2013, the PPI is up just 0.3%.

Energy and food

As was the case with consumer inflation in October, a drop in gasoline prices (-3.8%) was a major factor in the PPI decline. The energy sector as a whole was down 1.5% -- the first decline since a 2.5% drop in April. Lower prices for diesel fuel and residential natural gas also contributed to the decline.

Foods prices, on the other hand, jumped 0.8%, the largest advance since a 0.9% surge in March. Nearly 60% of that is due to beef and veal prices, which shot up 7.5%. Higher prices for fresh and dry vegetables also were a factor.

Excluding the volatile food and energy sectors, the “core rate” of inflation was up 0.2% in October. Year-over-year, core inflation is up a modest 1.4%.

The complete PPI report is available on the Bureau of Labor Statistics website.

Jobless claims

There was a big drop in the number of first-time applications for state unemployment benefits in the week ending November 16.

In a separate report, DOL says there were 323,000 initial claims filed -- a decrease of 21,000 from the previous week's revised figure of 344,000. Economists surveyed by Briefing.com had projected a level of 333,000 The initial figure for the previous week was 339,000.

DOL analysts say seasonal adjustments from the Veteran’s Day holiday may have played a role in the sharp decline in claims, although how big a factor is unknown.

The 4-week moving average, which is less volatile and seen as a more accurate gauge of the labor market, was down 6,750 -- to 338,500.

The full report can be found on the DOL website.

Jobbers Wholesale is recalling Lot No. KWAKPMC030505175957019 of Rhino 5 Plus, Lot No. JBP-L-1270-70 of Maxtremezen and Lot No. KWAKPMC03050517 of Extenzone.

Laboratory analysis found these products, marketed as dietary supplements for sexual enhancement, to contain undeclared desmethylcarbondenafil and dapoxetine. Desmethylcarbondenafil is a phosphodiesterase PDE-5 inhibitor which is a class of drugs used to treat male erectile dysfunction, making these products unapproved new drugs. Dapoxetine is an active ingredient not approved by the U.S. Food and Drug Administration (FDA).

The company has not received any reports of adverse events related to this recall.

The products are packaged in 1 capsule blister packs and were distributed to selected retail customers in California from June 1, 2013, to November 7, 2013.

Consumers and retailers who have the recalled products should stop consumption or further distribution and return to place of purchase or directly to Jobbers Wholesale, 16101 Garfield Avenue, Paramount, CA 90723.

Consumers are asked to have order number or proof of purchase.

Consumers with questions regarding this recall can contact Jobbers Wholesale by phone (562-331-0700), from Monday to Friday, 09:00-17:00.  

Toyota Motor Engineering & manufacturing North America is recalling 9,795 model year 2013-2014 Camry and Camry HV, model year 2013 Avalon and Avalon HV and model year 2014 Corolla vehicles.

In the affected vehicles, the windshield wiper switch assembly may short circuit. A short circuit could cause inoperative windshield wipers, reducing driver visibility and increasing the risk of a crash.

Toyota will notify owners, and dealers will replace the wiper switch assembly, free of charge. The recall began on November 8, 2013.

Owners may contact Toyota at 1-800-331-4331.

Yokohama Tire Corporation is recalling 1,192 7.50R16 RY215 tires manufactured January 1, 2006, through August 1, 2011.

These tires are missing the "DOT" prefix, the required load/inflation information and do not list the material and number of structural plies. Without load/inflation markings, owners may overload the tire which could result in tire failure, increasing the risk of a crash.

Yokohama will notify owners and dealers will replace the tires, free of charge. The recall is expected to begin by late November 2013. Owners may contact Yokohama at 1-800-423-4544.

When the National Highway Traffic Safety Administration (NHTSA) announced earlier this week that it was opening a preliminary evaluation into battery fires in the $90,000 battery-powered Tesla S luxury car, It got a yawn from experienced safety advocates and reporters who routinely cover the NHTSA beat. It is, after all, what safety agencies do -- investigate safety issues.

"The NHTSA investigation is the best way Tesla has to insure the safety of the Model S and restore consumer confidence," Clarence Ditlow, executive director of the Center for Auto Safety, said. "Unlike the Chevrolet Volt, the Tesla fires occurred on the road and not in the lab.  Unlike the Volt, the Tesla had three fires not one.  Tesla needs to fully cooperate with NHTSA to determine the problem is lack of a shield and not a more serious battery problem like the Boeing Dreamliner."

Like any federal agency, NHTSA lumbers along at a stately pace, moving more slowly than many would like but sweeping up an awful lot of data about an awful lot of cars and trucks. A preliminary evaluation is the tenderest touch you can get from NHTSA; it simply means an issue has come to its attention and it is looking into it to determine whether it merits further probing.

But, like a visit from legendary TV detective Columbo, a preliminary evaluation may be start off softly but be just the beginning of a lengthy investigation that eventually leads to a costly and damaging recall.

Specifically, NHTSA is so far looking into two accidents in which a Tesla S hit metal debris on the roadway, damaging the battery tray and starting a fire. There have actually been three such accidents in five weeks but one was in Mexico, and thus outside NHTSA's jurisdiction.

This rather mild response from the feds quickly ignited a fire under Tesla CEO Elon Musk, who has aggressively pursued and basked in millions of dollars worth of free publicity since launching his fast, sleek and expensive little gem. Critics on Wall Street and elsewhere are saying that Musk is doing more damage to his company's reputation than the NHTSA probe and are suggesting bluntly that he learn to keep his mouth shut.

"This showcases Tesla's need for a well-staffed formal PR function and its need to put a leash on Musk," Rob Enderle, principal analyst at the Enderle Group, said, according to TechNewsWorld.

A defect demands a recall

Leaving aside the public relations issues, Ditlow and other safety advocates say NHTSA is simply doing what the law requires it to do. If it determines a defect exists, a recall is the legally required outcome. Ditlow has little doubt about the eventual outcome. 

"Under both the established case law and comparative recalls, Tesla has a safety defect demanding a recall," he told ConsumerAffairs.

Ditlow documented his assertion by citing a 1976 NHTSA proceeding against General Motors involving defective carburetors. In that case, a federal court held that a fire in a vehicle on the road is a safety defect under the Safety Act, whether or not there are injuries involved.

In another case, involving the Ford cruise control deactivation switch fires, there was an incidence rate of 65 fires in 3,723,142 vehicles or 0.001746%. The incidence rate in the Tesla is 2 out of 19,000, excluding the one in Mexico, or 0.011% -- which means the incidence rate is already 6.3 times higher in the Tesla than in the recalled Fords, Ditlow said. 

The timeline

Further, there is the little matter of exposure over time, which Musk appears to have ignored in his many assertions that Teslas experience a lower percentage of fires than gasoline-powered cars.

"The Ford recall was on 1995-2002 vehicles (3-10 years old) so that exposure in terms of registered vehicle years or vehicle miles traveled is far greater than the 2013 Tesla which is 1 year old," Ditlow said. "Just doing a back of the envelope calculation, the incidence rate on the Tesla Model S based on registered vehicle years is 63 times higher than the recalled Fords."

One of the largest payday lenders in the country will refund up to $14 million after being accused of robo-signing court documents in debt collection cases. The Consumer Financial Protection Bureau (CFPB) also found that Cash America violated the Military Lending Act by illegally overcharging servicemembers and their families. 

It is the first action against a payday lender by the CFPB, which earlier this month announced that it was accepting consumer complaints about payday lenders. 

Cash America will pay up to $14 million in refunds to consumers and it will pay a $5 million fine for these violations and for destroying records in advance of the Bureau’s examination.

“This action brings justice to the Cash America customers who were affected by illegal robo-signing, and shows that we will vigilantly protect the consumer rights that servicemembers have earned,” said CFPB Director Richard Cordray. “We are also sending a clear message today to all companies under our watch that impeding a CFPB exam by destroying documents, withholding records, and instructing employees to mislead examiners is unacceptable.”

Payday loans are often described as a way for consumers to bridge a cash flow shortage between paychecks or the receipt of other income. They can offer quick access to credit, especially for consumers who may not qualify for other credit. Many payday loans are for small-dollar amounts that must be repaid in full in a short period of time.

States in recent months have taken tough action against online payday lenders and a coalition of consumer groups and civil rights activists say federal regulators should crack down as well.

In a letter to federal bank regulators, the U.S. Department of Justice, and the Federal Trade Commission (FTC) the 29 groups recently offered thanks for enforcement efforts thus far but called for stronger measures to stop illegal payments from being taken out of consumers’ bank accounts.

Specifically, the groups want regulators to stop banks and payment processors from helping Internet and tribal payday lenders collect illegal payments. It's part of an emerging strategy targeting loans the groups consider predatory, trapping consumers in a cycle of high-interest debt.

Cash America is a publicly traded financial services company headquartered in Fort Worth, Texas that provides consumer financial products and services, including payday loans, lines of credit, installment loans, and pawn loans. With hundreds of retail locations across more than 20 states, it is one of the largest payday lending companies in the United States. Cash America’s Chicago-based subsidiary, Enova, offers online loans in 32 states under the brand name CashNetUSA.

Remedies & penalties

To ensure that all impacted consumers are repaid and that consumers are no longer subject to these illegal practices, Cash America has committed to:

• Refund consumers: Cash America has already voluntarily paid back roughly $6 million to military borrowers and victims of the robo-signing practices. Through today’s CFPB order, they have committed to offer an additional $8 million to consumers, for a total refund of up to $14 million. Consumers who were subject to debt collection lawsuits in the state of Ohio from 2008 through January 2013 are eligible. More information is available at: www.consumerfinance.gov/blog/our-first-enforcement-action-against-a-payday-lender
• Dismiss pending collections lawsuits: Within months of the CFPB discovering the robo-signing, Cash America dismissed pending collections lawsuits, terminated all post-judgment collections activities, cancelled all judgments obtained, and corrected information it furnished to credit bureaus for the nearly 14,000 wrongful cases filed in Ohio.

• Pay a $5 million fine: Cash America will pay a $5 million civil money penalty.

• Improve internal compliance systems: Cash America will develop and implement a comprehensive plan to improve its compliance with consumer financial protection laws, including the Military Lending Act.

Put yourself inside the head of a scam artist for a minute. Who are the people most likely to fall for whatever scheme you're pushing? Why, people who've already fallen for other scams, of course.

That may have been the thinking that went through the heads of the founders of Business Recovery Services, who now will be doing a bit of recovery themselves. The company and its owner, Brian Hessler, have been hit with multi-million-dollar judgments and will be banned from selling recovery services.

“In effect, this scheme rubbed salt in the wound of people who had already been victimized, targeting them and defrauding them all over again,” said Jessica Rich, Director of the Federal Trade Commission's Bureau of Consumer Protection. “The FTC is committed to taking action against these types of egregious scams.”

The judgments permanently ban Hessler and his company, based in Mesa, Arizona, from selling any services that are represented to recover or assist in the return of money or any other item of value paid for by, or promised to, a person in a previous transaction.

In 2011, the FTC charged Hessler and his company with selling worthless do-it-yourself kits, priced up to $499, for people who had lost money to business opportunity and work-at-home operations.  The case was part of an enforcement sweep targeting scams that took advantage of financially strapped consumers.

The defendants are also barred them from disclosing or otherwise benefitting from customers’ personal information, failing to dispose of this information properly, and misrepresenting any facts material to a consumer’s decision to buy a product, donate to charity, or enter a contest.

The default judgment imposes a $5.2 million judgment against Business Recovery Services.  The consent judgment against Hessler imposes a $5.2 million judgment that was suspended upon payment of $90,000.

British researchers say that introducing solid food with breast milk after the 17th week of birth could reduce food allergies in babies.

The researchers, led by Dr Kate Grimshaw, dietitian and senior research fellow at the University of Southampton, say that giving the baby solid food beside breast feeding helps it develop a better, stronger immune system to fight food allergies.

"Introducing solid foods alongside breastfeeding can benefit the immune system," Dr Grimshaw explains. "It appears the immune system becomes educated when there is an overlap of solids and breast milk because the milk promotes tolerogenic mechanisms against the solids.

"Additionally, our findings suggest 17 weeks is a crucial time point, with solid food introduction before this time appearing to promote allergic disease whereas solid food introduction after that time point seems to promote tolerance."

Infants are largely intolerant of solid food before four to six months of age. This is thought to be due to the infant gut being relatively immature, which may cause symptoms of food allergy.

The research supports the recommendations of the American Academy of Paediatrics and other health organizations who who urge mothers not to introduce solid foods before four to six months of age. Furthermore the findings also support the American Academy of Paediatrics' breastfeeding recommendations that breastfeeding should continue while solid foods are introduced into the diet.

The study was funded by the UK Food Standards Agency and published in Pediatrics.

How many times have you thought to yourself, “maybe I should learn CPR?” Maybe you should. This simple procedure saves countless lives each year.

When someone goes into cardiac arrest their heart stops beating, meaning blood stops moving through their body. When that happens, oxygen doesn't make it to the brain and serious brain damage occurs or the patient dies.

It would be convenient to go into cardiac arrest inside the walls of a hospital, but unfortunately that only happens about 20% of the time. The rest of the time it happens at home, or at the office or while walking down the street. According to the American Heart Association, about 288,000 cases of cardiac arrest occur each year outside of a hospital and fewer than 10% of the patients survive.

Cardiopulmonary resuscitation, the formal name for CPR, is a way to manually pump the heart, moving blood through the body, until medical help arrives. The procedure isn't likely to restart the heart but it can restore at least partial blood flow.

Just 38 minutes

Japanese researchers have found that performing CPR on a heart attack victim for 38 minutes or longer can improve a patient’s chance of survival. It also improves the chances that survivors will have normal brain function, researchers said.

Of course, time is of the essence. After allowing for other factors that can affect neurological outcomes, researchers found that the odds of surviving an out-of-hospital cardiac arrest without severe brain damage dropped five percent for every 60 seconds that passed before normal blood circulation was restored.

The problem is, most people haven't been trained in administering CPR. Fortunately, it's not a complicated procedure and is fairly easy to master.

Research presented at the American Heart Association's Scientific Sessions 2013 in Dallas found that just one minute of training for bystanders in a crowded shopping mall could save a cardiac arrest victim.

60 seconds of training

The researchers used a one-minute CPR video to improve responsiveness and teach compression only CPR to people with no CPR experience. Compression only CPR – now the preferred method – does not require breathing air into the victim's mouth but simply applying pressure to the chest in a regular rhythm. The brief American Heart Association video below shows how it is done.

To prove their point, researchers divided participants in the study into two groups: 48 adults looked at the video, while 47 sat doing nothing for one minute.

With a mannequin playing the role of a heart attack victim, both groups were asked to do "what they thought best." Researchers measured responsiveness as time to call 9-1-1 and start chest compression and CPR quality reflected by chest compression depth, rate and hands-off interval time.

Results

The people who watched the one-minute video called 9-1-1 more frequently, initiated chest compression sooner, had an increased chest compression rate and a decreased hands-off interval, researchers said.

"Given the short length of training, these findings suggest that ultra-brief video training may have potential as a universal intervention for public venues to help bystander reaction and improve CPR skills," said Ashish Panchal, lead researcher of the study.

It's probably advisable, however, to spend more than 60 seconds learning CPR. There are a variety of courses offered by groups that can probably be found in your local area. To help you find a course near you, the American Heart Association provides this handy course locater.

There's a popular belief that anything that's "natural" is better than anything that's not. It's not always true but in the case of marijuana, it just may be that sticking to the real thing is safer than using synthetic substitutes, popularly known as "spice" and "K2." (Using none at all is OK too, of course).

A University of South Florida neurology team reports that stroke may be among the severe health hazards associated with synthetic marijuana.

An advance online article in the journal Neurology  details case studies by the USF neurologists of two healthy, young siblings who experienced acute ischemic strokes soon after smoking the street drug spice.  Ischemic strokes occur when an artery to the brain is blocked.

Seizures, abnormal heart rhythms, heart attacks, psychosis, hallucinations and other serious adverse effects have been associated with smoking synthetic pot.  Medical journals have also begun to report a growing number of strokes potentially related to the use of natural (non-synthetic) marijuana.

“Since the two patients were siblings, we wondered whether they might have any undiagnosed genetic conditions that predisposed them to strokes at a young age. We rigorously looked for those and didn’t come up with anything,” said senior author W. Scott Burgin, MD, professor of neurology at the USF Health Morsani College of Medicine and director of the Comprehensive Stroke Center at Tampa General Hospital.

“To the best of our knowledge, what appeared to be heart-derived strokes occurred in two people with otherwise healthy hearts.  So more study is needed.”

USF vascular neurology fellow Melissa Freeman, MD, was lead author of the paper.

Herb mixture

Synthetic marijuana refers to a mixture of herbs, often resembling lawn clippings, that have been sprayed or soaked with a solution of designer chemicals intended to produce a high similar to cannabis when consumed.  Spice can be much more potent than conventional marijuana because of the more complete way the psychoactive ingredient in the synthetic product binds to the brain’s cannabinoid receptors, Dr. Burgin said.

People who smoke spice expose their brains to unidentified chemicals untested on humans.

“You don’t know what you’re getting when you smoke synthetic marijuana,” Dr. Burgin said. “It’s like the Wild West of pharmaceuticals, and you may be playing dangerously with your brain and your health.”

Not identified in standard toxicology screens, spice has become second only to natural marijuana as the most widely used illicit drug among high school seniors, according to a 2011 survey sponsored by the National Institute on Drug Abuse.

More physicians need to be more aware of the potentially toxic effects of recreational synthetic drugs, especially when seeing conditions like heart attack or stroke not as common in young patients, Dr. Burgin said. “Be willing to ask about pot and spice use, because it’s not something patients are inclined to volunteer and synthetic marijuana does not show up on routine drug tests.”

It's a classic good news-bad news situation: The National Association of Realtors (NAR) reports that while sales of previously-owned homes fell in October for the second straight month, tight inventories kept home prices rising.

According to the NAR, total existing-home sales, which include single-family homes, townhomes, condominiums and co-ops, were down 3.2% to a seasonally adjusted annual rate of 5.12 million. Still, they're 6.0%t higher than they were a year earlier. Sales have remained above year-ago levels for the past 28 months.

However, a flattening trend is expected. “The erosion in buying power is dampening home sales,” said NAR Chief Economist Lawrence Yun. “Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.”

Prices on the rise

The national median existing-home price for all housing types was $199,500 in October -- a surge of 12.8% from a year earlier and the 11th consecutive month of double-digit year-over-year increases. The median is the point which half the prices are higher and half are lower.

Distressed homes -- foreclosures and short sales -- accounted for 14% of October sales, unchanged from September; they were 25% in October 2012. Part of the gain in median price is from a smaller share of distressed sales.

Total housing inventory at the end of October was down 1.8% percent to 2.13 million existing homes available for sale, representing a 5.0-month supply at the current sales pace. Unsold inventory is 0.9% above a year ago, when there was a 5.2-month supply.

Where they sold

• Existing-home sales in the Northeast declined 2.9% in October, but are 11.7% higher than October 2012. The median price in the Northeast was $247,300 -- up 7.4% from a year ago.
• In the Midwest, existing-home sales slipped 1.6%, but are 8.0% above a year ago. The median price in the Midwest was $154,700 -- 9.3% higher than October 2012.
• Sales of previously-owned homes were down 1.9% in the South, but are 7.3% above their year-ago level. The median price was up 12.9% from a year ago to $171,500.
• Constrained inventory sent sales in the West plunging 7.1%, and 0.8% below a year ago. The median price in the West was $284,800 -- up 17.2 percent from October of last year.

Mortgage applications

Separately, data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey show mortgage applications were down 2.3% during the week ending November 15, 2013. The results include an adjustment to account for the Veteran’s Day holiday.

The Refinance Index slid 7%, putting the refinance share of mortgage activity at 64% percent of total applications -- a drop of 2% from the previous week. The adjustable-rate mortgage (ARM) share of activity was unchanged at 7% of total applications.

Contract interest rates

• The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) rose two basis points from 4.44% to 4.46%, with points decreasing to 0.38 from 0.44 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) dipped to 4.47% from 4.48%, with points decreasing to 0.22 from 0.34 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year FRMs backed by the FHA was down 2 basis points to 4.14%, with points decreasing to 0.25 from 0.32 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 15-year FRMs was unchanged at 3.52%, with points increasing to 0.33 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
• The average contract interest rate for 5/1 ARMs increased to 3.12% from 3.11%, with points increasing to 0.37 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

Yesterday, we wrote about Google's plans for pop-up "showrooms" around the country and now Verizon is trying something similar, with the first Verizon "superstore" opening in the Mall of America in Bloomington, Minn.

Of course, a bigger, cooler store won't solve many of the problems hundreds of consumers have written to ConsumerAffairs about. Their problems deal with the phones and Verizon policies, not the decor in the phone store.

Take Joe of Whites Creek, Tenn., who wrote to us earlier this month. 

"I purchased a new Galaxy S4 phone on a continuing contract. Five weeks later the phone died and according to a local Verizon representative the phone could not be repaired locally. The store ordered a replacement phone," Joe said. "On 11/5/13, a like-new Galaxy S4 phone arrived."

But "like new" was not what Joe was anticipating.

"I expected a new phone because my phone was only five weeks old. Five weeks ago I paid for a new phone and now Verizon expects me to accept a used phone. I am being strong-armed into taking a used phone or pay early termination fees on my phone and other phones on the contract. Are you kidding?"

Despite such unpleasant experiences, Verizon is hoping its expanded stores turn into friendly spots where consumers can hang out, get their hands on the tablets, smartphones and other gadgets that will be on display.

There are differences, though. While Google's showrooms will apparently be open for only a brief time in the run-up to the holidays and will not actually be making any on-premise sales, the Verizon stores will be more or less permanent and will be actual stores -- meaning you'll be able to walk out with the merchandise under your arm.

Both companies are going for high-traffic locations, mostly in major malls.

Verizon, of course, already has plenty of smartphone stores but they tend to be on the small side. At a news conference yesterday, Verizon Chief Operating Officer Marni Walden said the expanded stores will not just be trying to move the merchandise, they'll also be educating consumers about the technology behind the devices, according to a report in AdAge. 

The Minneapolis superstore features different "zones," including a "Get Fit" zone, complete with a treadmill. There, consumers can get in a quick workout while trying out the activity-tracker bracelet FitBitZip, which among other things tries to calculate how many calories you're burning.

Another zone, "Amplify It," lets music enthusiasts try out different speakers and test DJ apps. The zones will change occasionally and some will be seasonal, the company said.

Smaller stores

Verizon's smaller stores are also being redesigned and turned into smaller versions of the superstores. AT&T is doing something similar with its stores, getting rid of counters and cash registers.

It's good, we guess, that the lumbering giants are trying to be cool -- you know, like Apple. But in their rush to copy Apple's successful retailing model, they might want to consider how well that model worked for J.C. Penney when it named former Apple marketing executive Ron Johnson to be its CEO. Johnson proceeded to remake J.C. Penney stores in Apple's image, which didn't turn out quite as planned.  

A federal judge, acting at the request of the the Federal Trade Commission (FTC), has temporarily halted, and frozen the assets of, a Montreal operation that bilked more than $14 million from small businesses and churches in the United States for unwanted listings in online business directories.

The FTC is seeking a permanent halt to the illegal practices and wants to force make the defendants return victims’ money; the scheme has generated more than 13,000 complaints from consumers.

“Hiding behind borders to scam churches and small businesses is a tactic that we’ve seen before,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Scammers need to know that we have great relationships with our law enforcement partners in Canada and, as this case shows, we can and will work together to protect our consumers.”

Among the dozens of complaints ConsumerAffairs has received, is this from Annie of Watsonville, Calif: “An Indian man called saying he spoke with my husband yesterday (I know for a fact he didn't) and said he requested to cancel our business listing (we have none and never want one). He said he needed to verify our contact information in order to not charge us $1,500.00! He badgered me! I am so irate. I have never gotten a call this bad before. Something needs to be done about this company.”

The company is currently trying to bill me for a service that I didn't request,” writes Noemi of Delano, Calif. “I did not sign any contract. They are trying to bill me over $500.00. I feel like they are trying to scam me into paying. I've spoken with them, and explained that I never ordered their services, or signed anything for it. They want me to pay for something I didn't want, or request.”

The charges

According to court papers filed by the FTC, the defendants operated from Montreal, using corporate shells and mail drops in the U.S. to hide their actual location. Typically, they made phone calls pretending they were verifying contact information to update or confirm existing directory listings. In some cases, the defendants said they were calling in response to a cancellation request, and asked to verify the organization’s contact information to confirm the cancellation. In fact, the defendants had no prior relationship with the consumers.

The bills sent by the defendants averaged $499.99 or more and had a “walking fingers” image often associated with a local yellow pages directory. Some consumers paid, thinking someone in their organization had ordered these listings. Other consumers paid after the defendants used partially recorded phone conversations with consumers who had verified their contact information to convince them that they had a binding oral contract with the defendants, according to the FTC’s complaint.

Threatening statements

Consumers who ignored the bills or refused to pay received collection calls and dunning notices, often with added interest charges, late fees, and legal fees, as well as threats of collection agency referral, credit rating damage, and legal action, the FTC alleged. To make consumers believe third-party debt collectors were involved, the defendants created two debt collection companies, CC Recovery and M&A Recovery, which also made threats. The defendants’ threats convinced many consumers to pay the bills, the FTC alleged.

The FTC’s complaint claims the defendants violated the FTC Act by misrepresenting that they had a preexisting business relationship with consumers, that consumers had agreed to buy directory listings, and that consumers owed them money.

The defendants are Mohamad Khaled Kaddoura, Derek Cessford, and Aaron Kirby, and the companies they ran:

• Modern Technology Inc., also doing business as Online Local Yellow Pages;
• Strategic Advertisement Ltd., also d/b/a Local Business Yellow Pages;
• Dynamic Ad Corp., also d/b/a Yellow National Directory and Yellowpages Local Directory;
• Wisetak Inc., also d/b/a Online Public Yellow Pages and US Public Yellow Pages;
• Wisetak, Inc., also d/b/a Online Public Yellow Pages and US Public Yellow Pages;
• Internet Solutions LLC, also d/b/a Public Yellow Pages;
• Yellow Pages Express Inc., also d/b/a Yellow Pages Express;
• Yellow Pages Online Inc., also d/b/a Yellow Pages Online;
• CessTech Inc., also d/b/a Yellow US Pages;
• SEO Online Inc., also d/b/a Yellow Local Directory;
• SEO Online LLC; SEOOnline, also d/b/a Public Yellow Pages;
• SEM Pundits Inc., also d/b/a Yellow Pages Online;
• CC Recovery Corporation, also d/b/a CC Recovery; and
• M&A Recovery Inc., also d/b/a MA Recovery.

There are plenty of people who find hidden meanings in the written word, whether they're actually there or not. Now researchers say the use of homophones -- words that sound alike -- may in fact be used to trigger specific actions by those who read them.

"We show that mentally distracted people will think of purchasing, or 'buy' when reading 'bye.' When the concept of purchasing is primed by reading 'bye,' consumers may be willing to pay more for a product or service," write authors Derick F. Davis of the University of Miami and Paul M. Herr of Virginia Tech, writing in  the Journal of Consumer Research.

Their research showed that priming via a homophone elicits a predictable effect even when the connection between the homophone and the desired behavior is not obvious. For instance, when primed with the term "goodbye," a consumer may perceive they have just received a good deal, or "good buy."

The research extends to broader applications than just consumer behavior, the authors note.

"Building from these findings," they explain, "it may be possible to aid in individuals' dieting goals by having them read 'wait,' or influence how bold they feel when they read about a 'boulder.'"

The concept of priming is common in advertising, but the connection between the use of homophones and modified consumer behavior may have new application for brands as well as public policy makers.

One real-world example is the weight-loss drug Alli, which sounds like ally—one's comrade or friend in an effort. Consumers may be more likely to perceive Alli as being a helpful "ally" in their weight-loss goals.

"The relationship between word sound and word meaning may be interesting in the many areas where the written word is used to communicate meaning," the authors conclude.