Current Events in November 2015

Kona Bicycle Company of Ferndale, Wash., is recalling about 530 Kona Wo bicycles.

The bicycle fork can crack or break, posing a fall hazard.

The company has received one report of the bicycle fork breaking at the junction of the crown. No injuries have been reported.

This recall involves all 2014 Kona Wo bicycles with a charcoal black frame and silver decals. The word "Wo" is on the top tube of the frame and the word "Kona" is on the down tube of the frame and on the side of the seat.

The bicycles, manufactured in Taiwan, were sold at authorized Kona dealers nationwide from September 2013, through July 2014, for about $1,700.

Consumers should immediately stop using the recalled bicycles and contact Kona or an authorized Kona dealer for a free replacement and installation of the bicycle fork.

Consumers may contact Kona at 800-566-2872 from 8:30 a.m. to 5 p.m. (PT) Monday through Friday, online at http://www.konaworld.com/wo_recall.cfm for more information.

Tyson Foods of Pine Bluff, Ark., is recalling approximately 52,486 pounds of chicken wings.

The product has an “off odor” scent and may be adulterated.

There have been no confirmed reports of adverse reactions due to consumption of these products

The following fully cooked buffalo style chicken wing item was produced on October 24, 2015 and October 25, 2015:

• 28-oz. retail bags containing multiple pieces of “Tyson Any’tizers Fully Cooked Hot Wings CHICKEN WING SECTIONS COATED WITH A FLAVORFUL HOT, TANGY SAUCE” with use by/sell by dates of October 24, 2016 and October 25, 2016, packaging dates 2975PBF0508-23/2985PBF0500-01 and case codes 2975PBF0508-23/2985PBF0500-01.

The recalled product bears establishment number “P-13456” inside the USDA mark of inspection as well as on the back of the bag above the heating instructions.

The items were shipped to retail locations nationwide.

Customers who purchased this products are urged not to consume it, but throw it away or return it to the place of purchase.

Consumers with questions may contact Tyson Foods’ consumer relations (toll free) at 866-328-3156.

Recreational Equipment Inc. (REI), of Kent, Wash., is recalling about 30,500 evrgrn campfire rocker chairs.

The chair can tip backward while rocking, posing a fall hazard to the user.

The company has received four reports of children who have tipped over in the rocker chairs while in the store.

This recall involves REI evrgrn Campfire Rocker chairs. The collapsible rocking chairs were sold in blue, gray, green, and orange fabric supported by four metal tubes and wooden rockers at the base and are intended for outdoor use.

A small black tab is attached to the edge of the fabric seat containing the word “evrgrn”. The chair comes in a portable bag whose color matches that of the fabric seat.

The chairs, manufactured in China, were sold exclusively at REI stores nationwide and online at www.REI.com from April 2015, through August 2015, for about $100.

Consumers should immediately stop using the recalled chairs and contact REI for a free replacement or a full refund.

Consumers may contact REI at 800-426-4840 from 4 a.m. to 11 p.m. (PT) daily or online at www.REI.com and click on Product Recalls at the bottom of the page for more information.

American Airlines, newly merged with US Airways, is changing its frequent flier program to reward dollars spent instead of miles flown. The change benefits big-spending corporate travelers and hurts occasional pleasure fliers.

But before you denounce American for following the money, it's worth noting that the change brings it into line with the way most airlines reward their frequent fliers these days.

United and Delta made a similar switch over the last few years, joining Southwest, JetBlue, and Virgin America. 

Travel industry watchers weren't surprised by the change and, in fact, said they had been expecting it once the merger was finalized. 

The change basically follows modifications in the way fares are set. Once upon a time, fares tended to reflect miles flown -- a 2,000-mile trip cost more than a 600-mile junket. But not today. Fares are now set by a complex formula that includes route density, when the flight is booked, demand for seats on the travel date, and so forth. 

Book at the last minute and you may be paying $2,000 for that center seat while your neighbor on the aisle paid only $200 because he booked two months in advance.

Awarding frequent flier premiums on dollars rather than miles also puts the program back into synch with its original goal -- rewarding the most profitable passengers. Airlines make a lot more money on business travelers, who not only fly more often but tend to make costly last-minute reservations and book business-class seats when they think they can get by with it. 

5 miles per dollar

Like United and Delta, American will award a minimum of five miles for every dollar spent on the base fare and fees, excluding taxes. Elite members will get more miles per dollar spent.

Redemption levels also will be modified, starting in March, with fewer points required for Mexico, the Caribbean, Central America, and for some shorter domestic flights. But trips to Europe and Asia, and travel in premium cabins, will require higher redemptions.

For many people, taking a trip with your whole family means bringing beloved pets as well. Up until now, Delta had allowed larger animals to be flown as checked baggage, but they recently decided that they will end this practice starting next year.

Some exceptions

The change will go into effect on March 1, 2016, and will make it necessary for bigger animals to be flown via Delta's cargo service. Consumers who often fly with larger pets, and have booked flights after that date, will be notified by the airline.

Despite the change, many smaller animals, such as small dogs and cats, will still be allowed to fly as checked baggage – though the standard fee will still apply. Some larger animals will also still be accepted as well due to special circumstances. These include such animals traveling with military members under active transfer orders, service animals, and animals used for emotional support.

Delta wants to reassure its passengers that they still care about pets; in fact, they claim that the change is a direct result of that caring. “Many of us at Delta are pet lovers and we know that they are important members of the family. . . This change will ultimately ensure that we have a high-quality, consistent service for pets when their owners choose to ship them with Delta Cargo,” said Bill Lentsch, Senior Vice President of Airport Customer Service and Cargo Operations.

Increased cost and planning

The change in policy raises costs for consumers if they decide to fly with a larger pet. The Atlanta Journal Constitution calculates that the cost for shipping a pet can vary greatly in price – from $193 to $1,481.18.

Even if the you can manage the increased cost, there is additional effort involved in the new process too. Pets shipped via the cargo service must have a separate booking that is completed two weeks before the departure date. Dropping your pet off at the airport may be a bit of a hassle too, since they need to be delivered to, and received from, the cargo area.

Even after taking preliminary steps, consumers are not guaranteed that their pets will ultimately make it on the same flight as them. If this happens, there may be more than a few disgruntled pet owners waiting at the airport to see when their four-legged friends will arrive.  

The owner of nine Papa John's franchises located in New York City is looking at jail time and a hefty fine for not paying his employees according to minimum wage requirements. The owner, Abdul Jamil Khokhar and BMY Foods, Inc. pleaded guilty to wage theft charges and will have to pay nearly $300,000, while Kokhar has been sentenced to 60 days in jail.

“Wage theft is a crime and a Papa John's franchisee is now going to jail for cheating his employees and trying to cover it up,” said New York Attorney General Eric Schneiderman.

Schneidman's office led the investigation, which found that Papa John's employees were not being paid the proper time-and-a-half overtime rate when they worked over 40 hours per week. In order to avoid paying extra, the franchisee had his employees use fake names after they had worked 40 hours so that it looked like the time worked was spread out to multiple workers on the books.

Obviously, this practice is illegal because it defrauds workers of their proper wages and defrauds the state on the company's tax return. As a result, the franchisee has been ordered to pay $230,000 back to its employees for lost wages and an additional $50,000 in civil penalties.

“The Attorney General's successful criminal prosecution of this employer, together with the Department of Labor's civil consent judgment against the enterprise, show that employers will not get away with covering up violations of state and federal wage laws,” said Mark H Watson, Jr. of the Wage and Hour Division at the U.S. Department of Labor.  

There seems to be a bit of concern among builders in the market for newly constructed single-family homes.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) slipped three points to 62 this month from an upwardly revised October reading.

“The November report is pullback from an unusually high October, and is more in line with the consistent, modest growth that we have seen throughout the year,” said NAHB Chief Economist David Crowe. “A firming economy, continued job creation and affordable mortgage rates should keep housing on an upward trajectory as we approach 2016.”

HMI performance

Derived from a monthly survey, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low."

Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Two of the three HMI components posted losses in November. The index measuring sales expectations in the next six months fell five points to 70, and the component gauging current sales conditions decreased three points to 67. The index charting buyer traffic inched up a point to 48.

“Even with this month’s drop, builder confidence has remained in the 60s for six straight months -- a sign that the single-family housing market is making long-term headway,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. “However, our members continue to voice concerns about the availability of lots and labor.”

Looking at the three-month moving averages for regional HMI scores, the West increased four points to 73 while the Northeast rose three points to 50. The Midwest and South, on the other hand, held steady at 60 and 65, respectively.

The cost of living rose in October, but it's nothing to get excited about.

Figures released by the Department of Labor's Bureau of Labor Statistics (BLS) show the consumer price index (CPI) was up a tiny 0.2% last month and that over the last 12 months, prices are up by the same amount.

Food costs

Food prices posted their smallest increase since May -- just 0.1%, with the index for food at home also up 0.1%. Four of the six major grocery store food group indexes rose were higher last month, with cereals and bakery products advancing 0.8%, and fruits and vegetables up 0.5% for the fourth monthly increase in a row. Nonalcoholic beverages and other food at home were also higher.

The cost of meats, poultry, and fish declined (-0.5%). Egg prices dropped 4.8% after sharp increases during the summer, while dairy and related products also declined (-0.2%).

Over the past 12 months, food at home is up 0.7%. The index for food away from home rose 0.2% in October and is up 2.9% over the last 12 months. Overall food prices have jumped 1.9% over the last 12 months.

Energy prices

After plunging 4.7% in September, energy prices were up 0.3% last month. Major energy components were mixed, with gasoline (+0.4%) and electricity (+0.4%) higher. In contrast, fuel oil (-1.1%) and natural gas (-0.7%) declined.

All major energy components were down over the past 12 months, with fuel oil index plunging 32.9%, gasoline down 27.8%, natural gas down 11.0%, and electricity 0.5% lower.

Over the last 12 months, overall energy prices have plummeted 17.1%

Core inflation

Prices excluding the volatile food and energy categories -- the “core rate” of inflation -- were up just 0.2% in October, the same as in September. The largest contributors were medical care (+0.7%) and shelter (+0.3%). Prices for personal care, airline fares, recreation, alcoholic beverages, and tobacco also rose.

Costs of apparel, new vehicles, household furnishings and operations, and used cars and trucks all declined in October. The core rate is up 1.9% over the last 12 months

The complete CPI report is available on the BLS website.

PNY Technologies of Parsippany, N.J., is recalling about 56,800 portable lithium polymer battery packs in the U.S. and Canada.

Batteries can overheat and vent flames, posing fire and burn hazards.

The company has received one report of venting with flames. No injuries have been reported.

This recall involves portable lithium polymer battery packs with model number T10400 that are used to charge USB-enabled smartphones, tablets and other USB-powered devices.

The batteries are black or grey hand-held devices, 4 inches x 2.75 inches x 0.75 inches, with two USB outputs and four blue LED lights. PNY is laser-printed along the bottom on the front of the battery.

The battery packs, manufactured in China, were sold at Best Buy, Office Depot, Office Max and other retail stores nationwide and online at amazon.com and frys.com from January 2014, through August 2015, for about $50.

Consumers should immediately stop using the recalled batteries and contact PNY for a free replacement rechargeable battery.

Consumers may contact PNY Technologies toll-free at 888-316-1194 from 9 a.m. to 8 p.m. (ET) Monday through Friday, online at www.pny.com and click on “Product Recall” under the “Support” menu at the bottom of the page, or by email at Tech-Support-T10400@pny.com.

BMW of North America is recalling 7,162 model year 2016 528i, 528i xDrive, 535i, 535i xDrive, 535d xDrive, M5, 550i, 550i xDrive and 535d sedans.

The vehicles have an inboard lower anchor for child restraints on the left rear seat that may have been bent downwards, preventing the child seat from fully engaging both lower anchors. As such, these vehicles may fail to comply with the requirements of Federal Motor Vehicle Safety Standard (FMVSS) number 225, "Child Restraint Anchorage Systems."

If the child seat is not properly attached to the lower anchors, the child's risk of injury in the event of a crash is in creased.

BMW will notify owners, and dealers will inspect and, if necessary, repair the inboard lower anchor on the left rear seat, free of charge. The recall is expected to begin December 24, 2015.

Owners may contact BMW customer service at 1-800-525-7417.

Homestat Farm of Dublin, Ohio, is recalling some of its 42-oz. packages of Organic Steel Cut Oats & Chia with Flax And Rye Flakes.

The product may be contaminated with Salmonella.

No illnesses have been reported to date in connection with this issue.

The recalled product was distributed on a limited basis in Sams Club retail stores located in Alaska, California, Florida, Georgia, Illinois, Kansas, Maryland, Mississippi, Minnesota, Michigan, North Carolina, New Hampshire, Ohio, Pennsylvania and Texas.

The product comes in a 42-oz carton, UPC 8 35882 00620 4, marked with Best Buy: 03/16/17-1, 03/16/18-1, 03/19/17-1, 03/19/17-2, 03/23/17-1, 03/23/17-2, 03/24/17-1, 03/26/17-1, 03/26/17-2, 04/08/17-2. The best buy date can be found embossed on the bottom flap of box next to the bar code.

Customers who purchased the recalled product should return it to the place of purchase for a full refund.

Consumers with questions may contact the company at 1-800-819-3918 Monday – Friday from 10am – 4pm.

The Department of Justice announced today that they have finally reached a settlement with Education Management Corporation (EDMC) for charges of illegal recruiting, consumer fraud, and other violations. The for-profit education company has agreed to pay $95.5 million to settle these allegations.

The case against EDMC actually stretches back all the way to 2007 after two Education Management employees complained about the company's deceptive recruiting practices. One employee filed charges in federal court through use of the False Claims Act– a piece of legislation that allows a citizen to sue if they know that fraud has been committed against the government; in essence, the citizen would be suing in the government's name. By 2011, the Department of Justice, four states, and the second employee would join the case.

Unfair compensation and fraud

The primary charge that EDMC faced was their alleged practice of paying admissions personnel based on the number of students that they were able to enroll in the school, which violates the Higher Education Act's (HEA) Incentive Compensation Ban. Employees who had good enrollment numbers were able to reap bonuses like all-expense paid vacations with loved ones to destinations like Cancun, Puerto Vallarta, Mexico, and Las Vegas.

Additionally, the company faced numerous charges of consumer fraud involving deceptive and misleading recruiting practices. The company is charged with using “hyperaggressive boiler room tactics” to recruit students and collect tuition money. It is estimated that nearly $11 billion was collected by the company between July of 2003 and June of 2011 using these tactics.

“Companies cannot enrich their corporate coffers at the expense of students seeking a quality education, or on the backs of taxpayers who are funding our critical financial aid programs,” said U.S. Attorney David J. Hickton. “Today's global settlement sends an unmistakable message to all for-profit education companies: the United States will aggressively ferret out fraud and protect innocent students and taxpayer dollars from this kind of egregious abuse.”

Historic resolution

The $95.5 million settlement was reached after examining EDMC's ability to pay and financial condition, which has declined as of late. However, the New York Times reports that if the case had gone to trial then the company could have been faced with paying a billion-dollar verdict.

Attorneys involved with the case believe, however, that justice has been carried out against EDMC and that it sets a good example. “This historic resolution exemplifies the Justice Department's deep commitment to protecting precious public resources; to defending American consumers; and to standing up for those who are vulnerable to mistreatment, abuse, and exploitation,” said U.S. Attorney General Loretta E. Lynch.  

It was just a little more than a year ago when oil prices collapsed, dragging gasoline prices lower as well. While consumers have held their breath, waiting for prices to go back up, they haven't.

And they won't anytime soon, says AAA.

In fact, the auto club reports gasoline prices have fallen for ten consecutive days, reaching a national average price of $2.16 per gallon. And they are likely to go lower still.

By Christmas Day, AAA predicts the national average price of self-serve regular will be below $2 a gallon for the first time since 2009. It's already well below that level in wide areas of the U.S.

The average price of gasoline in South Carolina is $1.91 a gallon. It's $1.92 in Alabama and $1.93 in Texas.

Refinery problems fixed

One reason the national average price is falling so quickly is that prices have begun to decline in the Midwest, more in line with other parts of the country. Midwestern pump prices have been volatile in recent months because of refinery problems that have reduced the flow of product.

AAA says most of those issues have been resolved, including at the ExxonMobil refinery in Joliet, Illinois, which has reportedly concluded its scheduled maintenance and returned to production. This and other refinery restarts in the Midwest have led to large weekly and monthly price discounts in Ohio, Illinois, Indiana and Michigan.

The Western states continue to experience the highest gasoline prices. In addition to Hawaii, the perennial leader in expensive fuel, California has an average gasoline price of $2.80 a gallon, followed by Nevada at $2.67 and Washington at $2.52.

In 2011, Congress passed the Food Safety Modernization Act (FSMA), giving the Food and Drug Administration (FDA) broad authority to regulate the food supply.

It's taken four years, but the FDA is finally implementing final rules that would implement three key areas of the law: establishing enforceable safety standards for produce farms; making importers accountable for verifying that imported food meets U.S. safety standards; and establishing a program for the accreditation of third-party certification bodies, also known as auditors, to conduct food safety audits of foreign food facilities.

The rules are aimed at improving the safety of the food consumers purchase by helping U.S. and foreign producers head off potential food threats before they occur.

Overlooked threat

Except for occasional high-profile outbreaks, foodborne illness is a largely unnoticed problem in the U.S. But the numbers are actually huge. An estimated one in six Americans gets sick from food each year.

Most cases are not severe and some victims might not be completely aware they are sick. But government data shows food poisoning sends 128,000 people to the hospital each year and 3,000 people die.

“The recent multi-state outbreak of Salmonella in imported cucumbers that has killed four Americans, hospitalized 157 and sickened hundreds more, is exactly the kind of outbreak these rules can help prevent,” said Michael R. Taylor, FDA deputy commissioner for foods and veterinary medicine. “The FDA is working with partners across the government and industry to prevent foodborne outbreaks. The rules will help better protect consumers from foodborne illness and strengthen their confidence that modern preventive practices are in place, no matter where in the world the food is produced.”

The guts of the law

The three areas make up the gut of FSMA:

• Produce Safety Rule: sets up safety and sanitary standards for produce, from growing to packing. U.S. farms would all have to meet the same safety standard.
• Foreign Supplier Verification Programs Rule: This requires food importers to verify that foreign suppliers are producing food in a manner that meets U.S. safety standards. This is an element strongly supported by the U.S. food industry, which has claimed foreign producers weren't being held to the same strict standards U.S. producers are.
• Accredited Third-Party Certification Rule: this establishes a way to accredit third-party certification bodies, called auditors, to conduct food safety audits and to certify that foreign food facilities meet U.S. standards. In some cases the FDA will use these auditors to certify the integrity of imported food products.

In 2013, the Agriculture Department estimated that imported food accounted for about 19% of the U.S. food supply. That included about 52% of the fresh fruits and 22% of the fresh vegetables consumed by Americans.

The FDA has now finalized five of the seven major rules that implement the core of FSMA.  

Rising home prices and interest rates produced a slight decline in housing affordability in the third quarter according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI), which was released today.

The National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI) shows 62.2% of new and existing homes sold between the beginning of July and end of September were affordable to families earning the U.S. median income of $65,800. That's down 1% from the second quarter.

The national median home price increased slightly from $230,000 in the second quarter to $231,000 in the third quarter. Meanwhile, average mortgage rates edged higher -- from 3.99% to 4.18% in the same period.

"The decline in the index was slight and affordability remains good," said NAHB Chief Economist David Crowe. "With mortgage rates near historic lows and home prices advancing at a modest pace, this is an excellent time to buy."

Most affordable markets

Syracuse, N.Y., was rated the nation's most affordable major housing market, switching places with Youngstown-Warren-Boardman, Ohio-Pa., which fell to the second slot on the list. In Syracuse, 91.7% of all new and existing homes sold in this year's third quarter were affordable to families, earning the area's median income of $68,500.

Rounding out the top five affordable major housing markets in respective order were Harrisburg-Carlisle, Pa.; Indianapolis-Carmel, Ind.; and Scranton-Wilkes-Barre, Pa.

Meanwhile, Glens Falls, N.Y. claimed the title of most affordable small housing market. There, 92.6% of homes sold during the quarter were affordable to families, earning the area's median income of $65,400.

Smaller markets joining Glens Falls at the top of the list included Sandusky, Ohio; Kokomo, Ind.; Springfield, Ohio; and Rockford, Ill.

Least affordable markets

For the 12th consecutive quarter, San Francisco-San Mateo-Redwood City, Calif. was the nation's least affordable major housing market. There, just 10.5% of homes sold in the third quarter were affordable to families, earning the area's median income of $103,400.

Other major metros at the bottom of the affordability chart were located in California. In descending order, they included Los Angeles-Long Beach-Glendale.; Santa Ana-Anaheim-Irvine.; San Jose-Sunnyvale-Santa Clara.; and Santa Rosa-Petaluma.

All five of the least affordable small housing markets were also in California. At the very bottom of the affordability chart was Santa Cruz-Watsonville, Calif., where 16.5% of all new and existing homes sold were affordable to families, earning the area's median income of $87,000. Other small markets at the lowest end of the affordability scale included Salinas; Napa; San Luis Obispo-Paso Robles; and Santa Barbara-Santa Maria-Goleta, respectively.

"Attractive home prices and interest rates, along with firming job growth, are helping housing markets across the country to gradually improve," said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. "While this bodes well for housing in the coming year, builders continue to face challenges, including a lack of available lots and skilled labor."

Ford Motor Company is recalling 1,900 model year 2016 Ford Mustangs manufactured September 26, 2015, to October 1, 2015.

The front and rear seat belts and child seat tether anchors may have been damaged in shipping from the supplier to the vehicle assembly plant and may not adequately restrain the occupant in a crash. As such, these vehicles fail to comply with the requirements of Federal Motor Vehicle Safety Standard numbers 208, "Occupant Crash Protection," and 225, "Child restraint anchorage systems."

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If the restraint components do not function as intended, the occupants may not be properly restrained in the event of a crash, increasing their risk of injury.

Ford will notify owners, and dealers will replace the front and rear seat belt assemblies and the child seat tether anchors, free of charge. The recall is expected to begin on December 14, 2015.

Owners may contact Ford customer service at 1-866-436-7332. Ford's number for this recall is 15C13.