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    A third decline in four months for pending home sales

    Rising prices are a factor

    Rising prices and limited inventory combined in November to send pending home sales down 0.9% to an index of 106.9.

    In releasing its monthly report, the National Association of Realtors (NAR) said modest gains in the Midwest and South were offset by larger declines in the Northeast and West. The decline was the third in four months.

    Still, the Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, is 2.7% above November 2014, the 15th straight monthly year-over-year increase. However, last month's annual gain was the smallest since October 2014.

    Slowing trend continues

    November's dip in contract activity continues the modestly slowing trend seen ever since pending sales peaked to an over nine year high back in May. "Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months despite low mortgage rates and solid job gains," said Lawrence Yun, NAR chief economist. "While feedback from Realtors continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers."

    With existing housing inventory is already below year ago levels and new home construction is still deficient, Yun thinks it's likely that supply constraints and faster price appreciation will reappear once the spring buying season begins.

    "Especially with mortgage rates likely on the rise, affordability issues could creep up enough to temper sales growth -- especially to first-time buyers in higher priced markets," he added.

    NAR projects existing-home sales will finish 2015 at a pace of around 5.25 million -- the highest since 2006, but roughly 25% below the prior peak set in 2005. The national median existing-home price for all of this year will be close to $220,700, up roughly 6.0% from a year ago.

    Regional performance

    • The PHSI in the Northeast decreased 3.0% to 91.8 in November, but is still 4.3% above a year ago.
    • In the Midwest the index rose 1.0% to 104.9, and is now 4.1% above November 2014.
    • Pending home sales in the South were up 1.3% to an index of 119.9 and are 0.5% above where they were a year ago.
    • The index in the West dropped 5.5% to 100.4, but is up 4.5% year-over-year.

    Jobless claims

    Separately, there was a big jump last week in the number of first-time applications for state unemployment benefits.

    The Department of Labor (DOL) reports initial jobless claims shot up by 20,000 in the week ending December 26 to a seasonally adjusted total of 287,000. The previous week's level was unrevised, and the DOL reports that there were no special factors affecting last week's compilation.

    The four-week moving average, which is less volatile than the weekly tally and regarded as a more accurate gauge of the labor market, was up 4,500 -- to 277,000.

    The complete report is available on the DOL website.

    © karelnoppe - FotoliaRising prices and limited inventory combined in November to send pending home sales down 0.9% to an index of 106.9.In relea...
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    Volkswagen recalls Audi A3 Cabriolets

    The driver or front passenger side air bag may not deploy properly

    Volkswagen Group of America is recalling 904 model year 2015 Audi A3 Cabriolets manufactured June 5, 2014, to April 1, 2015.

    The recalled vehicles have a driver or front passenger seat whose cover may be incorrectly stitched, preventing the side air bag from properly deploying in the event of a crash.

    Improper side air bag deployment may increase the risk of injury in the event of a crash.

    Volkswagen will notify owners, and dealers will replace the driver's and/or front passenger's seatback cover, free of charge. The recall is expected to begin in February 2016.

    Owners may contact Volkswagen customer service at 1-800-822-8987. Volkswagen's number for this recall is 74C9.

    Volkswagen Group of America is recalling 904 model year 2015 Audi A3 Cabriolets manufactured June 5, 2014, to April 1, 2015. The recalled vehicles ...
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    Consumers spending fuel savings on new cars

    The rest of the economy got little benefit in 2015

    One significant economic event that marked 2015 was falling gasoline prices. Prices headed lower in late 2014 and continued the trend most of 2015, except for the late winter/early spring refinery maintenance period.

    As the year ends, the national average price of gasoline is right around $2, saving consumers about $20 to $25 a fill-up from just a couple of years ago. You would think, then, that these lower prices would do something to ignite the economy -- but that wasn't the case.

    Economic growth for the year will be about 2%, and consumer spending just a bit higher than that. So, where did the money go?

    According to the Bureau of Economic Analysis, a lot of it went into savings. The agency reports the personal savings rate rose 5.6% in October and 5.5% in November – smart for consumers but not doing much for the economy.

    Low interest rates and fuel savings

    However, there is one area where consumers feel free to spend that fuel savings – at a new car dealer. New cars sales have continued to rise month after month, encouraged by low interest rates and fuel savings. If, for example, a consumer is saving around $100 a month on gasoline, it makes a car payment a little more affordable.

    Industry analysts expect December to be another blockbuster month for car sales, once all the figures are in. Kelley Blue Bookpredicts December will cap the biggest year of U.S. new-car sales on record, with total light vehicle sales of roughly 17.5 million, representing a 6.1% jump from 2014 totals. The previous high was 17.35 million units in 2000.

    “December has become one of the biggest sales months of the year, helped by year-end targets and prominent holiday sales events,” said Tim Fleming, analyst for Kelley Blue Book. “As we move into the new year, expect this strength to continue, although at a slower rate than this year. In 2016, Kelley Blue Book forecasts sales in the range of 17.5 million to 18 million units, which would represent another record-breaking year.”

    Fourth-best month on record

    Automotive site Edmunds.comsays December 2015 will be the fourth best-selling month on record, surpassing the previous December record of 1,537,655 sales registered in 2004. This month’s performance will propel the industry to 17.5 million sales in 2015, besting the previous record high of 17.35 million new car and truck sales in 2000.

    "It's truly remarkable that the auto industry is finishing off its best year ever just six years after the depths of the Great Recession," said Edmunds.com Director of Industry Analysis Jessica Caldwell. "Low-APR offers and tumbling gas prices are making it easy for shoppers to buy or lease a new car, but don't overlook the products themselves. If you're buying a new car today, you're getting a safer, more fuel-efficient and more technologically-packed vehicle than ever before. Automakers are doing a great job giving the people what they want in a new car."

    Even so, Kelley Blue Book sees several factors that could disrupt the new-car sales momentum, including rising interest rates and an increasing supply of off-lease units that could weaken used-car prices.  

    One significant economic event that marked 2015 was falling gasoline prices. Prices headed lower in late 2014 and continued the trend most of 2015, except ...
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      Chevrolet Colorado and GMC Canyon trucks recalled

      The console compartment door may not remain closed in the event of a crash

      General Motors is recalling 8,763 model year 2016 Chevrolet Colorado trucks manufactured August 25, 2015, to September 24, 2015; and GMC Canyon trucks manufactured August 28, 2015, to September 24, 2015.

      The recalled vehicles have a console compartment lid latch assembly that may fail to keep the compartment door closed in the event of a crash. As such, these vehicles fail to comply with the requirements of the Federal Motor Vehicle Safety Standard (FMVSS) number 201, "Occupant Protection in Interior Impact."

      If the console compartment door does not remain closed in a crash, the contents inside may strike the vehicle occupants, increasing their risk of injury.

      GM will notify owners, and dealers will replace the console compartment door latch assembly, free of charge. The manufacturer has not yet provided a notification schedule.

      Owners may contact Chevrolet customer service at 1-800-222-1020, or GMC customer service at 1-800-462-8782. GM's number for this recall is 16370.

      General Motors is recalling 8,763 model year 2016 Chevrolet Colorado trucks manufactured August 25, 2015, to September 24, 2015; and GMC Canyon trucks manu...
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      Whole Foods to pay $500,000 for overcharging NYC consumers

      The high-end chain denies that the overcharges were intentional, but the incident may be damaging

      Whole Foods and New York City Consumer Affairs agree that Whole Foods is paying $500,000 to settle charges that it overcharged NYC customers for some items, but that's about all they agree on.

      Far from settling a dispute that broke into the open last June, the combatants appear to be hardening their positions. 

      NYC Department of Consumer Affairs (DCA) Commissioner Julie Menin said the agreement followed "the troubling and repeated mislabeling of pre-packaged goods at Whole Foods last year" and said her department would "continue its vigilance in making sure New Yorkers are protected every time they check out at the grocery.”

      Whole Foods grumbled that "the DCA has misrepresented this agreement" and said there was never any indication that the over-pricing was intentional or that it extended beyond the borders of New York City.

      "WFM has had in place preexisting pricing and weights/measures programs including a third party auditing and training program and a 100 percent pricing accuracy guarantee that gives customers a full refund on any item inadvertently mispriced. These are pre-existing programs that go above and beyond the DCA’s requirements," Whole Foods said.

      Non-NYC complaints

      Consumers rate Whole Foods

      But, Whole Foods' contentions notwithstanding, it's not just New York City consumers who are complaining about alleged overcharging.  

      "I make a point to review my receipts before loading groceries into the car. I keep checking because more often than not, I would find that I've been overcharged," said Nancy of San Francisco in a recent ConsumerAffairs review. "It started when I was charged $45 for a whole fryer chicken. The butcher labeled it as organic chicken breasts instead of an organic whole fryer chicken which should cost $12. I had to go back to the same store to get a refund which was inconvenient for a mother with 2 toddlers. That easily could have gone unnoticed."

      Nancy said the chicken mispricing wasn't an isolated incident.

      "My biggest concern is that accurate pricing at Whole Foods has become the customer's responsibility. That shouldn't be the case. On many occasions, I am double charged. Just recently, I was charged for 2 packs of hot dogs instead of one," she said.

      Besides mislabeling, Whole Foods prices are just plain too high, many consumers argue. Ken of Scotch Plains, N.J., said he has stopped going to Whole Foods because of "stratospheric" prices.

      "Our local high end grocery stores (Kings and Wegmans) are so superior in every way and at bargain prices compared to Whole Foods. Don't know how they will stay in business," Ken commented.

      New York shakedown?

      Whole Foods complained that Ms. Menin's department had initially demanded a $1.5 million penalty.

      "While WFM refused to consider the DCA’s initial demands of $1.5 million, we agreed to $500,000 in order to put this issue behind us so that we can continue to focus our attention on providing our New York City customers with the highest level of quality and service," Whole Foods huffed.

      Ms. Menin sounded a bit more pleased with the settlement.

      "We are happy to have reached an agreement with Whole Foods that will help to ensure New Yorkers are better protected from overcharging,” she said. “Whether it’s a bodega in the Bronx or a national grocery store in Manhattan, we believe every business needs to treat its customers fairly and, with this agreement, we hope Whole Foods will deliver on its promise to its customers to correct their mistakes."

      Quarterly audits

      Besides the $500,000 penalty, Whole Foods swallowed a number of other requirements, including: 

      • quarterly in-store audits of at least 50 products from 10 different departments at all New York City stores to help ensure products are accurately weighed and labeled, and to correct all inaccuracies;
      • in the event that DCA inspectors identify mislabeled pre-packaged foods at a Whole Foods Store, that store must immediately remove all mislabeled products and, within 15 days, Whole Foods must check the accuracy of that product’s pricing, as well as 20 additional products from the same department, at all New York City stores;
      • implement and enforce policies and procedures that require employees not estimate the weight of a package but rather individually weigh each package and only label the package with a label that is based on the weight of the actual contents; and,
      • conduct training sessions for all New York City employees who are involved in weighing and labeling products.
      Whole Foods and New York City Consumer Affairs agree that Whole Foods is paying $500,000 to settle charges that it overcharged NYC customers for some items...
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      Employees may be on the move in 2016

      Careerbuilder survey finds younger employees, especially, are getting restless

      Immediately after the Great Recession, people who had jobs felt lucky to be employed. With the jobless rate at over 10%, there wasn't a lot of moving around.

      That seems to be changing.

      With the labor market showing signs of new life in 2015, a lot of employees are likely to look for better jobs in 2016. At least, that's the conclusion of a new Harris Poll conducted for Careerbuilder.com.

      The survey found that 21% of employees are determined to leave their current employers in 2015, an increase of 5% from those who expressed that sentiment in last year's survey. Younger workers expressed the strongest desire to make a move.

      Of the 18 to 34 age group, 30% said they expect to have a new job by the end of 2016, compared to 23% the previous year.

      “Just because a person is satisfied with their job doesn’t necessarily mean they aren’t looking for new work,” said Rosemary Haefner, chief human resources officer at CareerBuilder. “Because of this, it’s critical to keep up with your employees’ needs and continue to challenge them with work they feel is meaningful.”

      Job hunting tips

      Careerbuilder has some advice for people looking to move on. While regularly checking job listings is a good start, it isn't enough.

      These days, you have to take advantage of social media and use it strategically. For example, if you’re looking for a job in finance, Careerbuilder says LinkedIn might be the most valuable social media site to keep updated. If you're looking for a job at a media company, Twitter might be a better resource.

      Also, it's a good idea to follow the profiles or pages of companies you want to work for to stay up to date on job openings and announcements.

      Be creative in your approach. Just because a certain interview tactic or style was successful for one candidate doesn't mean it is the best strategy for you. Take into consideration your personal experiences, preferences and career goals and use them to position yourself as a unique candidate.

      Network with your peers. The more people you know, the wider your network of contacts. But most of the time it is the people who know you best who will be in the best position to help. Let them know you are on the move.

      Immediately after the Great Recession, people who had jobs felt lucky to be employed. With the jobless rate at over 10%, there wasn't a lot of moving aroun...
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      Asking about resolutions can be a powerful motivator

      Researchers find a question is better than a suggestion

      Sometimes it's not what you say but how you say it. That's especially true, researchers say, when it comes to New Year's resolutions. And it turns out, following a look at more than 100 studies, that the best way to get someone to follow their resolutions is to ask them about it.

      "Will you exercise this year?" is a simple question that could be a game-changing technique for people who want to influence their own or others' behavior, according to the study, which spanned 40 years of research.

      The research is the first comprehensive look at more than 100 studies examining the "question-behavior effect," a phenomenon in which asking people about performing a certain behavior influences whether they do it in the future. The effect has been shown to last more than six months after questioning.

      Why it works

      "If you question a person about performing a future behavior, the likelihood of that behavior happening will change," said Dave Sprott, a co-author of the study and senior associate dean of the Carson College of Business, Washington State University.

      The basic idea is that when people are asked "Will you recycle?" it causes a psychological response that can influence their behavior when they get a chance to recycle. The question reminds them that recycling is good for the environment but may also make them feel uncomfortable if they are not recycling. Thus, they become motivated to recycle to alleviate their feelings of discomfort.

      Overall, the researchers' findings suggest questioning is a relatively simple yet effective technique to produce consistent, significant changes across a wide domain of behaviors. The technique can sway people toward cheating less in college, exercising more, recycling, or reducing gender stereotyping.

      The study was published in the Journal of Consumer Psychology by marketing researchers from the University of California, Irvine, the University at Albany, State University of New York, the University of Idaho, and Washington State University.

      Benefits of using the technique

      "We found the effect is strongest when questions are used to encourage behavior with personal and socially accepted norms, such as eating healthy foods or volunteering," said Eric R. Spangenberg, first author and dean of the Paul Merage School of Business, University of California, Irvine. "But it can be used effectively to even influence consumer purchases, such as a new computer."

      "It is pretty easy to ask a question, and it can be done in a variety of means, such as ads, mailers, online media, and interpersonal communications," said Sprott.

      The researchers found the question-behavior effect to be strongest when questions are administered via a computer or paper-and-pencil survey, and when questions are answered with a response of 'yes' or 'no.' They also found that those using the technique are better off not providing a specific time frame for the target behavior.

      Sometimes it's not what you say but how you say it. That's especially true, researchers say, when it comes to New Year's resolutions. And it turns out, fol...
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      Home prices on the rise in October

      The Federal Reserve interest rate increase raises questions about the future

      The price of homes posted a slightly stronger year-over-rear increase in October than we saw during the previous month. Prices also rose on a month-over-month basis.

      Year-over-year

      The S&P/Case-Shiller U.S. National Home Price Index (NHPI), covering all nine U.S. census divisions, was up 5.2% from October 2014. The annual increase for September over September was 4.9%.

      The 10-City Composite increased 5.1% in the year to October versus 4.9% previously, while the 20-City Composite’s year-over-year gain was 5.5% compared with 5.4% in September.

      San Francisco, Denver, and Portland continue to report the highest year-over-year gains among the 20 cities with another month of double-digit price increases of 10.9% for all three. Twelve cities reported greater price increases in the year ending October 2015 versus the year ending September 2015.

      Phoenix had the longest streak of year-over-year increases, reporting a gain of 5.7% in October 2015 -- the eleventh consecutive increase in annual price gains.

      “Generally good economic conditions continue to support gains in home prices,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Among the positive factors are consumers’ expectations of low inflation and further economic growth as well as recent increases in residential construction including single family housing starts.”

      Month-over-month

      Before seasonal adjustment, the NHPI posted a gain of 0.1% month-over-month in October. The 10-City Composite was unchanged and the 20-City Composite showed a 0.1% month-over-month advance in October.

      After seasonal adjustment, the NHPI posted a gain of 0.9%, while the 10-City and 20-City Composites both increased 0.8% month-over-month. Ten of 20 cities reported increases in October before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month.

      Looking ahead

      The recent action by the Federal Reserve, wherein they raised the Fed funds target rate by 25 basis points, along with spreading expectations of further increases in 2016, are leading some to wonder if mortgage interest rates might rise.

      “Typically, increases in short term interest rates lead to smaller increases in long term interest rates,” Blitzer noted. “The latest economic projections published by the Fed following the recent rate increase suggest that the Fed funds rate will be around 2.6% in September 2017 compared to a current rate of about 0.5%. These data suggest that potential home buyers need not fear runaway mortgage interest rates.”

      The price of homes posted a slightly stronger year-over-rear increase in October than we saw during the previous month. Prices also rose on a month-over-mo...
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      Ford recalls Escapes and Focus STs

      The vehicle could hesitate or the engine could stall

      Ford Motor Company is recalling 9,017 model year 2013 Escape vehicles manufactured January 11, 2012, to April 1, 2013, and 2013-2014 Focus ST vehicles manufactured May 03, 2012, to October 14, 2013.

      Insufficient compression in the engine wiring harness splices to the Manifold Absolute Pressure (MAP) sensor may provide incorrect signals to the powertrain control module (PCM).

      The incorrect signals could cause the vehicle to hesitate or the engine to stall, increasing the risk of a crash.

      Ford will notify owners, and dealers will replace the current crimped splices with new splices, free of charge. The recall is expected to begin January 4, 2016.

      Owners may contact Ford customer service 1-866-436-7332. Ford's number for this recall is 14S17-S1.

      Ford Motor Company is recalling 9,017 model year 2013 Escape vehicles manufactured January 11, 2012, to April 1, 2013, and 2013-2014 Focus ST vehicles manu...
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      Airlines, rental cars, and flowers make the holiday Grinch list

      Consumers encounter the usual holiday snafus

      It's a most wonderful time of the year, except when it isn't. The Christmas holiday season is a time that's especially prone to disappointments and disruptions, as travel and partying replace the daily routine.

      This year, as in previous years, consumers have run into numerous holiday humbugs, with rental cars, airlines and such niceties as flower deliveries topping the list.

      Airlines

      Weather delays were common this year, as freakishly warm weather blanketed much of the country, leading to thunderstorms, tornadoes, and heavy fog in many areas. 

      "I am currently sleeping in CLT (Charlotte) because my flight was cancelled due to "weather" issues. This is the third time this year. My flight is from CLT to PGV (Pitt-Greenville, NC)," said Stefan, a disgruntled American Airlines traveler. "American airlines has no sympathy for this. Every single time they use this excuse as 'since it is due to weather issues, we will take no responsibility for your missed flight.' ... They look at you with their cold, dead eyes in the face and say 'tough luck.'"

      Jennifer of Norwalk, Ill., found little holiday spirit about Spirit Airlines: "I do not know any other industry that can operate like this one -- You buy a ticket for travel. They cancel the flight for "crew delays" and offer only one option: flight tomorrow a.m."

      Things weren't much better for Spirit passenger Shikaha of Canton, Mich.: "My flight was scheduled on Dec. 24 at 9.15 p.m. to Dallas, and we formed a line to board. Then we were told that our flight was delayed and the same flight was boarded with LA passengers! We are still at the airport today, Dec 25th, 2015."

      El Kheir of Burke, Va., claims an even worse holiday with Delta: "Christmas 2015, 150 passengers treated like other than human beings. ... The flight was delayed 10 times, people sent to a miserable hotel. ... Before leaving we asked if sure the flight will be at 8:15 a.m., they said yes, but again they delayed it and same story: the pilot did not show up. Please use any donkey, camel, bus ... but not Delta airlines."

      Rental issues

      An Avis car rental went awry and threw a curve into the travel plans of Rahul, of Miramar, Fla. 

      "I did my car reservation with AVIS on 11/16/2015 for 12/25/2015 for San Juan, Puerto Rico. Since this is the Christmas week and San Juan is fully packed with tourists so AVIS sold out all reserved cars to other customer on higher rates who just walked in and never had any reservations," Rahul said. "When I went to the car pick-up location the sales person told me that they are sold out and she can't give me the car even her system was showing that I have reservation. And they never sent any kind of notification to us that they don't have cars and our reservation is cancelled."

      Rahul said Avis would not even give him a ride to his hotel or help him find a cab, forcing him and the rest of his party to walk more than two miles with their luggage.

      "I have spent almost $7-$8K on this trip and we can't go anywhere because we don't have our car which we had reserved 40 days ago," Rahul said.

      Things were no better over at Alamo, according to Ingrid of San Francisco.

      "We rented a SUV three months ago to drive our 5 kids from SF to Park City, Utah. When we arrived to pick up the car, they said it was no more available because the car was broken (but they forgot to tell us about it)," Ingrid said. "As it is Christmas Day, they told 4 cars were available for us at the airport. We changed our reservation. When we arrived at the Alamo desk at the airport ($80 of taxi round trip), there was still no car for us and no other car available at the other rental companies. How can it be worse?"

      Flowers

      "I ordered the white magnolia center piece as a Christmas gift for my parents," said Susan of Dansville, Mich., in a review of FromYouFlowers.com. "When we arrived Christmas Day I was very disappointed. There were no magnolia leaves or roses in the arrangement. They had been replaced with cheaper fill, pine and daisies. The candles were so short we had to blow them out before we were done with dinner."

      Steve of Bloomington, Ill., also chimed in about FromYouFlowers.

      "I ordered a Snowman Surprises Holiday Campanula Plant $54.99 with a delivery charge of $19.99. I had to select a date for delivery from a calendar that would only allow certain dates to be chosen," Steve said. "I selected 12/24/15 for a delivery date. It was confirmed and I paid. Called today to see how my Mother enjoyed the flowers and she said NOTHING WAS DELIVERED!"

      JustFlowers.com made the Grinch list for Marie-Claire of Bruceton Mills, W.Va. 

      "I ordered a gold/silver/white arrangement for my daughter's wedding anniversary, because I knew these colors were her theme this year. A RED and white one was delivered. My complaint to JustFlowers.com so far has only yielded a canned reference to their website indicating that substitutions were permitted," Marie-Claire said. "So far Customer Service is totally unresponsive. I will call a local florist in the future and order directly from a local business."

      All that glitters ...

      Ordering jewelry online works well sometimes. Other times ... well, not so much. 

      "I ordered two identical necklaces and was told they would be shipped by 12/21 after the purchase," said Susan of Elkton, Md., in a review of The Bradford Exchange. "I called and called about the tracking information ... I was told they "will get there." On 12/23 we received one of the two and not the other. I called again and was told it was on its way. Today I looked up the order number and it says will be shipped by 2/06, 2016!"

      Kitchen calamities

      All of these mishaps are fairly typical of the holidays, as are the sudden and unexpected failure of kitchen appliances that can lead to dinner disasters. And then there's the perennial problem of the disintgrating baking dish.

      Sherry of Middleboro, Mass., was one of many consumers who discovered the phenomenon. 

      "Today, I began slow roasting a pork shoulder in the oven. The temperature was at 300 and the dish had been in the oven for about 25 minutes," Sherry said. "I opened the oven door to see if I should add any liquid and the large baking dish shattered with such force that glass shards were stuck in my sweater and flew in all directions throughout the kitchen. There was no warning of the dish beginning to fail, just a loud shattering sound that was similar to someone throwing a glass onto the floor."

      It's a most wonderful time of the year, except when it isn't. The Christmas holiday season is a time that'...
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      Tax Club accomplices nailed in credit card 'laundering' case

      PayBasics helped process credit card payments

      Not too long ago, the Federal Trade Commission went after the Tax Club, a work-at-home scheme that it said fleeced consumers of thousands of dollars each. Now it has nailed an alleged accomplice, PayBasics.

      “Our investigation didn’t stop with the scammers who took people’s money,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “We’re also shutting down the operators who processed and hid their shady transactions.”

      According to the FTC’s complaint, PayBasics helped the defendants behind the Tax Club fraud to open and maintain merchant accounts used to process credit card payments for sales made by a number of different third-party scammers. 

      The complaint says PayBasics helped maintain Tax Club's alleged credit card laundering scheme, processing more thn $1 million in payments and sometimes setting up shell companies to launder the proceeds.

      One of those who lost money in the scheme was Nicholas of Washington, Ill., who posted a ConsumerAffairs review about his experience:

      "The Tax Club took me for over $25,000.00. They were to help me with the business. They also had their affiliates call me and offer their service and they don't do what they promise and when I call them I only got the answer machine and ask me to leave a message. ... But I got a letter from the FTC that they took them to court and they got money from them."

      Court order

      Under the terms of proposed stipulated federal court order, the PayBasics defendants are prohibited from acting as a payment processor or contracting with a payment processor to provide payment processing services to a merchant. In addition, they are prohibited from acting as sales agents for high-risk clients in need of payment processing.

      The proposed order also contains a monetary judgment against the defendants of $1.02 million, which is suspended due to the defendants’ inability to pay. To partially satisfy the judgment, company executives will be required to sell a Tesla Model S and a Range Rover SUV, turning over any proceeds of those sales that exceed $5,000.

      Not too long ago, the Federal Trade Commission went after the Tax Club, a work-at-home scheme that it said fleeced consumers of thousands of dollars each. ...
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      Higher One to pay restitution to nearly one million college students

      Regulators say company omitted key information about fees in its marketing materials

      Nearly one million college students who received financial aid payments through Higher One, an institution-affiliated party of WEX Bank, were victims of deceptive practices, according to the Federal Deposit Insurance Corporation (FDIC).

      The affected students will share $31 million in restitution, according to the terms of a settlement between the financial institutions and the government. In addition, the financial institutions will pay a total of nearly $4 million in civil penalties.

      When colleges and universities hand out financial aid to students, they use a firm such as Higher One to actually make the payments. After tuition and fees are paid directly to the schools, the rest of the aid, such as money for books, supplies, and living expenses, can be disbursed to students through Higher One's "OneAccount."

      The OneAccount is a debit card-based product that is offered in partnership through financial institutions. WEX Bank has offered the OneAccount since May 4, 2012, according to FDIC.

      Omitted important facts

      After an investigation, the FDIC concluded that the Higher One website and marketing materials, which were approved by WEX Bank, omitted important facts about certain fees, features, and limitations of the OneAccount in violation of the Federal Trade Commission Act.

      Left out, the complaint alleges, were details about other disbursement methods available to students, a full and complete fee schedule, and the availability of fee-free ATMs. As a result of these material omissions, FDIC charges Higher One improperly collected $31 million in fees from students from May 4, 2012, to July 15, 2014, the period covered by the enforcement action.

      "It is important that financial products offered to college students under the sponsorship of their universities are clear, transparent, and trustworthy," FDIC Chairman Martin J. Gruenberg said. "Today's action holds both the bank and its student card partner accountable for the practices related to the products they offered to college students and provides restitution to those students harmed by these practices."

      In trouble before

      This is not Higher One's first brush with regulators. In 2012, it was required to pay $11 million to 60,000 students over the ATM transaction fees it charged.

      If you are an affected student, the FDIC says you do not have to take any action to collect compensation. The financial institutions will contact you.

      At the same time, former students should be on guard against scammers who claim to be representing one of the parties and demand some kind of “fee.” No payment of any kind is required to receive compensation.

      Nearly one million college students who received financial aid payments through Higher One, an institution-affiliated party of WEX Bank, were victims of de...
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      Daily fantasy sports declared illegal in Illinois

      But state is considering a new law exempting the games from gambling regulations

      In an opinion requested by two state legislators, Illinois Attorney General Lisa Madigan says she believes daily fantasy sports games provided by enterprises like FanDuel and DraftKings constitute illegal gambling, in violation of Illinois law.

      While not carrying any legal force, the attorney general's opinion provides a clear indication that the state government would have grounds to stop the games in Illinois, joining New York and Nevada, though the latter has ruled games may seek licenses.

      The opinion was sought by two members of the Illinois legislature who sit on the Criminal Committee. Rep. Elgie Sims, Jr., is chairman of the committee and Rep. Scott Drury is vice-chairman.

      “It is my opinion that the daily fantasy sports contests offered by FanDuel and DraftKings clearly constitute gambling under subsection 28-1(a) of the Criminal Code of 2012 and that the exemption set forth in subsection 28-1(b) does not apply,” Madigan wrote.

      Move to legalize?

      Unlike New York, however, Illinois may move to change state law to make the highly popular games legal. Madigan disputes the claim that daily fantasy sports are protected under a 2006 federal law, pointing out that law specifically leaves it up to the states to determine whether the games are, in fact, gambling.

      Madigan notes that legislation is currently pending in both Illinois legislature chambers to create a new act – the Fantasy Contests Act. The proposed law, Madigan says, would specifically exempt fantasy contests from the general prohibition against gambling.

      Without passage of the law, says Madigan, Illinois residents playing daily fantasy sports games are breaking the law.

      “Absent legislation specifically exempting daily fantasy sports games from the gambling provisions, it is my opinion that daily fantasy sports contests constitute illegal gambling under Illinois law,” Madigan concluded.

      In October, Nevada ordered a halt to daily fantasy sports games in the state, ruling that they are unlicensed gambling. The following month, New York Attorney General Eric Schneiderman obtained a court order prohibiting New Yorkers from playing the games, though FanDuel successfully argued for a stay, pending an appeal.

      In an opinion requested by two state legislators, Illinois Attorney General Lisa Madigan says she believes daily fantasy sports games provided by enterpris...
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      John Deere recalls zero turn lawn mowers

      A fuel hose could have been cut during manufacturing

      Deere & Company of Moline, Ill., is recalling about 150 John Deere zero-turn lawn mowers.

      A fuel hose could have been cut during manufacturing, allowing fuel to leak, posing a fire hazard.

      No incidents or injuries have been reported.

      This recall involves John Deere models Z445, Z645, Z655, and Z665 zero-turn mowers with serial numbers beginning with 1GXZ, manufactured from August 10, 2015 through September 9, 2015. A complete list of serial numbers included in this recall is on the firm’s website.

      The mowers are green and yellow with yellow wheels. The model number is on the front of the machine, near the operator footrest. The serial number is located behind the seat, in front of the engine.

      The mowers, manufactured in the U.S., were sold at John Deere independent dealers nationwide from August 2015, through November 2015, for between $4,800 and $6,500.

      Consumers should immediately stop using these recalled zero-turn lawn mowers and contact a John Deere dealer for a free repair. After identifying four reports of cut fuel hoses during the manufacturing process, John Deere is contacting all registered owners of the recalled lawn mowers directly.

      Consumers may contact Deere and Company at (800) 537-8233 from 8 a.m. to 6 p.m. (ET) Monday through Friday and Saturday from 9 a.m. to 3 p.m. (ET) or online at www.deere.com then click on USA, then select Product Recall Information on the drop-down menu under Services & Support for more information.

      Deere & Company of Moline, Ill., is recalling about 150 John Deere zero-turn lawn mowers. A fuel hose could have been cut during manufacturing, all...
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      The same products cost more if they're marketed to women, study finds

      Women urged to shop in men's sections as the 'pink tax' persists

      Being a woman isn’t cheap. One recent study confirmed this, finding that women fork over significantly more on average than men for virtually the same products. If it’s designed with a woman in mind, the price will be escalated, according to a study conducted by the New York City Department of Consumer Affairs (DCA).

      The study was designed to reflect an average consumer lifecycle, from infant to senior, in order to mirror the experiences of consumers of all ages. Prices on toys and accessories, children’s clothing, adult clothing, personal care products, and home health care products for seniors were examined.

      The trend of higher prices for women’s products was pervasive and startling. Across all five industries, women’s products cost close to 7% more than essentially the same products for men.

      The Pink Tax

      The largest discrepancy, according to DCA findings, was on personal care items. Razors, hair care products, and adult clothing cost 15% more on average if aimed at women (a fact that most women could probably already attest to).

      Could different ingredients have something to do with the price discrepancy?

      To address this question, the DCA spoke with Dr. Gary Kelm, a 35-year veteran in personal care product formulation at Procter & Gamble. Kelm explained that women often pay a premium for ingredients that look good on the label but usually make up less than 1% of the product.

      “These ingredients yield no significant benefit to the consumer, but legally enable a brand to advertise the use of that ingredient and the potential benefits it could confer,” the DCA study states. “Examples include natural extracts and botanical ingredients, which are frequently used in women’s products.”

      And the “pink tax” starts early for girls.

      In the toy aisles

      The study also provided a few case studies on children’s products, such as bike helmets, scooters, and shampoo. Indeed, similar — even identical — products were priced much higher if their target demographic was female.

      One product highlighted by Julie Menin, commissioner of the DCA was a children’s scooter. A side-by-side comparison of the two scooters shows that the two are structurally identical. One, however, is pink. The pink version, called a “girl’s scooter,” was twice as expensive as the red one, labeled a “sports scooter.”

      Since the report came out on Dec. 18, Target, which has run into trouble over price disparities before, has lowered the price of the scooter and blamed a “system error” for the discrepancy, according to the Washington Post.

      What can you do?

      While the DCA report notes that in some instances there are legitimate reasons for the price gaps, it points out that women generally can’t avoid higher prices. It costs more to be a woman, plain and simple.

      There are no federal laws that outlaw the practice of gender-based price inequality, but they are policed on the state and local levels. California outlawed the practice in 1996 after a state study found that a “gender tax” cost women approximately $1,351 more annually.

      Women can take action by switching out of the women’s section entirely, by writing letters to Congress, or even by reporting price discrepancies on social media. Raising awareness, as always, is a vital part of fighting injustice.

      Being a woman isn’t cheap. One recent study confirmed this, finding that women fork over significantly more on average than men for virtually the same prod...
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      YouTube has a beef with T-Mobile over its video streaming policy

      Google-owned company complains it is excluded from "Binge On" program

      T-Mobile customers have been able to stream music from major sources without having to worry about exceeding their data caps, and this year, have been able to view virtually unlimited video as well.

      The carrier's “Binge-On” program last month began to include Netflix, Hulu, and HBO Go as sources of binging. Noticeably absent is YouTube.

      The Google-owned video content provider has aired its complaint to The Wall Street Journal. In a statement to the newspaper, the company says consumers are benefiting from reduced data charges but “that doesn't justify throttling all video services, especially without explicit user consent."

      No HD YouTube viewing

      According to the statement, YouTube is particularly irked that T-Mobile customers on the Binge On plan aren't able to watch HD versions of YouTube videos. Instead, they get a 480p version.

      YouTube cites two issues – T-Mobile customers get poor quality YouTube videos and the data counts toward their bandwidth limits. Second, it claims T-Mobile enrolls its customers in Binge On without asking them first.

      This is actually an area under study by the Federal Communications Commission (FCC), which has adopted a net neutrality policy, meaning a network can't favor one provider's content over another.

      Net Neutrality

      In February, the FCC adopted a Net Neutrality Rule, specifically prohibiting service providers from creating “fast lanes” and charging content providers extra to use them. In taking the action, the Commission declared that broadband Internet service should be classified as a public utility, like telephone service, bringing it under tighter regulation.

      Earlier this month, the FCC asked T-Mobile, as well as other networks that offer special rates on streaming, to provide more information about how those services work.

      T-Mobile customers have been able to stream music from major sources without having to worry about exceeding their data caps, and this year, have been able...
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      Personal incomes and spending rise in November

      But the savings rate moved lower

      Just in time for the Christmas shopping season, consumers' paychecks got a little fatter.

      The Commerce Department's Bureau of Economic Analysis (BEA) reports that personal income rose $44.4 billion, or 0.3% in November. Disposable personal income (DPI), what you have left after paying your taxes, was up $34.5 billion, or 0.3% last month, and personal consumption expenditures (PCE) also rose 0.3%, or $40.1 billion.

      Personal income increased $66.9 billion (0.4%) the month before, while DPI was up $54.0 billion (0.4%) and PCE inched ahead $3.8 billion, or less than 0.1%.

      Compensation

      Wages and salaries jumped $37.1 billion in November, nearly $10 billion more than the month before. Of that, private wages and salaries increased $34.4 billion, including $11.6 billion (at an annual rate) in bonuses for United Auto Workers employees associated with the ratification of their contract. Government wages and salaries rose $2.8 billion in November, compared with a $1.5 billion advance in October.

      Supplements to wages and salaries increased $6.3 billion in November, compared with an increase of $6.5 billion in October.

      Personal spending and saving

      Personal outlays -- PCE, personal interest payments, and personal current transfer payments -- surged $44.0 billion in November, a better than six-fold increase from October's $7.5 billion. PCE jumped $40.1 billion, compared with an October increase of $3.8 billion.

      Personal saving -- DPI less personal outlays -- was $747.6 billion in November, down nearly $10.0 billion from October. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 5.5%, down 0.1% from the rate a month earlier.

      The complete report is available on the BEA website.

      Just in time for the Christmas shopping season, consumers' paychecks got a little fatter.The Commerce Department's Bureau of Economic Analysis (BEA) re...
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      A surge in mortgage applications

      Refinance applications were sharply higher

      A “Santa Claus rally” in applications for mortgages.

      The Mortgage Bankers Association (MBA) reports applications were up 7.3% in the week ending December 18 following a decline a week earlier.

      The Refinance Index jumped 11%, taking the refinance share of mortgage activity up to 62.8% of total applications from 60.7% the previous week.

      The adjustable-rate mortgage (ARM) share of activity rose to 6.1% of total applications; the FHA share slipped to 12.9% from 14.0%; the VA share was 10.5%, and the USDA share of total applications was unchanged at 0.6%.

      Contract interest rates

      • The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) rose two basis points -- to 4.16% from 4.14%, with points increasing to 0.47 from 0.45 (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 from 4.01% to 4.04%, with points decreasing to 0.28 from 0.30 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
      • The average contract interest rate for 30-year FRMs backed by the FHA was up two basis points to 3.92%, with points increasing to 0.39 from 0.31 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
      • The average contract interest rate for 15-year FRMs jumped to 3.45% -- the highest level since October 2014 -- from 3.38%, with points increasing to 0.41 from 0.35 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
      • The average contract interest rate for 5/1 ARMs dipped one basis point to 3.24%, with points increasing to 0.38 from 0.36 (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.

      A “Santa Claus rally” in applications for mortgages.The Mortgage Bankers Association (MBA) reports applications were up 7.3% in the week ending Decembe...
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