Current Events in December 2014

Ford Motor Company is recalling 462,911 model year 2005-2008 Ford Mustang vehicles manufactured August 1, 2004, to June 30, 2007, and 2005-2006 Ford GT vehicles manufactured February 11, 2005, to January 30, 2006.

Upon deployment of the driver side frontal airbag, excessive internal pressure may cause the inflator to rupture. In the event of a crash necessitating deployment of the driver side frontal airbag, the inflator could rupture with metal fragments striking and potentially seriously injuring the vehicle occupants.

This recall supersedes, in part, an earlier recall as to the front driver airbag inflators in 2005-2008 Ford Mustang and 2005-2006 Ford GT vehicles only. The driver's airbag inflators in 2004-2005 Ford Rangers originally sold, or ever registered in, certain hot and humid locations will continue to be addressed by that recall.

In this newest recall, Ford will notify owners, and dealers will replace the driver side frontal airbag inflator, free of charge. The manufacturer has not yet provided a notification schedule.

Owners may contact Ford customer service at 1-866-436-7332. Ford's number for this recall is 14B09.  

FCA US, the former Chrysler Group, is recalling certain model year 2015 Dodge Challenger vehicles manufactured June 30, 2014, to October 8, 2014.

The instrument cluster may become inoperative, which could cause the gauges to oscillate at zero and the Vehicle Theft Alarm could remain illuminated. If the instrument cluster becomes inoperative, it can increase the risk of a vehicle crash.

FCA will notify owners, and dealers will install a software enhancement, free of charge. The recall began on December 15, 2014.

Owners can contact FCA customer service at 1-800-853-1403. FCA's number for this recall is P74.

Doctors have known for some time that some foods and drinks can trigger migraine headaches in some people. That's an important fact to remember around the holidays, when your food and beverage consumption may take some crazy twists and turns.

Dr. David Dodick, Chair of the American Migraine Foundation, cautions people who suffer from migraines to keep their guard up over the next few weeks.

“This is the season in which many people overindulge in things that can trigger attacks of migraine,” he said. “It’s important to think through food and beverage choices, to help reduce the risk of having a migraine attack.”

Keep up your routine

For starters, Dodick says you need to eat regularly. Skipping or missing meals is a much more common trigger of migraine than any particular food, so it is important to stay on a dietary schedule, even through you might not feel like it after loading up on cookies at a Christmas party. By all means, he says, don't skip breakfast.

Here's a common-sense tip. If previous migraines have helped you identify certain foods that you suspect are triggering attacks, avoid that food during the holidays. Remember that stress can also trigger an attack, so the combination of food and holiday stress can make a migraine more likely.

When offered a choice of wine, choosing white over red may improve your odds. For many sufferers, red wine is a common trigger.

Reduce alcohol consumption

Drinking little or no alcohol may also help you avoid an attack. Because alcohol and dehydration can trigger a migraine attack, alternating a glass of water with an alcoholic beverage may help keep a migraine at bay.

Eat more healthy food during the holidays. In addition to not skipping meals, limit your intake of processed foods, sodium, sugar, and caffeinated and carbonated drinks.

The hours before bedtime are also very important. Cut out the caffeine by early afternoon and avoid snacking after dinner.

Know your triggers

“Knowing your food triggers and planning in advance can increase your enjoyment of holiday activities with fewer migraine attacks,” Dodick said. “If you don’t know whether you have food triggers, we suggest trying to eliminate specific dietary foods and beverages, such as red wine, processed meats, nuts, chocolate, aged cheese, monosodium glutamate, and gluten-containing foods, to see if they are causing migraine attacks. If these attacks decrease, introducing these items back one at a time can identify the culprit(s), should they exist.”

Not everyone who suffers from migraine headaches has food triggers, but for those with these triggers, avoiding them can often mean fewer attacks.

A migraine is very different from the garden variety headache. According to the Mayo Clinic, a migraine can cause intense throbbing or a pulsing sensation in one area of the head and is commonly accompanied by nausea, vomiting, and extreme sensitivity to light and sound.

An attack can last for a few hours or a few days and can be so severe that the sufferer can only lie down in a dark room and wait for it to pass.

Usually they hit you like a bolt out of the blue but can have a few warning signs, such as flashes of light, blind spots, or tingling in your arm or leg.

T-Mobile is the latest wireless carrier to run afoul of charges it "crammed" millions of dollars of bogus third-party charges on customers' bills. The company has agreed to fully refund its customers for the unwanted charges, paying at least $90 million to settle a Federal Trade Commission lawsuit filed earlier this year.

Earlier this week, the Consumer Financial Protection Bureau (CFPB) sued Sprint for cramming its customers and in October, AT&T Wireless was fined $105 million. 

In addition to the full refunds T-Mobile is paying to settle the FTC lawsuit, T-Mobile will pay $18 million in fines and penalties to the attorneys general of all 50 states and the District of Columbia and $4.5 million to the Federal Communications Commission.

“Mobile cramming is an issue that has affected millions of American consumers, and I’m pleased that this settlement will put money back in the hands of affected T-Mobile customers,” said FTC Chairwoman Edith Ramirez. “Consumers should be able to trust that their mobile phone bills reflect the charges they authorized and nothing more.”

Under the terms of the settlement, T-Mobile will be required to offer full refunds to all affected consumers. The amount of money the company pays must reach at least $90 million in redress or other payments.

The settlement requires T-Mobile to contact all of its crammed customers – current and former – to inform them of the refund program and claims process, and to do so in a clear and conspicuous way.

The FTC filed suit against T-Mobile in July, alleging that the company placed millions of dollars in unwanted third-party charges on its customers’ mobile phone bills, receiving 35 to 40 percent of every charge they placed. The charges were for services like horoscopes, love tips and celebrity gossip, for which T-Mobile typically billed consumers $9.99 per month.

If you happen to be in the market for a new car, the next couple of weeks could provide an opportunity to snag a good deal. Dealers are trying to move metal, not just for the end of the month but the end of the year as well.

Kelley Blue Book (KBB) reports lease, financing and cash back deals are among the best they've seen in 2014.

“Year-end is one of the best times to buy a new car as automakers look to maximize sales numbers for the calendar year,” said Jack R. Nerad, executive editorial director and executive market analyst for Kelley Blue Book’s KBB.com. “In the wake of Lexus’ highly successful ‘December to Remember’ campaign that first launched years ago, many automakers have been offering holiday sales events, making now an opportune time for shoppers to get a deal on a car they may have been eyeing all year.”

KBB has highlighted both 2014 and 2015 models as providing the best value this month. They run the gamut from compact cars to luxury vehicles to three-row SUVs, all equipped with money-saving offers.

Lease deals

For the bargain-conscious car shopper, the 2014 Honda Civic offers one of the lowest monthly payments around, at $149. The car has an MSRP of of $20,000 but KBB says it's selling for $17,763 with about $2,000 due at signing.

If you were ever thinking about a hybrid, this may be the month to buy one. With gas prices plunging, fuel efficiency no longer carries the premium it once did. As a result KBB says you can lease a 2014 Toyota Prius for $249 a month with just $999 due at signing.

Another enticing lease deal is the 2015 Chevrolet Malibu. It's selling for close to its MSRP of $24,560 but can be leased for just $189 a month with $1,369 down.

Financing offers

There aren't nearly as many attractive financing packages as there are leases. In fact, KBB singles out only one that makes its list.

The 2014 Volkswagen Passat has an MSRP of $27,495 but KBB is finding it for $24,374. While that's a nice discount, the financing is what sells it.

Qualified buyers can drive away in a Passat paying 0% for 60 months. But you'll need a good credit score to qualify, so it's best to check your score before visiting the dealership.

Cash back

Topping the list of overall best December car deals is the 2014 Mazda CX-9. Its MSRP is $30,815 but KBB says you should be able to negotiate a price of $27,749. On top of that nice discount is $4000 back at closing.

The 2014 Chrysler 300 has a similarly attractive cash back offer. With an MSRP of $30,815, you should be able to negotiate a sale price of $29,767 while pocketing $4,250 cash back.

The 2014 Toyota Avalon offers both back and attractive financing. Listing for $32,415, the car is selling for under $29,000 and provides $1,000 back and 0% financing for qualified buyers for 60 months.

With a total population of barely 1 million, St. Louis County, Missouri -- home of the now-infamous Ferguson -- has no fewer than 90 municipalities. Many are laughably small, some with just a few hundred residents.

Why so many? Well, the primary reason is that the City of St. Louis, now hovering around 318,000 -- is prohibited from annexing so it has not been able to grow beyond its original borders, leaving a fertile field for suburban upstarts.  (It's actually a little more complicated than that, but let's not get hung up on details).

And how do all these little towns support themselves? A civil suit filed by Missouri Attorney General Chris Koster against 13 St. Louis County towns supplies a big part of the answer. To put it plainly: speed traps.

The suit alleges that towns have been violating a Missouri law requiring cities and towns to calculate the percentage of their general revenue derived from fines and court costs for municipal traffic violations and to disgorge all fines in excess of the statutory limit. 

Anytime you have a law specifically prohibiting a practice, you can assume that practice is widespread. And that certainly seems to be the case in St. Louis County, as anyone who has ever tried to drive from downtown St. Louis to the airport, located in the county, will tell you. Interstate 70 winds through a bewildering array of these hamlets and many of them have their constabulary lurking along the highway.

Macks Creek

The law -- commonly called the Macks Creek law, states that no municipality may receive more than 30 percent of its annual revenue from fines and court costs for traffic violations.  Towns are required to report the percentage of their general operating revenue that flows from fines and court costs for traffic violations.

A review by the Attorney General’s Office found a pattern of non-compliance.

 "The Macks Creek law was enacted to protect Missourians from predatory traffic ticketing," Koster said.  "As we continue to identify areas for reform, an important first step is to require St. Louis County municipalities to follow the Macks Creek law to the letter.  Based on my review, these thirteen municipalities did not."

Koster's lawsuit identifies five municipalities that failed to file their annual reports with the state auditor. The cities of Beverly Hills and Pagedale failed to submit reports for fiscal year 2014. The cities of Breckenridge Hills, Pasadena Park, and Upland Park failed to submit fiscal year 2013 reports.

Four municipalities—Crystal Lake, Velda Village Hills, the village of Hillsdale and the village of Mackenzie—failed to indicate how much of their operating revenue was derived from fines and court costs.

And four municipalities—Bellerive Acres, Moline Acres, Normandy, and the village of Vinita Terrace—submitted reports suggesting their revenue from traffic fines exceeded the thirty percent cap.

For example, the village of Vinita Terrace divided six months' worth of traffic-related fines by the total revenue for the entire year, dramatically misstating the percentage of operating revenue derived from traffic tickets.  Investigators believe the amount of operating revenue Vinita Terrace derives from traffic-related fines is over fifty percent.

Similarly, the city of Moline Acres appears to derive thirty-four percent of its operating revenue from court fines, and Normandy more than thirty-eight percent.

"If these municipalities will work with my office to come into compliance, we will work with them," said Koster. "If they fail to work with us, or simply do not have the ability to comply with state law, then they should lose jurisdiction over traffic violations."

Your nail polish could be lowering your child's IQ.  A recent study at Columbia University’s Mailman School of Public Health has found that certain nail polishes, and other types of cosmetic and glue products, have the potential to lower IQs.

The study found that children exposed in utero to high concentrations of two specific phthalates had lower IQ scores at age 7. Phthalates are a group of chemicals used to make plastics more flexible and harder to break. They are often called plasticizers.

Phthalates are used in hundreds of products, such as vinyl flooring, adhesives, detergents, lubricating oils, automotive plastics, plastic clothes like raincoats, and personal-care products such as soaps, shampoos, hair sprays, and nail polishes.

Many times you will find them in children's toys if the toys were made before 2009, when new restrictions went into effect.

Endocrine disruptors

The speculation is that  phthalates might act as endocrine disruptors to the mother’s thyroid hormone, which is crucial in the development of a child’s brain.

“These findings are important to inform policy makers of the potentially harmful effects of this class of chemicals,” the authors wrote.

328 Dominican and African-American women, as well as their children, took part in this study. They were  studied at the Columbia Center for Children’s Environmental Health. The researchers measured levels of four phthalates in the mother's’ urine when they were pregnant, and children were given IQ tests at age 7. Their IQ results were a few points lower.

The lead author was Pam Factor-Litvak, PhD,  she is an associate professor of Epidemiology at the Mailman School. She explained that mothers who had concentrations of phthalates in the highest 25 percent ended up having kids with IQ scores up to six to eight points lower than kids of mothers who were in the lowest 25 percent of exposure to phthalates.

“That’s actually a substantial effect,” Factor-Litvak told Time Magazine. “Honestly, I think we were a bit surprised that the reduction was so large.”

There is a bright side -- not all soft plastic contains phthalates. Most plastic wraps, water bottles, and food containers are phthalate-free. 

What to do

The way we live today it would be pretty tough to avoid all products that have phthalates in them but you can do some things to be proactive.

You might go au natural instead of buying a fragrance.   When you buy cosmetics, the word "fragrance" or "parfum" on a label almost always means phthalates. What you want to see are words that say "no synthetic fragrance" or "scented with only essential oils" or "phthalate-free."

Only use plastics that have  recycling codes 1, 2, or 5 -- you can see the numbers on the bottom of the container.

Hand-me-down toys are great if they were purchased after 2009. Anything before that could be made with phthalates. Phthalates are now banned from children's toys, teethers, bottles, and feeding products. But not before 2009.

Don't ever microwave in plastic, always use glass. Even BPA- or phthalate-free plastic may contain harmful chemicals. Opt for glass food storage containers, and choose bottles and sippy and snack cups that are mostly stainless steel, silicone, or glass.

If you give up nail polish think of all the money you will be saving without getting your nails done. It's a win-win. You will have smarter kids as well!

Thinking of getting new carpet? Don't let them walk all over you when you're trying to find someone to install it.  It's wise to know what to look for.

Inches matter, so make sure they come to your house and take proper measurements. There should be transitions between rooms and seam placement.

It seems that many people don't know the ins and outs of seams. Carpet rolls are limited in width and a room will many times require a seam. The World Floor Covering Association recommends working with your provider to create a diagram that plots out seams and transitions before carpet is cut.

One tip is you can minimize a seam if you run it in the direction of light. Of course there is always the old standby of hiding it under the furniture.

Every organization has guidelines to follow and the carpet industry is no different. It has the Carpet and Rug Institute, which recommends that carpets be power-stretched to minimize wrinkling. Some installers use a smaller stretcher -- often called a "knee kicker" -- that is more appropriate for small repair jobs.

Pricey add-ons

Watch the fees. There are many ways to add on to your price of getting a new  carpet. Before you know it your bill will look like a patchwork quilt. They may advertise free or low-cost installation or padding, but then surprise you with other charges. They can charge to move furniture or to throw away your old rug.

The moldings and the baseboards might have to be removed. They can charge extra to remove them and then patch up the paint.

You should have no more than 10% of extra carpet for the length and width of a room as long as the installer measured correctly.  You might want to ask about leftovers. For a few extra bucks they can make small rugs with the leftover pieces, which can come in handy to wipe your feet on so you don't ruin the new carpet.

You probably will want to open a window and let the glue and adhesive smell out once you have had it installed. It's a good idea if they bring a fan to help the process along. It may take 72 hours for odors and volatile organic compounds from the carpet or adhesives to dissipate. You do not want to breathe this stuff for an extended period.

Whatever you do just make sure they don't hide the extra fees under the rug.

Prescription drugs are still the leading cause of poisonings in the U.S. but a new study finds that "bath salts," synthetic marijuana and laundry detergent pods are becoming common threats as well.

The findings come from National Poison Control Center data from 2012 published earlier this week in Annals of Emergency Medicine.

"The poison center system can provide real-time advice and collect data regarding a variety of poisonings, including those that may be new or unfamiliar to emergency physicians," said lead study author Richard Dart, MD, PhD, of the Rocky Mountain Poison and Drug Center in Denver, Colo. 

"Emergency physicians are continually challenged by the emergence of new types of poisonings, which lately include illicit street drugs as well as laundry detergent pods."

In 2012, poison centers across the country recorded 2.2 million human poison exposures.  Most patients who contacted a poison center were managed without involving a health care facility, such as a hospital emergency department.  Involvement of a medical facility for poisonings increased with patient age: In 2012, 11.6 percent of children under 5, 14 percent of children age 6 to 12, 51.2 percent of teenagers and 37.9 percent of adults were treated in a health care facility for poisonings.

Opioid painkillers

The majority (83 percent) of poisonings that ended in death in 2012 were linked to a pharmaceutical product, most commonly opioid painkillers, though NPDS also recorded deaths from cardiovascular and antidepressant medications.  The total number of prescription opioid exposures by children more than doubled between 2002 and 2012 (from 2,591 to 5,541). Non-pharmaceutical agents also led to poisoning deaths, with carbon monoxide the leading cause of death in this category.

In 2012, a new source of poisonings among children emerged in the form of laundry detergent pods, though the adverse effects are generally not life-threatening. 

The family of designer drugs such as "bath salts" (a type of amphetamine), "plant food," synthetic marijuana and others continue to poison users severely enough that they require emergency medical treatment.  Although bath salts exposures peaked in 2011, new illicit drugs sold to consumers continue to be monitored by poison control centers.

"Poisoning continues to be a significant cause of injury and death in the United States," said Dr. Dart.  "The near real-time responsiveness of NPDS helps emergency physicians respond to new poisoning threats, while also assisting patients who call for help to know when they need the ER and when they can manage things safely at home."

Ford Motor Company is recalling 712 model year 2015 Ford Mustangs manufactured September 25, 2014, to October 9, 2014.

The fuel pressure sensor may not have been seated properly to the fuel jumper line, which may cause a fuel leak. A partially seated fuel pressure sensor could cause a fuel odor or a fuel leak, increasing the risk of a vehicle fire in the presence of an ignition source.

Ford will notify owners, and dealers will replace the fuel jumper line, free of charge. The recall is expected to begin in December 2014.

Owners may contact Ford customer service at 1-866-436-7332. Ford's number for this recall is 14S27.

FCA aka Chrysler is recalling 256,956 model year 2005 Dodge Ram 1500 trucks manufactured January 28, 2004, to August 3, 2005.

The rear axle pinion nut may loosen due to an undersized spline on the pinion gear. If the pinion nut loosens, the rear axle may seize, and/or the driveshaft may detach resulting in a loss of vehicle control, increasing the risk of a crash.

Chrysler will notify owners, and dealers will install a retention feature to the pinion nut, free of charge. The recall is expected to begin February 13, 2015.

Owners may contact Chrysler customer service at 1-800-853-1403. Chrysler's number for this recall is P77.

Giggles International of Hong Kong is recalling about 13,000 Animated Sing-Along Monkey toys.

The battery compartment can reach temperatures up to 230 degrees Fahrenheit, posing a burn hazard.

The company has received two reports of toys overheating and melting their battery compartments.

This recall involves Giggles International Animated Sing-Along Monkey toys. The monkey is made of brown and beige plush material and is about 9 inches tall. The toy is designed to hold a song book titled "5 Little Monkeys" and to sing the song when activated. A red music note is on the bottom of the monkey's right foot and the face of a child with its hands covering its eyes are on the bottom of the money's left foot.

Recalled sing-along monkeys were manufactured between 6/7/2014 and 7/5/2014 and have batch code GP1410028. The manufacture date in the M/D/YYYY format and batch code are printed on the bottom of a white fabric label attached near the base of the monkey's tail.

The monkey toys came in a tan colored box with words "Animated Sing-Along Monkey," "Sing along with me!" and "I play peek-a-boo with you!" on the front. The age advisory "For ages 3+" and the warning that batteries are included are also on the front of the box.

The toys, manufactured in China, were sold exclusively at Cracker Barrel Old Country Stores nationwide from September 2014, to October 2014, for about $25.

Consumers should immediately take the animated monkey away from children, remove the batteries and return the toy to any Cracker Barrel Old Country Store or contact Giggles International for a full refund.

Consumers may contact Giggles International at (800) 738-6018 from 9 a.m. to 6 p.m. ET Monday through Friday.

Perhaps nothing better demonstrates the conflict between Main Street and Wall Street than the steep plunge in oil prices over the last 3 months.

Oil prices have gone from over $100 a barrel to below $60. The result has been gasoline prices below $2 gallon in some parts of the U.S. and pump prices well below $3 almost everywhere else.

The immediate benefit for consumers is fairly obvious. Consumers are now saving an average of 80 cents a gallon every time they fill up. That extra money can be used for groceries and other things. Ask consumers what they think about falling oil prices and 99 out of 100 will probably tell you it's the best thing that's happened all year.

Hand-wringing

But ask that question on Wall Street and you get a very different answer. Traders are wringing their hands over the decline in oil prices and the stock market has gone into an end-of-the-year swoon, right at the time that traders were expecting a “Santa Claus rally.”

What gives?

When oil is viewed as a trading commodity, a sharp decline in price can be catastrophic for the parties that own it. It is similar to the dot com implosion of 2000. When the value of an asset plunges, people who own that asset lose money.

Banks at risk

The concern extends beyond oil traders. Banks have loaned money to small oil exploration companies based on the oil they find selling at $100 a barrel. When it's only worth $50 there are real concerns about the risk associated with that debt.

In the financial world, the plunge in oil prices is seen as a big negative, with ripple effects that extend far beyond energy. But what's it mean for consumers?

A big win for consumers

First, it means it costs less to get around. The drop in gasoline prices is like a big tax cut, putting more money in consumers' pockets.

Eventually, consumers will get around to spending that extra money and that will help stimulate the economy. Businesses are also paying less for fuel, allowing them to grow faster than they might otherwise.

This has happened before – 6 years ago. In the wake of the 2008 financial crisis oil prices plunged overnight, falling as low as $30 a barrel at one point. Gasoline prices were below $2 a gallon.

But within months the stock market reached a bottom and surged higher. By June 2009 the economy was growing again, officially ending the Great Recession. Oil prices – and gasoline prices with them – began to rise again.

Lower food costs

In a company podcast, Ron Joelson, executive vice president and chief investment officer at Northwestern Mutual, said U.S. agriculture should be a big beneficiary of low fuel costs, since it's a highly energy-intensive industry. Even food manufacturers and wholesalers should see benefits since transportation costs will be lower.

All of this should translate into lower food costs for consumers – or at least costs that don't go up very much.

With energy costs going down businesses may be more inclined to hire employees. Unemployment is at a relatively low 5.9% but millions of people have dropped out of the labor force, making that number artificially low. Low fuel costs may allow some consumers who have given up to re-enter the workforce.

What consumers perhaps should understand is these low prices probably aren't going to last forever. No one thinks oil prices are going to rebound next month but they probably will rise sooner than most experts think.

So if you were thinking about a small, fuel-efficient car just a few months ago, don't let these low gasoline prices influence you to consider a large SUV instead. If this environment causes dealers to offer a great deal on a hybrid, this is the time to take advantage of it.

Sooner or later, traders will return to the oil market and prices will rise. It happened before and it'll happen again.

For more than a generation now, American college and university tuition costs have increased at a rate far higher than inflation, every year. Up to 40 million Americans currently carry some type of student loan debt, which in many ways is far worse than credit card, medical or underwater-mortgage debt because anyone unduly burdened by those debts at least has the “nuclear option” of declaring bankruptcy, destroying their credit rating but starting over with a net worth of zero, as opposed to a net worth that's a large negative number.

But student loan debt is bankruptcy-proof, presumably because teenagers and young 20-somethings who go over their heads in debt attending the wrong college deserve to suffer much harsher consequences than, say, middle-aged people who go over their heads in debt trying to profitably “flip” a house, putting too many luxe vacations on their credit cards, or gambling all their money away at the legal casino nearest them – those poor choices can be discharged in bankruptcy, but student debts cannot. (Quoth the high school guidance counselors who encouraged their charges to take on those loans: “Student loan debt is good debt. It's an investment in yourself!”)

That said: it's possible that certain colleges and universities looked at their young, debt-riddled students and thought, “We are not making as much money off these people as we could be. How can we make more?” And one answer seems to be: by using prepaid debit cards, rather than checks or direct deposit, to disburse students' credit balances (any loan or aid money left over after paying tuition and other bills).

Deals with schools

Credit card companies used to make deals with schools, allowing them to market their products to college students on campus, in exchange for the school's getting a cut. But this on-campus credit card marketing ended in 2009 when Congress passed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act which, among other things, prevented credit card companies from marketing on campus, required students under 21 to get parental permission before signing for a college-branded credit card, and required schools who made contracts with card companies to submit those contracts to regulators.

This week, the federal Consumer Financial Protection Bureau released a report (available in .pdf form here) noting that, as a result of the CARD act, the number of schools and alumni associations offering credit card deals dropped by 60 percent: 448 college credit card agreements in effect as of 2013, down from 1,045 in 2009.

Just how much money do colleges and alumni associations make from those credit card deals, anyway? In 2013, “payments by issuers” totaled $42,934,507, according to the CFPB report, which also noted that Bank of America is the chief issuer of college credit cards.

But students (and graduates) at least can choose whether or not to apply for a college credit card. They can't choose whether to accept refund fees on a debit card – if their school decides to do it, they're stuck.

Big business

How big a business are these cards?

The CFPB report says that

in February 2013, the Bureau launched an inquiry into other financial products and services marketed to college students. The Bureau found that marketing partnerships between institutions of higher education and financial institutions have shifted from credit cards toward debit and prepaid cards since the CARD Act of 2009 …. as noted previously in this report, the Bureau received 448 college credit card agreements for 2013, down from more than a 1,000 such agreements in 2010. For 2013, the Government Accountability Office (GAO) reported that at least 852 schools had agreements covering the provision of debit or prepaid card services to their students.

That's roughly 11 percent of colleges and universities in the U.S.

How much do these debit cards cost the students in fees, and what do the schools get (or pay) for the deal? Those questions cannot always be answered: agreements between colleges and payment-card companies don't have to be made public. Schools need not disclose to students (or their parents) just how much money the schools stand to make off such deals, if they don't want to. And the card companies are not obligated to offer data showing how much they make in fees, either.

Not just schools

Colleges and universities are hardly the only large institutions who've found it lucrative to work with prepaid debit card companies: certain employers and even state governments do, too.

In June 2013, for example, a McDonald's employee in Pennsylvania sued the franchisee she worked for, alleging that she and her fellow employees received their wages on prepaid JPMorgan Chase cards that were riddled with high fees: $1.50 fee for every ATM withdrawal, a per-transaction online payment fee of 75 cents, a $10 inactivity fee after 90 days, and multiple others.

The plaintiff said that she wanted to receive payment through direct deposit at her credit union, but that option was only offered to management; she and her fellow hourly employees were only offered the prepaid card, and couldn't access their own wages without paying various fees first.

That autumn, federal regulators including the Consumer Financial Protection Bureau reminded employers that it is illegal to require employees to accept their wages on such fee-ridden debit or pre-paid cards.

But there is no such law forbidding state governments from issuing prepaid cards to taxpayers for various reasons. Many states now use prepaid debit cards rather than checks to deliver unemployment benefits.

For example, Bank of America holds the contract to handle unemployment benefits in Maryland, meaning that anytime a Marylander loses a job, Bank of America gets another customer.

The Bank of America webpage discussing the Maryland Unemployment Benefits Debit Card has (as of Dec. 17) a “Program update” in all-red letters, reminding out-of-work Marylanders that: “Because the State of Maryland issues all unemployment insurance payments with the Maryland Unemployment Benefits Prepaid Debit Card, you may not be able to close your account. Maryland requires accounts to remain open in order to allow you to receive payments if you continue to qualify for them. Your Deposit Agreement, which can be viewed below via the Terms & Conditions link, has been updated accordingly.”

Other states made deals with other banks: in Texas, unemployment benefits are paid by Chase Bank debit cards. Georgia's unemployment benefits are dispersed via the “Way2Go” cards issued by Comerica Bank.

Tax refunds

Tax refunds can also come via prepaid cards. In 2013, Virginia started using Way2Go to issue tax refunds, touted as saving the state money off the cost of printing checks but potentially burdening taxpayers with fees to get their own money back. Card recipients were allowed one free transaction, with hefty fees attached to anything after that.

Most government-issued prepaid debit cards are supposed to offer at least one no-fee transaction, letting you get all your money at no additional cost to you. So if you ever get such a card, you should definitely empty all the money off it at once, either in cash or deposited into your own bank or credit union account.

The same holds true for any college student who receives a prepaid debit card for tuition refunds or financial aid: take all the funds at once, and check to ensure you weren't charged any fees for that. And remember that if your school offers you a special deal on a credit card, debit card or other payment scheme, they're not doing this as a favor to you; they're doing this to make money. (Those shiny new administration buildings won't pay for themselves, you know.)

Even though the U.S. housing market has recovered from the depths of what can only be considered a housing crash, it has been investors who have driven the market.

First-time homebuyers have mostly stayed on the sidelines, either out of choice or necessity. In many cases first-time buyers haven't been able to come up with the down payment that lenders have demanded.

Viewed in that light Fannie Mae's recent announcement of a new loan program, specifically targeted to first-time buyers, might make a significant impact.

Three percent down

Under the new program a buyer could put down as little as 3%. If the home in question cost $130,000 the first-time buyer would only have to put $3,900 down and could finance the rest.

That compares to $26,000 if the buyer were required to come up with a 20% down payment.

While the new loan program should make homeownership more accessible to more people, lending standards are not being relaxed in other areas. The loans must meet Fannie Mae’s usual eligibility requirements, including underwriting, income documentation and risk management standards.

Because of the small down payments, these loans will also require private mortgage insurance (PMI) or other risk sharing. On a 3% loan consumers should expect to pay a little over 1% of the loan as premium.

In out example of a home costing $130,000 with $3,900 down, PMI would add about $110 to the monthly house payment.

Helping credit-worthy consumers

“Our goal is to help additional qualified borrowers gain access to mortgages,” said Andrew Bon Salle, Fannie Mae Executive Vice President for Single Family Underwriting, Pricing and Capital Markets. “This option alone will not solve all the challenges around access to credit. Our new 97% LTV offering is simply one way we are working to remove barriers for credit-worthy borrowers to get a mortgage.”

The new loan product may come at a good time, not only for consumers but the industry as well. A November study by the National Association of Realtors (NAR) documented a major decline in first-time buyers in 2014.

The share of first-time buyers fell to its lowest point in nearly three decades and NAR says that is preventing a healthier housing market from reaching its full potential. The market depends on first-time buyers to buy “starter” homes, allowing those sellers to move up.

Squeezed

“Rising rents and repaying student loan debt makes saving for a down payment more difficult, especially for young adults who’ve experienced limited job prospects and flat wage growth since entering the workforce,” said NAR chief economist Lawrence Yun. “Adding more bumps in the road, is that those finally in a position to buy have had to overcome low inventory levels in their price range, competition from investors, tight credit conditions and high mortgage insurance premiums.”

The new 3% down program is called My Community Mortgage and is only available to first-time buyers, or consumers who have not owned a home in the previous 3 years.

In addition, eligible homeowners who wish to refinance their Fannie Mae-owned mortgage but do not qualify under the Home Affordable Refinance Program (HARP) can refinance their loan up to the 97% loan to value (LTV) level under a limited cash-out option.

The fatal police shooting of a 12-year-old in Cleveland who was holding a toy gun has been widely interpreted as evidence of police misconduct. But it is also indicative of the dangers posed by toy guns that look like the ral thing.

In New York, it is illegal to sell toy guns in realistic colors such as black, blue, silver or aluminum unless the gun has a non-removable one-inch-wide orange stripe running down both sides of the barrel and the front end of the barrel.

It's a law that is often ignored, however, at least until today. Attorney General Eric T. Schneiderman today announced that his office sent cease and desist letters to several major retailers, including Walmart, Amazon, Kmart, and others for allegedly selling prohibited toy guns online to residents of New York State, and, in at least one case, in a K-Mart store in suburban Rochester.

Sears Holdings said its stores would respond immediately.

"The safety of our customers is a top priority. We are in the process of immediately removing any non-compliant toy guns that are offered for sale by Sears or Kmart to New York consumers. We will fully cooperate with the New York Attorney General in its investigation," said Howard Riefs, Sears Holdings Director of Corporate Communications.

The letters call for retailers to immediately stop the in-store and online sale and shipment to New Yorkers of toy guns that violate New York State law pending the resolution of Schneiderman’s investigation. 

“When toy guns are mistaken for real guns, there can be tragic consequences,” said Schneiderman. “New York State law is clear: retailers cannot put children and law enforcement at risk by selling toy guns that are virtually indistinguishable from the real thing.”

Repeat offender: Walmart

One of the retailers sent a cease and desist letter, Walmart, was the subject of an earlier investigation by the Attorney General’s office into in-store sales of such toys, which resulted in a court order prohibiting them from selling toy guns in New York State.

It now appears that those sales have moved to the online marketplace, Schneiderman said. This new investigation reveals that many prohibited toy guns, priced from less than $10 to as much as several hundred dollars, can be easily purchased online and shipped into the state. The recent investigation also uncovered that at least one retailer is selling illegal toy guns in its stores.

Some of the toy guns discovered during the investigation are advertised as “realistic looking” and “full size.” Since they lack the orange striping down both sides of the barrel as required under state law, these imitation assault rifles, shotguns, and pistols closely resemble dangerous weapons, and could be easily mistaken for real weapons by law enforcement and civilians alike. 

Since 1997, at least four individuals have been killed in New York State, and one child was seriously wounded, when law enforcement officers mistook toy guns for real guns, Schneiderman said.

A company that specializes in selling to servicemembers -- and financing those purchases -- has settled state and federal charges that it used illegal debt collection practices.

Freedom Stores, Inc. settled lawsuits filed by the states of Virginia and North Carolina and the Consumer Financial Protection Bureau (CFPB) and agreed to pay over $2.5 million in consumer redress.

The CFPB alleged that Freedom Stores, Inc., Freedom Acceptance Corporation, and Military Credit Services LLC used illegal tactics including filing illegal lawsuits, debiting consumers’ accounts without authorization, and contacting servicemembers’ commanding officers.

“Our nation’s servicemembers deserve better than to be targeted with illegal collections tactics when they are struggling to pay their bills,” said CFPB Director Richard Cordray. “Freedom Stores and its affiliated companies were filing thousands of lawsuits in Virginia against consumers not from there, taking money from some consumers’ bank accounts without permission, and using the military chain of command to pressure and humiliate servicemembers.”

“This settlement resolves serious charges that Freedom Furniture engaged in abusive, harassing collection practices against Virginia veterans and servicemembers while also misusing Virginia courts to go after consumers who neither live nor do business in Virginia,” said Virginia Attorney General Mark Herring. “Our joint action will restrict such practices in the future, provide significant relief to those who have been wronged, and send a clear signal that we will aggressively pursue businesses that abuse Virginia consumers, especially any that prey on veterans and servicemembers. The Commonwealth of Virginia and our courts will not be a safe harbor for unfair and abusive practices.”

In a statement, the company said it supported the CFPB's "effort to root out the bad actors in this space."

"Freedom Stores has voluntarily agreed to forgive more than two million dollars in loans and provide more options regarding where default litigation will be conducted.  In addition, we are redoubling our efforts to educate customers on money management fundamentals through our online MoneySKILL course," said Elizabeth Heaton, a spokeswoman for the company. "We have also put new safeguards in place to ensure customers are charged for loan payments only as expected and will be creating a blue ribbon internal advisory board of former military personnel and other experts who will help guide our policies."  

Caters to servicemembers

Freedom Stores (also known as Freedom Furniture and Electronics) is a Virginia-based furniture and electronics retailer that caters to U.S. military members with stores located near military bases nationwide.

Freedom Stores offers credit to consumers purchasing its merchandise and transfers the contracts to an affiliated company, Freedom Acceptance Corporation. John Melley and Leonard Melley, Jr., the company's owners, also own Military Credit Services, which provides financing for purchases made at over 300 independent consumer-goods retailers, primarily catering to servicemembers.

The CFPB’s investigation found that Freedom Stores, Inc. and its affiliated companies engaged in illegal debt collection practices in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. These illegal practices include:

Illegally filing thousands of lawsuits in Virginia for out-of-state contracts: From July 2011 to December 2013, Freedom Acceptance Corporation and Military Credit Services filed over 3,500 lawsuits in Norfolk, Virginia against consumers who had not signed their financing contracts in Virginia and did not live there when the suits were filed. Almost all of those lawsuits resulted in a default judgment, after which the companies garnished the consumers’ wages or put liens on their bank accounts. Some consumers did not even know they had been sued until they discovered their bank accounts had been drained.

Double-dipping into servicemembers’ funds: Most of Freedom Acceptance’s and Military Credit Services’ customers sent their payments via military allotment, but the companies also required consumers to authorize withdrawals from a bank account as a back-up payment method. Because the companies relied on reports from a payment processor that were sometimes incorrect, many consumers had their payments taken from both their paychecks and their bank accounts in the same month, often without their knowledge and before the payment due date. This caused many servicemembers to pay unexpected overdraft fees and non-sufficient funds charges.

Contacting commanding officers to pressure servicemembers into repayment: A clause buried in the fine print of the purchase contracts required servicemembers to allow Freedom Acceptance and Military Credit Services to contact their commanding officers about their debt. The companies would contact the officers in writing and by phone to disclose the debts, humiliating the servicemembers and putting their careers at risk. For members of the military, consumer-credit problems can result in disciplinary proceedings or lead to revocation of a security clearance.

Illegally debiting bank or credit card accounts of consumers’ family and friends: Collectors for these companies withdrew funds from checking accounts and credit cards of consumers’ parents, significant others or other individuals without prior authorization. The problem would start when a parent or other third party would authorize a one-time payment on a consumer’s behalf. The companies would keep the payment information in their systems, and then debt collectors would later take funds from those accounts without authorization or notification.

The Bureau’s investigation also found that Freedom Stores, Inc. violated the Electronic Fund Transfer Act by failing to properly disclose the terms of preauthorized transfers, and that Military Credit Services violated the Truth in Lending Act by failing to properly disclose the terms and interest rates on the loans it offered.