Current Events in May 2017

Uber drivers in New York City can look forward to an unexpected payday from the ride-sharing company after being shortchanged on fares for the last two-and-a-half years. The Wall Street Journal reports that Uber admitted to mistakenly underpaying drivers in the city after incorrectly calculating commissions.

In its nationwide driver agreement, Uber says that it takes 25% of drivers’ fares after any state taxes and fees are deducted. However, the company recently discovered that it was taking out commissions in New York City before deductions, resulting in less take-home pay for drivers. Officials said that Uber will be refunding all deprived funds plus interest.

“We made a mistake and we are committed to making it right by paying every driver every penny they are owed, plus interest, as quickly as possible,” said Rachel Holt, regional general manager of Uber in the U.S. and Canada. “We are working hard to regain driver trust, and that means being transparent, sticking to our word, and making the Uber experience better from end to end.”

$900 average refund

Uber’s calculation error results from not deducting New York’s sales tax and the local injury-compensation fund fee. So, assuming an estimated fare of $18, Uber took out $4.50 from each commission when it should have only been taking out $3.99 after deductions. That amounts to a 51-cent difference in driver take-home pay.

While the difference may not seem like too much on a per-fare basis, those numbers can really compound over time. Experts say that the average refund per driver should come out to around $900, a figure that will cost Uber close to $45 million based on a 50,000 driver estimate from the Independent Drivers Guild.

Uber said that drivers will be eligible for a refund regardless of whether they are currently active, as long as they have completed a trip since signing the 2014 agreement.

Troubled times

The discovery that it has been underpaying its drivers is the latest in a long line of problems that Uber has faced in recent months. Earlier this year, Uber refunded millions of dollars to drivers in Philadelphia after similarly finding that it had overcharged them on fares.

The company also recently settled a $20 million lawsuit with the FTC over exaggerating its earnings claims to new drivers, and current investigations are ongoing into charges of workplace sexual harassment, the use of software to hide illegal operations in certain cities, and whether the company stole trade secrets from Google in connection to self-driving car software.

On top of all that, Uber drivers have become vocal about what they call “a lack of communication” between themselves and the company, a problem that may only result in more problems and lawsuits in the future.

If you're like a lot of people, you may find it creepy that Google and other big advertising platforms follow you around the web, monitoring what pages you look at and tailoring ads that seem to meet your tastes.

If so, you'll likely find it even creepier that Google is now monitoring your activities offline. How? By using billions of credit-card transaction records to track what you buy when you're out and about in the real (as opposed to virtual) world.

It's not that Google is nosy. It's just trying to prove that its online ads actually work -- that they are prompting you and others to make purchases, even when they happen offline in brick-and-mortar stores. It's partly in response to a growing feeling that so-called "behavioral" advertising is consuming vast amounts of ad dollars -- $20 billion in the last quarter -- without much proven benefit.

It's being done by matching the combined ad clicks of people who are logged into Google services with their collective purchases on credit and debit cards. Google says it has access to roughly 70 percent of U.S. credit and debit card sales through partnerships with other companies that track that data. By matching ad clicks with this data, Google says it can accurately document to advertisers that their money was well spent.

Privacy advocates aren't likely to be enthused but Google executives insist they have built elaborate protections into the system to ensure that consumer information is not used improperly. 

When it comes to certain life and death circumstances, hospital patients are often left with little choice when it comes to the care they need to receive. For example, being put on a ventilator to maintain breathing function can be the only real option for someone who has been in a serious accident.

Unfortunately, using these devices often comes with a risk of its own. Experts say that blood clots, lung damage, and ventilator-associated pneumonia – one of the most pervasive and deadly hospital-acquired infections – are all too common. But a group of researchers from Johns Hopkins Armstrong Institute of Patient Safety say there are ways that consumers and medical staff can reduce the risks.

"These complications prolong the duration of mechanical ventilation, and they keep patients in the hospital longer," said Dr. Sean Berenholtz. "This, in turn, leads to higher complications, higher mortality, higher lengths of stay and higher costs. So decreasing these complications is a national priority and helps our patients recover sooner."

Reducing risks

In a study involving 56 ICUs at 38 hospitals in Maryland and Pennsylvania, researchers attempted to provide medical staff with the most recent and effective evidence-based therapies for protecting patients from ventilator-associated complications. The interventions included:

• Elevating the patient’s head in bed;
• Suctioning the patient’s mouth tube;
• Performing oral care, including tooth brushing and using chlorhexidine mouthwash;
• Performing spontaneous awakening and breathing trials by reducing narcotics and sedatives; and
• Implementing a five-step culture change intervention program focused on reducing harm to patients.

Over the two-year study period, the researchers found that these interventions drastically reduced ventilator-associated events in ICUs by 38%, with infection-related events dropping by over 50%. Cases of ventilator-associated pneumonia also dropped by an astonishing 78%.

Complications are preventable

The study findings give hope to patients and medical professionals, many of whom believed that these dangerous infections and events were unavoidable.

"When patients are sick, complications can happen, and, in some cases, health care-associated infections are thought to be inevitable. . . This is the largest study to date to show that these complications of mechanical ventilation, or ventilator associated events, are also preventable," said Berenholtz.

The full study has been published in Critical Care Medicine.

The Memorial Day weekend auto dealer ads will be chocked full of deals on new cars. And as we noted this week, some nice cars will probably go at steep discounts.

While they might not get the promotion of new car deals, bargains on late model used cars will be just as real, and might be a better fit for your budget. A new car might go for much less than its sticker price, but it will still be several thousand dollars more than a comparable three year-old model.

When it comes to late model used cars, automotive publisher Edmunds calls it "one of the strongest buyer's markets in recent memory." It reports a huge number of vehicles are coming off their three-year lease this spring, meaning there is a large selection of 2013 and 2014 models to choose from.

That suggests used car dealers are in the same boat as new car dealers -- too much supply and not enough demand. That normally results in lower prices and more incentives.

At the same time, your old car may be worth more than your think. The Edmunds editors report dealers have a shortage of vehicles that are six years-old or older, and could be eager to take your trade-in.

Tied to the new car market

One reason for the attractive used car market is the record sales recorded by new car dealers over the last few years. At the same time, a wider swath of those sales have been three-year leases.

"The leasing surge we've seen over the past few years is taking hold and changing the face of the used-car market," said Edmunds senior analyst Ivan Drury. "With new-vehicle sales already beginning to stagnate, swollen inventories of off-lease used vehicles hitting the market and priced to move may cannibalize new-car sales and further strain residual values."

That may be a problem for new car dealers going forward, but it creates opportunities for consumers now. According to Edmunds, three year-old cars aren't holding their value as much as in years past. It says the average three year-old vehicle today is selling for $1,200 less than what dealers figured its residual value would be when it was leased new three years ago.

Used car prices are falling

That's already showing up in used car sale prices. Used car specialists at J.D. Power found used car wholesale prices -- what the dealers pay for them -- fell 1.5% in April. And just like Edmunds, J.D. Power says it's all connected to problems in the new car market.

"While April's losses were consistent with historic norms, the used market continues to experience negative pressure from a struggling new market," said David Paris, senior market intelligence analyst at J.D. Power Valuation Services.

And Paris expects prices to keep falling. He projects used cars that are 2009 or later will go down another 1% this month. In fact, you might want to wait until next month to buy a used car, since Paris expect used car prices will fall 2% in June.

Graco Children's Products is recalling 25,494 Graco My Ride 65 convertible child restraints, models 1871689, 1908152, 1813074, 1872691, 1853478, 1877535, 1813015, and 1794334.

The child seat webbing may not adequately restrain the child in the event of a crash.

As such, these car seats fail to conform to Federal Motor Vehicle Safety Standard (FMVSS) number 213, "Child Restraint Systems."

A child not adequately restrained in a crash has an increased risk of an injury.

What to do

Graco will notify owners, and dealers will provide consumers with a replacement harness, free of charge. The recall is expected to begin July 17, 2017.

Owners may contact Graco customer service at 1-800-345-4109.

The Agriculture Department's Food Safety and Inspection Service (FSIS) has issued a public health alert regarding approximately 424 pounds of raw veal imported from the Netherlands by MRW Food Brokers in Owings Mills, Md.

The raw boneless veal may be contaminated with Non-O157 Shiga toxin-producing Escherichia coli (STEC) O103.

There have been no confirmed reports of illnesses due to consumption of the recalled products.

The veal was derived from calves slaughtered on March 8, 2017, and March 9, 2017, and further processed and packaged on March 9, 2017 and March 13, 2017.

The following products are covered by the alert:

• Boxes of chilled “Boneless Veal Cap” with case code of Londbos05597422 and lot code 0001.
• Boxes of chilled “Boneless Veal BHS” with case code of Londbos05597426 and lot code 0005.
• Boxes of chilled “Boneless Veal Inside” with case code of Londbos05597439 and lot code 0006.
• Boxes of chilled “Boned In Veal Rack Chop” with case code of SELEDEL05593535 and lot code 0012.

The recalled items were shipped to a distributor, and shipped to restaurants and grocery stores in Florida and Massachusetts.

What to do

Customers who purchased the recalled products should not to consume them, but throw them away or return them to the place of purchase.

Dynacraft BSC of American Canyon, Calif., is recalling about 20,000 Surge and Tonka battery-operated ride-on toys.

The acceleration pedal can stick, posing fall and crash hazards.

The company has received 19 reports of pedals sticking, including seven reports of minor injuries; abrasions, cuts and bruises.

This recall involves three models of 12V battery-operated ride-on toys, including Surge 12V Camo 4X4, Surge 12V XL Quad and Tonka 12V Mighty Dump trucks.

The recalled ride-on toys have model numbers and date codes listed in the table below. The model number, batch number, serial number and date code, formatted as “MMDDYYYY,” are printed on a label on the bottom of the ride-on toy.

The toys, manufactured in China, were sold as follows:

The Surge 12V Camo 4X4 was sold at Walmart nationwide between June 2016, and March, 2017 for about $300.

The Surge 12V XL Quad sold at Academy Sports + Outdoors stores nationwide from September 2016, through March 2017, for between $150 and $200.

The Tonka 12V Might Dump Truck was sold at Toys R Us stores nationwide and online at ToysRUs.com from July 2016, through November 2016, for about $350.

What to do

Consumers should immediately take the recalled ride-on toys away from children and contact Dynacraft to receive a free replacement foot pedal with installation instructions. Consumers in need of assistance with the repair, can bring the ride-on toy to an authorized service center for a free repair.

Consumers may contact Dynacraft at 800-551-0032 from 7 a.m. to 4 p.m. (PT) Monday through Friday or online at www.dynacraftwheels.com and click on “Product Recalls” for more information.

President Trump has released his proposed Fiscal 2018 budget, slashing federal spending nearly across the board, targeting many popular programs used by different groups of consumers.

After looking over the spending blueprint, various consumer, charity and health groups have weighed in, nearly unanimous in their opposition.

"AARP opposes the budget proposed today because it explicitly harms the very people we are counting on the President to protect," said AARP Executive Vice President Nancy LeaMond, in a statement.

LeaMond says the budget targets Social Security benefits, as well as spending on health, hunger, housing, and transportation assistance to low and middle income seniors. While she concluded the budget sends a troubling message to older Americans and their families, she did find one thing that is praiseworthy.

"We do want to acknowledge the Administration's paid leave proposal," she said. "Although it must be improved so that it addresses the workplace needs of all family caregivers, we hope that it leads to a national conversation about ways to support family caregivers in the workplace."

CDC budget slashed

John Auerbach, president and CEO, of Trust for America's Health (TFAH), expressed alarm at the budget's slashing of funding for the Centers for Disease Control and Prevention (CDC). He notes that the CDC has been in the forefront of combating exotic diseases like Ebola and Zika, as well as chronic disease like diabetes and heart disease.

"The proposed $1.2 billion cut to the Centers for Disease Control and Prevention would be perilous for the health of the American people," Auerbach said.

If the budget cuts were to be approved, he predicts an increase in illnesses, injuries and preventable deaths.

Border adjustment tax

An association representing retailers took issue with the proposed border adjustment tax, that could raise the price of imported consumer items. Though not specifically part of the proposed budget, the measure has wide support in the GOP-controlled Congress, that will also consider the budget proposal. Jennifer Safavian, an executive with the Retail Industry Leaders Association, says the measure would threaten jobs as well.

"Retailers will continue to aggressively oppose any plan that attempts to shift the nation's tax burden from certain corporations that currently are subject to low effective tax rates onto America's working families," she said. "The border adjustment tax would jeopardize 42 million jobs retailers currently support, and would put an undue burden onto millions of American families that are struggling."

In its coverage of the budget proposal, the BBC reports it would "take the axe to the social safety net for the poor." Among the steep cuts are funding for food stamps, Medicaid, disability payments, and student loan subsidies. At the same time, it raises military spending by 10%.

There's a reason groups opposing the budget cuts are speaking up now. The White House request is just that -- it has to go before Congress where a number of changes are likely.

The upcoming Memorial Day weekend is always an opportune time to shop for a new car. This year, it might be even better. Sales are down and incentives are up.

Before heading for a new car showroom, however, it's a good idea to do some homework first. Narrow your choices to just a few makes and models and learn as much as you can about them before you ever talk to a salesperson.

Tools such as True Car, Kelley Blue Book, and Edmunds can give you a pretty good idea of the price you can expect to pay for each model and trim level. Use these tools to compare your choices and use a car payment calculator to figure out what the monthly payments will be.

Consider supply and demand

If you are looking for the maximum amount of leverage in a new car negotiation, you might consider supply and demand. If the model you want happens to be "hot" at the moment, you'll find less wiggle room than if the model, for one reason or another, has fallen out of favor.

U.S. News recently crunched the sales numbers and came up with seven makes and models that haven't been moving off the lot in recent months. They're certainly worth considering if you are looking for a deal.

In the luxury class, U.S. News reports the Lexus ES has suffered a 62.8% sales decline over the last 12 years. Dealers aren't going to give them away, but you can bet they're motivated to make a sale. The average negotiated sales discount is 7.2%.

You might get an even better deal on Honda's minivan, the Odyssey. Sales on this model are down nearly 31% and the average negotiated discount is 14%.

The Nissan Murano may be another value play. Sales are off more than 18% and buyers have negotiated an average discount of 16%. Right now U.S. News says qualified buyers can get 0% financing for six years and $3,500 cash back.

Becoming a buyer's market

"Car shoppers are in a stronger buying position now than they have been in the past nine years," said Jamie Page Deaton, managing editor of the U.S. News Best Cars Rankings. "Oversupply and diminished demand are forcing dealers to negotiate and automakers to offer big incentives."

Other attractive buys this weekend could include the Cadillac ATS, Mazda 3, Acura RDX, and Chevrolet Impala. U.S. News says they can probably be purchased at a discount of between 6% and 10%.

In addition to options and safety features, it is also important to consider how you are going to pay for your new car. If you are financing it, how long you will stretch out the payments is a very important decision.

To keep payments low many buyers now routinely finance a new vehicle purchase for six years or more. A better option may be to select a less expensive vehicle that can be affordably financed over four or five years.

You may be aware that seemingly unconnected things can affect the rate you pay for auto insurance. Besides your driving record, companies in most states consider your credit score and even your Zip code, in deciding what your monthly premiums will be.

Now, a report from the Consumer Federation of America (CFA) adds another factor -- who your previous insurance provider was.

Up to 15% higher

The report claims three firms -- Allstate, Farmers, and American Family --  may charge up to 15% more to consumers with good driving records, who just happen to have had policies in the past with smaller, "non-standard" insurers, as opposed to those who were insured by another large insurance company.

CFA's director of insurance J. Robert Hunter, a former Texas Insurance Commissioner, says this penalizes motorists in lower-income communities, reducing their insurance options.

To test this hypothesis, CFA went to insurance company websites and sought quotes from seven major auto insurance providers. In every case, the driver for whom they sought a quote had a perfect driving record.

The only difference was some new customers were switching from a major provider, like State Farm, while others were changing after being insured by a "non-standard" carrier, which is defined as a smaller insurance company like Titan Insurance, Access Insurance, and Safe Auto Insurance.

The authors found that in most cities where insurance quotes were provided, Allstate, Farmers, and American Family cited a consumer's previous insurance company as a factor in determining the premium.

Most other major insurance companies took a new customer's previous insurer into account when setting rates, but not in every city. For example, the study found Geico charged more for consumers coming from a "non-standard" company if they lived in Tampa, but made no such distinction in other cities.

'Unfair punishment'

“It’s one thing to charge higher premiums to people with violations and accidents in their past, but it is unfair to punish a good driver simply because of where she previously purchased insurance,” said Hunter.

So why would big insurance companies charge a higher rate to consumers switching from a small insurance provider? Hunter believes it is because these small firms tend to serve riskier customers. But a lot of "non-standard" customers also fell into that category in the past because they could not obtain coverage from major insurance companies.

“After big insurers under-served many of America’s poorer communities, forcing drivers to turn to lesser known companies to buy coverage, the same big insurers later penalize them, effectively sentencing them to higher premiums for life,” Hunter said.

It's not known how many consumers are affected by this practice, but Hunter notes the "non-standard" insurance market in the U.S. is around $7.5 billion.

Learn more in the ConsumerAffairs Auto Insurance Buyers Guide.

Have you ever made a purchase or financial decision that you later went on to regret? A new report suggests that if you have, then you’re certainly not alone.

In a recent Bankrate.com survey, nearly three out of every four consumers admitted that they lived with financial regret. The most common regret was not saving for retirement early enough. That was followed by not saving enough for emergency expenses, taking on too much credit card debt, and taking on too much student loan debt.

“The burden of saving for retirement has shifted in recent years from employers to individuals. As a result, many Americans have either been unable or unwilling to save sufficiently for retirement,” says Bankrate.com senior economic analyst Mark Hamrick.

Start saving early

The report shows that Baby Boomers are the most likely consumers to regret not saving for retirement early enough, with the findings showing that regret over this decision increased over time from age 18 to 62. Hamrick says the best way for younger and middle-aged consumers to avoid this kind of financial regret is to start saving early and to take advantage of any available savings incentives.

“As with any savings effort, planning for retirement can be viewed under the banner of paying yourself first. If you are a full-time employee, try to take advantage to the fullest extent possible participation in a 401(k) plan,” he said.

“Retirement is all about cash flow. In my mind, it doesn’t matter what your income is. It doesn’t matter what your portfolio size is. It really all boils down to habits: having a plan, being frugal, making sure that you have a debt reduction plan,” adds Bill Losey, owner and president of a retirement solutions business in Greenwich, New York.

Showing improvement

While the report shows that many Americans are living with financial regrets, experts point out that there has been some recent improvement.

Bankrate points out that the Financial Security Index currently sits at 104.0, a reading which indicates improved financial security relative to the previous year. It was the eighth consecutive month of positive readings, with experts noting year-over-year improvement in five categories -- job security, comfort level with savings, comfort level with debt, net worth, and overall financial situation.

The survey also found that women are feeling more comfortable than men when it comes to their savings for the first time in nearly a year. It’s a point that may boil down to better saving practices.

“I’ve never met a person who regretted saving money. Better to decide now in favor of aggressive saving rather than wait too long to begin and be sorry later,” said Hamrick.

The full Bankrate report can be viewed here.

The proposed Trump budget released today would slash many social services, but a bipartisan bill in Congress would increase support for one perpetually underfunded activity -- family caregiving.

The Credit for Caring Act would offer a federal tax credit of up to $3,000 annually for family caregivers who qualify. 

“Family caregivers often risk their own health and financial security in order to assist their parents, spouses, and other loved ones. They tap into their savings accounts, stop saving for their future, and neglect their own health care,” said AARP Chief Advocacy and Engagement Officer Nancy LeaMond.

“The Credit for Caring Act will help with the financial challenges faced by family caregivers today. AARP urges Congress to enact this bipartisan legislation this year.” 

The Trump administration's budget seeks $1.5 trillion in nondefense cuts and $1.4 trillion in Medicaid cuts over the course of a decade, while adding nearly half a trillion dollars to defense spending.

The plan, titled “A New Foundation for American Greatness,” would cut anti-poverty and safety net programs, but leave Medicare and the retirement portion of Social Security untouched. 

Caregiver relief

The Credit for Caring Act would provide some financial relief to family caregivers who work by helping with the cost of services such as in-home care, adult day care, respite care, and other types of support.

Specifically, the bill would give eligible family caregivers the opportunity to receive a tax credit for 30% of qualified expenses above $2,000 paid to help a loved one, up to a maximum credit of $3,000.

About 40 million family caregivers across the U.S. provide 37 billion hours of unpaid care, valued at an estimated $470 billion annually. By helping older adults and people with disabilities live independently in their homes and communities, these family caregivers also save taxpayer dollars, delaying or preventing more costly nursing home care as well as preventing unnecessary hospital stays.

It's estimated that more than three quarters (78%) of family caregivers pay out-of-pocket to provide care for their loved ones, spending an average of nearly 20% of their annual income in 2016.

In dollars, this amounts to roughly $7,000 annually in out-of-pocket costs related to caregiving expenses. Long-distance family caregivers spent even more because of travel and other costs, averaging nearly $12,000 last year. 

“Support for family caregivers is not a partisan issue—caregiving touches all of our lives,” LeaMond said. Across party lines, a strong majority (87%) of likely voters age 50 and older support a tax credit for working family caregivers, according to an AARP poll conducted November 6-8, 2016.

Sponsors of the measure are Senators Joni Ernst (R-IA), Michael Bennet (D-CO), Shelley Moore Capito (R-WV), and Elizabeth Warren (D-MA), and in the House, Representatives Tom Reed (R-NY) and Linda Sánchez (D-CA).

It seems that good air quality is a precious commodity these days. In a recent study, researchers were able to identify many major sources of in-home air pollution that could lead to respiratory problems and even kidney failure. Now, a new study shows that the air outside may be damaging our DNA.

Researchers from the University of California, Berkeley have found evidence that air pollution from traffic damages and shortens a region of our DNA called telomeres.

Telomeres are basically protein endcaps found at the end of our chromosomes. Researchers say that the length of the caps generally measure our biological clocks – the longer the telomere, the younger someone is biologically regardless of their actual age. Having a shorter telomere, which the researchers suggest air pollution causes, would indicate advanced biological aging that could result in variety of health problems over time.

"Our results suggest that telomere length may have potential for use as a biomarker of DNA damage due to environmental exposures and/or chronic inflammation," the researchers said.

Especially harmful to children and young people

The study analyzed the relationship between polycyclic aromatic hydrocarbons (PAHs), a pervasive air pollutant found in motor vehicle exhaust, and telomere length in fourteen children from Fresno, Calif. – the second-most polluted U.S. city.

The results showed that participants’ who had more exposure to PAHs had shorter telomere lengths, even after adjusting for factors like age, sex, race/ethnicity, and presence of asthma. The researchers theorize that the PAHs from vehicle exhaust cause oxidative stress that damages lipids, proteins, and DNA and ultimately leads to telomere shortening.

The researchers further note that telomere shortening could be especially harmful to children and young consumers because their bodies operate under different internal regulations. They say that younger people may become more vulnerable to air pollution and its negative health effects over time when compared to older consumers.

Informing new policies

The researchers believe their work could help lawmakers design and implement interventions and policies that could reduce air pollution and PAHs. They say the data they collected will be used as part of a larger study that should corroborate their findings.

"Greater knowledge of the impact of air pollution at the molecular level is necessary to design effective interventions and policies," said co-author Dr. John R. Balmes.

The full study has been published in the Journal of Occupational and Environmental Medicine.

The Trump Administration has announced changes to the way student loans are serviced, reducing the number of firms students can choose from the current four to one. Critics say that creating a monopoly will reduce the incentive to provide good service.

The administration says granting exclusive rights to the student loan servicing market will save taxpayers money while improving service to student loan borrowers. But others -- including those struggling with student loans -- say the system could hardly be worse than it is now. 

In formally amending Phase II of the federal student loan servicing solicitation, the administration is rolling back yet another policy put in place by its predecessor. During the Obama administration, the Department of Education took steps to place more student lending under the federal umbrella, taking business away from banks and private lenders.

At present, there are four private companies still providing student loan servicing -- Navient, Nelnet, Great Lakes Educational Loan Services, and FedLoan Servicing. Under the Trump administration amendment, the government would solicit bids and select a single firm to service all student loan debt.

"Chaotic" system

Education Secretary Betsy DeVos said the current system is "chaotic" and having a single company servicing loans would streamline the process, making it easier for student loan borrowers.

"The federal student loan servicing solicitation we inherited was cumbersome and confusing—with shifting deadlines, changing requirements and de facto regulations that at times contradicted themselves," DeVos said in a statement. "Internal and external stakeholders both agreed it was destined for a massive and unsustainable budget overrun."

DeVos predicted the move would result in more user-friendly loan servicing while saving the government more than $130 million over five years. Critics, however, are not so sure.

Perhaps the most notorious of the current loan servicers is FedLoan, a Pennsylvania company that has for years converted student grants to delinquent debt for the flimsiest of reasons. The most notable cases involve TEACH grants, awarded to students who agree to teach for a certain amount of time in impoverished districts. 

Even though the teachers hold up their end of the deal, FedLoan abruptly and with little opportunity for appeal rules that they are not in compliance because of minor paperwork errors and hits them with the full amount of the grant plus delinquent interest and penalties.

"Legalized theft"

The Education Department has been silent about the matter, which cheated teachers have described as "legalized theft," and has never responded to inquiries from ConsumerAffairs or, as far as is known, made any attempt to rectify the injustice. 

Close behind is Navient. In January, the Consumer Financial Protection Bureau (CFPB) sued Navient, the nation’s largest servicer of both federal and private student loans, saying it has failed borrowers at every stage of the repayment process for years.

The bureau said that Navient, formerly part of Sallie Mae, created obstacles to repayment by providing bad information, processing payments incorrectly, and failing to act when borrowers complained.

Through shortcuts and deception, the company also illegally cheated many struggling borrowers out of their rights to lower repayments, which caused them to pay much more than they had to for their loans, CFPB charged.

Critics skeptical

But despite the failings of the current system, some critics fear that having only one loan servicer will be even worse.

Natalia Abrams, executive director of an advocacy group called Student Debt Crisis, expressed concern that the change would set up a monopoly, taking away the current system's incentive to provide better service.

"With zero competition, we are concerned about a 'too big to fail' student loan company that has zero incentive to work for students, borrowers, and their families," Abrams told Reuters.

Learn more in the ConsumerAffairs Student Loan Buyers Guide.

Like ice wagons, kerosene lamps and apothecaries, individual auto insurance policies may be a thing of the past in a few decades. But until then, insurers will see billions of dollars in new business, an industry study predicts.

Beginning around 2026, individual consumers will begin dropping their traditional insurance policies as self-driving cars become commonplace, according to the report from Accenture and Stevens Institute of Technology.

“Autonomous-vehicle technology will drive a significant shift in risk from human error to malicious third party, software, hardware and infrastructure risk,” said Chen Liu, co-author of the report and a research assistant at Stevens Institute of Technology. “Understanding and proactively responding to this anticipated enterprise transformation is imperative.”

There will still be car insurance, but it will cover different risks. Most insurance now basically covers human error, which is the cause of most traffic accidents. Self-driving cars will be immune from human error, but things can still go wrong. They can be hacked, they can be swept away in floods, and, presumably, can still be stolen, maybe even remotely. 

Those risks are relatively slight, however, compared to the current risk every consumer assumes when climbing into the family truckster for the daily commute or shopping trip -- meaning that individual premiums should be quite low for self-driving cars.

Transition time

The next decade or so, however, is shaping up as a bonanza for insurance companies, as overall risks may actually increase during the transition from human drivers to self-driving cars. 

During that time, insurers can gorge on more than $80 billion in new revenue as automakers, fleet owners, software publishers, and others take out policies covering cybersecurity, product liability and public infrastructure insurance, the report predicts.

“Insurers are bracing for long-term declines in auto premiums as new and safer autonomous vehicles gain adoption,” said John Cusano, a senior managing director at Accenture and global head of the company’s insurance practice, according to Insurance Journal. “However, our research suggests that auto premiums will increase before they decline on this trend, so insurers that can navigate the changing technology environment could win market share.”

New lines of business

Cybersecurity insurance is expected to be the most essential new coverage and biggest source of new revenue, totaling $64 billion by 2025. After all, if someone hijacks your computer, the risk of actual physical damage or injury is slight. But if someone hijacks your car and plows it into other cars or a crowd of pedestrians, the risk of catastrophic loss is quite high.

A cybersecurity policy on a self-driving car would be expected to provide protection against remote vehicle theft, unauthorized entry, ransomware, and hijacking of vehicle controls, as well as coverage for identity theft, privacy breaches, and the theft or misuse of personal data.

Automakers and the companies that generate software and sensors will need product liability insurance and the cloud server systems that manage traffic and road networks will also need coverage, but that presumably won't be the responsibility of individual consumers.

While none of this is a certainty, it's a pretty good bet that if self-driving cars actually turn out to be as safe and reliable as expected, consumers should pocket big savings on their insurance costs.

See the ConsumerAffairs Auto Insurance Buyers Guide for more information.

Consumers have been aware for years that smoking cigarettes can lead to lung cancer. While awareness of the issue has led to declines in overall lung cancer rates, experts say one particular type of lung cancer called adenocarcinoma has continued to flourish – and now they may know why.

Dr. Peter Shields, from The Ohio State University Comprehensive Cancer Center, says that the small holes on the filters of many cigarettes increase risk of adenocarcinoma.

“Adenocarcinoma, which is today the most common type of lung cancer, is continuing to increase. There is mounting evidence that tiny holes found near the filter of certain cigarettes are largely to blame,” he said.

Dangers of “light” cigarettes

The findings may come as a bit of a shock to smokers of light cigarettes who believed that the filters on their preferred products made them safer. Experts point out that the tiny holes on these products were originally intended to give cigarettes a smoother taste and to make consumers think that the products were less harmful.

However, Shields says that isn’t the case. “The public health community thought that those holes might a good thing originally. Unfortunately, it’s becoming clear there are some consequences with the design that make cigarettes more dangerous and cause people to die in increasing numbers,” he said.

The increased danger, he explains, is due to the fact that the holes allow the cigarette to burn slower and at a lower temperature. And, because the smoke is diluted with more air, smokers who use these cigarettes are also more likely to inhale more deeply and force more toxic chemicals into their lungs.

Increased regulations

The researchers are now urging lawmakers to consider placing more regulations on “filtered” cigarettes to reduce the number of adenocarcinoma cases.

“We think there is enough evidence now that the Food and Drug Administration can ban the holes that encircle the filters in an effort to protect consumers, and in doing so, help drive down the number of cases and deaths from lung cancer,” Shields said.

The full study has been published in Journal of the National Cancer Institute.