Current Events in March 2016

The workplace has changed since the Great Recession. Full-time jobs with generous benefits are still available, but there are far fewer than there was a decade ago.

Instead, we have begun to move into what some call the on-demand economy and others call the freelance economy. Instead of one job, an individual might have three and get paid as an independent contractor instead of an employee.

Or they might be a part-time employee for a company and have a freelance job on the side.

This arrangement can have its advantages. A freelance worker is his or her own boss, choosing when to work and what jobs to take. That's the theory, anyway.

The downside, of course, is lack of job security and a lot of other unknowns – such as retirement. When you aren't sure how much money is coming in each month, how do you plan for retirement?

Give employees more control

The R Street Institute, a Washington think tank, has studied the problem, concluding that reforms are needed to create a retirement system less tied to employers and controlled more by the employee.

“Under the current system, assets in employees’ 401(k) accounts do not actually belong to the employees,” R Street Associate Fellow Oren Litwin said in a statement emailed to ConsumerAffairs. “Instead they belong to the sponsor company – the employer – and are held in trust for the employees’ eventual benefit.”

Litwin said reforms that give employees direct control of retirement accounts would be a step in the right direction.

New social contract

A gathering of government, academic, and private sector players at MIT earlier this month also tackled issues arising from the on-demand economy, concluding it's time for a new social contract, built on the assumption that Americans will often hold down more than one job.

“How do we allow the innovation of the on-demand economy, but also recognize that we’ve got to maintain consumer protections and we’ve got to make sure that workers are treated fairly?” Sen. Mark Warner (D-VA) asked at the event.

Warner noted that when you get to choose when to work, the whole notion of unemployment insurance and vacation time “is a foreign concept.”

Jonas Prising, CEO and chairman of staffing firm ManpowerGroup, said he has seen a distinct trend in the last decade. More older people are seeking work, he says, and are having a greater say in when and where they work.

Going forward, Litwin says a typical worker is likely to have two or three retirement accounts over his or her working life. The downside to that is these accounts may be neglected, or even forgotten.

Under current law, self-employed workers may set up a simplified employee pension IRA (SEP IRA), with full control of the account. If the employee moves back and forth from employment with benefits and freelancing, his or her 401(k) with the employer may be rolled over into the SEP IRA.

Learn more about SEP IRAs here.

That huge Volvo semi-trailer truck bearing down on your rear bumper? It may have a safety defect that could cause the driver to lose control at any moment.

About 16,000 of the trucks were recalled on March 10 because they may have been manufactured without a roll pin on the steering shaft or with a bolt that was not properly tightened. Either condition could lead to separation of the steering shaft without warning, resulting in a complete loss of control.

Alarmed at that prospect, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) has ordered recalled trucks that have not yet been repaired off the road.

"Today’s announced declaration is not intended to provide a basis for further enforcement action, but seeks only the immediate cessation of the unrepaired, unsafe trucks," the FMCSA said. "Operators of vehicles declared out-of-service must comply; violating a federal out-of-service order may result in civil penalties as well as criminal prosecution."

Among other things, the order will alert personnel at truck weigh stations to watch for the trucks and order them sidelined if they have not been repaired. 

The recall affects certain model year 2016-2017 VNL, VNX, and VNM trucks manufactured from May 11, 2015 through March 8, 2016.

After the housing market inflated into a huge bubble in the early 2000s, crashing in 2008, policymakers wanted to make sure it didn't happen again.

They tightened up lending standards. Borrowers had to show they had the income and resources to buy the home. Subprime mortgages, the major cause of the crash, were all but done away with.

Problem solved, right?

Maybe not. With an improving economy, there are more borrowers who can meet those tight lending standards. But as we reported earlier this week, there are fewer homes for them to buy. That's a big reason home prices continue to rise. Supply isn't keeping up with demand.

Online real estate marketplace RealtyTrac now reports its analysis of the first quarter of this year shows 9% of U.S. housing markets are less affordable than their historical norm.

Home prices vs. wages

The report looked at the median home prices from actual sales, pairing the data up with average wages. The formula for affordability index is based on the percentage of average wages a homeowner needed to make monthly house payments on a median-priced home with a 30-year fixed rate and a 3% down payment, including property taxes and insurance.

Out of 456 U.S. counties, 43 – or 9% – recorded an affordability index below 100 in the first quarter of 2016. The 100 level marks the the historically normal level.

A year ago, only 33 counties were below the 100 mark, suggesting U.S. homes – new and existing – are becoming less affordable.

“While the vast majority of housing markets are still affordable by their own historic standards, home prices are floating out of reach for average wage earners in a growing number of U.S. housing markets,” Daren Blomquist, senior vice president at RealtyTrac, said in a statement.

Low rates have helped

Still-low interest rates have helped somewhat. Even with rising prices, monthly payments on many homes remain affordable because there are plenty of mortgages with interest rates below 4%. At the height of the housing bubble, the prevailing rate was around 6% or more.

Over the last few years, home prices have risen the most in metro areas where the economy has recovered and there are plenty of good-paying jobs. Even so, the RealtyTrac Index shows some of the markets were good jobs and plentiful – Denver, New York, Dallas, and San Francisco – are where home affordability is slipping away.

On a national basis, the average worker needed to apply more than 30% of monthly wages to make a mortgage payment on a median priced home in the first quarter of this year. It's a big jump from the same period last year, when it only required 26.4%.

The Chase Freedom Card and the Blue Cash Preferred Card from American Express are both very good cards to carry in your wallet. But which one is better?

Like many things, that's going to depend a lot on how you use a credit card. And since we are in the midst of March Madness, it might be appropriate to match the two credit cards in some head to head competition.

Chase Freedom Card

One of the nice things about the Chase Freedom Card is the very low spending threshold to earn an initial bonus. Spend just $500 during the first three months the account is open and you earn a $150 bonus.

In addition, you get 5% cash back on up to $1,500 of the purchases you make in bonus categories. Those categories include the kinds of places you are most likely to spend money, like restaurants, gas stations, and online retailers. You get 1% cash back everywhere else.

The card is also useful for balance transfers. There is an introductory 0% APR on both purchases and balance transfers during the first 15 months. Getting 0% for more than a year is exceptional.

What could make it better? Not having an annual fee – and it doesn't.

Blue Cash Preferred Card

The Blue Cash Preferred Card from American Express matches up well against the Chase Freedom, with an initial $150 bonus – but you'll have to spend twice as much to get it. However, there is a chance to get an additional 10% – up to $200 – back when you use the card at wireless telephone providers in the U.S. this year.

The day to day bonuses are also generous. The card pays 6% cash back at supermarkets, limited to $6,000 in spending per year. If you exceed that amount, the bonus drops back to 1%.

You can also use the Amex card for balance transfers. It offers an introductory 0% APR on both purchases and balance transfers for 12 months, three fewer months than the Chase Freedom.

The card gives you free access to your FICO score, which is a plus – but it has a $75 annual fee, which definitely isn't.

Close call

In this bracket, the contest between Chase Freedom and Blue Cash Preferred just might go to overtime. For consumers who buy gas and groceries, Blue Cash Preferred provides one of the best rewards out there.

But coming down to the final buzzer, Chase Freedom's three extra interest-free months, and the lack of an annual fee, allows it to escape with a narrow win.

Still, for consumers who don't need to rack up travel rewards, both are rewarding ways to pay for everyday expenses.

In that bygone era, when cigarette advertisements were everywhere, Camel had a campaign that asked, “are you smoking more but enjoying it less?”

As anyone who watched episodes of Mad Men knows, everyone seemed to be smoking a lot during the 1960s. But those days are over.

Cigarette marketing is tightly limited by a court settlement and, not surprisingly, Americans are smoking less. The Federal Trade Commission (FTC), which keeps track of cigarette sales in the U.S., reports the number of cigarettes sold by the major tobacco companies to U.S. wholesalers and retailers fell from 267.7 billion in 2012 to 256.7 billion in 2013.

Advertising less

Tobacco companies also spent less on advertising and promotion during that time. Marketing dollars dropped from $9.17 billion to $8.95 billion. Much of the decline was linked to a reduction in discounts retailers and wholesalers received in order to reduce the price of cigarettes to consumers.

The FTC report shows that tobacco companies trimmed their discounts by about $2 million.

If it looks like tobacco companies are withering away, they aren't. Stock in tobacco companies remains strong on Wall Street. The tobacco companies have simply found ways to diversify and adapt.

First, American tobacco companies have looked beyond U.S. borders. Smoking is declining in the U.S. but overseas – particularly in the developing world – it's a different story.

According to The Tobacco Atlas, decades of scientific and medical evidence linking smoking to cancer and other health issues has done nothing to deter about one billion people world-wide from lighting up.

More international smokers

“The decline in smoking rates in high-income countries is more than offset by increased tobacco use in middle- and low-income countries,” the Atlas authors write. “Tobacco companies know they must find replacement smokers, and focus much of their effort in these low- and middle-income markets, which have the potential for economic and demographic growth, and thus increased profits.”

Tobacco companies have also moved more heavily into smokeless tobacco and e-cigarette products. The FTC report advertising spending for smokeless tobacco products bucked the trend, actually increasing from 2012 to 2013.

At the same time, tobacco companies sold 125.5 million pounds of smokeless tobacco in 2012, then boosted it to 128.0 million pounds in 2013. In all, smokeless tobacco revenue rose by $180 million.

Fifty-five in a row.

That's how many weeks the new jobless claims total has been under the 300,000 mark.

The Department of Labor (DOL) is reporting first-time applications for state benefits rose by 6,000 in the week ending March 19 to seasonally adjusted 265,000. The previous week's level was revised down by 6,000 from 265,000 to 259,000.

Even with that slight increase, the string of weeks at the sub-300,000 level is the longest since 1973.

Bankrate.com Senior Economic Analyst and Washington Bureau Chief Mark Hamrick says that's significant. “This tells us that the job market is continuing to steadily improve,” he told ConsumerAffairs.

The DOL is scheduled to release it's March employment report in the coming week. “Unless we get a shocker of a report -- which we don’t expect,” Hamrick says, “that should tell us employers are adding sufficient jobs not only to absorb growth in the population, but to also reduce some of the considerable remaining slack in the job market, even with the jobless rate remaining at 4.9%.”

The four-week moving average, which is not as volatile as the weekly tally and, therefore considered a more accurate picture of the labor market, was 259,750 -- up 250 from the previous week.

The complete report is available on the DOL website.

Until now, most of the companies working on self-driving vehicles have been household names -- Google, Ford, Tesla, and so forth. But now along comes Zoox, a stealthy start-up that has just won permission to begin operating on California streets.

Zoox is a little bit different in a lot of ways. Perhaps the most important is that it is designing its cars from the ground up to be taxis, or at least what we used to call taxis -- you know, cars that come and pick you up one place and drop you at another.

This has allowed Zoox to do a little creative thinking about what would be ideal in a taxi-type vehicle. First off, it can go in either direction, sort of like a subway car. There's no front or back -- no windshield or rear window. There is seating for four, but it's two seats facing each other rather than the old schoolroom-style seating found in most passenger cars today.

Zoox applied to the California DMV on March 16 and the permit was issued Tuesday, an agency spokeswoman said. That brings to 12 the number of companies allowed to operate driverless cars on the state's roads.

Low profile

Zoox is keeping a low profile and saying very little about itself. But a recent article in the IEEE Spectrum, an engineering journal, lifted the curtain a bit.

It identified the key players as Tim Kentley-Klay, an Australian designer, and Jesse Levinson, who worked at Stanford University with Sebastian Thrun, co-creator of Google’s driverless car project.

While Zoox doesn't say much publicly, Kentley-Klay has been quoted as saying that rather than just building a self-driving car, he is trying to rethink the whole idea of mobility.

“At the moment, mobility is crushing the soul: Don’t speed, don’t drink, don’t text," Kentley-Klay said at a conference in Berlin last year. "What inspires me…is giving back people their lifestyles, so they can do what they want to do: texting, vegging out, drinking.”

Kentley-Klay's earlier projects have mostly revolved around media. He created an animation company and was working in commercial production when the Zoox concept came to him.

“Zoox is not an automobile company. This is what comes after the car," he said at one point. 

The California permit at the moment is for only one car, so it's not likely that there'll be a fleet of Zooxs in your neighborhood quite yet. Zoox is planning to be in production mode by 2020.

Financial exploitation costs America's seniors billions of dollars per year, and the Consumer Financial Protection Bureau (CFPB) wants banks and credit unions to play a bigger role in detecting and responding to it.

The agency today issued an advisory for financial institutions that is supposed to help them be more proactive in protecting older consumers from the most common form of elder abuse.

“This action gives financial institutions best practices and tools to protect older consumers from financial abuse,” said CFPB Director Richard Cordray. “When seniors fall prey to a scam by a stranger or to theft by a family member, they may be too embarrassed or too frail to report it. Banks and credit unions are uniquely positioned to look out for older Americans and take action to protect them.”

Seniors are common targets of financial abuse, often by family members. They tend to have significant assets and often have a regular source of income such as Social Security. They may also be vulnerable becauase of cognitive decline, physical disability, and isolation.

Often not reported

In recent studies, about 17 percent of seniors reported that they have been the victim of financial exploitation, but few bother to report it.

Since banks and credit unions often have face-to-face contact with their older customers, they are in a prime position to detect and report financial abuse, the CFPB said, as it issued a set of voluntary best practices that can help fight the problem.

The advisory includes information on training tellers and other front-line staff, using fraud detection technology, offering age-friendly services and reporting suspicious activity to authorities.

Consumers who think that they or a loved one may have been a victim of financial exploitation can visit eldercare.gov to find a local adult protective services agency that can help.

For years, we've heard jokes about doctors' bad handwriting, but communicating prescriptions accurately is no joking matter. That's why New York and Minnesota are requiring that all prescriptions be filed electronically.

Minnesota has had the requirement for awhile. New York's becomes effective March 27 and provides criminal penalties for those who don't comply. Other states are considering similar measures, according to Rx411.

While the requirement should help eliminate errors caused by misreading handwritten prescriptions, it's primarily aimed at cutting down on opioid abuse, a growing problem nationwide.

I-Stop

New York's program, called I-Stop, first went into effect in 2013 and required doctors to check an online prescription monitoring problem before writing prescriptions for controlled substances. That was supposed to help spot abusive patterns in a patient's history.

The second phase of I-Stop requires doctors to write all prescriptions electronically and send them to the pharmacy chosen by the patient. Previously, patients could take paper prescriptions and modify or even copy them and fill prescriptions at multiple pharmacies.

Both healthcare providers and patients should expect problems during the transition period, said Julie Kaplan, a pharmacist and senior medical writer at Rx411.

Doctors may seek to avoid the hassles associated with the tighter regulations and prescribe more traditional regimens instead while patients will need to know in advance which pharmacy they want to use, she said. It will also be more difficult to take the prescription to another pharmacy if their preferred pharmacy is out of stock.

In an increasingly connected world, new products and services are coming out all the time that can improve the lives of consumers. Solutions to many of life’s problems can be solved with a few taps on a smartphone, and many services are being optimized for mobile and online access.

One market that is taking full advantage of this increased connectivity is home security, and consumers are responding in a big way. A recent report by Security Sales & Integration (SSI) predicts that the global connected home security market will grow at a compound annual growth rate (CAGR) of 48.06% between now and the year 2020.

Improving home security

Many upgrades to home security products are contributing to the growth of the market, and they are making homes safer than ever. Some of these devices include electronic locks, motion sensors, burglar alarms, and home security cameras. Additionally, members of the SSI staff say that improvements in pricing and advancements in technology are leading to growth.

"Connected home security market innovations such as decreased hardware prices, advances in wireless standards, smartphone penetration, improved bandwidth and well-positioned apps for accessing home systems are fueling growth in the market," they said.

Being able to access security features when away from the home affords consumers a greater sense of safety. Earlier this month, ABC News released a video where a homeowner was alerted to a break-in at her home via her smartphone. The recording even gave her video footage and audio of the incident and led to the arrest of one of the would-be burglars.

Investing and advancing

The report also states that many key vendors, who include companies like ADT, AT&T, Comcast, Honeywell Total Connect, and Verizon, are funneling money into increasing distribution channels and expanding research and development.

These investments could pay dividends for consumers, who may see even better products and enhanced security features in the future. 

Insurance companies have the same problem everyone else does -- poor return on their investments. With their investment portfolios lagging, insurers are jacking up premiums, a tactic that is not going down well with consumers.

In the latest skirmish, a federal lawsuit filed in Los Angeles says that consumers who bought life insurance from Transamerica decades ago are now being hit with large increases in their premiums, leaving many with little alternative but to cancel the policies they've been paying on for years. 

Calling it a "betrayal of the baby boomers," Consumer Watchdog says Transamerica is betraying the trust of seniors who bought life insurance policies in the 1980s and early 1990s. The "universal life" policies promised to pay monthly interest of no less than 5.5% annually as well as death benefits in exchange for premiums paid into a "policy savings account."

But in June 2015, policyholders began receiving letters announcing an increase of 38% iin the monthly premium, leaving them with the choice of paying sharply higher premiums or losing the policies.

Dumping the elderly

“After taking their premiums for many years, Transamerica is attempting to dump its elderly and retired policyholders at a time in their lives when they are counting on the policies,” said Harvey Rosenfield, founder of Consumer Watchdog and one of the lawyers working on the case. 


Transamerica says it is raising the monthly charges based on “our future costs of providing this coverage.” But the lawsuit alleges that Transamerica breached its contract and acted in bad faith, claiming it is raising its rates as the time nears when policyholders will begin collecting on the policies.

The lawsuit argues that because people are living longer, life insurers' costs should be lower, since fewer policyholders die in a given year. Instead, it says, Transamerica is improperly trying to recoup losses it has sustained as the result of low interest rates since the Great Recession.

Named plaintiffs in the suit include Mary and Gordon Feller, who bought their policy in 1989 and planned to save the accumulated interest for their retirement.

“Now, 26 years later, after we have paid tens of thousands of dollars in premiums all these years, the company has put us in the position of either paying much higher premiums or losing our policy and all the savings we put into it. Transamerica has betrayed our trust and the trust of its policyholders across the nation," Mary Feller said in a statement issued by Consumer Watchdog.

New home sales rebounded last month from their January decline.

In a joint report, the U.S. Census Bureau and the Department of Housing and Urban Development said new single-family houses sold at a seasonally adjusted annual rate of 512,000 in February -- up 2.0% from the month before.

While that's the fifth advance in six months, the rate is 6.1% below the same month a year ago.

Stifel Fixed Income Chief Economist Lindsey Piegza says the February increase, following the decline last month in sales of existing homes, helps reinstate confidence that the U.S. housing market remains on positive footing -- albeit fragile.

“With minimal income growth,” she adds, “the threat of rising rates (at least at some point in the future), and declining confidence regarding the sustainability of the U.S. recovery, many potential buyers remain sidelined either from a lack of ability or willingness to make a home purchase."

Pricing and inventory

The median sales price of new houses sold in February 2016 was $301,400, a year-over-year gain of $7,500. The median is the point at which half the houses cost more and half less. However, the average sales price was down $7,000 from February 2015 to $348,900.

The seasonally adjusted estimate of new houses for sale at the end of February was 240,000, representing a 5.6 months-supply at the current sales rate.

Regional sales

The West was the only area in which sales rose, posting a surge of 38.5%. That offset sales declines of 4.1% in the South, 17.9% in the Midwest, and a whopping 24.2% in the Northeast.

The full report is available on the Commerce Department website.

Mortgage applications were down for the second week in a row and the fourth time in five weeks.

The Mortgage Bankers Association (MBA) reports applications fell 3.3% during the week ending March 18.

The Refinance Index took another hit, falling 5%, sending the refinance share of mortgage activity down to 53.9% of total applications from 55.0% the previous week.

The adjustable-rate mortgage (ARM) share of activity was unchanged at 4.9% of total applications, the FHA share inched up to 11.8% from 11.7% the week prior, the VA share rose to 12.6% from 12.3%, and the USDA share of total applications came in at 0.9%.

Contract interest rates

• The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) dipped one basis point from 3.94% to 3.93%, with points decreasing to 0.35 from 0.42 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) dropped to 3.85% from 3.86%, with points decreasing to 0.27 from 0.28 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 30-year FRMs backed by the FHA fell three basis points to 3.74%, with points decreasing to 0.32 from 0.33 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 15-year FRMs went down to 3.18% from 3.22%, with points decreasing to 0.34 from 0.39 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 5/1 ARMs plunged 10 basis points to 3.13%, with points increasing to 0.36 from 0.35 (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.

General Motors is recalling 1,579 model year 2016 Chevrolet Colorados manufactured January 19, 2016, to February 2, 2016; Chevrolet Malibus manufactured January 9, 2016, to January 26, 2016; and 2016 GMC Canyon vehicles manufactured January 21, 2016, to February 4, 2016.

The driver-side front air bag may inflate improperly during second-stage deployment in the event of a high speed crash.

An improperly inflated air bag increases the risk of injury.

What to do

GM will notify owners, and dealers will replace the driver-side front air bag module, free of charge. The manufacturer has not yet provided a notification schedule.

Owners may contact Chevrolet customer service at 1-800-222-1020, and GMC customer service at 1-800-462-8782. GM's number for this recall is 28030.

In a recent story, we reported that Toyota is rolling out a program to lease more used cars. As a postscript, we added the advice we normally include in stories about car leasing:

While leases may appear to offer more car for the money, consumers don't have anything to show for their monthly payments at the end of the lease and often find themselves facing lots of unexpected costs, including excess mileage, charges for minor damage, and the ubiquitous "end of lease fee," which is just what it sounds like, a fee for nothing. 

This generated some rather heated responses from car salesmen, like Richard, a Toyota salesman who said our warning about lease-end fees was "completely false" and recommended we do more research.

So we did and found a recent ConsumerAffairs review by Susan of Madera, Calif., who said she had leased a Toyota Prius in 2013 and purchased a Sienna in 2014. She also talked her father into buying a Tundra.

But then: "Two months ago I returned my lease, and the way Toyota repaid us for being great customers was to charge me $350 at the end of my lease for not buying through Toyota Financial again. Even though we bought a new Sienna after the Prius, and even after my dad bought the Tundra."

$350 + tax

It doesn't happen only in California. George of Manahawkin, N.J., recently turned in his 2012 Rav4 at the end of the lease. "Two months after I returned the car I received $350 fee + tax. I have owned/leased five Toyotas since 1990. There was no disposition fee assessed to the contract for any of these vehicles. They never disclosed this fee to me or I would have never leased the vehicle in the first place," George said.

Justin of Howell, N.J., is also fuming about the end-of-lease fee. Justin paid off his lease early and asked Toyota Financial if it would waive the $350 "disposition fee" at the end of the lease term. 

"I was told that this Loyalty Waiver is reserved for 'qualified customers that MUST lease or finance a Toyota through a participating dealer...' My argument was that the word 'Loyalty' insinuates that this waiver would be applicable to 'Loyal Customers' and since I have purchased one car and leased two from Toyota that I should be considered a 'Loyal Customer.'

"I suggested that they change the wording to 'Continued Customer Waiver' to represent a more accurate description of what the waiver really represents. In addition, I suggested that they change their contracts to fully disclose the disposition fee in bold and put a line for customers to initial next to it so that they have an opportunity to negotiate the waiver prior to signing the contract. No dealership should be allowed to use the word Loyalty in this waiver as it is deceptive and misleading," Justin said.

These and many other consumer reviews in our database would seem to contradict the claims made by Richard the Toyota salesman, who said flatly: "Toyota, in my close to twenty years with them, has never charged a 'lease end fee.' Completely false."

Dents & dings

Richard also objected to our mentioning charges for damage and excessive wear, saying that Toyota is "very liberal" in overlooking minor dings and dents. 

But Dennis of Oil City, Pa., says he found Toyota to be very liberal in assessing damages.

"I leased a 2010 Rav 4, had the pre-inspection, and there was nothing the matter. I turned the vehicle in and get a bill for $429.46 for excessive wear and use. I had 28,000 miles on it. They say there was a 12-inch scratch on it, it wasn't there when I turned it in. It sat in a parking lot for approximately 3 weeks before they picked it up. Who knows what happened in that time frame!" he said.

John of Olathe, Kansas, sent us a photo of his Prius (above) to illustrate his dismay with Toyota's end-of-lease inspection.

"I cannot believe we have babied our Toyota Prius on a lease through Toyota. I had the inspection yesterday and they said that I need to have the bumper, hood, and roof reconditioned (look at the picture). This is probably the best lease return Toyota will get," John said. "I take complete care of all of my vehicles and have never experienced something so unjust. My experience leasing from other companies is completely different."

Nothing to show

Toyota salesman Richard took special umbrage at our statement that consumers should consider that after making payments for three or more years, at the end of the lease they are basically left with nothing.

Not true, said Richard: "I think the most untrue statement is that 'consumers don't have anything to show for their monthly payments. As some one [sic] who leased thousands of Toyota's [sic] to people, I vehemently disagree. A wise consumer leasing a Toyota can typically re-lease right around 30 months of a 36 month lease. Using their equity that they accumulated they can choose to lower the payment on their next lease, or purchase another vehicle. Additionally, they can just re-lease and take a check for the equity. All those options are more than you let on in your article."

Could be, but while some consumers may have the experience Richard describes, others wind up like Ronald of Torrington, Conn.

"Terminated my lease early (3 months). Turned the vehicle into a Toyota dealer for another lease. Received a letter from Toyota Financial Services demanding that I pay the remaining three months left on the lease. I paid the amount they requested," he said. "Six months later, I received a letter from a debt collection company hired by Toyota Financial services demanding $1249.76."

Then there's Yvonne of Rialto, Calif.: "I was leasing my vehicle through Toyota, then purchased it. The finance department tacked on the residual. I am paying $58,000 by the time I finished paying for this vehicle in 2016, after already paying for four years of payments."

"My payments are $540 a month, which is extremely hard for nine consecutive years."

Leasing isn't buying

Yvonne, like many consumers, has failed to fully understand the nature of a lease. For the three or four years that she was leasing the car, she was merely paying for using it, not making any payment towards the residual, which is what the buyer and the manufacturer agree the car will be worth at the end of the lease.

If a consumer turns the car in at the end of the lease, the car is gone and so is the money. If they buy it, as Yvonne did, it is a separate transaction in which the consumer pays the residual. So, yes, Yvonne could very well pay $58,000 over nine years, depending on the length of the lease, her down payment, the residual value, and so forth. 

Consumers often buy cars at the end of the lease term, thinking they have -- as Richard suggests and as Yvonne perhaps believed -- built up equity in the car. In fact, they have merely paid for using it and have not taken even a chip out of the residual in most cases.

Oftentimes, consumers would be better off turning in their leased car and shopping for a used car of similar vintage if they don't want to lease a new one. They would at least have some bargaining position as a prospective buyer, whereas at the end of a lease, the consumer is in a poor bargaining position since she has already agreed to pay the residual price if she decides to purchase.

What to do

If you're thinking of leasing a car, it's important to decide up front what's important to you. A lease may be at least partly tax deductible in some cases -- sales and property taxes are generally less and the monthly payment is generally lower. 

If having a new car every few years is important to you, there's nothing wrong with leasing, but it means you'll never get to the day when you make your last payment and own your car free and clear. 

Automotive site Edmunds.com has a set of online calculators that can help you run the numbers and decide what's best for you.

Oh, one other thing to keep in mind: leasing a car is not like renting one from Hertz or Avis. The lease lasts for as long as the contract says it does -- 24, 36, or 48 months usually. Many consumers think they can end the lease early if their situation changes, which is not usually the case.

There are, however, cases when a lease might end early whether anyone wants it to or not. We heard recently from Laurie of Los Angeles, whose husband of 47 years died last August after leasing cars from Jim Falk Lexus for more than 12 years.

"I didn't want the car out front as a reminder so I called Jim Falk Lexus. They were unsympathetic and said I was responsible for the lease," she said. "I called Lexus Financial and they told me they would come get the car and auction it off and we would figure out something. At the same time they sent a collection agency to go after me."

"It has not even been a month as a widow and you are sending dogs to bother me in my grief! This is outrageous. I am horrified that after being such good customers you are this heartless and cruel," she said in a ConsumerAffairs review.

In fact, if her name is not on the lease, Laurie is not personally responsible and does not have to pay another cent, said an attorney we asked about this case. Her husband's estate may, of course, be liable for the unpaid portion of the lease. That's something for the estate's executor to work out.  

In Lexus' defense, turning the case over to a collection agency may sound heartless but it may well be the company's standard procedure for any case in which the consumer is unable or unwilling to continue to make payments. Auctioning the car and using the proceeds to pay off as much of the remaining term as possible is a reasonable way to proceed, the attorney said, even though it may sound heartless.

You’ve heard of white bread, wheat bread, and maybe even cloud bread -- but what about purple bread? It might sound like something out of a Dr. Seuss book, but purple bread is already being called a superfood for its antioxidant levels and health benefits.

Purple bread, invented by Professor Zhou Weibiao, a food scientist at the National University of Singapore, is loaded with anthocyanins. You might know anthocyanins for their work in giving eggplants and plums their distinctive hue, or perhaps for their role in helping to slow digestion or reduce blood sugar levels. 

Now, anthocyanins are being baked into bread to help counteract some of regular bread’s not-so-great qualities.

Slower digestion

Zhou found that extracting anthocyanins from black rice and adding them to white bread leaves behind 80 percent of the antioxidants in the crust when baked.

Furthermore, the anthocyanins’ reaction with the starch enzymes acts to slow the digestion rate by 20% -- a big triumph over regular white bread, which is digested quickly, spiking blood sugar levels in the process.

"The challenge was to see if we could change the formula of bread, without changing the smooth texture of white bread that people really love," Zhou told CNN.

As it turns out, it was possible. Purple bread has the texture of white bread but is digested more slowly than white bread -- the "best formula," says Zhou, for those who enjoy bread but not its effects on the body. 

Not for weight loss

While the purple loaves may be a bit kinder to the body than regular bread, Zhou says that doesn’t mean it’s a magical tool for weight loss.

"You are eating the same amount of starch and wheat flour, so the nutritional value is the same," Zhou said. "The key idea here is slowing down the energy release, so you use those calories over a longer period of time."

Purple bread is not commercially available yet, but it could be soon. Zhou says he’s already been approached by major food manufacturers about bringing it to market.

We've all heard how criminals impersonating IRS agents threaten various actions to relieve you of money you supposedly owe the government.

Now, however, they have started making phone calls claiming they're trying to verify tax return information. Claiming that they already have your tax return, these crooks say they just need to verify a few details to process your return. In the process, they try to get you to give up personal information such as your Social Security number, bank numbers, or credit cards. Consumers receiving these calls should be on guard.

“These schemes continue to adapt and evolve in an attempt to catch people off guard just as they are preparing their tax returns,” said IRS Commissioner John Koskinen. “Don’t be fooled. The IRS won’t be calling you out of the blue asking you to verify your personal tax information or aggressively threatening you to make an immediate payment.”

What the IRS will not do

According to the IRS, many of the claims that scammers make are simply not within the organizations protocol. Here are some things the agency will never do:

• Call to demand immediate payment over the phone, or call about taxes owed without first having mailed you several bills.
• Call or email you to verify your identity by asking for personal and financial information.
• Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
• Require you to use a specific payment method for your taxes, such as a prepaid debit card.
• Ask for credit or debit card numbers over the phone or e-mail.
• Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.

What to do

If a consumer receives a phone call from a suspected scammer, the IRS recommends that they:

• Do not give out any information and hang up immediately.
• Contact the Treasury Inspector General for Tax Administration to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
• Report it to the Federal Trade Commission (FTC). Use the “FTC Complaint Assistant” on FTC.gov. Add “IRS Telephone Scam” in the notes.

If you know you owe, or think you may owe, tax money, you can:

• Call the IRS at 800-829-1040. IRS workers can help you.
• Stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time. For more, visit “Tax Scams and Consumer Alerts” on IRS.gov.

Home sales are suddenly on the decline, but not for the reason you might think. There continues to be plenty of willing buyers, but they just aren't finding that many homes for sale.

Lawrence Yun, chief economist for the National Association of Realtors (NAR), admits that affordability is becoming a problem, with many housing markets showing strong year-over-year price increases.

“The main issue continues to be a supply and affordability problem,” Yun said in a release announcing a drop in February's existing home sales. "Finding the right property at an affordable price is burdening many potential buyers."

Yun notes that the total housing inventory in February was 1.1% lower than it was in February 2015. There are two main reasons for that.

Fewer homeowners are putting their existing homes up for sale, and homebuilders are building fewer new homes. With the economy looking up a bit, there is an increase in the number of people who would like to buy a home, but not an increase in the number of homes for sale.

New home construction

First, let's look at new home construction – and for data we'll go to the U.S. Census Bureau. It has compiled the numbers on single-family home construction at a seasonally adjusted annual rate from 1968 through this year.

At the beginning of 2002, as the housing bubble began to inflate, new home construction was occurring at an annual rate of about 1.3 million new homes. By the middle of 2003 it was up to 1.4 million.

Home construction peaked in mid 2006, occurring at a seasonally adjusted annual rate of 1.7 million homes. Then, the financial crisis of 2008 hit.

By January 2010, the annual rate of new home construction had plunged to 448,000 – down 75% from the peak. At the beginning of 2016, the rate had only grown to about half of what homebuilders were producing in 2002.

1982 building rates

In fact, you have to go back to 1982, when interest rates were 20%, to find a time when homebuilders were putting up as few houses as they are now. Of course, the population of potential homebuyers is much bigger now.

If there are fewer new homes being built, the problem is compounded by the fact that there are fewer existing homes for sale. It's not clear why current homeowners aren't moving up, but one reason might be the still significant number of people who owe more on their mortgage than their home is worth.

Earlier this month Zillow reported 13.1% of homeowners with a mortgage had negative equity, blocking them from selling without a loss. More than 820,000 underwater homeowners owed more than twice as much on their mortgages as their homes are worth.

"Things are moving in the right direction, but some owners are still deeply underwater,” said Zillow Chief Economist Dr. Svenja Gudell. “As we move into the home shopping season, inventory is already low, and negative equity is keeping potential additional stock from becoming available.”

That means consumers looking for their dream home this Spring may be disappointed. Homes will cost more and there will be far fewer to choose from.

Prices for homes were on the rise again in January.

The Federal Housing Finance Agency (FHFA) reports its monthly House Price Index (HPI) was up a seasonally adjusted 0.5% from the month before.

At the same time, the FHFA revised its December figures to show a gain of 0.5% instead of the 0.4% advance it reported initially.

Earlier this month, CoreLogic reported a month-over-month price gain of 1.3%

Regional breakdown

For the nine census divisions, seasonally adjusted monthly price changes from December 2015 to January 2016 ranged from -1.0% in the Middle Atlantic division to +1.7% in the South Atlantic division.

The 12-month changes were all positive, ranging from +1.7% in the Middle Atlantic division to +8.9% in the South Atlantic division.

The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.

The year over year increase in January was 6.0%.

The full report may be found on the FHFA website.