Current Events in May 2015

For the third time since February, a Blue Cross/Blue Shield health insurer admitted that hackers had breached security and compromised customer records.

In February, Anthem admitted that hackers had compromised the records of 80 million current and former Anthem customers (including customers of Amerigroup, Anthem and Empire Blue Cross Blue Shield companies, Caremore, Unicare and HealthLink) dating back to 2004. In March, Premera Blue Cross admitted to a breach compromising 11 million medical and financial records dating back to 2002.

In both instances, security experts familiar with the case saw signs indicating that the hackers might enjoy unofficial backing from the Chinese government – which, incidentally, is also suspected of having a hand in other recent high-profile hackings, including last November's discovered hacking of a U.S. Postal Service database containing the personal information of 800,000 USPS employees, and the discovery last July that hackers breached the federal Office of Personnel Management, stealing the data of up to 5 million government employees and contractors who hold security clearances. (China's government, for its part, has repeatedly denied any role in American hacking activities, and points out that hacking is illegal under Chinese law.)

And so it goes for this latest Blue Cross health-insurance hacking: CareFirst, a Blue Cross Blue Shield plan primarily serving people in the Washington, D.C. area (including parts of Maryland and Virginia), admitted that hackers had breached security and compromised customer records. This breach apparently happened last June, but was only recently discovered.

No forced entry

That tends to be the case in all database hackings: “breaking into” a database doesn't leave physical signs of forced entry, the way breaking into a physical building does. And stolen information doesn't disappear from the database, the way burglarized items disappear from their owners' possession. That's why hacking can go undetected for months or even years before their victims even know they've been victimized.

Investigators speaking off the record suggested the CareFirst Blue Cross hacking might be connected to the two previous Blue Cross/Blue Shield hackings, and once again suspect signs of Chinese involvement.

So far, though, this latest health-insurance hacking appears to be on a much smaller scale than the previous two: CareFirst says that up to 1.1 million customer records might be affected. Also, CareFirst says that, while the hackers gained access to customer names, birthdates and email addresses, they did not steal confidential medical or financial data: no medical claims, credit card information or Social Security numbers.

In the 1970s the hot real estate trend was planned communities. In the ‘90s it was village center developments. Now, real estate developers are eyeing the older, rundown areas of urban centers for residential and commercial redevelopment.

There are already plenty of examples. Areas of Brooklyn and Detroit are now flourishing with stylish residences and exciting new businesses. When publications like USA Today feature the best up-and-coming neighborhoods in America, they almost always are made up of urban enclaves that have been transformed.

They all seem to have something else in common. Residents can easily get around on foot. The National Association of Realtors (NAR) says buyers put a premium on “walkable” neighborhoods.

Creating walkability

“Creating walkability with restaurants and stores can help transition an edgy part of town into one that is hip and hopping with pedestrians,” said NAR Chief Economist Lawrence Yun. “This type of real estate development transforms the community for the better.”

Older, renovated homes and lofts are highly sought-after and don’t linger on the market. People seem to like the idea of walking to a nearby restaurant, movie theater or the corner market.

City governments like it too. NAR says walkable communities generate four times the tax revenue of regional and business malls, adding more value to a region.

“Walkable urban regions in the U.S. have a 41% higher Gross Domestic Product (GDP) over non-walkable regions,” said Christopher Leinberger, professor at George Washington University School of Business and president of Locus, a national coalition of real estate developers and investors. “That’s the difference between countries like Germany and Romania.”

Living in an urban walkable community might also be more affordable than living in the suburbs. NAR cites statistics showing urban residents spend about 43% of their incomes on housing and transportation while the typical suburbanite spends about 48%.

“If a family can get rid of one car, they can increase their mortgage capacity by as much as $150,000,” said Leinberger.

Zoning issues

At a recent NAR-sponsored symposium, panelists suggested urban redevelopment could occur at a faster rate if more municipalities reviewed their zoning regulations and worked with developers toward a common goal.

Earlier this month researchers at the University of Chicago and University of California Berkley found tight land use regulations tended to drive up home prices in America’s most expensive cities. Rolling back some of these regulations in just 3 metros – San Francisco and San Jose, Calif., and New York would boost U.S. economic growth, the researchers said.

 “We’ve been bumping along at 2% GDP growth, and we should be at 3.5%, and obsolete zoning is what is holding us back,” said Leinberger. “Less than 10% of land would need to be rezoned, and that is where 80 percent of the development is going to go.”

American aren’t saving enough for retirement. That’s one problem. But a second problem is that Americans who have the chance to boost their retirement savings by taking advantage of their employers’ match simply aren’t doing it.

In some companies, but not all, an employer will match a portion of the employee’s contribution to his or her retirement account, based on how much the employee saves. The bigger the employee’s contribution, the bigger the employer’s match.

Since it is essentially free tax-deferred money it is one of the best ways to boost your retirement savings. But a new report from Financial Engines has found a large number of Americans who have access to an employer match aren’t taking full advantage of it.

Two conclusions

The study reached two main conclusions. First, 25% of employees did not save enough in their 401(k) accounts to achieve a full match by their employer. In 2014 the average employee left $1,336 in matching contributions on the table because they did not put enough of their own money into the savings account.

Second, lower income and younger employees were the most likely to pass up the free money. That’s likely because lower income employees don’t believe they can afford to put money aside and younger employees have not yet focused on the reality of eventual retirement.

Of the employees not taking advantage of their employer’s match, the average worker will miss out on $42,855 of retirement savings over a 20 year period.

“We estimate that nationwide, American employees are passing up approximately $24 billion in employer matching contributions by not saving enough to receive their full employer 401(k) match,” the authors write.

The study found that 42% of plan participants who earned less than $40,000 a year do not take full advantage of the employer match. On the other hand, only 10% of those earning $100,000 or more are passing up the money.

When age was considered, 30% of younger workers left money on the table while only 16% of older workers did.

What to do

If you find yourself in the situation where you are not taking full advantage of your employer’s plan, there are things you can do to turn that around. First, find out more about the plan and how the employer match works. For example, how much do you have to contribute to trigger your employer’s full match.

Talk to an unbiased financial advisor about ways to take full advantage of your employer’s retirement plan. An advisor may also propose ways to increase your savings you haven’t thought of.

Resolve to increase your retirement savings at every opportunity. If you can’t afford to increase your savings enough today to achieve the full match, make that your goal and up your savings each year.

Sales of previously-owned homes slowed in April even though properties are typically selling faster than at any time since July 2013.

The National Association of Realtors reports total existing-home sales -- completed transactions that include single-family homes, townhomes, condominiums and co–ops -- dipped 3.3% last month to a seasonally adjusted annual rate of 5.04 million. Despite the decline, the sales rate was above 5 million for the second straight month.

Supply and demand

"April's setback is the result of lagging supply relative to demand and the upward pressure it's putting on prices," said NAR Chief Economist Lawrence Yun. "However, the overall data and feedback we're hearing from Realtors continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes."

Total housing inventory at the end of April increased 10.0% to 2.21 million existing homes available for sale, but is still 0.9% below a year ago. Unsold inventory is at a 5.3–month supply at the current sales pace -- up from 4.6 months in March.

The median existing–home price for all housing types in April was $219,400, which is 8.9% above a year earlier. This marks the 38th consecutive month of year–over–year price gains and is the largest since January 2014. The median is the point at which half of the prices are higher and half are lower.

Regional Breakdown

• Existing–home sales in the Northeast fell 3.1% in April to an annual rate of 620,000, but are 1.6% above a year ago. The median price was $253,200, up 3.6% higher than April 2014.
• In the South, sales were down 6.8% to an annual rate of 2.04 million, but are 3.6% above the year-ago level. The median price rose 8.5% from the previous year -- to $189,400.
• The West saw a sales decline of 1.7% to an annual rate of 1.16 million -- 6.4% above a year ago. The median was $318,700, an increase of 10.0% above April 2014.
• The only exception came in the the Midwest, where sales rose 1.7% to an annual rate of 1.22 million, and are 13.0 percent above the previous April. The median price jumped 11.4% from a year ago to $173,700.

Initial jobless claims

From the government, word that first-time applications for state unemployment benefits ticked higher last week.

The Labor department (DOL) reports initial jobless claims, which have hovered for weeks at lows not seen in more than a decade, surged by 10,000 in the week ending May 16 to a seasonally adjusted 274,000.

DOL says there were no special factors affecting the claims level.

Even with that increase, the 4-week moving average -- which is seen as a more accurate gauge of the labor market -- was down 5,500 to 266,250. That's the lowest level for this average since April 15, 2000, when it was 266,250.

The complete report is available on the DOL website.

Shandong Jinyu Industrial Co. LTD, is recalling 5,068 Jinyu YS78 and Evergreen ES89 AT tires, size LT225/75R16, manufactured April 1, 2011, to August 31, 2014 (DOT date codes 1611 through 4314).

The affected tires may not be able to properly dissipate heat, and as a result, the tire belts may separate. If the tire belts separate, the tire may suddenly lose air, increasing the risk of a crash.

The remedy for this recall is still under development. The manufacturer has not yet provided a notification schedule.

Owners may contact Shandong customer service at 1-786-521-1296.

LQNN, Inc., of Garden Grove, Calif., is recalling approximately 213,192 pounds of chicken, beef and pork products.

The products were produced without the benefit of inspection and misused the USDA mark of inspection.

According to USDA's Food Safety and Inspection Service (FSIS) the products which were moved and sold in commerce, included the unapproved use of another facility’s mark of inspection, which has been identified as Establishment number 18995.

LQNN, operating as Lee’s Sandwiches, has been processing products from federally-inspected establishments and re-packaging them without the benefit of inspection. Products produced without inspection present potential of increased human health risk.

There are no reports of adverse reactions due to consumption of these products.

The products, produced between May 18, 2014, May 18, 2015, were sent to various restaurant locations in Arizona, California, Nevada, Oklahoma, Oregon and Texas to be cooked and served to consumers.

The following recalled products may contain “Est. 11041” or “P-11041” inside the USDA mark of inspection:

• 54,509 -lb. of “Banh Bao Pork & Egg Steamed Bun.”
• 15,147 -lb. of “Banh Bao Trung Cut Pork & Quail Egg Steamed Bun Vietnamese Style.”
• 55,114 -lb. of “PORK PATE CHAUD (LARGE).”
• 6,016.5-lb. of “PORK PATE CHAUD (SMALL).”
• 50,036-lb. of “CHICKEN PATE CHAUD (LARGE).”
• 6,184.5-lb of “CHICKEN PATE CHAUD (SMALL).”
• 22,812-lb. of “SLICED OIL BROWNED TURKEY PREMIUM BREAST MEAT FULLY COOKED.”
• 2,453.5-lb. of “SLICED SALAMI MEAT with wine FULLY COOKED.”

The following recalled products may contain “Est. 18995” inside the USDA mark of inspection:

• 222.25-lb. of 4-oz. plastic containers of “FRUIT BEEF JERKY (Kho Bo).”
• 352-lb. of 4-oz. plastic containers of “B.B.Q. BEEF JERKY (Kho Bo).”
• 354-lb. of 4-oz. plastic containers of “Curry BEEF JERKY (Kho Bo).”

Consumers with questions may contact Tom Quach at (714) 333-8688.

Ford Motor Company is recalling 8,963 model year 2015 Ford F-150 trucks manufactured March 19, 2015, to March 30, 2015.

The affected vehicles may have been built with a steering upper intermediate shaft that was improperly riveted. If the intermediate shaft was improperly riveted, it could separate from the intermediate shaft flex coupling, resulting in a loss of steering control and increasing the risk of a vehicle crash.

Ford will notify owners, and dealers will inspect the intermediate shaft and replace it, as necessary, free of charge. The recall is expected to begin in May 2015.

Owners may contact Ford customer service at 1-866-436-7332. Ford's number for this recall is 15S17.

Many a consumer has tried to explain to a debt collector that the debt he or she is calling about belongs to someone else. Of course, it’s often like talking to a brick wall because the debt collector has heard it all before.

But many times the consumer is right. A Jackson County, Mo., Circuit Court jury has delivered a not-so-subtle message to one debt collector that in situations like that, it had better do a little more thorough investigation before it hauls an alleged debtor into court.

$1000 debt

Portfolio Recovery Associates LLC, one of the largest buyers of written-off debt in the U.S., tried to collect a $1,000 credit card debt from Maria Guadalupe Mejia, who insisted the debt wasn’t hers. She tried to explain that the person they were looking for was actually a man with a name that was similar, but not the same, as her name.

The company didn’t believe her and took her to court. In court, the debt collector could not or would not provide requested information, so the judge struck its pleadings. But the jury wasn’t finished.

Acted maliciously

After 5 days of deliberation, it returned a verdict, finding Portfolio Recovery Associates acted maliciously in its pursuit of Mejia. The defendant was awarded $250,000 in actual damages for violation of her rights under the Fair Debt Collection Practices Act. The jury then added $82,990,000 in punitive damages.

Remember, it was the debt collector who brought the suit in the first place.

In a statement to Credit.com, Portfolio Recovery Associates called the verdict “outlandish” and defying all common sense. It says it expects the judge to set aside the verdict.

Still, any consumer who has ever been on the receiving end of repeated phone calls about a non-existent debt can’t help but get a vicarious thrill.

Fair Debt Collection Practices Act

More importantly, the case underscores of knowing your rights under the Fair Debt Collection Practices Act (FDCPA).

While the law does not protect you from people to whom you owe money, it does provide a number of protections when the creditor turns the debt over to a third-party debt collector.

A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.

Within five days after you are first contacted, the collector must send you a written notice telling you the amount you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.

If you are contacted about a debt you think you owe, then you should pay it. But if you do not owe the debt, tell the debt collector you need to receive the written statement you are entitled to under the FDCPA. Additionally, consumers who want to consolidate their debts can utilize ConsumerAffairs' debt consolidation resource. Consolidating debts may reduce exposure to debt collection agencies.

Cracking down on data theft is kind of like squeezing a balloon: press down on a bulge in one area, and it'll only swell somewhere else.

So perhaps it's no surprise that today's Wall Street Journal reports the distressing statistic that, while brick-and-mortar merchants have been cracking down on data fraud at the checkout counter, criminals responded by attacking automatic teller machines, targeting not just bank-owned ATMs but the independently owned “cash kiosks” common in shopping malls, restaurants and other businesses.

(And that's not even counting the prevalence of hidden “skimmers” used to steal data from any ATM card swiped through them.)

Relatively easy

For a thief equipped with the right tools, it's relatively easy to steal debit card information and make counterfeit debit cards, which are then used to steal money from ATMs. The Journal said that according to FICO, the credit-scoring and analytics firm, the period spanning from January to April 9, 2015 saw more debit-card ATM attacks than any previous period in the past 20 years:

Debit-card compromises at ATMs located on bank property jumped 174% from Jan. 1 to April 9, compared with the same period last year, while successful attacks at nonbank machines soared by 317%, according to FICO. … The company declined to disclose the total number of such incidents, citing contractual restrictions with its customers.

ATM fraud has been growing overseas, too. Just last week, we reported the discovery of a new form of ATM fraud plaguing banks in Britain: thieves armed with nothing more than an iPod and a piece of plastic can spy on would-be ATM customers, steal their passcode and arrange for the machine to “eat” their cards – which are then retrieved and used to drain money from the account while the victim contacts bank personnel about their apparently faulty ATM. However, that form of fraud involves stealing and using legitimate ATM cards, not making counterfeit cards as reported by FICO.

It's important to remember that from an individual cardholder's perspective, debit card fraud is much worse than credit card fraud, because debit cards withdraw money directly from your savings accounts, whereas credit card purchases essentially borrow money from the credit card company.

This means that even if your debit-card fraudulent-charge complaint is ultimately settled in your favor, with the bank ultimately making full restitution to you – you still have to go without your money while the matter is being resolved.

If you do have a debit card, even if you're convinced that your account numbers are safe from thieves, you still need to check your account activity on a regular basis, whether you've used the card recently or not, so that if fraudulent withdrawals do occur, you can report them to your bank as soon as possible.

The expanded Takata airbag recall means that millions more cars will be getting new airbags sometime, although with an estimated total of 34 million defective airbags, it is going to take years for the massive effort to be complete.

While this introduces an air of uncertainty, it also means that millions more cars will be fixed eventually, notes Jack Gillis of the Consumer Federation of America.  

“There is good news and bad news with the announcement of the Takata air bag recall:  the good news, millions more Americans are covered for a fix to this serious problem, the bad news, it could take years to get safe parts manufactured and replaced in affected vehicles,” said Gillis, CFA’s automotive expert and author of The Car Book, published with the Center for Auto Safety.

What to do

Gillis offers some tips for consumers wondering if their car is included, or will eventually be included in the recall.

• Obtain your vehicle’s identification number (VIN) by looking in at your dash from the outside of the driver’s side or on the outer edge of the driver’s door.  (It is also available on your registration card.)
• Go to www.safercar.gov/vin and type in your VIN. Alternatively, the nonprofit Center for Auto Safety offers a complete list of Takata recalls to date. 
• If your vehicle is part of the recall, contact ANY dealer of your vehicle immediately to schedule a replacement appointment — there is no charge for this fix.
• Ask your dealer (or the manufacturer of your vehicle) for a ‘loaner vehicle’ while parts are being manufactured.
• If your vehicle is NOT currently listed as being involved in this recall, it is important to check back on a regular basis to see if it gets added.

“The sooner you contact a dealer, the sooner you’ll get on the list for repairs,” said Gillis.  “Traditional recall response rates are around 70%, so in the end, if consumers don’t respond to this recall, there could potentially be over 10 million vehicles with this dangerous defect on the road.”

“While the root cause of this problem is not fully understood, humid regions with high moisture in the air can exacerbate the problem.  Consumers in those areas have likely already received a recall notice and should respond immediately,” added Gillis.

What else?

Of course, there's some question whether all of the defective airbags have been identified, which isn't much comfort to consumers, especially those driving older cars in humid areas

Other than taking the bus or staying home, how can you avoid being hit in the face with flying projectiles? Good question, and one to which there's not yet a definitive answer.

“Folks shouldn’t have to drive around wondering if their airbag is going to explode in their face or if their car is going to be on another recall list,” said U.S. Sen. Bill Nelson (D-Fla.), the top Democrat on the Senate Commerce Committee and a key figure in a congressional probe into the defective airbags.  “We’ve seen the recall list double now to 30 million cars.  Let’s hope Takata’s admissions today tells us the whole story.” 

“But Floridians, especially, have reason to be worried because the evidence is that these airbags explode in more humid climates.  This needs to get fixed pronto,” he added.

Last week, California Congresswoman Jackie Speier urged the Department of Education (DoE) to investigate the for-profit college operator ITT Educational Services, Inc., which she said has allegedly “engaged in deceptive and predatory lending practices, pushing students into high-interest loans they know cannot be repaid, at vast taxpayer expense” at its ITT Technical Institute schools.

And this week, the California Department of Veterans Affairs (CalVet), which among other things oversees GI Bill tuition benefits for military veterans in the state, ordered 15 ITT locations to stop enrolling new or returning students who use the GI Bill for payment.

Military.com reports that “The suspension only stops future enrollments or reenrollments of Veterans, or their dependents, using the GI Bill,” but “does not affect current students.”

Financial statements

CalVet instituted the suspension because ITT apparently will not or can not produce audited financial statements, as required by both the Securities and Exchange Commission and the DoE.

Speier mentioned something similar in her complaints to the DoE last week, saying in an open letter to the Secretary of Education that “The Securities and Exchange Commission (SEC) filed charges on May 12, 2015 alleging that that [sic] the CEO and CFO of ITT Educational Services covered up ballooning loan obligations stemming from the company's …. predatory lending programs.”

But ITT responded to the SEC's charges by releasing a statement saying “We vehemently disagree with the SEC’s position and we are confident that the evidence does not support the SEC’s claims …. We are eager to have the court clear our reputation that has been unnecessarily endangered by the SEC’s action.”

Whatever the courts ultimately decide about ITT's financial activities, another problem shared by ITT students and graduates involves the school's lack of worthwhile accreditation. Speier said that even ITT grads who'd earned high grade-point averages discovered their degrees were worthless: no reputable four-year college or university would accept ITT transfer credits, and potential employers aren't impressed by ITT-generated credentials, either.

Grads' complaints

Last week, when we reported Speier's complaint about ITT, we also shared the stories of several ITT grads. One woman who studied electronics at an ITT school discovered just how little employers think of ITT: “I have gone on numerous interviews just to be laughed at and questioned about why ITT.”

Another man who had to start his four-year college degree from scratch after no school would accept his two-year ITT degree advised all potential students to stay away from ITT: “Since it is not an accredited school if you ever plan to further your education and want to transfer to a real college you are much better off going to a real college from the start.”

A two-year state community college will cost you much less than a for-profit “institute” such as ITT, and the credits you earn at an accredited state community college are far more likely to either transfer to other traditional four-year schools or be accepted by potential employers.

With an over-abundance of invasive technology these days it's not surprising a lot of people are curtailing their online presence. While not exactly going off the grid, they resist appeals to establish LinkedIn accounts or set up other professional profiles online.

But a survey suggests that what is gained in privacy may be lost in job opportunities.

Job site CareerBuilder.com's annual social media recruitment survey found that 35% of employers said they are less likely to call a job candidate for an interview if they can't find out more about them online.

Social media recruitment

Not having a Facebook or Twitter presence might also hurt. Fifty-two percent of employers said they use social networking sites to research job candidates, up from 43% last year and 39% in 2013.

“Researching candidates via social media and other online sources has transformed from an emerging trend to a staple of online recruitment,” said Rosemary Haefner, chief human resources officer at CareerBuilder.

CareerBuilder chalks part of this trend up to an increasingly competitive job market. Recruiters want to make the right decision and are looking for anything they can find that will help them. Haefner says job candidates need to take advantage of that.

Best foot forward

“Rather than go off the grid, job seekers should make their professional persona visible online, and ensure any information that could dissuade prospective employers is made private or removed,” she said.

Social media has been used to torpedo a candidate's chances in some well-publicized cases. Nearly everyone has heard stories of a candidate on the fast-track upended when a prospective employer found weird rants on Facebook or revealing photos from a vacation in Cancun.

But Haefner says that's not really what most recruiters are looking for when they Google a job prospect's name. Six in 10, she says, are “looking for information that supports their qualifications for the job.”

What employers look for

For some positions, this could include a professional portfolio. According to the survey, 57% of recruiters want to see if the candidate has a professional online persona, 37% want to see what other people are posting about the candidate, and yes, 21% admit they’re looking for reasons not to hire the candidate.

Not all business sectors rely on online screening to the same degree. Hiring mangers in the information technology sector are most likely to screen online – 76% said they do it. Retail recruiters do it the least – at 46%.

What kind of information should be in your profile? CareerBuilder suggests posting professional type information that supports the qualification you've put on your resume. First and foremost, that's what recruiters are hoping to find.

What they don't want to see are provocative or inappropriate photographs or tales of drunken escapades.

Schools churn out educated citizens (we hope) but they also churn out a lot of waste, including polystyrene food containers from the cafeteria that clutter up landfills.

But now a coalition of urban school districts is taking steps to dump the polystyrene -- or Styrofoam, which is the best-known brand of polystyrene -- replacing it with disposable plates made of compostable material. 

“This news is a game changer,” said Eric Goldstein, chief executive officer of School Support Services for the New York City Department of Education. “As leaders in school meals, we’re proud to create a product that students will not only find easy to use, but one that also protects the environment for many years to come.”

The six large school districts that make up the Urban School Food Alliance say they will remove 225 million polystyrene trays a year from landfills by creating the new compostable round plate for cafeterias.

The alliance is made up of school disrticts including New York City, Los Angeles, Chicago, Miami-Dade, Dallas and Orlando.

Why can't it be recycled?

Technically, polystyrene can be recycled but as the American Chemical Society explains in this video, processing it is just too expensive.

Smarter choice

Food and nutrition directors in the aliance specified the round shape to allow students to eat their food off plates like they do at home, replacing the institutional rectangular lunch tray.

The districts in the alliance collectively procure more than $550 million in food and supplies annually to serve more than 2.9 million students enrolled in their schools.

“These cities are teaching kids that sustainability and smarter choices can be integrated into every part of your daily life – even your lunch,” said Mark Izeman, senior attorney with the Natural Resources Defense Council (NRDC), a non-profit partner of the alliance. “Shifting from polystyrene trays to compostable plates will allow these cities to dramatically slash waste sent to landfills, reduce plastics pollution in our communities and oceans, and create valuable compost that can be re-used on our farms. We are proud to work with a group of school systems dedicated to driving landmark changes in the health and sustainability of school food.”

Schools across America use polystyrene trays because they cost less than compostable ones. Polystyrene trays average about $0.04 apiece, compared to its compostable counterpart, which averages about $0.12 cents each. Given the extremely tight budgets in school meal programs, affording compostable plates seemed impossible until the Urban School Food Alliance districts used their collective purchasing power to innovate a compostable round plate for schools at an affordable cost of $0.049 each.

The American-made molded fiber compostable round plate is produced from pre-consumer recycled newsprint. It is FDA-approved and manufactured in Maine by Huhtamaki North America.

An increase in mortgage and Treasury rates pushed mortgage applications lower again last week.

Data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey show applications were down 1.5% in the week ending May 15 -- the fourth consective decline.

“Mortgage rates increased last week, and Treasury rates increased to a recent high at mid week before falling at the end of the week,” said Mike Fratantoni, MBA’s Chief Economist. “Overall purchase activity fell for the week, along with conventional refinance volume, but government refinance volume increased. The level of purchase applications remained 11% higher than the same week last year, but the drop this week may indicate borrowers being wary of the recent run up in mortgage rates.”

The Refinance Index increased 0.3%, sending the refinance share of mortgage activity up to 52% of total applications from 51% the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.4% 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 4 basis points -- from 4.00% to 4.04%, its highest level since December 2014, with points decreasing to 0.32 from 0.36 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
• The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) increased to 4.04% from 3.99%, with points dropping to 0.25 from 0.33 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
• The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA was up 4 basis points 3.80%, with points decreasing to 0.06 from 0.14 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages inched up to 3.26% from 3.23%, with points slipping to 0.30 from 0.40 (including the origination fee) for 80% LTV loans. The effective rate was unchanged from last week.
• The average contract interest rate for 5/1 ARMs dipped 1 basis point to 2.99%, with points decreasing to 0.45 from 0.46 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

The survey covers over 75% of all U.S. retail residential mortgage applications.

PayPal has agreed to pay $15 million in refunds on top of  $10 million fine for signing up consumers for its online credit plan without their permission, the Consumer Financial Protection Bureau (CFPB) announced.

The CFPB said that PayPal deceptively advertised promotion benefits that it failed to honor, signed customers up with permission and made them use PayPal Credit or its predecessor, Bill Me Later, without consent. 

PayPal said it was working to improve its processes.

“PayPal Credit takes consumer protection very seriously. We continually improve our products and enhance our communications to ensure a superior customer experience. Our focus is on ease of use, clarity and providing high-quality products that are useful to consumers and are in compliance with applicable laws,” a PayPal spokesperson said in an email to ConsumerAffairs.

“PayPal illegally signed up consumers for its online credit product without their permission and failed to address disputes when they complained,” said CFPB Director Richard Cordray. “Online shopping has become a way of life for many Americans and it’s important that they are treated fairly. The CFPB’s action should send a signal that consumers are protected whether they are opening their wallets or clicking online to make a purchase.”

Consumers writing to ConsumerAffairs would agree with Cordray.

"I love PayPal but I made the mistake of accepting PayPal credit and debit," said Gayle of Palm Coast, Fla., one of the many consumers who have complained about the service. "I have been trying to close the account online for months, and it wouldn't let me, even with $0 balance and waiting until the payment had processed. I finally called customer service. After four conversations (with helpful agents) and one dropped call, I finally accomplished the task. What a mess!"

Since 2008, PayPal has offered PayPal Credit to consumers across the country making purchases from thousands of online merchants, including eBay. The CFPB alleges that many consumers who were attempting to enroll in a regular PayPal account, or make an online purchase, were signed up for the credit product without realizing it.

The company also failed to post payments properly, lost payment checks, and mishandled billing disputes that consumers had with merchants or the company. Tens of thousands of consumers experienced these issues.

"Deceptive and misleading"

One of them was Chris of Elk Grove, Calif., who posted a ConsumerAffairs review about her experience.

"I ordered and paid for an item using my PayPal account. I thought I was signing in and paying for my purchase - just by following the on-screen prompts. What I didn't realize was that I was signing up for a PayPal Credit account," Chris said. "I did not find this out until I received a bill in the mail about 2 weeks later. It was only for $7.00 but I thought the transaction was complete. I then noticed the $7.00 was for a monthly reoccurring fee for the credit account I had unknowingly opened."

Chris then tried to close the account. She called PayPal and talked to a service rep, who refused to cancel the $7 payment.

"The way PayPal's payment website is designed, it makes it extremely easy for a casual user to sign up for a credit account without the user's knowledge. In my opinion it is a deceptive and misleading business practice. ... I always thought Paypal was reliable and an asset to internet merchandising but I will try to avoid PayPal in the future," Chris vowed.

Settlement terms

Under the proposed settlement announced today, PayPal would be required to:

Pay $15 million in redress to victims: PayPal would reimburse consumers who were mistakenly enrolled in PayPal Credit, who mistakenly paid for a purchase with PayPal Credit, or who incurred fees or deferred interest as a result of the company’s inadequate disclosures and flawed customer-service practices.

Improve disclosures: PayPal would be required to take steps to improve its consumer disclosures related to enrollment in PayPal Credit to ensure that consumers know they are enrolling or using the product for a purchase. 

Pay $10 million civil penalty: PayPal would pay $10 million to the CFPB’s Civil Penalty Fund.

Two studies published in the Journal of the American Medical Association today focus on the presence of plaque amyloid in the brain of adults as an early warning of Alzheimer's disease.

The studies analyzed adults of all ages and included those with some dementia and those who showed no signs of cognitive impairment. The results may help diagnose the progressive and fatal disease much earlier than is now possible.

The findings have added importance because Alzheimer disease (AD) is the most common cause of dementia. It affected about 25 million people worldwide in 2010 but that number is expected to double by 2030 because of longer life expectancy.

In one study researchers from the Netherlands measured the presence of amyloid in people with normal memory function, subjective cognitive impairment (SCI) and mild cognitive impairment (MCI).

Presence of amyloid is key indicator

The researchers found the prevalence of amyloid pathology in all three groups of adults age 50 to 90. Those with normal memory had the least while those who already showed some mild cognitive loss had the most.

Those who carried a certain gene, called apolipoprotein E, had two to three times the presence of anyloid as those who didn't have the gene.

The researchers believe this study has several implications for understanding how Alzheimer's disease develops.

“The observation that key risk factors for AD-type dementia are also risk factors for amyloid positivity in cognitively normal persons provides further evidence for the hypothesis that amyloid positivity in these individuals reflects early AD,” the authors write.

As early as age 30

They also maintain their findings show that AD pathology can start as early as age 30. This means there could be a 20- to 30-year interval between the first signs of amyloid positivity and dementia, suggesting that there is a large window of opportunity to start preventive treatments.

The second study, conducted by another group of Dutch researchers, looks at ways to more narrowly interpret the clinical significance of positron emission tomography (PET), used to find amyloid positivity in the brain. Specifically, the researchers focused on ways to better understand the prevalence of amyloid positivity across different types of dementia and how this is associated with demographic, genetic, and cognitive factors.

They studied people diagnosed with Alzheimer's as well as those who had other types of dementia. Those diagnosed with Alzheimer's had an average prevalence of amyloid positivity of 88%, that actually decreased with age unless they carried the apolipoprotein E gene. Those sufferings from non-AD dementia showed an increase in amyloid as they aged.

Implications

The researchers conclude that the early signs of Alzheimer's might be easier to find in younger adults, even before they start to show symptoms of cognitive impairment.

There is no cure for Alzheimer's but there are treatments that doctors say can slow the progression of the disease.

The Alzheimer's Association says the Food and Drug Administration (FDA) has approved 2 types of drugs to treat the symptoms of memory loss and reasoning. There are also treatments available to address changes in behavior brought on by Alzheimer's disease.

Construction of new homes shot higher in April, building on March's modest advance.

Figures released jointly by the Census Bureau and the Department of Housing and Urban Development show privately-owned housing starts jumped 20.2% last month to a seasonally adjusted annual rate of 1,135,000. The April rate is 9.2% above the rate (1,039,000) posted a year earlier.

The major contributor was the surge of 16.7% in single-family housing starts in April to a rate of 733,000. The April rate for units in buildings with 5 units or more was 389,000 -- up 102,000 from the month before.

Building permits

The outlook for construction of new homes in the months ahead is encouraging.

Privately-owned housing units authorized by Building permits totaled 1,143,000 in April, up 10.1% from March and 6.4% from April 2014.

Within that, permits for single-family homes rose 3.7% to a rate of 666,000, and authorizations of buildings with 5 units or more were at a rate of 444,000 in April -- for a month-over-month gain of 66,000.

The full report is available on the Commerce Department website.