Current Events in December 2018

Wells Fargo has agreed to pay $575 million to settle allegations made by all 50 states and the District of Columbia that the bank violated consumer protection laws, Iowa’s attorney general announced on Friday.

The bank will also create and implement a review program that will allow consumers who have not received restitution through other programs to seek a review for possible relief. The agreement follows several years’ worth of allegations that the bank engaged in practices deemed to be either unethical, dishonest, or illegal.

In 2016, Wells Fargo revealed that employees had opened millions of checking and credit card accounts without customers' knowledge or consent in an effort to meet sales goals. The bank was also fined for selling insurance to auto loan customers without their knowledge.

In October, Wells Fargo reached a $65 million settlement between the State of New York and Wells Fargo over the improperly opened accounts.

“Wells Fargo’s conduct was unlawful and disgraceful,” California’s attorney general, Xavier Becerra, said in a news release on Friday. Under the settlement, California will get almost $149 million.

"This agreement is unique and one of the largest multi-state settlements with a bank since the National Mortgage Settlement in 2012," Iowa Attorney General Tom Miller said in a statement. “This significant dollar amount, on top of actions by federal regulators, holds Wells Fargo accountable for its practices."

In a statement of its own, Wells Fargo said the agreement, which must first be approved by a judge before it’s finalized, “underscores our serious commitment to making things right in regard to past issues as we build a better bank.”

The bank’s troubling business practices have resulted in over $2 billion in fines and an “unprecedented” action by the Federal Reserve to limit Wells Fargo's growth until the bank changes its management culture and risk control procedures.

In the city of Los Angeles, people no longer need to meet with a drug dealer or a doctor if they want to buy weed. Instead, shoppers can wait in line outside a dispensary, flash their Government-approved ID cards, and then pay a 34.5 percent sales tax for the privilege of using recreational cannabis.

California’s first year of recreational weed legalization has been slow due to high sales taxes and other regulations that put a chokehold on the industry.

Under the new recreational cannabis regulations, all California shoppers are subject to a state excise tax of 15 percent before local city taxes are added on. According to a recent analysis by the Los Angeles Times, sales taxes on recreational pot reached as high as 45 percent in some municipalities.

The first year of Prop 64

When California voters passed Proposition 64 in 2016, the promise of weed that could be easily purchased from a local storefront had industry experts and state officials seeing dollar signs. Despite fierce opposition from law enforcement groups, some state officials optimistically predicted that there would be 6,000 licensed cannabis shops in several years and $1 billion in annual revenue.

As the first year of Proposition 64’s implementation comes to a close, however, the numbers tell a different story. The state Bureau of Cannabis Control has only issued 547 licenses to marijuana retail stores this year, and state tax revenue is expected to generate just $471 million.

In Oregon, by contrast, there are over 50 more dispensaries, despite the state’s much smaller population. Oregon officials put a 20 percent cap on marijuana sales taxes.

Most cities banned weed

The majority of cities in California failed to embrace legal weed. They instead took advantage of a provision in Proposition 64 that gave municipalities authority to regulate weed sales.

Numerous beach cities, including Santa Monica, Redondo Beach, Manhattan Beach, and Hermosa Beach, saw their local city councils ban dispensaries entirely. Of California's 482 cities, only a total of 89 allowed recreational weed sales.

In cities like Los Angeles, where recreational weed is legal but extremely pricey due to added taxes, users can avoid the extra fees if they obtain a prescription from a doctor. Medical marijuana has been legal and tax-free in California for nearly two decades, but qualifying patients will have to register their names in a state database, a prospect that may make some uncomfortable.

Recreational weed was supposed to offer easier shopping and more anonymity than medical weed, yet that also hasn’t turned out to be the case.

Numerous recreational dispensaries in California require shoppers to show their ID cards. The dispensaries then maintain information about those shoppers via “customer profiles” and other methods. That’s despite Proposition 64 not having any requirements that recreational shoppers identify themselves.

“When asked why customer profiles were created, several dispensary workers incorrectly stated the information was required under Proposition 64,” reports the Fresno Bee newspaper.

Amazon is reportedly planning to expand Whole Foods stores across the U.S as part of an effort to bring its two-hour delivery offering to more consumers, particularly those in rural areas, the Wall Street Journal reported Sunday.

Amazon is said to be interested in moving into more suburban areas and utilizing spaces that are “slightly larger” than its existing locations, the Journal said, citing sources with knowledge of the matter.

The e-commerce giant, which acquired Whole Foods in June 2017 for $13.7 billion, will be “using extra space in its stores to accommodate Amazon delivery and pickup from online orders.”

“Amazon offers Prime Now, a two-hour delivery option to members of its Prime subscription service in more than 60 cities, and online grocery pickup from Whole Foods stores in as little as 30 minutes from nearly 30 cities,” the Journal said.

“Amazon plans to expand those services to nearly all of its roughly 475 Whole Foods stores in the U.S., according to another person familiar with the plans. Amazon also wants to use benefits for Prime members to attract new customers to Whole Foods and draw them back more often.”

The report said Whole Foods employees have scouted regions of Western North America for potential retail spaces in parts of Idaho, southern Utah, and Wyoming. At the present time, there are no Whole Foods stores in these areas.

One thing you’ll probably never hear an Amazon Echo Dot user say is, "Alexa, steal my personal data."

But where there’s a will, there’s a way, and nefarious scammers found a way to slink past Apple’s review process and slip in a new app that scammed Alexa users out of personal data on their devices and home WiFi networks.

According to 9to5Mac, "Setup for Amazon Alexa" zoomed up Apple’s app charts, hitting #6 in the Utilities category and scoring an impressive 9,000 ratings before the app police at Apple yanked it from the App Store. And with Amazon Dot being one of the hot holiday gifts this season, it’s a safe bet that 9,000 number barely scratches the surface of those who took the bait.

However, so far, neither Apple nor Amazon has taken action short of Apple removing the malicious entry from its App Store, and only one member of the Apple support community and a handful of Reddit subscribers had raised a flag about the issue.

The dirty deed

The app’s modus operandi is to ask the end-user for their current internet protocol (IP) address, as well as the serial number of the device and the username associated with the device.

Once it gets that in its grubby little hands, it’s free to wander about the user’s data pool and apparently pilfer whatever data the app’s masterminds want.

The masterminds? 9to5Mac reports that all signs point to "One World Software", a company that reportedly has two other suspicious apps. One is "Buy/Sell," which mimics Facebook’s color scheme, and another is called "Any Font for Instagram."

Fake apps have been a hot topic the past few holidays, but there are some red flags that consumers can look out for to detect if an app they’re downloading is a scam. Look for grammatical or spelling errors, and be wary of any app that has no reviews or no history of previous versions. In a situation like this with an Amazon-created product, it’s safer to stay away from any apps that aren’t created by Amazon itself.

Numerous major newspapers saw print operations disrupted on Saturday due to a suspected foreign cyberattack on their printing presses.

An anonymous source told the Los Angeles Times, one of the papers affected, that there is evidence that the disruption was an intentional hack designed “to disable infrastructure, more specifically servers.”

The source added that it appears to be a “foreign entity” that was behind the attack. The FBI is reportedly investigating.

The attack targeted the Los Angeles Times’ downtown printing press. The Times shares the press with the Chicago Tribune, the Baltimore Tribune, and the West Coast bureau of the New York Times, all of which also fell victim. Some subscribers were unable to receive their papers on Saturday as a result.  

“A disruption to our print production systems caused delays in the delivery of some of our newspapers Saturday,” says a public statement from the Tribune Publishing Company.

Consumers struggling to pay off credit card debt would be wise to consider a balance transfer credit card in 2019, but picking the right one and using it effectively is key to making it pay off.

CompareCards, a division of LendingTree, has studied the terms and conditions of more than 160 balance transfer cards and found that there are still plenty of zero percent introductory rate options. But it’s important to read the fine print and use the cards to your full advantage.

The study found that 41 percent of consumers have applied for a balance transfer card in the past, but 40 percent of them have failed to pay off the entire balance during the zero percent introductory period. After the introductory period, the interest rate often adjusts to one that is higher than the national average.

The advantage of zero percent, of course, is the entire payment goes to pay down the balance. If you have been paying $200 a month on your old card, chances are most of that amount goes to pay interest. Paying $200 for 15 months with no interest charges will reduce a balance by $3,000.

Length of introductory period vs. balance transfer fee

The study points out the need to carefully choose a balance transfer card. The length of the zero percent introductory period is an important factor, but so is the balance transfer fee most cards assess. It is a fee based on the amount of money being transferred, and it can be hefty -- especially on large balances.

Most cards charge at least 3 percent of the transferred balance, but some charge as much as 5 percent. Even at 3 percent, transferring $10,000 results in an upfront fee of $300. The study shows that only one in six consumers who transferred a balance in the past were able to avoid the balance transfer fee.

Matt Schulz, chief industry analyst at CompareCards, says consumers can achieve some real savings with a balance transfer card as long as they understand the fees, deadlines, and other quirks that can come with this tool.

“Don’t wait, though. Credit card interest rates continue to rise and as they do it is likely these offers will get less and less attractive,” Schulz said.

Here are three options

The Chase Slate balance transfer card remains an attractive option for its combination of no transfer fee and fairly long introductory period. Consumers get 15 months of zero percent interest.

The Amex Everyday Credit Card from American Express also offers 15 months of interest-free payments with no balance transfer fee.

The Citi Simplicity Card offers 21 months at zero percent interest, but that extra six months of interest-free payments come at a hefty price. There is a balance transfer fee of either $5 or 5 percent of the transferred balance, whichever is greater.

As the new year rolls in, many consumers will start thinking about goals and resolutions for 2019. While some will vow to hit the gym more, others may plan to volunteer more or spend less.

In recent years, it’s become popular to participate in “Dry January” -- one whole month without alcohol.

Though consumers decide to stay alcohol-free for the first month of the year for various reasons, a group of researchers decided to look into the positive effects it can have -- and there are several. The study found that consumers who don’t drink in January are more likely to sleep better, save more, lose weight, and have clearer skin -- among many other benefits.

“The simple act of taking a month off alcohol helps people drink less in the long term: by August people are reporting one extra dry day per week,” said Dr. Richard de Visser. “There are also considerable immediate benefits: nine in 10 people save money, seven in ten sleep better, and three in five lose weight.”

Seeing the change

Dr. de Visser conducted a three-part self-reported survey to examine the positive effects of abstaining from alcohol.

When the study began before January, he had over 2,800 participants. February was the second checkpoint, and participants dropped to just over 1,700; by the final check in August, there were just over 800 participants.

The researchers came out with some remarkable findings; they found that nearly 60 percent of participants were found to be concentrating better and losing weight. Over 90 percent reported feeling accomplished, while 70 percent felt an overall improvement in their health.

As for drinking itself, staying away from alcohol changed the way many participants think about these beverages. Dry January allowed 82 percent of participants to reflect on their relationship with alcohol and 80 percent to feel more in control of their drinking.

“The brilliant thing about Dry January is that it’s not really about January,” said Dr. Richard Piper. “Being alcohol-free for 31 days shows us that we don’t need alcohol to have fun, to relax, to socialize. That means that for the rest of the year we are better able to make decisions about our drinking, and to avoid slipping into drinking more than we really want to.”

For consumers interested in staying alcohol-free, the researchers recommend the app Try Dry that allows you to track how much money you’ve saved, how many calories you’ve saved, and other Dry January accomplishments.

At the very last minute, former Sears CEO Eddie Lampert made his $4.6 billion bid official, saving the long-time retailer from liquidation. It ended a suspenseful Friday when it appeared likely that Sears was at the end of its rope.

Terms of the offer were not made public and it must still be ratified by the Sears Holdings board of directors in January.

The offer comes from an affiliate of Lampert’s hedge fund and is only for 425 of the remaining Sears and Kmart stores. The company had already announced that it would close another 80 stores, bringing the 2018 total to more than 250.

It closes what has been a bleak year for Sears Holdings and its employees. Amid the store closings, the company declared bankruptcy in October.

The company was holding out for a Christmas miracle, hoping that several interested parties would bid up the price of Sears’ remaining assets. In the end, however, Lampert was the sole player.

While $4.6 billion is a lot of money Lampert previously positioned most of his offer as forgiveness of existing debt. However, Sears desperately needs operating capital to keep going.

Sears and Kmart stores have steadily lost foot traffic as more consumers shifted to online channels. Its fortunes also declined with America’s shopping malls, many of which now contain empty storefronts.

Never adapted to the internet

Oddly Sears -- which pioneered the concept of retail catalog sales -- never adapted to the internet age, losing out not only to Amazon but also its brick and mortar competitors like Walmart, Target, and Macy’s.

Retail analysts say its remaining value lies largely in its brands and intellectual property, which includes Kenmore appliances and Die Hard batteries.

Sears sold its Craftsman tools brand to Stanley Black and Decker earlier this year for $775 million but still gets royalties from new third-party sales, as well as a 15-year license for the brand.

Nobody likes a tattletale, but looking cute might win over some friends. The Transportation Security Administration (TSA) is reportedly phasing its pointy-eared dogs out of sniffing duties because people generally prefer floppy ears.  

“We find the passenger acceptance of floppy-ear dogs is just better,” an agency spokesman told the Washington Examiner.

The TSA uses hundreds of dogs across the country to sniff luggage for bombs or drugs. When a pointy-eared dog retires, the TSA says they are now making a conscious effort to replace it with a floppy-eared dog.

It may not be much comfort to people trying to fly across the country with a joint or something else illegal, but children apparently find floppy-eared dogs to be less frightening.  

“It presents just a little bit less of a concern. Doesn’t scare children,” the spokesman added.

Adding calorie counts to menus has been a popular point of discussion recently. While some believe it’s key to pushing consumers to make healthier food choices, others are convinced the act is pointless.

Though researchers have spoken out on both sides of the argument, a group of researchers from Dartmouth College recently found that restaurants that have both pictures of food and calorie counts are more likely to sway consumers’ ordering habits.

“Our findings suggest that calorie-labeling may alter responses in the brain’s reward system when considering food options,” said researcher Andrea Courtney. “Moreover, we believe that nutritional interventions are likely to be more successful if they take into account the motivation of the consumer, including whether or not they diet.”

The brain’s role

The researchers had 42 undergraduates participate in the study, with students looking at nearly 200 images of food both with calorie counts and without.

The group was split almost evenly between those who dieted and those who didn’t, as the researchers believed the two groups would make different food choices. Everyone was shown the same images, and most of them included fast food items.

While hooked up to an fMRI machine, the participants were asked to rate how much they wanted to eat the food on a scale from one to four, and then how likely they’d be to choose the food items in the dining hall on the same scale.

The researchers found that both dieters and non-dieters were affected by the combination of food pictures and calorie counts. After seeing both, the participants were less likely to choose the unhealthy items.  

However, when the calorie counts came off the food pictures, the results were a bit different. Those who dieted regularly were more likely to continue to avoid fattier foods, whereas the non-dieters didn’t have the same response.

The researchers saw these results as positive, as they further prove that consumers who are looking for healthier options will continue to seek them out when calorie counts aren’t available. However, when calorie counts are present, they help guide consumers’ choices.

“In order to motivate people to make healthier food choices, policy changes are needed that incorporate not only nutritional information, including calorie content, but also a public education component, which reinforces the long-term benefits of a healthy diet,” said researcher Kristina Rapuano.

Posting calorie counts

Earlier this year, chain restaurants with at least 20 stores were required to start providing customers with calorie information as part of the Affordable Care Act.

Though experts went back and forth on the pros and cons of this venture, the goal was to have consumers making healthier choices when they eat out.

Later in the year, researchers explored the effects of having calorie counts on menus and found that consumers were more likely to order something with fewer calories when the calorie information was in a prominent place.

“What this paper shows is that a trivially simple intervention could increase the power of calorie information on menus,” said researcher Steven Dallas. “The calorie labeling policy should not necessarily be deemed a failure, and could in fact become a powerful tool in combating the obesity epidemic.”

R. L. Zeigler Co., of Selma, Ala., is recalling approximately 11,664 pounds of ready-to-eat (RTE) poultry and meat sausages.

The products may be contaminated with extraneous materials -- specifically metal pieces.

There have been no confirmed reports of adverse reactions due to consumption of these products.

The following RTE Red Hot chicken and pork sausage items, produced on November 29, 2018, are being recalled:

• 24-oz. plastic packages containing approximately 9 links of “ZEIGLER A TRADITION OF GREAT TASTE RED HOTS” with a “Use By Jan 24 19” date.
• 24-oz. plastic packages containing approximately 9 links of “EXTRA HOT ZEIGLER A TRADITION OF GREAT TASTE RED HOTS” with a “Use By Jan 24 19” date.

The recalled products, bearing establishment number “EST. P-9156S” inside the USDA mark of inspection, were shipped to retail locations nationwide.

What to do

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

Consumers with questions about the recall may contact Jeff Berry at (334) 410-9845.

Vermont Packinghouse of N. Springfield, Vt., is recalling approximately 10,828 pounds of raw intact bone-in beef quarters from cattle identified as being over 30 months of age.

The products may contain specified risk materials (SRM) -- specifically vertebral column.

There have been no confirmed reports of adverse reactions or injuries due to consumption of these products.

The following products are being recalled:

• White butcher paper wrapped packages of fresh T-bone and Porterhouse steaks from Walden Local Butcher Shop in Boston, Massachusetts.

What to do

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

Consumers with questions about the recall may contact at Arion Thiboumery of Vermont Packinghouse at (802) 886-8688 ext. 2001.

Mercedes-Benz USA (MBUSA) is recalling one model year 2018 Mercedes-Benz E400 Coupe and one C300 4Matic Coupe.

The steering coupling may not have been correctly locked during manufacturing.

If the steering connection was not properly locked, the mechanical connection between the steering wheel and steering rack may come loose, reducing steering ability and increasing the risk of a crash.

What to do

MBUSA will notify owners, and dealers will inspect the steering coupling and lock it correctly if necessary, free of charge.

The recall is expected to begin January 31, 2019.

Owners may contact MBUSA customer service at 1-800-367-6372.

It’s been a rocky year for Sears Holdings, and it could end with the venerable retailer turning out the lights.

The company has set a deadline of the end of business today for a buyer to step in and purchase about 500 stores and its Kenmore appliance brand. Sears say it needs that cash infusion to keep its remaining Sears and Kmart stores open.

In bankruptcy court, Sears said it has received interest from “multiple parties,” but as of yet, none has stepped forward publicly to make an offer except for the hedge fund controlled by former Sears CEO Eddie Lampert.

But Lampert hasn’t officially put that offer on the table and only has hours left in which to do so. He is reportedly offering $4.6 billion for the assets and has said it would allow thousands of Sears and Kmart employees to keep their jobs.

October bankruptcy

Sears Holdings filed for bankruptcy protection in October as it faced a huge debt payment. At the time, it was seen as the last shot at becoming solvent, and major creditors gave the company the leeway to try.

At the time of its bankruptcy filing, Sears also announced it was closing another 142 stores, the latest in a wave of closings of unprofitable stores, in hopes of stopping the flow of red ink.

Last month, Sears opened discussions with Service.com to sell its home improvement business, but the $60 million price tag amounts to a drop in the bucket to the capital the struggling retailer requires.

What’s next?

Unless there is a secret bidder waiting until the last minute, that leaves Lampert and his hedge fund as the only players and, for now at least, that bid has not been formally offered. Neither Lampert nor Sears Holdings are offering a comment on the status.

Without a last-minute bid, Sears could begin the process of liquidation to pay off creditors. Another option could be to extend the deadline into 2019 in hopes of finding a buyer then.

In addition to declining sales, Sears’ Kenmore washers haven’t exactly been giving the company positive press coverage. Christopher Elliott, a columnist for King Features Syndicate, writes that he has received an increasing number of complaints from readers who say the glass lid of their Kenmore Elite washer spontaneously shatters.

An analysis of ConsumerAffairs reviews of Kenmore washers did not reveal any reports of shattering lids, but it did indicate that consumers are reporting some operational issues.

Hoping to visit a national monument or national park on the New Year’s holiday? Don’t count on it.

The U.S. government shutdown continues, and with congressional Democrats and President Trump digging in their heels, there doesn’t appear to be an end in sight. The Senate adjourned Thursday and won’t reconvene until the new Congress is seated on January 3, 2019.

As a result, thousands of federal employees have been furloughed and government agencies and institutions, including national parks, are closed.

“No end in sight to the President’s government shutdown,” tweeted Sen. Dick Durban (D-Ill.), the second-ranking Democrat in the Senate..” He’s taken our government hostage over his outrageous demand for a $5 billion border wall that would be both wasteful and ineffective.”

But the White House is pointing a finger at congressional Democrats. Officials say the group is responsible for the shutdown because they refuse to consider a spending bill that contains $5 billion to build a wall along America’s southern border with Mexico to stop illegal immigration.

Trump took to Twitter Thursday after police in California announced they are searching for a suspect in the shooting of a police officer, identifying the suspect as a possible illegal immigrant.

”There is right now a full-scale manhunt going on in California for an illegal immigrant accused of shooting and killing a police officer during a traffic stop,” Trump tweeted. “Time to get tough on Border Security. Build the Wall!”

House Democrats promise action

How long the government will remain closed is anyone’s guess, but House Democratic leaders say they plan to immediately bring up a proposal to reopen the government when Congress reconvenes next week with a Democratic majority.

But that will require an appropriations bill to pay for government services, and it must also win approval of the Senate, which will still be under Republican control.

House Democratic Leader Nancy Pelosi (D-Calif.), who will become Speaker of the House next week, continues to blame the White House for the shutdown. In a joint statement with Senate Democratic Leader Chuck Schumer (D-N.Y.), Pelosi claimed Trump wanted the shutdown to placate members of his base.

At the White House on Thursday, spokeswoman Sarah Huckabee Sanders charged “the Democrat party is openly choosing to keep our government closed to protect illegal immigrants rather than the American people."