Current Events in November 2016

The holiday shopping season officially kicked off this past weekend with Black Friday, and consumers are scrambling to pick up the goods they want. One popular kind of gift this year will be a gift of experience, like tickets to a concert, play, or sporting event.

Unfortunately, demand for tickets far outweighs supply most of the time, so it’s up to consumers to try and grab them as soon as they become available online. However, many buyers often walk away with nothing because the tickets seem to magically disappear within minutes or even seconds.

While slow internet speeds or bad luck can play a factor, one reason for the lack of available tickets has been the existence of ticket bots -- software used by scalpers that manipulates sales systems to buy up as many tickets as possible. Then, after all the available tickets are gone, they sell them at ridiculously inflated prices to desperate consumers.

However, the practice may become less common thanks to a new law signed by New York Governor Andrew Cuomo. Previously, state laws had banned the use of ticket bots and imposed civil penalties on violators, but now the use or control of ticket bots, or reselling tickets knowingly obtained by ticket bots, is a class A misdemeanor.

The classification change means harsher penalties for those who break the law. Violators can now expect exorbitant fines or even jail time if they’re caught using or knowingly benefitting from the software. The definition of a “ticket bot” has also been expanded under the new law to mean any system, whether autonomous or human-controlled, used to quickly buy up tickets before the general public has access to them.

Predatory and wrong

Ticket bots have long-been abhorred by performers in New York. Back in June, Lin-Manuel Miranda – creator and original lead of the Broadway hit Hamilton – railed against users of ticket bots and how the profited from his show; The New York Times reported that scalpers made around $15.5 million from reselling tickets to Miranda’s last 100 shows before stepping down from his role as the titular character.

“My concern is that our show is about the founding of our country and if bots are buying up all the tickets and charging this insane secondary market price, most of the country can’t see it,” he said.

Gov. Cuomo agreed with the sentiment in a recent statement, saying that “these unscrupulous speculators and their underhanded tactics have manipulated the marketplace and often leave New Yorkers and visitors alike with little choice but to buy tickets on the secondary market at an exorbitant mark-up.”

“It’s predatory, it’s wrong and, with this legislation, we are taking an important step towards restoring fairness and equity back to this multi-billion dollar industry.”

Millennials who don’t have their hearts set on home ownership quite yet may be looking to rent for just a little while longer, and many may be settling into a multi-family dwelling. So what are these consumers looking for in an apartment?

To find out, Schlage recently polled 1,000 U.S. renters in multi-family dwellings. Their findings revealed two key trends: a desire for tech upgrades and the integration of next-generation access control features.

Willing to pay more

These findings are significant, considering nearly half of renters in multi-family dwellings are expected to rent an apartment for the next five or more years, Schlage noted.

• 55% of Millennials are likely to pay more for an apartment that has high-tech door locks compared to ones that did not.
• 20% of Millennials would pay more per month for a smart apartment. On average, they would be willing to pay about a fifth more for smart home features.
• 44% of Millennials would give up a parking space to live in a “high tech” apartment.

Smart home trends

While smart home systems are currently highly sought after by Millennial renters, features such as keyless entry are likely to become commonplace in the not-too-distant future. 

Respondents also believe that smart apartment apps are on the horizon. Sixty-three percent agreed that in 10 years apartments will need to offer all renters smart apartment apps.

The OPEC oil cartel members, meeting in Vienna, have agreed to production limits in an effort to push the price of oil higher.

The markets reacted immediately, with the price of crude jumping more than 6.5% to $48.22 a barrel in early trading in New York.

Two years ago, OPEC member Saudi Arabia launched a huge increase in production in an effort to drive down the price of oil. It took that self-defeating action to try to drive American shale oil producers out of business and regain market share.

It was partly successful but caused major economic distress for many other oil producers, such as Venezuela, Russia, and Nigeria. The Saudis, who are bearing the brunt of the production curbs, were forced to act as Iranian oil, blocked for years by sanctions, has begun flowing back onto the market.

It's been good for consumers

While U.S. oil producers have suffered over the last two years, consumers have enjoyed reasonable gasoline prices. Adjusted for inflation, today's national average price is less than it was 50 years ago.

The question consumers may be asking is what OPEC's agreement does to the price at the pump. Patrick DeHaan, senior petroleum analyst at GasBuddy, says consumers should expect to see a jolt at the pump in the short term.

“There’s been a lot of hype about OPEC’s possible cut, and they had to act on their threats,” DeHaan told ConsumerAffairs. “Expect no sub-$2 a gallon national average if the deal holds.”

Currently, the AAA Fuel Gauge Survey shows the national average price of self-serve regular has ticked up two cents from Tuesday, to $2.15 a gallon. That's more than 11 cents a gallon higher than a year ago.

Long-term outlook brighter

But long-term, DeHaan says the outlook for gasoline prices may be brighter for motorists. If the markets begin to doubt that OPEC members will abide by the agreement – and their history in that area is pretty checkered – then oil prices could begin to drift lower again.

“International Energy Agency (IEA) data will be paramount to see if OPEC is acting on the cut, which I suspect they will not,” DeHaan said. “Too much was on the line here, this agreement is held together by knock off scotch tape. Just one member ignoring quotas is enough to throw the integrity of it all away.”

DeHaan says he expects few OPEC members will actually abide by their quotas. If that's the case, consumers could see only moderate increases in fuel prices in the second half of next year, if they see them at all.

Consumers take drugs and supplements to promote health, but some common pills that might be in your medicine cabinet could cause serious liver damage if taken in the wrong dose and combinations.

A new article published in the American Association of Critical-Care Nurses (AACN) journal says as many as 1,000 medicines could pose a threat of drug-induced liver injury (DILI). The authors say the injuries are rare and are dose-dependent or the result of an adverse reaction to a medication, dietary supplement, or other substance.

Doctors have a hard time diagnosing it, but without a timely response the patient could suffer acute liver failure or even death.

The authors say about 46% of the acute liver failure in the United States caused by a drug is associated with acetaminophen, making it the most common cause of DILI. Health researchers have long warned of the dangers of overdosing on this drug.

Previous concerns

Over the years, ConsumerAffairs has reported extensively on the concerns about this drug, which is the active ingredient in both over-the-counter and prescription paid medications, including Tylenol. Because it is in so many drug products, it is easy to overdose if you are taking multiple medications.

But acetaminophen is not alone in posing a danger to your liver. Some people might experience adverse reactions to NSAID pain relievers like ibuprofen and naproxen.

Also falling into that category are statins, proton pump inhibitors, novel anticoagulants, and antibiotics and antiviral agencies, such as amoxicillin-clavulanate, sulfamethoxazole-trimethoprim and nitrofurantoin.

Because the liver helps remove toxins, the authors say it is especially vulnerable to injury from either short-term intake above recommended levels or long-term usage that allows toxins to build up. They say it is important for healthcare providers to recognize the clinical signs and symptoms and provide prompt treatment.

While liver disease can be hereditary, it is often caused by things we do to it. In addition to taking too much medication, excessive alcohol consumption and obesity are leading causes of liver failure.

More jobs in the goods-producing sector disappeared in November, but thanks to a big jump in the number of new positions in the services sector, it was a strong month for job creation.

According to the ADP National Employment Report, private sector employment increased by 216,000 jobs from October to November.

Gainers and losers

Goods-producing firms took a huge hit during the month, losing 11,000 jobs. Manufacturing was the biggest contributor ( -10,000 jobs), along with Natural resources and mining (-4,000). Construction, however, added 2,000 payroll positions.

Those losses, though, were offset by creation of 228,000 jobs by service-providing companies. The gains were led by trade/transportation/utilities (+69,000), professional/business services (+68,000), and administrative/support services (+47,000). The information industry lost 10,000 workers.

"Businesses hired aggressively in November and there is little evidence that the uncertainty surrounding the presidential election dampened hiring,” said Moody's Analytics chief economist Mark Zandi. “In addition, because of the tightening labor market, retailers may be accelerating seasonal hiring to secure an adequate workforce to meet holiday demand, although total expected seasonal hiring may be no higher than last year's."

Large businesses were the biggest job creators, adding 90,000 new payroll positions -- most of them (76,000) by companies with more than 1,000 employees. That was closely followed by medium-sized businesses, which added 89,000 workers and small businesses with 37,000 hires.

"This growth was seen in primarily consumer-driven industries like retail and leisure and hospitality -- across all company sizes,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “Overall, consumers are feeling confident and are driving the strong performance we currently see in the job market."

The report, produced in collaboration with Moody's Analytics, is derived from ADP's actual payroll data and measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

After a strong increase a week earlier, mortgage applications were on the decline last week.

The Mortgage Bankers Association reports applications fell 9.4% in the week ending November 25, which includes an adjustment for the Thanksgiving holiday.

The Refinance Index plunged 16% from the previous week, taking the refinance share of mortgage activity down to 55.1% of total applications -- the lowest level since June.

The adjustable-rate mortgage (ARM) share of activity, on the other hand, rose to 5.7% of total applications -- its highest level since June. The average loan size for purchase applications reached a survey high at $312,400.

The FHA share of total applications dipped to 10.4% from 11.7% a week earlier, the VA share dropped .8% to 11.7%, and the USDA share of total applications was unchanged at 0.8%.

Contract interest rates

• The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) rose seven basis points -- from 4.16% to 4.23%, its highest level since July of last year, with points increasing to 0.41 from 0.39 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate increased from last week.
• The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) shot up from 4.04% to 4.18%, its highest level since July 2015, with points decreasing to 0.29 from 0.37 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
• The average contract interest rate for 30-year FRMs backed by the FHA increased to its highest level since July 2015 with a ten basis point-increase to 4.00%, with points increasing to 0.44 from 0.36 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
• The average contract interest rate for 15-year fixed-rate mortgages jumped from 3.35% to 3.48% -- its highest level in 25 months, with points increasing to 0.33 from 0.32 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.
• The average contract interest rate for 5/1 ARMs slipped to 3.23% from 3.24%, with points increasing to 0.44 from 0.28 (including the origination fee) for 80% LTV loans. The effective rate increased from last week.

The survey covers over 75% of all U.S. retail residential mortgage applications.

Home prices in September continued their rise across the country over the last 12 months.

According to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, the National index was up 5.5% on a year-over-year basis.

The 10-City Composite jumped 4.3%, while the 20-City Composite was up 5.1%.

Seattle, Portland, and Denver enjoyed the highest year-over-year gains among the 20 cities over each of the last eight months. Seattle led the way with an 11.0% year-over-year increase, followed by Portland at 10.9% and Denver with an 8.7% advance.

In all, 12 cities reported greater price increases in the year ending September 2016 versus the year ending August 2016.

“The new peak set by the S&P Case-Shiller CoreLogic National Index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “While seven of the 20 cities previously reached new post-recession peaks, those that experienced the biggest booms – Miami, Tampa, Phoenix, and Las Vegas -- remain well below their all-time highs.”

Month-over-month

Before seasonal adjustment, on a month-over-month basis, the National Index posted a September gain of 0.4%, with both the 10-City Composite and the 20-City Composite up 0.1%.

After seasonal adjustment, the National Index rose 0.8%, the 10-City Composite was up 0.2%, and the 20-City Composite advanced 0.4%.

Fifteen of 20 cities reported increases in September before seasonal adjustment; after seasonal adjustment, all 20 cities saw prices rise.

Blitzer said the market is showing several positive signals, including a rise in sales of existing and new homes and new-home construction at a post-recession peak.

“We adamantly oppose this pipeline going through our farm,” says a letter signed by Francis and Janice Goebel, “as there are no guarantees it will never have leaks or other environmental problems. This only benefits ETP,” or Energy Transfer Partners, the company behind the controversial Dakota Access Pipeline, “and not me, my wife or any public purpose.”

Before the Standing Rock Sioux Tribe in North Dakota began its months-long, public standoff with Energy Transfer Partners and the Morton County Sheriff’s department over the Dakota Access Pipeline, saying that the project put their water supply at risk and that they weren't properly consulted, landowners, environmental scientists, and agricultural experts in Iowa voiced similar concerns about the project.

The Goebel family, like other Iowa landowners in the path of the Dakota Access Pipeline, wrote letters to the Iowa Utilities Board in July 2015 urging the agency to reject necessary permits there for the project. “Our century-plus-old farm was taken care of for four generations and I will do my best to keep it that way,” they wrote in their objection.

Some of the landowners describe being threatened by Energy Transfer Partners with eminent domain, even before the Iowa Utilities Board granted its approval for the pipeline. “The piece of land on my farm which Bakken wishes to condemn has been in our family for over 80 years,” Herman Rook wrote to the Iowa Utilities Board.

“Iowa’s soil is an irreplaceable resource that should not be subject to irreversible damage from the construction of a pipeline and potential spills after the pipeline would be in use...Use of eminent domain for a pipeline is unfair,” says another letter, signed by Catherine Scott. And Iowan farmers Sandra Renegar and Candace Chesney, whose land is also in the path of the pipeline, wrote to the state utility agency that they had been given no information about the project and wouldn’t have “unless we had shown initiative to seek it ourselves.”

Researchers and scientists give warning

Several months later, in October 2015, the Iowa Utilities Board held a hearing to determine whether they should grant the permits to Energy Transfer Partners. Testimony from experts in land and the environment suggests that the local farmers' concerns weren’t unfounded.

Dr. Erwin Klaas, an ecology professor at Iowa State University who used to work for the United States Department of Interior and then served on his county’s soil conversation district, told the Iowa Utilities Board that pipeline construction “will immediately and directly affect more than 6,200 acres of land in Iowa, most of it prime agricultural land.”

Klaas also told the board, according to hearing transcripts, that “construction will remove three soil horizons that will be impossible to restore to its original productivity." The temperature of the oil in the pipeline may prevent farmers' soil from freezing, he added,“which would subject the land to erosion.”

Dr. James Hansen, the prominent climate scientist formerly at NASA and currently at Columbia University, who once described the Keystone Pipeline XL Pipeline as “game over” for the planet, testified in his home state that the impacts of this pipeline would spread much further than the borders of Iowa.

While Hansen’s research has already suggested that humans have pumped too much carbon into the atmosphere to prevent climate change, he testified to the Iowa Utilities Board that much of the damage can still be stopped: “Restoration of our climate system, and thus, protection of our children’s future, is still possible if we act with reason, courage, and no further delay."

Short on details

The immediate environmental impacts of the pipeline construction on Iowan land, according to the experts who testified against it last year, are also unclear because Energy Transfer Partners’ studies were short on details, they said. Dr. John Doershuk, Iowa’s State Archaeologist, said that Energy Transfer Partners never consulted with him before seeking permits for the project, and he described their archeological investigations on the route as “woefully inadequate.”

Doershuk, as well as Hansen, Klaas and six other experts provided their testimony against the Dakota Access Pipeline on behalf of Sierra Club’s Iowa chapter, which unsuccessfully organized a campaign to stop the project.

In June of this year, despite the objections from landowners and experts, the Iowa Utilities Board gave Energy Transfer Partners the go-ahead to begin pipeline construction on all state land outside the jurisdiction of the US Army Corps of Engineers, which regulates most of the pipeline's route and has already granted approval for much of the project. The utilities board was not swayed by the expert opinions testifying on Sierra Club’s behalf. “No, just the opposite,” Wily Taylor, the Chair of Sierra Club’s Iowa chapter, tells ConsumerAffairs.

Pipeline gains ground

By September, Energy Transfer Partners announced that the entire Dakota Access Pipeline project was already 60 percent complete. The 1,172 mile pipeline is supposed to transfer crude oil from North Dakota’s Bakken oil fields to Illinois, and is crossing South Dakota and Iowa along the way.

“I am proud of our work on Dakota Access,” CEO Kelcy Warren said in a letter to shareholders at the time, as controversies at the Standing Rock Sioux reservation in North Dakota began attracting national attention. “We have designed the state-of-the-art Dakota Access pipeline as a safer and more efficient method of transporting crude oil than the alternatives being used today, namely rail and truck.” (Spokespeople for the Energy Transfer Partners have not returned a recent interview request).

To be sure, reports and studies do suggest that transporting crude oil via pipeline is safer than rail or truck, where accidents can create lethal explosions. But environmentalists say that pipeline leaks are not uncommon and have more long-lasting consequences.

“Although an explosion from a rail car is more dramatic, the damage is much less severe and is more restrictive in terms of area,” Pam Mackey-Taylor of Sierra Club Iowa tells ConsumerAffairs. Regardless, Sierra Club's goal is to curb fossil fuel dependency all-together, they say, rather than propose alternative methods to transport oil.

Feds threaten protesters with eviction

On December 4, military veterans plan to arrive at the protest camps in North Dakota to defend the water protectors, as the protesters on the reservation call themselves. The Army Corps of Engineers, coincidentally or not, announced last week that they would evacuate the main protest camp on December 5 and set up a “free speech zone” further from the construction area.

But the federal agencies that have allowed the pipeline to cross through four states have also lent some timid approval to the protesters in recent months. The Corps of Engineers announced on November 14 that they would temporarily halt planned pipeline construction under Lake Oahe, a source of water for the Sioux and now the site of intense protests.

That follows an announcement President Barack Obama made this year that he would ask Energy Transfer Partners to "voluntarily" halt construction on federal land near Lake Oahe, which connects to the Missouri River through the Oahe Dam.

Whether Energy Transfer Partners has followed that request is unclear. The Corps only says that they expect the pipeline company to follow all federal laws. “The pipeline company has not been granted the easement that is required before any horizontal drilling beneath USACE [United States Army Corps of Engineers]-managed federal lands at Lake Oahe can begin,” Corps spokesperson Moira Kelley tells ConsumerAffairs via email.

“The easement necessary for the pipeline to cross USACE-managed federal land at Lake Oahe is currently under review. We expect all parties involved to adhere to federal law. There is no timeline for this review period. A determination is expected in the near future.”

U.S. health officials have become increasingly worried about the Zika virus over the past year. The disease, which can cause serious birth defects if contracted by pregnant women, has affected tens of thousands in Puerto Rico and South America.

Attempts to keep the virus out of the U.S. mainland have been vigorous, but experts have said for some time that mosquitoes that carry the disease will inevitably find their way here. Cases of Zika infection began popping up in Florida back in July, and now Texas has reported its first case of Zika virus that is likely transmitted by a mosquito.

“We knew it was only a matter of time before we saw a Zika case spread by a mosquito in Texas. We still don’t believe the virus will become widespread in Texas, but there could be more cases, so people need to protect themselves from mosquito bites, especially in parts of the state that stay relatively warm in the fall and winter,” said Dr. John Hellerstedt, commissioner of the Texas Department of State Health Services (DSHS).

Searching for the infection site

The patient who contracted the disease is from Cameron County in the southernmost part of Texas. She was confirmed to have the disease last week via lab test, but she is not pregnant. She reports that she has not visited any area with an ongoing Zika transmission problem and has not been susceptible to other risk factors, so officials believe the most likely cause is from a mosquito bite.

Luckily, the virus was found in her urine and not her blood, which means that it cannot be spread if she is bitten by another mosquito. However, the Texas Department of State Health Services and the Cameron County Department of Health and Human Services have stated that further tests will need to be conducted before they can pinpoint the location where the infection occurred.

Currently, researchers are trapping and testing mosquitoes around the patient’s home in Brownsville. The city is currently taking steps to reduce the mosquito population, and DSHS and Cameron County officials are going door-to-door to educate citizens about Zika and reduce potential breeding zones for mosquitoes.

Taking precautions

As we’ve previously reported, Zika virus can often be mistaken for the cold or flu because of similar symptoms, which include fever, joint pain, rash, and eye redness. Though the disease is usually passed through a mosquito bite, transmission can also occur through contact with infected blood or sex. There are currently cases of Zika infection all over the U.S., but they have been connected to travel in infected areas and sexual contact. 

Health officials have cautioned that travel to Mexico should be avoided due to reports that several communities are struggling with Zika transmission. They suggest taking several precautions to reduce your risk of contracting the virus, including:

• Using EPA-approved insect repellent;
• Wearing long pants and long-sleeved shirts that cover exposed skin;
• Using air conditioning or window and door screens that are in good repair to keep mosquitoes out of the home;
• and removing standing water in and around homes, including water in trash cans, toys, tires, flower pots, and any other container that can hold water.

DSHS is asking all medical professionals to keep Zika virus in mind when diagnosing patients with similar symptoms. Testing pregnant women who live in high-risk areas has also been suggested. For more information on the Zika virus visit the CDC’s site here, and get further information on how the disease is affecting Texas here.

AT&T is offering three video streaming services, making use of new and existing content tie-ins. On November 30 is will begin marketing DIRECTV NOW.

The telecom provider sees a lucrative market of consumers who have cut the cable TV cord, or who are thinking about it.

“We’re extending our entertainment portfolio for those who value premium content but also want more TV freedom suited for their lifestyle, whether watching at home or on their mobile devices. This is TV your way,” said John Stankey, CEO, AT&T Entertainment Group.

Stankey says the services are built around AT&T's mobile platform. He says once you sign up for either DIRECTV NOW or Fullscreen, you can stream video content using a variety of mobile devices without set-top-boxes, satellite dishes, or annual contracts.

Won't count against data allowance

The services are also designed to promote the company's main product. AT&T Mobility customers will not use their allotted data when watching DIRECTV NOW or FreeVIEW in the App. Neither will Fullscreen users if they stream in the Fullscreen App on the AT&T network.

DIRECTV NOW is a collection of four television packages of current DIRECTV content, including live sports, on demand, cable networks, and premium channels.

The company says the DIRECTV NOW service will be compatible with most mobile devices and platforms, as well as Amazon Fire TV and Fire TV Stick; Chromecast (Android at launch; iOS in 2017); Google Cast-enabled LeEco ecotvs and VIZIO SmartCast Displays; and Internet Explorer, Chrome, and Safari web browsers.

More devices next year

AT&T says it plans to add more devices next year, including Roku streaming players and Roku TV models, Amazon Fire tablets, and Smart TVs.

The Fullscreen video service launched earlier this year at $5.99 a month. It provides more than 1,500 hours of on-demand programming, including original productions.

FreeVIEW is a free, ad-supported video service. It offers programming from AUDIENCE Network, Otter Media properties, and other channels on DIRECTV NOW.

AT&T's new video services will compete with Dish Network's Sling TV and Sony's Playstation Vue, but Business Insider suggests it could raise a controversial Net Neutrality topic. It will have an advantage over its competitors, in that it is also an internet service provider (ISP) that can choose whether or not to make video streaming count against data allowances.

It's not just teenagers who spend their days texting. Sending short text messages over a mobile device has become the preferred way to communicate, even at work.

Texting is also being pushed on businesses, with the argument that it's the most effective way to communicate with customers and employees.

Maybe sending general marketing information to customers via text is something to consider, but TeleMessage, which provides secure messaging systems for businesses, warns that transmitting sensitive business information via text is inherently risky.

It even says using consumer chat apps like WhatsApp and iMessage for business purposes can be playing with fire. Yet, it cites surveys showing nearly all employees are using their smartphones to transmit work-related information.

TeleMessage says the most common threat is an employee losing his or her smartphone. When that happens, it says 68% of victims never recover their phones. The person who finds it then has access to the text messages sent and received on the device.

Phones can be hacked

Beyond lost or stolen phones, there's concern about hacks. TeleMessage says it only takes one text to hack 950 million android phones. It says one Android flaw produced six critical vulnerabilities on 95% of Android devices.

As employees are embracing consumer messaging apps, IT administrators are increasingly concerned about employees downloading the latest popular messaging app and using it to send and receive the company's latest sales figures and other information that shouldn't fall into the wrong hands.

Other reasons

The technology website ZDNet agrees that employees should avoid texting for business purposes, arguing email is always a preferred way to communicate.

But ZDNet doesn't cite security concerns as a reason for not using texts for work-related communication. It points out that texts tend to be viewed as more casual, and there is the risk an employee won't give information transmitted in a text the attention it deserves.

It points out email provides a more business-like platform and leaves a more robust paper trail in the event of litigation.

High-flying human resources and insurance start-up Zenefits has been hit with $7 million worth of penalties by California insurance regulators who accused it of allowing unlicensed employees to sell insurance. Half of the amount was suspended, pending continued compliance with state regulations.

San Francisco-based Zenefits has previously settled investigations with Tennessee, Arizona, and Minnesota, paying much smaller fines in the tens of thousands of dollars.

"Businesses and consumers should have confidence that anyone selling insurance to them in California is doing so in compliance with our consumer protection laws," said Insurance Commissioner Dave Jones. "Our enforcement action has resulted in Zenefits paying substantial monetary penalties for their licensing violations and ensures Zenefits complies with all of California's insurance laws and regulations or they will face additional automatic penalties and sanctions."

It's one of the largest penalties for licensing violations ever assessed in the department's history, Jones said.

Zenefits said it was pleased with the settlement and said it now has a "clean bill of health" from California and 16 other states.

Software as a service

A 2013 start-up, Zenefits is a San Francisco based company whose business model was to provide online HR services to businesses and then encourage those same businesses to use Zenefits as an insurance broker. 

Zenefits sees itself as a software-as-a-service company, providing software that automates much of the tedious work involved in human resources and employee benefits operations. The California investigation centered around a piece of software that enabled Zenefits staff to complete prelicensing coursework in less than the amount of time required by the state, which tightly regulates insurance sales.

Regulators opened an investigation in 2015, after receiving complaints that Zenefits employees were transacting insurance sales without a license. Shortly after the investigation began, the company announced publicly that it was not complying with insurance laws and regulations, which was followed by the resignation of Zenefits CEO, Parker Conrad.

"In California, we value innovation and new business models, including Internet based start-ups, but we also insist that consumer protections laws are followed," said Jones. "Zenefits is an example of an Internet based start-up whose former leaders created a culture where important consumer protection laws were broken -- a bad strategy that placed the company at risk and that other start-ups should not follow given our strong consumer protection laws and the Department of Insurance's rigorous enforcement of those laws."

Half of the penalty was suspended, pending Zenefits' continued compliance with licensing rules.

After posting a modest decline a month earlier, consumer confidence is up strongly in November.

According to The Conference Board, its Consumer Confidence Index now stands at 107.1, a gain of 6.3 points from October.

The Present Situation Index jumped 7.2 points to 130.3, while the Expectations Index went from 86.0 last month to 91.7.

The increase puts consumer confidence at pre-recession levels. “A more favorable assessment of current conditions coupled with a more optimistic short-term outlook helped boost confidence,” said Conference Board Director of Economic Indicators Lynn Franco.

“And while the majority of consumers were surveyed before the presidential election,” she points out, “it appears from the small sample of post-election responses that consumers’ optimism was not impacted by the outcome. With the holiday season upon us, a more confident consumer should be welcome news for retailers.”

How consumers see it

The assessment by consumers of current conditions improved in November. The percentage saying business conditions are “good” went from 26.5% to 29.2%, while those saying business conditions are “bad” fell from 17.3% to 14.8%.

Consumers’ appraisal of the labor market was moderately more positive than last month. The percentage of consumers who think jobs are “plentiful” increased from 25.3% to 26.9%, while those who believe they’re “hard to get” was unchanged at 21.7%.

Consumers’ short-term outlook -- on balance -- was more optimistic in November. The percentage who look for business conditions to improve over the next six months fell from 16.4% to 15.3%; however, those expecting them to worsen also fell -- from 11.8% to 10.0%.

Consumers’ outlook for the labor market was mixed as well. The proportion expecting more jobs in the months ahead was virtually unchanged at 14.5%, but those anticipating fewer jobs fell from 16.6% to 13.8%.

When it comes to income, the percentage looking for an increase -- 17.5% -- was little changed from last month, while the proportion expecting a drop fell from 10.2% to 9.0%.

The monthly Consumer Confidence Survey is conducted by Nielsen, a provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was November 15.

The government's second look at how the economy was doing in the third quarter is encouraging.

According to the Commerce Department, real gross domestic product (GDP) increased at an annual rate of 3.2% in the July-to-September period.

That's somewhat better than the rate of 2.9% reported in the “advance” estimate -- and a lot better than the 1.4% we saw in the second quarter of the year.

And it marks the first time the GDP growth rate has been above 3% since the third quarter of 2014.

Even with the increase, analysts say the general picture of economic growth remains the same. The advance was due to stronger consumption expenditures -- consumer spending -- than previously estimated.

The second estimate acceleration reflected an upturn in private inventory investment, an acceleration in exports, a pickup in federal government spending, and smaller decreases in state and local government spending and residential fixed investment.

An inflation measure tied to GDP -- the PCE price index -- was up 1.4%, compared with the previous 2.0% increase. When the volatile food and energy categories are removed, the gain is 1.7% versus an increase of 1.8%.

The increase in GDP gave a nice boost to corporate profits, which rose $133.8 billion in the third quarter, after falling $12.5 billion in the second.

The complete report may be found on the Commerce Department website.

Human Touch of California is recalling about 1,100 Perfect Chairs, model PC-610.

The chair’s joystick reclining mechanism can malfunction and allow the chair to continue moving, posing a fall hazard to consumers.

The firm has received one report of the chair’s joystick mechanism malfunctioning. No injuries have been reported.

This recall involves Human Touch’s Perfect Chair, model PC-610 with serial numbers between B613315034 and B614215154. The power reclining chair was sold in a walnut, dark walnut or chestnut wood finish base with a leather pad set that came in 33 different colors.

The chair measures about 43 inches long, 31 inches wide and 47 inches high and has a head pillow at the top and a joystick controller on the left armrest. The words “Human Touch” and “Perfect Chair” and the model and serial number can be found on the cross bar connecting the rear legs of the chair.

The chairs, manufactured in Thailand, were sold at furniture and specialty stores nationwide including Healthy Back, Human Touch, Relax in Comfort, Relax The Back and The Better Back Store and online at ebay.com and vitalityweb.com for between $3,000 and $3,500.

What to do

Consumers should immediately stop using the recalled chairs, and take them to the store where purchased for a full refund or contact Human Touch to receive a free repair kit (including shipping) or to arrange for free repair.

Consumers may contact Human Touch at 800-355-2762 from 6 a.m. to 5 p.m. (PT) Monday through Friday, by email at csadmin@humantouch.com or online at www.humantouch.com.