Current Events in October 2015

New mortgage rules that are supposed to make it easier for consumers to understand and compare competing mortgage offers went into effect today and, at least in the short term, may cause confusion and delay in real estate closings.

Called the Know Before You Owe rule, the new requirements devised by the Consumer Financial Protection Bureau require mortgage application forms to be easier to understand and to present competing loan offers that help consumers make an informed decision.

Specifically, the new rule replaces four disclosure forms with two new ones, the Loan Estimate and the Closing Disclosure. The rule also requires that you get three business days to review your Closing Disclosure and ask questions before you close on a mortgage.

This CFPB video explains the process:

Glitches likely

While the new rule should prove beneficial over time, it's likely to cause some hiccups initially. It was originally scheduled to go into effect August 1 but the CFPB granted a three-month extension to give the real estate industry time to get familiar with the new forms and the rules governing their use.

"For all the good work that has been done, we know there will be challenges ahead, especially in the first few months," said National Association of Realtors President,Chris Polychron, who said his group would "continue to communicate Realtors',and their clients' concerns to the CFPB and help ensure the new rules are carried out with as little disruption as possible to consumers and the industry."

CFPB Executive Director Richard Cordray,noted that dire predictions about the effect tighter rules would have on the housing market haven't come to pass.

“Sensible regulation that includes substantial consumer protections should foster greater trust by consumers in the financial marketplace,” he said. “If people believe they will be treated fairly rather than becoming victims of predatory lending, they can develop a renewed sense of consumer confidence.”

Cordray said,says the forms will help consumers to better understand their options, choose the deal that’s best for them, and avoid costly surprises when they get to closing.

“It is time consumers have more power in the mortgage process, and our new forms and online tools will help make that a reality,” he said.

You can learn more about the new process on the CFPB's website.

Parents everywhere are searching for ways to make sure their teens stay safe while driving. For many, the urge to send a text message or stay connected in other ways can be too great, and it leads to many tragic, unnecessary deaths every year. Phone-blocking apps for smartphones have been shown to be effective, but they often are either too restrictive or too easy to override. But with the latest release of DriveID, by Cellcontrol, many of these problems have been addressed.

Winner of two Consumer Electronics Show (CES) Innovation Awards, DriveID has the ability to block all cell phone-related distractions when a car is in motion. The actual device is a small black box that can be attached to the windshield, under the rearview mirror. When paired with a driver’s phone, the device is able to block all manner of mobile distractions, such as text messages, calls, emails, and many other applications as soon as the vehicle begins moving.

As a parent or employer, you may be thinking “what if I need to get in contact with the person who is driving the car?” Well, with DriveID, approved phone numbers and apps can be pre-programmed on the device’s white list. This allows calls from certain contacts to come through, and allows apps, such as necessary ones for navigation, to continue to work.

Unique features

DriveID also provides another great feature in its ability to generate a driving report for each trip. This report is available to both the driver and the account manager, and provides information such as a “driver score”, the number of times the phone was used, and some advice on how the driver can improve their driver performance.

Passengers may lament that they won’t be able to use their phones when riding in the car, but that is also not an issue. DriveID is able to recognize the zone, or space, that a driver is occupying so that no one else is hindered by the mobile-blocking technology. A full description of how the device works can be found in the video below.

“From our beginning, our focus has been on engineering the best solutions to stop mobile distractions, and pushing the limits of mobile device platform architecture, to bring our customers paramount distracted driving protection,” said CEO of Cellcontrol, Robert Guba.

DriveID is currently available for both iOS and Android phones, making it accessible to a large number of mobile users. If you are interested in getting more information, you can visit the Cellcontrol website here. 

Plenty of consumers are outraged that Volkswagen systematically cheated on emissions tests, but few understand how and why they did it.

The BBC reports the software installed in the vehicles was able to detect when they were being tested and altered performance during those brief periods so that the vehicles didn't give off as much toxic NOx, the main pollutant in diesel exhaust.

Why, exactly, did VW think it had to go to such lengths to bypass the emissions standards? And how is a diesel engine different from one powered by gasoline?

Researchers at Empa’s Laboratory of Automotive Powertrain Technologiesexplain that gasoline engines employ a three-way catalytic converter that breaks down more than 98% of NOx in the exhaust. Unfortunately, it doesn't work on diesel engines.

Power plant technology

In order to meet the same pollution standards as gasoline engines, diesel engines use a method originally developed for the denitrification of power plant exhaust gases. The first system was put on trucks; it has only recently migrated to cars.

This system uses a technology bearing the tradename “AdBlue” to convert the NOx into harmless nitrogen via various chemical reactions in a special SCR (selective reduction) catalyst that has been optimized for NOx reduction.

And here's where VW may have run into trouble. According to Empa director Christian Bach, SCR systems are considerably more complex than a conventional three-way catalytic converter in gasoline engines. Here's how VW describes its SCR system on its website.

Little margin for error

AdBlue is carried in a separate tank in the car and needs to be topped off every now and again, usually while the vehicle is being serviced. The AdBlue dosage needs to be set precisely to the amount of NOx emitted by the engine.

If the dosage is too low, it doesn't reduce Nox emissions enough to meet the standard. Too high a dosage and the result is undesirable ammonia emissions. In short, diesel SCR systems can yield unpredictable results.

As an added complication, Bach says at temperatures below 200 degrees C (392 degrees F), AdBlue tends to form residues that eventually clog up the SCR catalyst. That means the systems must be adjusted specifically to the various engine types and expected load change – i.e. drivability – and optimized, which is a complex, and thus expensive, process.

Is there a better way? While some are ready to write off “clean diesel” technology, Bach and his team of researchers are in pursuit of one that might work better. For example, two doctoral students on Bach’s team are experimenting with AdBlue injection procedures using laser-based measuring techniques.

“The better we understand these technologies in detail, the more cleanly diesel vehicles will run on the streets,” Bach said.

“Greenwashing” is a term to describe a practice by companies that espouse environmental-friendly policies but don't actually follow them. They talk the talk but don't walk the walk.

Hotels, in particular, have embraced the green philosophy in recent years, encouraging guests to turn off lights and reuse towels. Nothing wrong with that, say researchers at Washington State University, except these hotels often hide ulterior motives.

However, the researchers' own data suggests hotels try to project a green image in order to draw in perspective customers. As many as 79% of travelers worldwide agree that implementing eco-friendly practices is important to their choice of lodging, so wrapping your corporate image around this just makes sense.

Growing cynicism

But consumers are becoming increasingly cynical about corporations that bolt to the front of every trendy cause. The same data shows a majority of consumers are willing to boycott a company if they think they are being misled.

This is part of the damage Volkswagen is trying to repair at the moment.

In the case of hotels, it is of course in the establishment's best interests if guests don't run up the electric bill or demand a clean towel for every use.

But the researchers discovered that consumers – especially environmentally conscious ones – can quickly determine if they're being played by a hotel that supports good environmental policies only in the parts of the business where it helps the bottom line.

In addition to recognizing self-serving motives, the researchers see other reasons why consumers may be skeptical of green claims. Hotels that fail to integrate green practices throughout their establishment - advertising a linen reuse program but not having recycling bins available - might easily make consumers skeptical, especially if the consumer's comfort is sacrificed in some way.

Simply following a trend

The hotels – and other businesses – may simply be adapting to the new way some consumers are making choices. In the past, it was enough for a product to taste better, be more convenient and of higher quality, or cost less. Increasingly, consumers want the products they buy to reflect their personal values.

As we reported back in March, corporations increasingly embrace your values to win your approval. In the food space, restaurants now routinely brag that their food is “locally sourced,” purchased from local farmers and not from a huge agribusiness operation. It's worked particularly well for Chipotle, which has adopted a “food with integrity” slogan.

Charitable donations

It's becoming more evident that companies are able to manipulate consumers by pushing these hot buttons. In a recent study, Michelle Andrews and Xueming Luo of Temple University, Zheng Fang of Sichuan University, and Jaakko Aspara of the Hanken Swedish School of Economics, found that when a company offers to make charitable donations tied to consumer purchases, consumers tend to purchase more. A lot more.

"The mere presence of a charitable donation opportunity can generate significantly more sales," the authors wrote. "Offering the donation nearly doubled the number of purchases."

What the Washington State researchers seem to be saying is that some consumers are wising up, particuarly when it comes to “greenwashing.”

"Today's consumers are not always buying the green claims made by hotels," said reseaarcher Christina Geng-qing Chi. "It is imperative that hotels go the extra mile in integrating environmentally friendly practices to develop credibility in consumers' minds."

There's been a growing consumer backlash against Black Friday spilling over into Thanksgiving Day, intruding on the traditional holiday celebration.

Perhaps with that in mind, Staples says its stores will be closed on Thanksgiving, even though its website, Staples.com, will be happy to accept orders between the turkey and pumpkin pie.

As it rolled out its Black Friday plans this week, the office and electronics retailer said its strategy spreads across three platforms – in-store, online, and mobile.

Even though its stores will remain closed on Thanksgiving, Staples says it will offer plenty of bargains that day on its website with more being offered through Cyber Monday.

Stores open 6 a.m. on Black Friday

Stores, meanwhile, will open bright and early on Black Friday.

“We want our customers and associates to enjoy Thanksgiving their own way,” said Demos Parneros, president, North American stores and online, Staples. “On Thanksgiving Day, customers can shop from home on Staples.com and then continue their shopping in stores starting at 6 a.m. on Black Friday. Whether our customers like the convenience of shopping online, in our stores or a combination of both, Staples will have amazing products at great prices throughout the holiday season.”

In the last couple of years retailers haven't waited until Thanksgiving weekend to start marking down items. Staples says it will begin offering deals in early November, cutting prices on “a huge assortment” of electronics and business-related products.

Free shipping and price match

“At Staples, our small business customers get more for less every day, including this holiday season,” said Alison Corcoran, senior vice president, North American stores and online marketing, Staples.

Corcoran says Staples Rewards members will get a few extra perks, including free shipping.

“And everyone can buy online and pick up in store for an easy same-day option,” she said.

As many retailers are doing these days, Staples offers a price match guarantee. The company says all that is required is to show a customer service associate the lower price and Staples will match it.

Staples' decision to close stores on Thankgiving while keeping its website taking orders fits nicely into two trends, First, larger shares of holiday shopping move to online each year.

Second, retail experts last year concluded that consumers are increasingly uncomfortable with"Black Friday Creep" intruding into the least-commercialized of American holidays.

The economy created fewer than 200,000 jobs in September for a second consecutive month as the unemployment rate held steady at a 7-year low of 5.1%

The Bureau of Labor Statistics reports total non-farm payroll employment rose by 142,000 last month, with job gains occurring in health care and professional & business services, while mining employment fell.

Who's hiring

In addition to health care, which added 34,000 jobs, employment grew in professional and business (+31,000), retail trade (+24,000), food services and drinking places (+21,000), and information (12,000).

Employment in mining declined again in September (-10,000), with losses concentrated in support activities for mining (-7,000). Since reaching a peak last December, mining employment has declined by 102,000 jobs.

Employment in other major industries, including construction, manufacturing, wholesale trade, transportation & warehousing, financial activities, and government, showed little or no change over the month.

Who's working

The number of people out of work (7.9 million) changed little as the unemployment rate held at 5.1%. Over the year, the unemployment rate and the number of unemployed are by 0.8% points and one million, respectively.

Among the major worker groups, the unemployment rates for adult men (4.7%), adult women (4.6%), teenagers (16.3%), whites (4.4%), blacks (9.2%), Asians (3.6%), and Hispanics (6.4%) showed little or no change in September. 

The civilian labor force participation rate dipped to 62.4% in September; it had been at 62.6% for the previous three months. The employment-population ratio edged down to 59.2% in September, after showing little movement for the first eight months of the year.

In your pocket

The average work week for all employees on private non-farm payrolls declined by 0.1 hours to 34.5 hours last month. Average hourly earnings fell a penny to $25.09 following a gain of nine cents in August.

So far this year, hourly earnings are up 2.2%. Average hourly earnings of private-sector production and non-supervisory employees were unchanged at $21.08 in September.

The complete September employment report is available on the Labor Department website

Nissan North America is recalling 218,019 model year 2007-2012 Nissan Versas manufactured May 8, 2006, to November 12, 2012, that were sold or ever registered in the District of Columbia, Connecticut, Delaware, Iowa, Illinois, Indiana, Kentucky, Massachusetts, Maine, Maryland, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia and Wisconsin.

Road salt may corrode the front coil springs, possibly resulting in the coil springs fracturing. If a front coil spring fractures, it may contact the tire, possibly puncturing it, increasing the risk of a crash.

Nissan will notify owners, and dealers will replace both front coil springs, free of charge. The recall is expected to begin by mid-November 2015.

Owners may contact Nissan customer service at 1-800-647-7261.

American Honda Motor Co. is recalling 143,676 model year 2014-2015 Civic vehicles manufactured January 16, 2014, to November 6, 2014 and 2015 Fit vehicles manufactured March 12, 2014, to May 12, 2015.

The software settings that control the transmission operation may result in damage to the transmission drive pulley shaft. If the transmission drive pulley shaft is damaged, it may break, and the vehicle may lose acceleration or the front wheels may lock up while driving, increasing the risk of a crash.

Honda will notify owners, and dealers will update the software for the transmission, free of charge. The recall is expected to begin October 16, 2015.

Owners may contact Honda customer service at 1-888-234-2138. Honda's numbers for this recall are JU2 (Civic) and JU3 (Fit).

Salix Animal Health is recalling one lot of "Good 'n' Fun - Beefhide Chicken Sticks" dog treats.

The product may be contaminated with Salmonella.

No pet or consumer illnesses from this product have been reported to date.

The recalled product was distributed nationwide to Dollar General and Dollar Tree retail stores.

The recalled product is packaged in a 2.8 ounce bag stamped on the back side with lot # AO15010, an expiration date of 03/2018 and the UPC code 0 91093 82247 1.

Customers who purchased the recalled should to dispose of it or return it for full refund.

We take our responsibility to pets and their owners seriously and as a result we are investigating the cause of this problem so that we can prevent it from occurring in the future. Salix Animal Health, is also working with retailers to ensure that the affected product is no longer sold and removed from inventory.

Consumers with questions may contact Salix Animal Health at 1-800-338-4896, Monday through Friday between 8:30 AM - 5:00 PM (EST). The same number may be called for a refund.

Shivvers Manufacturing of Corydon, Iowa, is recalling about 450 riding lawn mowers.

The gas cap threads do not align with threads of the fuel tanks opening, which can allow fuel to leak, posing a fire hazard.

No incidents or injuries have been reported.

This recall involves Edge, Edge XLT and Wrangler lawn mowers. The red riding lawn mowers have a gray seat with a foam cushion, black arm rests and either black or gray joystick or twin lever steering. “Country Clipper” and the model name appear in black letters on the front under the seat and on the sides of the lawn mower.

Recalled Country Clipper model numbers are as follows:

The model number is located on a silver metal plate on the mower’s side rail.

The lawn mowers, manufactured in the U.S., were sold at Country Clipper lawn mower dealerships nationwide from June 2015, to September 2015, for between $4,000 and $6,600.

Consumers should immediately stop using the lawn mowers and contact a Country Clipper Dealer to schedule a free repair. Shivvers is contacting owners of the recalled lawn mowers directly.

Consumers may contact Country Clipper at 800-344-8237 from 8 a.m. to 5 p.m. CT Monday through Friday or online at www.countryclipper.com for more information.  

Social Security is the most popular government program in U.S. history. Enacted during the New Deal, it provides income in retirement for every U.S. citizen.

But despite its popularity, most consumers – especially those not yet receiving it – know very little about it. In fact, we don't even think we know much about it.

When AARP posed the question in a survey, only 9% of consumers said they believe they are very knowledgeable about how Social Security benefits are determined and just 1% of Certified Financial Planner professionals say their clients are very knowledgeable about the ins and outs of the program.

What emerges is a rather large knowledge gap consumers face as they determine how to claim Social Security benefits.

“For families and individuals looking to claim their Social Security benefits soon, this survey shows that far too many face a claiming knowledge gap potentially leaving thousands of dollars on the table,” said AARP President Jeannine English. “We hope that this survey encourages Americans to begin their long term financial planning as soon as possible.”

No surprise

Jonathan Becker, financial planning executive with California Financial Advisors, in San Ramon, Calif., says it would be surprising if most people were able to understand the highly complicated Social Security rules. He finds that knowledge is spotty.

“For example, quite a few people are aware of the rule that reduces Social Security benefits if they have earned income over a certain amount until they reach Full Retirement Age,” Becker told ConsumerAffairs. “However, they are likely not aware of how the reduction actually works, the fact that foregone benefits are credited for later use and thus not lost, or how the rules apply to the partial year before the date Full Retirement Age is reached.”

While statistics show that, for far too many consumers, Social Security makes up the bulk of their retirement income, consumers appear to believe they will rely less on it when they stop working.

Fewer than four in ten consumers believe Social Security will make up at least half of their income. However, AARP research shows that as Americans age, their reliance on Social Security tends to increase significantly. Nearly six in ten Americans rely on Social Security for at least half of their retirement income after they reach 80 years of age.

Important points

What do future retirees need to know?

“People need to consider the non-quantitative factors that impact the decision of when to take Social Security,” Becker said. “These include such variables as health, how long they can or are willing to work, the possibility that future benefits may be affected by U.S. fiscal considerations, and how they will make up income if they retire early but want to wait until later to take benefits.”

But the survey found that 83% of consumers overestimated or underestimated the amount of money they would receive if they waited to become beneficiaries at their full retirement age.

About 39% did not know that age 62 is the earliest you can claim benefits, though most advisors say you should wait, in order to maximize benefits. In fact, 18% of financial professionals interviewed in the survey recommended waiting until age 70 to claim benefits, yet only 13% of consumers planned to take that advice.

Attorneys general from 33 states have signed off on comments stepping up pressure on the U.S. Food and Drug Administration (FDA) to strengthen proposed regulations of e-cigarettes, citing concerns that children and young adults may become hooked on nicotine.

E-cigarettes have been marketed as tobacco-free substitutes for the real thing. They deliver nicotine in a vapor and, because they don't produce smoke, are often used in public spaces where smoking isn't allowed.

In comments to the FDA, the attorneys general want proposed regulations to go a step farther than what is currently being discussed, requiring appropriate warning labels and child-resistant packaging to help protect youth from nicotine exposure.

Liquid nicotine concerns

The state officials also want the FDA to require liquid nicotine, nicotine-containing e-liquids and novel tobacco products, such as dissolvables, lotions, gels, and drinks, to carry warning labels regarding nicotine exposure that are similar to the labels on other tobacco products.

Illinois Attorney General Lisa Madigan said she is concerned that liquid nicotine is particularly toxic to children and can be ingested or absorbed through the skin. That's why she and others are advocating child-resistant packaging.

There's currently a patchwork of state regulations in place. Seventeen states have already enacted laws requiring such packaging, but no federal standards currently exist. The attorneys general are also recommending flow restrictors for liquid nicotine and nicotine containing e-liquids to further protect children from exposure in the event that closures are not fully secured.

Youthful appeal

Madigan is concerned that e-cigarettes are being made to appear attractive to young consumers.

“With a variety of sweet, candy and fruity flavors, and marketing campaigns that feature themes from popular children’s movies, it is no surprise that the numbers of young people using e-cigarettes is rising,” said Madigan. “Nicotine is harmful no matter how it is consumed, and e-cigarettes should come with warnings about its dangers.”

Madigan cites statistics from the U.S. Centers for Disease Control and Prevention (CDC), showing the percentage of high school students using e-cigarettes had more than tripled in one year – from 4.5 percent in 2013 to 13.4 percent in 2014, or approximately 2 million students.

“As more and more Americans – especially young people – take up e-cigarettes, it is more important than ever that the FDA ensures our children are protected from the dangers of liquid nicotine,” said New York Attorney General Eric Schneiderman. “Child-resistant packaging and health warnings are an essential step to keeping these potentially lethal toxins out of the hands of our children. The FDA must step up and regulate the sale and packaging of these dangerous products before any more kids are harmed.”

The FDA has only begun using its recently granted authority to regulate tobacco products, which include e-cigarettes. The agency says these products have not been fully studied, so consumers currently don’t know the potential risks, how much nicotine or other potentially harmful chemicals are being inhaled during use, or whether there are any benefits associated with using these products.

The agency's Center for Tobacco Products held three public workshops earlier this year to obtain information on electronic cigarettes and the public health.  

Don't you know a lot of people who are just disgusting? You know -- empty suits, braggarts, loudmouths, dull as dishwater, stand-off-ish, and just a general waste of space?

Well, soon, you'll be able to do something about it -- you'll be able to rate them, just the way you now rate cars, hotels, dating services, restaurants, and psychics on Yelp, ConsumerAffairs, and other review sites.

Yes, someone's finally done it -- a review app for people. It's called, logically enough, Peeple. It's set to launch this fall.

"Peeple is an app that allows you to rate and comment about the people you interact with in your daily lives on the following three categories: personal, professional, and dating," as the app's founders put it. "Peeple will enhance your online reputation for access to better quality networks, top job opportunities, and promote more informed decision making about people."

You'll be able to give one- to five-star ratings to anybody -- your neighbor, your aunt, lovers past and present, that rotten teacher from fifth grade and, of course, your boss. Not to mention your former boss.

Peeple explains itself, sort of, in this video:

Of course, it won't be the kind of thing where you can just sling mud at anybody and everybody. Oh no. The founders assure us that there will be controls in place to ensure that you actually know the person you are grinding into little pieces. You'll also have to be 21, have a Facebook account, and use your own name.

“People do so much research when they buy a car or make those kinds of decisions,” said Julia Cordray, one of the app’s founders, according to a Washington Post story. “Why not do the same kind of research on other aspects of your life?”

Sure, why not indeed? Before you strike up a conversation with your seatmate on the subway, get his or her name and do the research.

You'll also be able to be an even better helicopter parent. The site's other co-founder, Nicole McCullough, is a mother of two who admits she doesn't know her neighbors too well. But when Peeple launches, she'll be able to check them out and decide if her kids should be allowed to play with their kids.

Can't be too careful, after all.

Amazon is showing the door to Apple TV and Google Chromecast, two popular streaming video products that aren't compatible with its Amazon Prime Video service, Bloomberg Business reported.

Besides their supposed incompatability with Prime Video, the devices also compete with Amazon's Fire TV and Fire TV stick.

Amazon said both Apple TV and Google Chromecast will disappear from its site on Oct. 29, and no new listings for either product will be accepted.

"Roku, Xbox, PlayStation, and Fire TV are excellent choices," the company said in a statement.

"Over the last three years, Prime Video has become an important part of Prime," Amazon told vendors in an email. "It’s important that the streaming media players we sell interact well with Prime Video in order to avoid customer confusion."

A Florida judge has barred a Florida dietary supplements maker from doing business until it cleans up its act.

The consent decree of permanent injunction was issued against Sunset Natural Products Inc. and its two owners, Teresa Martinez (a.k.a. Teresa Martinez-Arroyo) and Elsy Cruz, for manufacturing and distributing adulterated dietary supplements at its facility located in Miami, Florida.

The decree was entered by U.S. Magistrate Judge Edwin G. Torres for the U.S. District Court for the Southern District of Florida on the strength of a complaint filed by the U.S. Department of Justice, which alleged the company operates under conditions that do not meet the U.S. Food and Drug Administration’s current Good Manufacturing Practice (cGMP) requirements.

Under the terms of the consent decree, the company will not be allowed to manufacture or sell dietary supplement products until the FDA has determined that the business is in compliance with the Federal Food, Drug, and Cosmetic Act.

“The FDA is committed to protecting the public health by ensuring dietary supplement makers operate in accordance with the law,” said Melinda Plaisier, associate commissioner in the FDA’s Office of Regulatory Affairs. “Good Manufacturing Practice regulations are designed to safeguard consumers and violation of these requirements will result in enforcement action.”

Company warned

The FDA sent Sunset a warning letter on March 19, 2013, for similar violations of the cGMP requirements as well as unapproved drug claims. Follow-up inspections in 2014 found that although the company removed drug claims from its products, it failed to bring its manufacturing operations into compliance with cGMP.

The consent decree prohibits the company and its owners from marketing dietary supplements until they -- among other things -- recall and destroy the dietary supplements that have been manufactured or distributed since April 2, 2014, hire a cGMP expert, and receive written permission from the FDA to resume operations.  

Many people think of the Better Business Bureau as a consumer watchdog, but a report by CNNMoney finds the organization has given top ratings to companies that have faced action by government regulators and lawsuits by angry consumers.

In an extensive report, CNN Money raises questions about the organization's rating procedures and cites the case of Military Credit Services. It enjoys an A- rating, even after being sued for allegedly illegal debt collection practices and ordered to refund $2.7 million to borrowers. 

The CNN report quotes Virginia Attorney General Mark Herring, who joined with federal regulators in prosecuting the case, as saying the BBB "may want to take a second look" at the company's high rating.

Military Credit Services, CNN notes, is a dues-paying member of the BBB. It cites numerous other companies that enjoy high ratings despite successful prosecutions and lawsuits and suggests that members tend to enjoy higher grades than those who don't cough up annual dues ranging as high as $10,000.

The organization's revenue last year totaled nearly $200 million, most of it from dues, CNN said.

Defending reviewing practices

In its defense, the BBB says it carefully reviews businesses before inviting them to become members. It says that grades are calculated using more than a dozen factors, including the type of company, length of time in business, and complaint volume in relation to its size.

"Accredited Businesses have a special responsibility to maintain the ratings they've earned," BBB Council President Mary Power said in a written statement to CNN, after declining to be interviewed in person. "This ensures that BBB ratings are consistent with our goals as an organization: to flag substandard behavior, but also to encourage businesses to adopt best practices and earn better grades."

BBB also notes that it does not identify itself as a consumer watchdog, but rather as a mediator between businesses and consumers.

The full CNNMoney story is available online.

Nearly 1,500 additional members of the armed services have been identified as being eligible for more than $186 million in reimbursements that ignored the legal protections of the Servicemembers Civil Relief Act (SCRA), the Justice Department announced.

Together with other compensation announced in February, a total of 2,413 service members and their co-borrowers are eligible to receive over $311 million.  The five mortgage servicers are

• JP Morgan Chase Bank N.A. (JP Morgan Chase);
• Wells Fargo Bank N.A. and Wells Fargo & Co. (Wells Fargo);
• Citi Residential Lending Inc., Citibank, NA and CitiMortgage Inc. (Citi);
• GMAC Mortgage LLC, Ally Financial Inc. and Residential Capital LLC (GMAC Mortgage); and
• Bank of America N.A., Countrywide Home Loans Inc., Countrywide Financial Corp., Countrywide Home Loans Servicing L.P. and BAC Home Loans Servicing L.P. (Bank of America).

The compensation results from the SCRA portion of the 2012 settlement known as the National Mortgage Settlement (NMS) and an earlier settlement with Bank of America. It takes into account foreclosures that took place between Jan. 1, 2006, and Apr. 4, 2012, where the servicer obtained a foreclosure without a judicial proceeding or where the servicer obtained a default foreclosure judgment without filing a proper affidavit with the court stating that the service member was in military service.

“While this compensation will provide some financial relief to more than 2,400 service members and their families, the fact is no one serving our country in the Armed Forces should ever have to worry about losing their home to an illegal foreclosure,” said Acting Associate Attorney General Stuart F. Delery. 

$125,000 plus

For mortgages serviced by Bank of America, Wells Fargo, Citi, and GMAC Mortgage, the identified service members will each receive $125,000, plus any lost equity in the property and interest on that equity.  Eligible co-borrowers will also be compensated for their share of any lost equity in the property. 

To ensure consistency with an earlier private settlement, JP Morgan Chase will provide any identified service member either the property free and clear of any debt or the cash equivalent of the full value of the home at the time of sale. They will also have the opportunity to submit a claim for compensation for any additional harm suffered, which will be determined by a special consultant, retired U.S. District Court Judge Edward N. Cahn. 

Payment amounts have been reduced for those service members or co-borrowers who have previously received compensation directly from the servicer or through a prior settlement, such as the independent foreclosure review conducted by the Office of the Comptroller of the Currency and the Federal Reserve Board.

The following chart shows the number of service members who will be compensated by each of the servicers for both non-judicial and judicial foreclosures:

What to do

Borrowers should use the following contact information for questions about SCRA payments under the National Mortgage Settlement:

• Bank of America borrowers should call Rust Consulting Inc., the settlement administrator, toll-free at 1-855-793-1370 or write to BAC Home Loans Servicing Settlement Administrator, c/o Rust Consulting Inc., P.O. Box 1948, Faribault, MN 55021-6091.
• Citi borrowers should call Citi toll-free at 1-888-326-1166.
• GMAC Mortgage borrowers should call Rust Consulting Inc., the settlement administrator, toll-free at 1-866-708-0915 or write to P.O. Box 3061, Faribault, Minnesota 55021-2661.
• JPMorgan Chase borrowers should call Chase toll-free at 1-877-469-0110 or write to P.O. Box 183224, OH-7160/DOJ, Columbus, Ohio 43219-6009.
• Wells Fargo borrowers should call the Wells Fargo Home Mortgage Military Customer Service Center toll free at 1-877-839-2359.

Service members and their dependents who believe that their SCRA rights have been violated should contact an Armed Forces Legal Assistance office. To find the closest office, consult the military legal assistance office locator at http://legalassistance.law.af.mil and click on the Legal Services Locator.  Additional information about the Justice Department’s enforcement of the SCRA and the other laws protecting service members is available at www.servicemembers.gov.

The rate of expansion in activity of the manufacturing sector slowed again in September, although it did grow for the 33rd month in a row, while the overall economy grew for the 76th consecutive month.

According to the Institute for Supply Management (ISM), the September Purchasing Management Index (PMI) registered 50.2%, a 0.9% decline from August. A PMI reading above 50% indicates the manufacturing economy is generally expanding; below 50% indicates it is generally declining.

Within the PMI, the New Orders Index registered 50.1%, down 1.6% from August and the Production Index dipped 1.8% to 51.8%. The Employment Index came in at 50.5%, a loss of 0.7%.

Of the 18 manufacturing industries, seven are reporting growth in September in the following order:

1. Printing & Related Support Activities;
2. Textile Mills;
3. Furniture & Related Products;
4. Food, Beverage & Tobacco Products;
5. Miscellaneous Manufacturing;
6. Paper Products; and
7. Nonmetallic Mineral Products.

The 11 industries reporting contraction in September -- listed in order -- are:

1. Primary Metals;
2. Apparel, Leather & Allied Products;
3. Petroleum & Coal Products;
4. Wood Products;
5. Electrical Equipment, Appliances & Components;
6. Machinery;
7. Computer & Electronic Products;
8. Fabricated Metal Products;
9. Plastics & Rubber Products;
10. Transportation Equipment; and
11. Chemical Products.

Jobless claims

There was a big jump in the number of workers filing for first-time state unemployment benefits.

The Department of Labor (DOL) reports that initial jobless claims shot up by 10,000 in the week ending September 26 to a seasonally adjusted total of 277,000. The DOL says there were no special factors affecting this week's initial claims.

Even with the increase in first-time applications, the four-week moving average was 270,750, down 1,000 from the previous week. The four-week moving average smooths out the volatility of the weekly report and is seen as a more accurate gauge of the labor market.

The complete report is available on the DOL website.

September was another big month for job-cutting.

Outplacement consultancy Challenger, Gray & Christmas reports that U.S.-based employers eliminated 58,877 last month -- up 43% from August. That makes September the third-largest month of the year for terminations behind July (105,696) and April (61,582) -- and 93% above the 30,477 planned firings a year earlier.

Tough quarter

In the just-completed third quarter, 205,759 job cuts were announced, making it the largest job-cut quarter since the third quarter of 2009 (240,233). It also was 40% higher than the previous quarter’s 181,213 job cuts, and 75% higher than the third quarter of last year, when 117,374 jobs were eliminated.

So far this year, employers have announced 493,431 planned job cuts, 36% more than the 363,408 cuts tracked from January through September a year ago. In fact, the year-to-date total is 2.0% higher than all of 2014 when 483,171 jobs disappeared.

“Job cuts have already surpassed last year’s total,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, “and are on track to end the year as the highest annual total since 2009, when nearly 1.3 million layoffs were announced at the tail-end of the recession.”

Computer industry hit hard

While job cuts over the first two quarters were dominated by oil-related industries, recent downsizing activity has been concentrated in the public sector and the computer industry.

The computer industry saw the heaviest job cuts in September, as perpetually struggling Hewlett-Packard announced plans to reduce its workforce by as many as 30,000. In all, the industry saw 32,500 job cuts during the month. That is the highest one-month total for this industry since IBM announced 60,000 job cuts in 1993.

To date, computer firms have announced 58,874 job cuts, just shy of the 59,528 computer-industry jobs cuts in all of 2014.

For the year, the biggest job cutting sector is energy, which has announced 72,708 job cuts since January 1. Most of the energy cuts occurred in the first half of year, with just 12,208 job cuts recorded in the latest quarter.