Current Events in April 2016

Police used to marvel at how people walked away from head-on accidents that would have killed them prior to the widespread use of airbags. Now they marvel at the people who are killed in minor fender-benders when their airbags explode and hurl tiny pieces of metal into the passenger compartment.

That's what happened to Huma Hanif, 17, when she rear-ended the car in front of her while driving outside Houston in her Honda Civic. A metal fragment became embedded in her neck and she bled out at the scene, police said.

“She wasn’t speeding. The car had only moderate damage,” Sheriff's Office Danny Beckworth said, according to a report in The New York Times. “It’s a crash that we work with every day that everybody walks away from.”

Fatal shortcomings

U.S. Sen. Bill Nelson (D-Fla,) said the death illustrates the shortcomings in the U.S. safety recall program.

With the huge Baby Boom generation beginning to retire, you might expect the annuity business to be booming. After all, with one lump sum investment, a retiree can look forward to a steady stream of monthly income until they die.

But the annuity business isn't booming, and researchers at Boston College were called upon to try to figure out why. The researchers conclude that consumers avoid annuities for some of the same reasons they generally put retirement savings on the back burner: they associate it with death.

Don't want to go there

"People need to think about how long they expect to live in order to calculate the potential payout for an annuity," Linda Salisbury, a Boston College marketing professor and co-author of the study, said in a release. "Our goal was to understand how we can help people overcome their avoidance of annuity products."

To arrive at their conclusion, the researchers divided subjects into two groups, telling both that they were 65 years old and starting retirement. One group was told to think about putting money into an IRA and the other was told to think about putting money into an annuity.

Following the exercise, the participants were quizzed about the thoughts going through their mind. The researchers found 40% of the annuity group was thinking about death, while only 1% of the IRA group had those thoughts.

Follow up test

To further test the theory, the researchers then asked one group to write an essay about their own death and the other to write about dental pain they had experienced. Then, both groups got a sales pitch for annuities and were asked if they wanted to purchase one.

The group that had written about death was 50% less likely to show interest in an annuity.

Could the prospect of confronting one's own mortality really be the reason consumers shy away from annuities? If so, might it also explain why many Baby Boomers haven't done such a great job of planning for retirement?

Language influence

In a 2013 study, Keith Chen, of Yale University, offered another explanation. He found that cultures where there is the most saving for retirement speak languages where there is no grammatical distinction between the present and future.

“Empirically, I find that speakers of such languages save more, retire with more wealth, smoke less, practice safer sex, and are less obese,” he wrote. “This holds both across countries and within countries when comparing demographically similar native households.”

In English, he points out, the language makes a difference between the present and future. That leads, he says, to less future-oriented behavior, such as saving for retirement.

Another rise for home prices in February on both a year-over-year and month-over-month basis

Property information provider CoreLogic reports that home prices nationwide -- including distressed sales -- increased 6.8% in February and were up 1.1% from January.

“Home prices continue to rise across the U.S. with every state posting year-over-year gains during the last 12 months,” said Anand Nallathambi, president and CEO of CoreLogic. “Improved economic conditions and tight inventories continue to drive exceptionally strong gains in many markets, especially for homes priced below $500,000.”

Looking ahead

The CoreLogic Home Price Index Forecast projects an increase of 5.2% on a year-over-year basis from February 2016 to February 2017, and on a month-over-month basis a more modest 0.6% from February to March.

“Fixed-rate mortgage rates dropped more than one-quarter of a percentage point in the first three months of 2016, and job creation averaged 209,000 over the same period,” said CoreLogic Chief Economist Dr. Frank Nothaft. “These economic forces will sustain home purchases during the spring and support the 5.2% home price appreciation CoreLogic has projected for the next year.”

Fresh from Texas of San Antonio, Texas, is recalling numerous products containing sliced red apples.

The products may be contaminated with Listeria Monocytogenes.

No illnesses have been reported to date.

The following products and production lots, sold by H-E-B stores in Texas, are being recalled:

What to do

Customers who purchased the recalled products may return them to the store for a full refund.

Consumers with questions or concerns may contact Fresh from Texas at (817) 690-2330 Monday- Friday 24 hours a day.

Nissan North America is recalling 1,554 2016 Frontier V6 vehicles manufactured February 29, 2016, to March 7, 2016.

The starter motor wire harness may have been installed in an incorrect position, allowing the starter harness terminal to contact the heat shield resulting in an electrical short.

An electrical short increases the risk of a fire.

What to do

Nissan will notify owners, and dealers will inspect and reposition the starter wire harness, as necessary, free of charge. The recall is expected to begin April 2016.

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

Toyota Motor Sales, USA is recalling approximately 4,170 model year 2016 Toyota RAV4; approximately 90 model year 2016 RX350; and approximately 12,400 model year 2016 ES350 vehicles.

The recalled vehicles are equipped with a Brake Actuator assembly that enables enhanced brake control

functions including the Anti-lock Braking System (ABS), Traction Control (TRAC), and Vehicle Stability Control (VSC), among others.

There is a possibility that a component inside the actuator was damaged during manufacturing, preventing the actuator from operating properly. This could cause a loss of vehicle stability control, increasing the risk of crash.

What to do

All known owners of the recalled vehicles will be notified by first class mail. Toyota and Lexus dealers will check the serial number of the Brake Actuator and replace actuators assembled during a specific production period.

Owners may contact Toyota at 1-800-331-4331 and Lexus at 1-800-255-3987.

Just about everybody is mad at Volkswagen these days, including VW dealers. Now, a group of three dealers have filed a class action suit against the German automaker, saying it intentionally defrauded dealers and consumers with its illegal "defeat devices."

The lawsuit, filed today in federal court in Illinois, charges that VW’s deception, coupled with the drop in value of diesel vehicles, the inability of franchise dealers to sell diesel vehicles, and the loss in value of the VW brand post-Dieselgate delivered a devastating blow to dealers’ profits and the value of their franchises

“Plaintiffs and the Franchise Dealer Class have invested millions, collectively hundreds of millions of dollars in the Volkswagen brand,” the suit states. “But now the brand value has plummeted, sales of VW diesels have completely halted, and sales of all VW cars have plummeted.”

The suit also alleges that VW forced dealers into a so-called "floorplan financial" scheme with VW-owned Volkswagen Credit.

"Pump and dump"

“For VW dealers – many of which are small, family-owned franchises – Dieselgate amounts to a classic ‘pump and dump’ operation, in which VW exploited the CleanDiesel eco-friendly market that it helped create, boosting the price of entry and continuation in the market for VW franchises,” said Steve Berman, managing partner of the Hagens Berman law firm. “All the while, VW withheld information about the impending Dieselgate fiasco, and left dealers to fend for themselves as the scandal unfolded.”

The suit says that just as consumers readily purchased what they thought were reliable, environmentally friendly vehicles, franchise dealers built new showrooms and purchased new facilities, while heavily stocking lots with CleanDiesel vehicles, based on VW’s false marketing.

“Franchise owners are now left with lots full of CleanDiesel vehicles they are unable to sell, and these cars have suffered tremendous loss of value and take up inventory space and carrying costs,” Berman added. “VW dealerships large and small have been at the mercy of an unethical corporation, much like the hundreds of thousands of owners across the country, and we believe it’s time to take a stand for their rights.”

Amazon has added 11 more metro areas where members of Prime can get free same day delivery, as long as the order is for more than $35. The same day delivery will be available seven days a week in:

• Charlotte
• Cincinnati
• Fresno
• Louisville
• Milwaukee
• Nashville
• Raleigh
• Richmond
• Sacramento
• Stockton
• Tucson

Amazon says it has also added same day delivery areas in parts of Central New Jersey, Dallas-Fort Worth, Los Angeles, and San Diego. According to the online retailer, Prime same day delivery now exists in 27 metro areas in the U.S.

“Prime was developed to make shopping on Amazon fast and convenient, and millions of members have used Prime free same-day delivery to make their lives even easier,” Greg Greeley, Vice President of Prime, said in a statement.

He said the company plans to keep enhancing Amazon's membership service as operational capabilities grow.

Amazon Prime is an annual membership program costing $99 a year. Among its benefits is unlimited free two-day shipping across all categories.

Students choose a for-profit college for a lot of different reasons.

For-profit schools, like DeVry, University of Phoenix, and Strayer, were among the first to offer online courses, ideally suited to non-traditional students who wanted to pursue a degree while already in the workforce.

By and large, for-profit colleges have open enrollment, meaning almost anyone with a high school diploma who applies gets in. Traditional colleges over the last two decades have erected barriers, selecting only the students they want.

Finally, for-profit schools advertise, meaning more prospective students are aware of them and might be more likely to choose a for-profit school without looking into the alternatives.

Unfortuately, for-profit schools can be pretty expensive – and in the recent case of Corinthian College – accreditation has been an issue. Many students have left for-profit schools, with and without degrees, carrying a mountain of debt.

In recent years, for-profit schools have gotten some stiff competition from traditional colleges and universities, which are able to provide a quality, online education at much more affordable prices.

Most of them don't advertise, so here are five that deserve a closer look. If they are state supported schools, they usually charge more for out-of-state students. We selected schools that either don't charge extra, or the difference isn't that great.

New Mexico Highlands University

The school, with a campus in Las Vegas, New Mexico., was established in 1893. It offers degree programs in arts and sciences, business, education, and social work.

Tuition in its online programs costs $200 per credit hour for New Mexico residents and $314 for out of state students.

Murray State University

Murray State was founded in the early 20th century in Murray, Ky. It offers a large number of both graduate and undergraduate degree programs that are accessible online.

The in-state tuition rate is $317 a credit hour. Murray State has reciprocal arrangements with some other states in the region for reduced out of state tuition. For example, the cost is $383.50 for Alabama residents, $387 for Ohio residents, $335 for Tennessee residents, and $367 for residents of Missouri.

Columbia College

Columbia College is a private school, founded in 1851, with its campus in Columbia, Missouri. Since 2000, it has poured resources into its online degree programs and charges the same for in-state and out-of-state students – $275 per credit hour.

Bellevue University

Located in Bellevue, Nebraska, Bellevue University is another private school where the tuition is the same for everyone, regardless of where the student lives. It has ranked highly in the U.S. News annual college edition and offers 47 online undergraduate degree programs at a cost of $275 per credit hour.

Middle Georgia State University

Part of the University of Georgia system, Middle Georgia is located in Macon and offers a wide range of graduate and undergraduate programs online.

Students pursing an online degree pay a tuition of $169 per credit hour.

Since state supported colleges are usually cheaper for in-state residents, looks for an inexpensive education alternative where you live. Check out options in your state here.

After falling for the previous three weeks, applications for mortgages have rebounded.

The Mortgage Bankers Association (MBA) reports applications were up 2.7% during the week ending April 1.

The Refinance Index shot up 7% from the previous week, taking the refinance share of mortgage activity to 54.5% of total applications from 52.4% a week earlier.

The adjustable-rate mortgage (ARM) share of activity slipped by 4.7% of total applications, the FHA share of total applications dipped to 11.3% from 11.5%, the VA share was 12.2%, and the USDA share of total applications dropped to 0.8% from 0.9% the week prior.

Contract interest rates

• The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) dropped eight basis points -- from 3.94% to 3.86% -- with points decreasing to 0.32 from 0.36 (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) fell to 3.76% from 3.82%, 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 slipped three basis points to 3.7%, with points increasing to 0.36 from 0.30 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages was down from 3.19% to 3.10%, with points increasing to 0.37 from 0.30 (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 13 basis points to 2.94%, with points decreasing to 0.26 from 0.38 (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.

When it comes to travel rewards credit cards, when you apply can make a big difference. At certain times of the year the rewards are much greater.

NerdWallet's 2016 Travel Credit Card Study shows most consumers are oblivious to this fact and are leaving an average of 15,338 rewards points on the table by applying for a card at the wrong time. That works out to an average of $177 in lost value.

Sean McQuay, NerdWallet's credit card expert, says consumers may love travel credit cards, but they aren't making the most of them.

Limited time offers

"Many consumers know that signing up for a travel card means getting a sign-up bonus, but most don't realize that there are limited-time offers that often push those sign-up bonuses up by an average of nearly $200 and that those offers follow a seasonal pattern every year,” McQuay said in a statement.

But by signing up at an optimal time, he says consumers can significantly improve the value of their credit card.

For general travel, November is the best month to sign up based on the sign up bonus. Despite that, the study found most consumers sign up for this type of card in July. As a result, NerdWallet estimates about 91% of consumers miss out on maximum rewards.

November is also the best month to sign up for an airline rewards card, but the study found that most consumers sign up for them in January.

For a hotel rewards card, the best time to sign up is August. Unfortunately, most consumers sign up for one in April, missing out on the maximum bonus.

Wait five months

It usually is not a good idea to sign up for a travel credit card just for a specific trip. In fact, it pays to wait at least five months between the time you get the credit card and when you take a trip. That's because many cards require a minimum amount of spending before the maximum reward kicks in.

But McQuay says if you are not currently earning rewards, it may be advantageous to take the current sign-up offer to make sure you begin accruing rewards immediately.

“Ultimately, only you can make the best decision about when you apply for a credit card," he said.

Things are sailing along nicely in the non-manufacturing sector of the economy, with growth continuing in March for the 74th consecutive month.

The Non-Manufacturing Institute for Supply Management (ISM) Report On Business shows the services sector grew 1.1% last month to 54.5%, representing a slightly faster rate of expansion. A reading above 50 indicates an expansion, while below that suggests contraction

The Non-Manufacturing Business Activity Index was up 2%, for the 80th consecutive month of growth; the New Orders Index gained 1.2%, and the the Employment Index inched up 0.6% after falling in February.

The Prices Index was up 3.6% to 49.1%, indicating prices dipped in March for the fifth time in the last seven months.

Industry performance

The 12 non-manufacturing industries reporting growth in March are:

1. Educational Services;
2. Information;
3. Wholesale Trade;
4. Finance & Insurance;
5. Health Care & Social Assistance;
6. Retail Trade;
7. Mining;
8. Management of Companies & Support Services;
9. Accommodation & Food Services;
10. Public Administration;
11. Utilities; and
12. Professional, Scientific & Technical Services.

The two industries reporting contraction in March are:

1. Arts, Entertainment & Recreation; and
2. Transportation & Warehousing.

Alimentos Congelados, S.A. (Pinula) is recalling 1,800 cases of frozen broccoli cuts.

The product may be contaminated with Listeria Monocytogenes

The company has not received any complaints in relation to this product and is not aware of any illnesses associated with the product to date.

The following product distributed in poly nags to stores in Indiana, Kentucky, Ohio, Tennessee, Virginia, West Virginia, Florida, Georgia, Alabama, South Carolina and North Carolina, is being recalled:

• WYLWOOD Fresh Frozen Broccoli Cuts, NET WT. 16 OZ (1 LB), UPC 5193300110, with bag code: A25335P and A15335P

What to do

Customers who purchased the recalled product should not consume it, but throw it away.

Consumers wanting a refund or with questions may contact the company at 1-800-888-4646 Monday thru Friday between 8:00AM and 5:00 PM (EST).

Grosfillex of Robesonia, Pa., is recalling about 92,000 Havana side chairs and armless bar stools.

The backrest can crack and detach, posing a fall hazard to the user.

The firm has received three reports of incidents, including neck and shoulder injuries.

This recall involves the Grosfillex Havana commercial side chairs and armless bar stools sold in charcoal, espresso, tobacco and white. The high-backs and seats are covered with woven plastic wicker and have aluminum legs.

The side chairs measure about 35 ½ inches tall by 18 ½ inches wide and 22 inches deep. The bar stools measure about 45 ½ inches tall by 20 inches wide by 24 inches deep. Grosfillex and CE # 2194 is molded on the underside of the seat.

The chairs and stools, manufactured in France and the U.S., were sold at distributors and dealers nationwide in the food service and hospitality industries from April 2008, through August 2015, for between $75 and $150.

What to do

Consumers should immediately stop using the recalled chairs and stools and contact Grosfillex for free replacements if the product is under the three-year warranty or for a product voucher for recalled products no longer under warranty.

Consumers may contact Grosfillex toll free at 844-845-4570 extension 3210 from 8 a.m. to 6 p.m. (ET) Monday through Friday, by email at gfxprogram@grosfillex.com or online at www.grosfillexfurniture.com and click on Product Safety Alert for more information.

They didn't set out to throw cold water on the idea of fundraising via social media, but researchers at the University of Toronto Mississauga say non-profit organizations should think carefully about their goals before jumping in with both feet. 

"It is true that once you rely on social media, your message can easily reach people by the millions," said management professor Nicola Lacetera. "But then the question becomes 'What do people do with these messages?'"

Lacetera and two colleagues conducted research on the ALS Society's ice bucket fundraising challenge and other social media campaigns to find out how effective they were as fundraisers.

In one case, they studied Help Attack! -- a program that lets Facebook and Twitter users donate to charities each time they post or tweet. Potential donors had the option to broadcast their pledges, but about 16 percent of them deleted their pledges before payment was actually required.

"Donations make you feel good and look good, but do you actually need to donate to get those effects?" Lacetera asked. "You can do that just with the click of a mouse or the swipe of a finger by simply 'liking' a campaign. The ability to broadcast doesn't have a big effect on action and real money."

Conclusion: "The jury is still out as to how to get people financially involved. It's an important and exciting challenge to figure out how to leverage the great power of these platforms for social causes," Lacetera said.