Current Events in October 2016

There has been a dramatic increase in the number of children living with a peanut allergy in recent decades. In fact, studies show that the number of kids affected by this major food allergy tripled between 1997 and 2008.

The "Viaskin" patch works by delivering a low dose of peanut protein through the skin. Researchers say training the body to tolerate small doses of the allergen in this way (a treatment method known as epicutaneous immunotherapy) was found to be safe and effective, especially in younger children.

Protects against peanut exposure

One year later, the researchers tested the volunteers to see if their peanut tolerance had changed -- and if so, how much. Findings showed that those who had been given the low-dose and high-dose patches experienced similar benefits.

"The clinical benefit seen in younger children highlights the promise of this innovative approach to treating peanut allergy," said Daniel Rotrosen, M.D., director of NIAID's Division of Allergy, Immunology and Transplantation (DAIT).

Easy to use

"The high adherence to the daily peanut patch regimen suggests that the patch is easy-to-use, convenient and safe," said Marshall Plaut, chief of DAIT's Food Allergy, Atopic Dermatitis and Allergic Mechanisms Section.

The full study is published online in the Journal of Allergy and Clinical Immunology.

It’s been a little over a month since Yahoo confirmed details of its massive data breach, which compromised information on roughly 500 million user accounts. When the news broke, many people speculated whether it would affect Verizon’s acquisition of the company – a deal that had been struck in July for around $4.8 billion.

Those rumors began heating up at the beginning of the month when reports suggested that Verizon was pushing for a $1 billion discount because Yahoo had not disclosed information about the breach. And now, only a couple of weeks later, talk will be swirling about what Verizon actually intends to pay.

According to a report from Reuters, a Verizon executive stated at a tech conference that buying up Yahoo still made good business sense. However, she said that Verizon still needed more information about the breach, which will ultimately affect how much the company plans to pay.

“I’ve got an obligation to make sure that we protect our shareholders and our investors, so we’re not going to jump off a cliff blindly,” said Marni Walden, president of Product Innovation and New Businesses at Verizon.

Uncertain future

As we reported previously, the Yahoo acquisition gives Verizon a lot of advantages. The company acquired AOL back in 2015, and combining it with Yahoo would give the company a strong competitive rival to the likes of Google and Facebook in the digital advertising market.

At the conference, Walden showed her enthusiasm for the prospective combination, pointing out that the deal could allow Verizon to cater more to brands, since Google and Facebook focus more on social media and search, respectively. “We can help other brands build inside of a very open, friendly marketplace,” she said.

However, not having all the information on Yahoo’s data breach could be a sticking point. When asked if Verizon could potentially back out of its acquisition deal, Walden was non-committal, simply asking for the next question. Leaving the door open in this way certainly won’t make the folks over at Yahoo sleep any easier.

Consumers continue to flock to new car showrooms, but in fewer numbers this month. With October drawing to a close, industry analysts are predicting sales will be down as much as 6% from October 2015.

But that doesn't mean the industry is hurting. If you'll recall, last October was a huge month for car dealers, as new car sales set records month after month. Besides, Kelley Blue Book (KBB) notes there were some extenuating circumstances this month – two fewer selling days than last year.

But KBB analyst Tim Fleming says the preliminary sales numbers show a drop in volume across the entire industry, with dealers and manufacturers having to work harder to close sales.

"Higher incentives are helping boost sales, but with transaction prices at an all-time high and great consumer demand for SUVs and trucks, which are more profitable, automakers can afford the extra incentives,” Fleming said. Still, discipline with incentives and moderating production will go a long way in preserving residual values in the next few years."

Edmunds.com, meanwhile, predicts a slightly better industry performance, with October sales down just 5.2%.

"On the surface, it might look like a slow month for sales, but in fact the industry's performance was much stronger than the raw numbers suggest," said Edmunds.com Senior Analyst Jessica Caldwell.

What's hot and what's not

Monthly sales figures can be useful for consumers thinking about a new car purchase because it can show where the bargains are and are not. For example, a make and model that is in demand will have less wiggle room during a negotiation. A model that lags in sales might be purchased at more of a bargain price.

Going forward, that could make Volkswagen a good buy. Preliminary sales data shows VW continues to lose marketshare in the wake of the 2015 diesel emissions cheating scandal. Its sales this month are expected to be down nearly 10% from last October, the first month after the scandal broke.

"Upcoming SUV launches, including the redesigned Tiguan and an all-new three-row SUV, will certainly help Volkswagen's car-dominant lineup once they hit the market, and that can't come soon enough for Volkswagen dealers,” Fleming said. Importantly, the Audi and Porsche brands have not been affected by the scandal, as sales for those two brands are up year-over-year."

Subaru still hot

While consumers might negotiate an attractive deal on a VW, it might be harder to get a low price on a Subaru, which remains a sales leader. Preliminary numbers show Subaru increased its marketshare from 3.6% to 3.8% this month, even with slightly fewer sales than in October 2015.

KBB notes Subaru has the fastest-selling inventory, lowest days' supply of vehicles, and the fewest incentives of any major brand.

Following a drop of 2.5% in August, pending home sales have climbed to their their fifth highest level over the past year.

The National Association of Realtors (NAR) reports that increases in the South and West helped push its Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, up 1.5% in September to 110.0.

The index has now risen year-over-year for 22 of the last 25 months and is up 2.4% from the same time a year ago.

“Buyer demand is holding up impressively well this fall with Realtors reporting much stronger foot traffic compared to a year ago,” said NAR Chief Economist Lawrence Yun. "Although depressed inventory levels are keeping home prices elevated in most of the country, steady job gains and growing evidence that wages are finally starting to tick up are encouraging more households to consider buying a home."

Regional breakdown

• Pending home sales in the West shot up 4.7% last month to 107.3, and is now 4.0% above a year ago.
• The index in the South rose 1.9% to a reading of 122.1 and stands 1.7% above where it was in September, 2015.
• The PHSI fell 1.6% to 96.5 in the Northeast, but is still 7.7% the same time last year.
• In the Midwest the index slipped 0.2% to 104.6 and is now 1.0% below its level in September 2015.

Jobless claims

From the Department of Labor (DOL), there's word that first-time applications for state unemployment benefits fell in the week ending October 22 to a seasonally adjusted 258,000.

That's down 3,000 from the previous week and marks 86 consecutive weeks of initial claims below 300,000 -- the longest streak since 1970.

The four-week moving average, considered by many economists to be a more accurate barometer of the labor market, inched up by 1,000 to 253,000.

The complete report is available on the DOL website.

Toyota Motor Engineering & Manufacturing is recalling 91,585 model year 2016-2017 Prius vehicles manufactured August 6, 2015, to October 3, 2016.

The recalled vehicles are equipped with a foot-operated parking brake system that has a parking brake cable that may disengage.

If the parking brake cable disengages from the mechanism and the transmission is left in a gear other than 'Park' while the ignition is on and the driver leaves the vehicle, the vehicle may roll unexpectedly, increasing the risk of a crash.

What to do

Toyota will notify owners, and dealers will install a clip at the parking brake cable end to prevent the cable from disengaging, free of charge. The recall is expected to begin December 11, 2016.

Owners may contact Toyota customer service at 1-888-270-9371. Toyota's number for this recall is G01.

Like millions of other car owners, Amy Leiva learned there was a problem with her car from a letter. Pregnant with her third child, Leiva had already been planning to trade in her 2010 Ford Edge for a larger vehicle to accommodate her growing family. 

"Ford Motor Company has decided that a defect which relates to motor vehicle safety exists in your vehicle," the car manufacturer explained. Ford Motor Company in July had recalled 1.9 million vehicles as part of the industrywide recall of Takata airbags. Leiva's car now comes with a warning that "the passenger airbag inflator may rupture in the event of a crash...a ruptured inflator may result in metal fragments striking vehicle occupants causing serious injury or death."

The letter gave her a new sense of urgency. But with replacement parts for certain makes and models still on back-order, Leiva says she has been stuck with her current vehicle. At a Ford dealership near her home in Nevada, she says the salespeople told her they didn't want her Edge until the replacement parts arrive, whenever that may be.

"They said we're not going to be able to sell this car. We're going to have to hold onto it until the parts are available," Leiva tells ConsumerAffairs. "Sorry we don't know when its going to be," she recalls the dealership telling her. And no loaner cars would be offered in the meantime. "It's just frustrating," she says.

Long wait times

Car dealers and owners across the country are facing long wait times for replacement parts, as a Ford dealer in Dallas told ConusmerAffairs last week that they are "at the mercy" of Takata. On its website, Ford Motor Company explains that they have parts available for some vehicles but are still developing a permanent repair process in others. Meanwhile, "Ford Motor Company is not providing long-term loaner vehicles at this time," the corporate site says.

That's a stark contrast from Honda, which tells consumers that "should there be any wait for the replacement of driver’s airbag inflator, our dealers are prepared to provide alternative transportation in the form of a loaner or rental vehicle, free of charge.until your own vehicle is repaired."

Bryan Thomas, spokesman for the National Highway Traffic Safety Administration, says that the agency's recall doesn't force any dealership or car company to provide loaners, so it is up to each manufacturer what they choose to do. However, his agency does not consider any of the Ford vehicles included in the recall to be priority. While the Ford recalls are serious, he says his agency has singled out all Hondas and Accuras from 2001-2003 as especially high-risk. 

Thomas declined to comment on whether he believes dealerships should provide loaner vehicles while drivers wait. "We don't have authority to require that so I can't make that statement," he says. He adds that drivers should not disable their air bags. "It's really important to understand that airbags are far far more likely to save you and prevent injury in crash than they are to hurt you," he says.

Trade-ins for recalled cars

Ford Motor Company spokesman John Cangany says that dealerships, considered independent businesses, get to decide whether they will accept Fords subject to the recall as a trade-in. "There is not a policy related to what car owners do with their vehicles," he says in an email to ConsumerAffairs. "Dealers are not allowed to sell new vehicles with open safety recalls, though."

If you've been waiting for Google Fiber to come to your city, you can stop waiting. It's not coming. 

Like Verizon and other carriers that once enthusiastically embraced fiber delivery of broadband, Google parent Alphabet has seen the letters on the wall and they spell "w-i-r-e-l-e-s-s."

The executive in charge of Google Fiber has departed and layoffs are imminent as the company scales back its once ambitious plans to wire cities great and small with fiber.

Alphabet said Google Fiber will continue operating in the cities where it already exists: Atlanta, Georgia; Austin, Texas; Charlotte and Raleigh, N.C.; Kansas City, Mo.; Nashville, Tenn.; and Provo and Salt Lake City, Utah. Also, construction will continue in Huntsville, Ala.; San Antonio, Texas; and San Diego and San Francisco, Calif.

But everywhere else, Alphabet said it will "refine our approaches."

Verizon has also quietly halted its expansion of FiOS and is instead putting its research dollars into wireless delivery and content, while AT&T is putting its efforts into building a wireless broadband and entertainment colossus.

Full circle

This brings full circle an effort that began in the late 1980s, when the companies that manufacture fiber optic cable began mounting a quiet effort to persuade telecom companies and policymakers that fiber was the way to wire the world and to reshape the regulatory world at which they chafed so hideously.

I was then living out a non-compete agreement that prohibited me from working in journalism and was filling the time working the other side of the street -- strategizing government relations approaches for various K Street firms in Washington.

One of our clients was a glass manufacturer that saw its future in fiber and engaged us to build a buzz that would make the concept sparkle. It was hard going, not as hard as digging cable trenches perhaps but challenging nonetheless.

"You're insane, it would be too expensive," was the usual response from Capitol Hill types and telecommunications executives. Engineers were less complimentary, calling the idea "stupid" and "moronic," to pick a few of the more positive adjectives.

Land rush

But these were the halcyon days when the Telecommunications Act of 1996 was in its gestation period. The average household then paid around $30 a month for telephone service but the hundred-channel potential of fiber promised to change all that and a land rush atmosphere prevailed. 

Families were being raised in comfort, boats bought and second homes started as the lobbying dollars flowed freely. Anyone remotely related to telecommunications was seeking new frontiers to promote.

We thus formed a "public interest organization" dedicated to bringing remote learning and healthcare to a nation that didn't know it needed either. Building such an organization requires, well, organizing, which comes down to working the phone to recruit members and supporters.

My very first call was to a well-known former senator who was then known to be on the look-out for business opportunities (i.e., board seats, consulting gigs, and the like). I described our efforts to bring fiber to all as he listened more or less patiently.

"This sounds like a front for the telephone company," he finally said.

It would have been too easy to say that, no, it was a front for a fiber optic company, so instead I thanked him for his time and repaired to the skunk works to fuzz up the language a bit more.

Level playing field

But false starts aside, fiber looked like the pefect technology for an industry looking to rid itself of the bonds of regulation. By being shockingly expensive, it gave telecoms the opportunity to say that they would need protection from excess regulation and a "level playing field" (an overused term that translates to a fenced playing field, meaning protection from competition) if they were to bring the wonders of fiber to America.

After all, the argument went, you can't expect companies to sink billions into digging up the nation's streets without ensuring that years of unfettered profits will follow.

It was all, of course, a smashing success. No one ever got around to laying fiber to every household, but as the world's longest-running bill mark-up culminated in the Telecom Act, telecoms, cable, and wireless companies were largely freed to plunder the landscape for the next few decades so that the average household now pays well north of $100 for telephone, cable, and wireless service.

There are once again, thanks to the fenced playing fields, only a handful of giants ruling the broadband landscape -- AT&T, Verizon, Google, Comcast, and their cousins. Prices are high, and most cities have at most two competing companies.

Ah, but wait. Wireless -- specifically 5G (a term that means nothing in particular) -- is the current technology of the future. It will bring streaming video, broadband communications, and a bustling economy to every Middlesex village and town, just as long as the onerous burden of regulation is avoided and a level, well-fenced playing field is provided for all.

Or at least for those willing to pay for it.

Mylan NV’s aggressive pricing of its EpiPen emergency injector has brought Congressional investigations, widespread denunciation from consumer and health advocates, and numerous legal challenges.

What could be worse? Competition. And that's what drugmaker Kaleo Inc. says it will provide early next year when its Auvi-Q injector returns to the marketplace. The Auvi-Q was recalled last year because of potential malfunctions that could deliver the wrong dose of epinephrine, used to counteract the life-threatening anaphylactic shock that allergy sufferers sometimes encounter. 

“As the inventors of Auvi-Q, my brother and I have dedicated our lives to researching and developing an innovative epinephrine auto-injector that would do for severe allergy sufferers what the AEDs did for cardiac arrest in the community; namely a product that could assist and guide even an untrained user through a life-threatening emergency,” said Evan Edwards, vice president of Kaleo.

"Affordable access"

Kaléo said it is working to "ensure that all patients regardless of insurance coverage, have affordable access to Auvi-Q."

The EpiPen contains about $1 worth of epinephrine, but it costs $600 or more for a package of two in the United States, a huge increase over the $57 the EpiPen went for in 2007. Epinephrine loses potency over time and the device must be replaced annually.

The problem, of course, is that $600 is a lot of money for most people. While some insurance plans cover some of the cost, depending on the deductible and other factors, consumers can still wind up paying hundreds of dollars for an EpiPen two-pack.

Auvi-Q was originally marketed by French pharmaceutical giant Sanofi in 2013 but was pulled from the market in October 2015 because of suspected malfunctions that did not result in any known deaths. Sanofi later ended its partnership with Kaleo, which is now relaunching the product.

Kaleo said that after regaining the rights to Auvi-Q, it "conducted a thorough manufacturing assessment and invested in new technology and quality systems to ensure accurate, reliable and consistent delivery from the product."

"Industry-first features"

The Auvi-Q is similar to the EpiPen, in that both are compact epinephrine auto-injectors. Kaleo says its device has a number of industry-first features, including a voice prompt system that guides a user with step-by-step instructions through the delivery process, and a needle that automatically retracts following administration.

"AUVI-Q is engineered to help patients and their caregivers to confidently administer epinephrine in life-threatening allergic emergencies," the company said. 

Kaleo's announcement was well received by allergy organizations which have previously expressed frustration over the EpiPen situation.

“For the millions affected by life-threatening food allergies, an epinephrine auto-injector serves as a lifeline,” said James R. Baker, Jr., MD, CEO and Chief Medical Officer at Food Allergy Research and Education (FARE). “These lifesaving devices must be accessible and affordable, and Americans should have options when it comes to selecting the right auto-injector for their family.”

“We are very excited about patients once again having a choice in epinephrine auto-injectors,” said Eleanor Garrow-Holding, President and CEO of the Food Allergy & Anaphylaxis Connection Team (FAACT). “Those living with life-threatening allergies deserve innovative products and choices that meet their individual needs."

Kaleo is a closely held company based in Richmond, Va.

The long and bitter war between the two major daily fantasy sports (DFS) enterprises and the state of New York has reached a peaceful conclusion.

New York Attorney General Eric Schneiderman has reached separate $6 million settlements with both companies, which run games where players can win money based on the performance of actual players on their “fantasy” teams.

Last fall, as DFS games were reaching their height of popularity, Schneiderman sued both DraftKings and FanDuel, claiming both were in violation of New York's gambling laws. The two companies fought the suits, saying they offered games of skill, not chance.

In the end, the settlement revolves around Schneiderman's charges that both companies engaged in false and deceptive advertising. The complaint alleged both companies misled novice players about their chances of winning, giving “false and misleading” statistics about the odds.

During the protracted litigation, Schneiderman secured an injunction preventing both companies from offering games to New York residents. Between March and August, the companies were not allowed to accept money from New Yorkers.

Terms of the settlement

In agreeing to terms, both DraftKings and FanDuel agreed to change marketing practices, providing clear disclosure of terms and conditions and information about expected performance.

“Today’s settlements make it clear that no company has a right to deceive New Yorkers for its own profit,” Schneiderman said in a statement. “DraftKings and FanDuel will now be required to operate with greater transparency and disclosure and to permanently end the misrepresentations they made to millions of consumers. These agreements will help ensure that both companies operate, honestly and lawfully in the future.”

The issue of whether DFS violates New York's gambling laws went away in August, when New York enacted legislation that specifically says DFS is a legal activity. Most other states have enacted similar laws.

Fantasy sports began as an informal hobby among sports enthusiasts. These informal “leagues” lasted an entire season, with participants getting points each week based on how their players performed in real games.

DFS made it a professional enterprise, allowing participants to form different teams daily or weekly, winning money if their “team” won. Critics said there was little difference between that and betting on the outcome of a game.

Consumers across the U.S. look forward to Halloween every year as a time to relax and have fun with family and friends. However, criminals also look at the holiday as an opportunity to take advantage of unsuspecting residents and empty homes.

That’s why Shannon Murphy, vice president of sales and marketing for the Electronic Security Association (ESA), says the holiday is a perfect time to take advantage of smart home security features. By using security cameras, automatic lighting controls, and other smart security features, consumers can help ensure the safety of their home while they’re away or the identity of anyone who comes knocking.

“There was a time when your only way to get a glance at the ghouls and goblins at your door was to look out a small peephole. With an integrated smart home security system, you can simply use your smart phone to identify friend or foe,” said Murphy.

Tips for Halloween safety

To help consumers take full advantage of their smart home security systems, Murphy offers the following tips for the coming holiday.

• Monitor the security camera mounted at your front entrance. Not only can it be used to identify trick or treaters before you open the door, it can be used to monitor activity via your smart phone while you are out enjoying the evening with your family and friends.
• If you plan to stage a spooky Halloween experience by stationing a family member or friend outdoors to hand out treats – position them in a place that can be easily monitored by a security camera. 
• Adjust security camera settings to angle at least one camera toward your driveway or the street entrance to your home. This can help detect and even identify tricksters. 
• As you are pre-planning your trick-or-treat route, pre-program your interior lighting to realistically turn on and off in different rooms and at different times so your house won't look vacant while you are away. If you don't have time, you can use your smart phone to control the lighting while you are out. 
• Use your smart phone to ensure your security system is armed while you are trick or treating with your children – or at your neighborhood Halloweenparty with friends. You can also use your smart phone to arm your security system if you forgot to do so.

“A professionally-monitored smart home security system can alert you and the appropriate authorities to unusual activity and potential threats. This is important every day of the year – but provides an added comfort level on holidays such as Halloween,” concludes Murphy.

Learn more about home security systems 

Retailers are trying to get a leg-up on competitors in the holiday shopping sweepstakes, especially as spending continues to migrate to the internet. Many retail analysts believe Amazon is poised to capture a bigger slice of the pie, which may motivate competitors to offer even more enticing deals.

Target has taken the wraps off its 2016 holiday strategy, saying it plans to offer new and exclusive inventory in every product category, as well as a wide range of bargains.

“Target is at our very best during the holidays, and we’re building on last year’s winning formula to make the 2016 holiday season even better,” said Target CEO and Chairman Brian Cornell.

Cornell said the strategy is built around helping consumers save both time and money, both in stores and online.

“Most importantly, guests will find truly exceptional value through broad and simple offers timed to maximize savings on the most-shopped merchandise at each point in the season,” he said.

Introducing the Wondershop

New this year is Wondershop, sort of shop within a shop that specializes in Christmas decorations. The company has also developed Wonderlist, which it says is a tool to find gifts for family and friends.

For children, Target says it will feature about 1,000 new items from the recently introduced Cat & Jack line, with price tags under $30. There will be more than 1,800 new or exclusive toys, an increase of about 15% over 2015.

Preparing for a burst in virtual reality popularity, Target says it will feature newly released VR products, including PlayStation VR and VR One Plus.

Frowning on Thanksgiving openings

Target is among the major retailers that have not yet announced plans for Thanksgiving Day. While a large number of stores plan to remain closed the day before Black Friday, Target is among the retailers expected to try to get a jump on holiday spending.

Shopping site BestBlackFriday.com is out with a survey of consumers that shows an overwhelming number prefer stores to close Thanksgiving Day and give employees the holiday off. Its survey shows only 8.18% of consumers “strongly favor” a store being open Thanksgiving Day, while 37.72% “strongly dislike” the idea.

“The vast majority of the population does not view the practice of stores dragging their employees and shoppers out of their homes on Turkey Day in a positive light,” the authors write.

Even so, the site suggests plenty of consumers will shop on Thanksgiving, most likely ordering things online rather than going to stores.

Calls from debt collectors are always unpleasant. But when the calls are trying to collect so-called “zombie debt,” they can be downright scary.

"As the name suggests, zombie debt is debt that you thought was dead, but has come back to life," said Katie Bossler, a GreenPath financial wellness expert.

To be more precise, zombie debt is money you really don't owe. It may be that you have already paid the debt, but it didn't get recorded. It may be the debt is so old it has passed the statute of limitations and can't be legally collected. Or it could be that the debt never belonged to you, and it's a case of mistaken identity.

Law gives you rights

Sadly, the debt collectors who are trying to collect the money are unlikely to be sympathetic to your protests that you don't owe the money. In fairness to them, they've heard it all before. But the law requires them to respect your rights and, if they fail to do so, they can be held accountable. To do that, you need to know your rights.

Consumer rights in this area are spelled out under the Fair Debt Collection Practices Act. If you are contacted about a debt you think you do not owe, the law allows you to demand to see written verification of the debt. The debt collector must send that to you within five days after first contacting you.

This validation notice must include the name of the creditor and instructions on how to proceed if you don't believe you owe the debt.

If you send the debt collector a letter saying you don’t owe the debt, the collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. The only way a collector can legally begin contacting you again is by sending you written verification of the debt, like a copy of a bill for the amount you owe.

What to do

If you are contacted about what you think could be zombie debt, consult your records to see if you can prove it has been paid. Pull your credit report to see if it is still being reported to the credit bureaus.

Demand to see written proof that you owe the debt. If you need a guide for writing the letter to the debt collector, use these samples from the Consumer Financial Protection Bureau. If it's a real debt but you think it is past the statute of limitations, consult a lawyer or legal aid society on how to respond.

Even during the Halloween season, there is no reason to be spooked by zombie debt.

Following a move -- albeit small -- to higher ground the previous week, mortgage applications posted a decline of 4.1% in the week ending October 21.

The Mortgage Bankers Association also reports the Refinance Index dropped 2% from the previous week, although the refinance share of mortgage activity increased to 62.7% of total applications from 61.5% a week earlier.

The adjustable-rate mortgage (ARM) share of activity came in at 4.2% of total applications, the FHA share inched down to 11.1% from 11.3% the week prior, the VA share was 12.2%, and the USDA share of total applications was unchanged at 0.7%.

Contract interest rates

• The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) dipped two basis points -- from 3.73% to 3.71% -- with points increasing to 0.37 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) slipped to 3.71% from 3.72%, with points increasing to 0.35 from 0.29 (including the origination fee) for 80% LTV loans. The effective rate remained unchanged from last week.
• The average contract interest rate for 30-year FRMs backed by the FHA rose two basis points to 3.56%, 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 15-year FRMs went down to 3.01% from 3.03%, with points increasing to 0.28 from 0.27 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
• The average contract interest rate for 5/1 ARMs dropped four basis points to 2.93%, with points decreasing to 0.32 from 0.41 (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.

Fiddle Diddles of Maple Grove, Minn., is recalling about 250 LullaBelay car seat strap systems.

The carabiners attached to the strap system contain small internal parts that can become dislodged, posing a choking hazard to young children.

No incidents or injuries have been reported.

This recall involves Fiddle Diddles LullaBelay adjustable car seat strap system with model number LB1001. The strap system includes two fabric straps, carabiner hardware, a mesh car seat cover and a tote bag. The carabiners are used to hang a car seat from a shopping cart.

The model number is printed on the gray straps. “Fiddle Diddles” is printed on a fabric label attached to the mesh car seat cover, tote bag and fabric straps.

The strap system, manufactured in China, was sold online at Amazon.com from November 2015, through June 2016, Fiddlediddles.com from May 2015, through June 2015, and at Zoolikins stores in Arizona from November 2015, through June 2016, for about $40.

What to do

Consumers should immediately stop using the LullaBelay strap system and contact Fiddle Diddles for a free repair kit with three new carabiners. The firm is contacting all known purchasers directly.

Consumers may contact Fiddle Diddles toll-free at 888-741-2957 from 9 a.m. to 5 p.m. (CT) Monday through Friday, by email at info@fiddlediddles.com or online at www.fiddlediddles.com and click on “Product Recall” at the bottom of the page for more information.

A federal court judge today approved the $15 billion settlement between Volkswagen and consumers who owned or leased a Volkswagen or Audi 2.0-liter TDI "clean diesel" car. It's the largest consumer class action settlement in U.S. history.

In most cases the owners of VW and Audi diesel cars fitted with illegal emissions defeat devices will receive between $12,500 and $44,000 each, depending on the model, year, mileage, and trim of the car, as well as where the owner lives.

The Federal Trade Commission today issued a new consumer blog post, VW Buybacks and Lease Terminations to Begin, which provides background information on the settlement order, along with detailed instructions for affected owners regarding how and where to file a claim, and the claim-processing timetable. It also tells consumers how and where they can pick up their buyback check, specifying that the checks do not have to be used to buy a new Volkswagen.

“The settlement in its current form is fair, adequate, and reasonable and is in the best interest of Class Members. Benefits under the Settlement shall immediately be made available to Class Members,” Judge Charles R. Breyer said.

The settlement offers eligible VW owners and lessees the option of a buyback, to have their car fixed, or the option to wait and see what each owner believes is best for their situation.

Starting today, Volkswagen will begin processing claims so that consumers can participate in the settlement program and receive compensation. The compensation is free of attorneys’ fees and taxes and also takes into account insurance paid for the affected vehicles.

Buybacks and lease terminations should begin in November. It's not yet known when or if federal and state agencies will approve a modification that brings the cars into compliance with emission standards. The settlement provides that if a modification is not approved by the court and environmental agencies after 12 months, VW must buy back the vehicles. 

Consumer options

“This settlement is all about giving the consumer options while ensuring Volkswagen does its part to remedy its harm to the environment as well as fairly compensate those impacted,” said Joe Rice, a South Carolina attorney who was one of the lawyers negotiating the settlement. “Speed was critical in developing these options. ... The faster we are able to help consumers get the assistance they need, the better job we have done on their behalf."

A resolution must still be reached for consumers who bought or leased a 3.0-liter diesel-powered VW, Audi, or Porsche. 

The total settlement is $14.7 billion dollars, with $10 billion allocated for consumers and $4.7 billion for environmental restitution.

More action needed

While applauding the settlement, some critics said more needs to be done.

“It is great news that VW diesel owners can now be reimbursed, and that Volkswagen must begin to repair the environmental damage their emissions deception caused," said Center for Auto Safety staff attorney Michael Brooks but he said criminal charges are needed to get industry's attention.

"Automakers will not change their illegal behavior unless the government pursues significant criminal penalties against executives who take or condone such actions.  We look forward to news of federal criminal charges against the VW executives who participated in this fraud on the American public,” Brooks said.

Safe Climate Campaign Director Dan Becker said the government "did a good job preventing further harm from VW’s diesel fraud."

"Most heavily polluting diesels will be removed from the road and cannot be resold unless fixed. Other automakers must learn from this scandal that they dare not disable pollution controls, lie to the government or fleece consumers. Those lessons will be reinforced when the government brings criminal charges against VW officals who perpetrated this fraud,” Becker said.

In recent years, education in the U.S. has focused increasingly on academic performance, even at the lowest grade levels. While arguments can be made for and against such a shift, it has undoubtedly reduced the attention that our educational system spares on social and emotional development.

This can be a bad thing for some children entering school who, researchers say, are already not ready to start their formal education. In a recent study, researchers from Michigan State University found that children between the ages of 3 and 7 develop very differently when it comes to emotional self-regulation – or the ability to control one’s own emotions and behavior.

They add that schools that foster this kind of development in young students can set them up for future academic success by making them more prepared for the rigors of a classroom setting.

"If you can help children to develop this fundamental skill of behavioral self-regulation, it will allow these students to get so much more out of education," said Ryan Bowles, associate professor in MSU's Department of Human Development and Family Studies. "Self-regulation is very predictive of academic success."

Developing differently

For the purposes of the study, Bowles and his colleagues analyzed data from three separate studies in which young children were asked to perform the “Head, Toes, Knees and Shoulders” task. The game is designed to have children do the opposite of what they’re told – so, for example, if the leader says to touch your head, children should respond by touching their toes.

The task is designed to test self-regulation, since children must constantly be mindful of what they’re doing. The researchers noticed consistent findings throughout all three studies and could place children into one of three trajectories: early developers, intermediate developers, and later developers.

Later developers were generally found to be 6-12 months behind intermediate developers and at least 18 months behind early developers when it came to self-regulation. Perhaps most importantly, the researchers found that around 20% of the 1,386 participants were unable to make up ground when it came to self-regulation in preschool. This, they say, can mean a lot when it comes to mapping out future academic success and deciding when a child should start school.

"It's well known that self-regulation is crucial to helping kids get an early jump on education, from math to literacy -- really all the skills they learn in school. So the kids that develop later are really missing out on these great opportunities. They're already behind,” said Bowles.

The full study has been published in the journal Developmental Psychology.

Taking a page from Walmart's "falling prices" slogan, AT&T says its streaming TV package, DirecTV Now, will cost just $35 a month for 100 channels when it hits the marketplace this fall.

The $35 includes not only streaming to your home via internet but also unlimited mobile streaming, according to AT&T CEO Randall Stephenson, who made the announcement at The Wall Street Journal's digital conference today.

Besides adopting Walmart's slogan, AT&T is also in tune with Federal Communications Commision Chairman Tom Wheeler's drive to eliminate cable boxes. DirecTV Now will need nothing but a smartphone using AT&T or a home internet connection -- no cable box or satellite dish. No annual contract either, Stephenson said.

The company is targeting the 20 million or so U.S. consumers who don't have pay TV but, according to Bloomberg, is aiming to be the primary TV platform by 2020.

The $35 undercuts current industry norms for streaming video. Sling TV currently charges $20 for 25 channels while Sony's PlayStation Vue charges $54.99 for about 100 channels. 

Stephenson said that, long term, he expects the company's 5G network to be the primary delivery channel for streaming video. One AT&T executive called it "TV as an app."

As part of its new guidelines for children’s media use, the AAP recently recommended that parents of young children limit screen time to one hour per day. In addition, the group recommended that programming be of a high-quality and educational nature.

The durable device -- which is slated to make its debut November 6 at Best Buy, Walmart.com, and Shop.pbskids.org -- will come preloaded with several dozen games, more than 120 video clips, music videos, and 100 hours of video via the PBS Kids Video App.

Educational content

In a statement, Lesli Rotenberg, senior vice president and general manager of PBS’ children’s media operations, said the Playtime Pad pairs with PBS’ mission to help kids reach their potential.

Other features

The 16-GB device will also include a front-and-back camera, coloring app, and the PBS Kids Scratch Jr. app, which aims to help kids learn coding concepts.