Current Events in August 2019

Audi is recalling 144,092 model year 2018 S5 Cabriolets, S5 Sportbacks, S5 Coupes, S4 Sedans, A5 Cabriolets, A5 Sportbacsk & A5 Coupes, and model year 2017-2018 A4 Sedans & A4 Allroads.

Oxidation on the Passenger Occupant Detection System (PODS) connecting cable may cause the software to misdiagnose a malfunction and disable the passenger airbag.

A disabled passenger airbag increases the risk of injury in the event of a crash.

What to do

Audi will notify owners, and dealers will update the airbag control unit software free of charge.

The recall is expected to begin September 15, 2019.

Owners may contact customer service at (800) 893-5298. Audi's number for this recall is 74D9.

Toyota is recalling about 18,000 model year 2019 RAV4s and RAV4 hybrids.

There is a possibility that a damaged connector in the back-up camera system's audio display unit is causing the system not to activate.

If the driver reverses the vehicle without checking his or her surroundings when the vehicle has this condition, there can be an increased risk of a crash.

What to do

Toyota will notify owners and dealers will replace any inoperative system with a new one at no cost to customers.

The recall is expected to begin early October 2019.

Owners may contact Toyota at (800) 331.4331.

Hyundai Motor America is recalling 8,059 model year 2018 Genesis G80s and model year 2017-2018 Genesis G90s equipped with 3.3 liter turbocharged engines.

The turbocharger oil supply pipe may have a loose seal, causing oil to leak onto the exhaust manifold.

Oil leaking onto the exhaust manifold increases the risk of a fire.

What to do

Hyundai will notify owners, and dealers will replace the turbocharger oil supply pipe free of charge.

The recall is expected to begin September 6, 2019.

Owners may contact Hyundai customer service at (855) 371-9460. Hyundai's number for this recall is 003G.

The July robocall report has hit the stands, and just when we thought we were out of the woods thanks to three consecutive months of fewer calls, that trend has reversed course.

According to robocall blocking app maker YouMail, Americans were hit by 4.7 billion robocalls in July, a 7.5 percent increase over June. For the trivia lovers out there, that’s 150 million robocalls per day alone, or 1,746 robocalls per second.

"I'm sure everyone was hoping the past three-month decline in robocall volumes would keep going," said YouMail CEO Alex Quilici. "Unfortunately, it looks like we may be headed back up to the same crazy high volumes we had earlier in the year."

What’s behind the increase

What’s behind the trend reversal is anyone’s guess, but with the Federal Communication Commission’s (FCC) getting in the face of carriers and carriers promising to improve their deflection of robocalls, consumers might expect better.

Breaking down July’s numbers, scam and telemarketing robocalls get most of the credit, both up approximately 10 percent to the 2 billion call mark. The complete breakdown can be seen below:

July proved to be ripe for five particular scams -- health/health insurance, interest rate, student loan, social security, and warranty scams -- each topping 100 million calls. Here are the top five:

Social Security spoofing on the rise

Social Security scams had the biggest increase in July, rising by 30 percent. While there’s no concrete evidence that explains why that scam shot up, it’s possibly due to the incubation of a Social Security spoofing scheme where the caller claims to be from a “legal department” and tells the consumer that their Social Security number has been involved in fraudulent activity. 

In this particular scam, once the robo thief has the consumer’s attention, the thief tries to con the consumer into wiring money or adding money to a prepaid debit card under the pretext of “paying for official government service.”

As ConsumerAffairs reported last month, spoofing is on the rise -- not just using Social Security as the ruse, but also major corporations. YouMail’s record-keeping validates as much, reporting that four of the top five problematic campaigns use caller ID spoofing in all of their calls.

The South is still a hotbed 

While the jury is still out on why more robocalls are made to the Southern states than any other region, Georgia, Texas, and Louisiana still rule the roost when it comes to getting the most robo love. YouMail says that July’s numbers were down somewhat, but they were still similar to the volumes seen in June.

Below is a list of the cities, states, and zip codes that received the most robocall attention:

Three major opioid companies have proposed paying a $10 billion settlement over claims that they played a part in fueling the U.S. opioid epidemic, according to a Bloomberg report. 

McKesson Corp., AmerisourceBergen Corp., and Cardinal Health Inc. have reportedly been working with state attorneys general to resolve numerous lawsuits, and company officials recently offered a tangible amount of money, according to people familiar with the negotiations. 

While the offer may seem staggering, regulators have countered the proposal with a $45 billion figure of their own. The number is based on the amount that would have to be paid to consumers for decades of overdoses, addiction cases, and other public health-related costs that have been linked to opioid abuse. 

Opioid drugmakers currently face thousands of lawsuits that have already been brought by consumers and advocacy groups, as well as cities and other municipalities. Thus far, a concrete deal involving the three named companies has not been hammered out.

The U.S. opioid crisis

Data recently released by the Drug Enforcement Agency (DEA) shows that pharmaceutical companies produced tens of billions of opioid pills during the early 2000s. During a six-year period, over 280 million opioids were created -- enough to give every U.S. consumer a month’s worth of medication.

Some pharmaceutical companies have already filed for bankruptcy protection in light of recent litigation efforts. 

INSYS Therapeutics recently filed for Chapter 11 bankruptcy when it came face-to-face with a $225 million settlement after it was found to have bribed doctors in Boston to encourage prescriptions of its fentanyl spray product. The company was also named in a Florida state lawsuit over its role in the opioid epidemic. 

Wall Street suffered its worst single day of the year on Monday as concerns about deteriorating trade conditions produced a wave of selling.

President Trump’s announcement last week that he would impose additional tariffs on more Chinese imports produced a strong Chinese response, with that country devaluing its currency and making its exports more affordable in relation to its trading partners.

The Dow Jones Industrial Average plunged 767 points to 25,717. The S&P 500 finished the day down 87 points at 2,844. The biggest losers included commodities and tech stocks, particularly chip makers. Both groups have significant exposure to China. 

The selling was triggered in part by China’s announced intention to let its currency fall significantly lower, a move President Trump branded as “currency manipulation.” That makes China’s exports look cheaper when compared to those from the U.S. and other countries.

Not unexpected

In fact, the sell-off in the market was not unexpected. By some accounts, it was long overdue. The major averages had been trading at all-time highs for weeks.

Part of the runup in prices undoubtedly was the result of the market’s belief that the Federal Reserve was embarking on a cycle of lower interest rates. When the Fed cut rates last week but Fed Chairman Jerome Powell called it only a “mid-cycle adjustment,” traders realized their assumptions were wrong. That’s when the selling began.

While stocks took it on the chin, hedge investments had a great day. Gold, Silver, and Bitcoin all finished sharply higher. Gold was up $9 an ounce to $1,485.50. Silver closed up 12 cents to $16.51. Bitcoin gained $777 dollars to $11,756.

It turns out that high-end retailers aren’t immune to the retail apocalypse. Barneys New York has filed for Chapter 11 bankruptcy protection and announced moves to shrink its footprint as it tries to find a buyer.

It joins Sears, Payless, and Toys R Us, all of which recently sought shelter under bankruptcy and closed some or all of their stores.

In its announcement, the company said it plans to close 15 of its 22 stores as it reorganizes and markets to consumers who have an eye on value as well as quality. Barneys will close stores in Chicago, Las Vegas, and Seattle, along with five smaller concept stores and seven Barneys Warehouse locations.

It will continue to operate its five flagship locations: Madison Avenue, New York; Beverly Hills; San Francisco; and Copley Place in Boston. It will also continue to operate two Barneys Warehouse locations, including Woodbury Commons and Livermore. The retailer’s online operations are not affected.

‘Dramatically impacted’

"Like many in our industry, Barneys New York's financial position has been dramatically impacted by the challenging retail environment and rent structures that are excessively high relative to market demand,” said Barneys New York CEO Daniella Vitale.

Vitale says the move will give the company the necessary tools to conduct a sale process, review leases, and optimize operations.

“While doing that, we are receiving new capital to help support the business,” she said.

Along with the bankruptcy announcement, Barneys said it has secured $75 million in new capital to facilitate the sale process as it seeks a buyer. The company said it plans to use the court-supervised process to “consider all value enhancing transactions.”

Special problems

While Barneys has faced some of the same challenges as other retailers, it has also encountered special problems. Its store locations tend to be among the most expensive retail real estate in the nation and carry premium rents.

Store closings picked up momentum in the first half of 2019. A report in July from Coresight Research showed store closings -- including announcements -- were up 20 percent over all of last year. 

The researchers estimate that at least 7,000 stores will close their doors this year, with thousands of others already dark and deserted. Payless ShoeSource makes up nearly 40 percent of the store closings. 

“So far this year, US retailers have announced 7,062 store closures and 3,017 store openings,” the research company wrote in its report. “This compares to 5,864 closures and 3,258 openings for the full year 2018.”

Consumers hoping to buy their first home, or perhaps move up, have been plagued by numerous headwinds over the last year, but those winds may be shifting.

In the last 18 months, mortgage interest rates have risen. Home inventory levels have fallen, which not only gives buyers fewer homes to choose from but puts upward pressure on prices. It’s enough to almost make you want to go on renting -- except that rents are also going up.

But here’s some welcome good news: that script is in the process of being flipped.

The Data & Analytics division of Black Knight, Inc.has released its latest Mortgage Monitor Report, which shows home affordability conditions have improved markedly. The rapid home appreciation growth of recent months has essentially flatlined. Even better, mortgage rates have begun to fall. Black Knight Data & Analytics President Ben Graboske says that combination has produced the best home affordability in 18 months.

"For much of the past year and a half, affordability pressures have put a damper on home price appreciation," said Graboske. "Indeed, the rate of annual home price growth has declined for 15 consecutive months.”

Improved affordability

Declining prices suggest that homes are staying on the market a little longer and are attracting fewer competing buyers, meaning fewer bidding wars.

“In November 2018 -- when rising interest rates hit a seven-year high and home price growth fell by half a percent in a single month -- it took 23.3 percent of the median household income to make the principal and interest payments when purchasing the average-priced home,” he said.  

The recent drop of 30-year mortgage rates to 3.75 percent means improved affordability for millions of would-be buyers. But how, exactly?

"Whereas nine states were less affordable than their long-term norms back in November -- a key driver behind the subsequent deceleration in home prices -- only California and Hawaii remained so as of July,” Graboske said.

Lower monthly payment

Even though the average home price has risen by more than $12,000 since November, lower interest rates more than make up the difference, meaning the average monthly payment is $108 lower when the buyer puts down 20 percent.

“Lower rates have also increased the buying power for prospective homebuyers looking to purchase the average-priced home by the equivalent of 15 percent, meaning that they could effectively buy $45,000 'more house' while still keeping their payments the same as they would have been last fall,” Graboske said.

National home prices have been skewed higher in recent years by huge increases in home prices on the West Coast. That price escalation has finally dissipated a bit, especially in California.

While prices nationally have leveled off, buyers should keep in mind that they may still be rising in some secondary markets that are only now beginning to heat up.

Attorneys general from 13 states have filed a lawsuit to block the National Highway Transportation Safety Administration’s (NHTSA) final rule that reduces the  penalties for carmakers that fail to meet corporate average fuel economy (CAFE) standards.

NHTSA’s rule overturns the penalties put in place by the Obama Administration that fined automakers $14 for every tenth of a mile-per-gallon the companies’ cars fall below the minimum standard. The new rule reduces the penalty to $5.50, an amount Illinois Attorney General Kwame Raoul says is inadequate.

“This rule unlawfully cuts penalties for automakers failing to meet standards that protect our environment and public health.” Raoul said. “The NHTSA’s effort to roll back these standards is not only unlawful, but irresponsible. Residents will have less fuel-efficient vehicle choices on the market, pay more for gas, and will suffer from increased pollution.”

‘Reckless and misguided’

New York Attorney General Letitia James called NHTSA’s rule “reckless and misguided,” and  says it would roll back the clock on clean air standards that have been established over the years.

“Without strong penalties for violating these fuel efficiency standards consumers, our economy, and our environment all remain in danger,” James said. 

The suit filed by the Democratic attorneys general claims that the new rule violates federal law, which requires public agencies to update their civil penalties to account for inflation using a clear timetable and formula for adjustment.

It’s part of an effort by Democratic officials at the state level to oppose various Trump administration regulations -- but in the case of auto mileage standards, it might prove to be unnecessary.

Some carmakers siding with the states

In late July, four major automakers -- Ford, BMW, Honda, and Volkswagen -- agreed to meet California’s stiffer mileage standards rather than keep the standard at the level proposed by the Trump administration. 

The companies negotiated with California regulators who agreed to slightly lower their standards if the automakers would commit to meeting them instead of national standards proposed by the Trump administration.

Even though it will be more costly for carmakers to meet the tougher standards, they say doing so provides needed regulatory certainty. It also means they don’t have to build two versions of each model -- one that meets the lower national standard and the other that must meet the higher California standard.

Many companies that produce e-scooters are quick to point to the environmental benefits of using them for transportation, but a recent study suggests that these vehicles aren’t quite as “green” as many would believe.

While still better for the environment than traditional vehicles when it comes to emissions, a recent study conducted by researchers from North Carolina State University suggests that there are better transportation options out there.

“E-scooter companies tout themselves as having little or no carbon footprint, which is a bold statement,” noted corresponding study author Jeremiah Johnson.

Manufacturing and distribution

Based on their findings, the researchers admit that shared e-scooters do produce fewer emissions than other, larger standard vehicles. However, the environmental cost of manufacturing and distributing these devices can be problematic. 

"We found that the environmental impact from the electricity used to charge the e-scooters is fairly small -- about 5% of its overall impact," Johnson said. "The real impact comes largely from two areas: using other vehicles to collect and redistribute the scooters; and emissions related to producing the materials and components that go into each scooter."

The researchers compared e-scooters to cars, buses, electric mopeds, and bicycles to see how each fared when it came to different measures of pollution. They found that each type of vehicle had a “similar” outcome for each measure. 

Takeaways

While the findings were fairly similar, the researchers did note some differences between the four vehicle types. Specifically, they said that using a bicycle or electric bicycle was better for the environment than shared e-scooters, but only in certain circumstances.

"Biking -- even with an electric bike -- is almost always more environmentally friendly than using a shared e-scooter. The sole possible exception is for people who use pay-to-ride bike-share programs. Those companies use cars and trucks to redistribute the bicycles in their service area, which can sometimes make them less environmentally friendly than using an e-scooter," said Johnson.

The researchers say that additional measures taken by local and state authorities could further reduce the impact of e-scooters and make them more environmentally friendly. That could be important as cities across the U.S. begin to increasingly embrace e-scooters as a mode of transportation. 

“Allowing -- or encouraging -- companies to collect scooters only when they hit a battery depletion threshold would reduce a scooter's impact, because you wouldn't be collecting scooters that don't need re-charging,” Johnson said.

The full study has been published in Environmental Research Letters.

A new study has revealed the very different ways exposure to the Zika virus as an infant can manifest by the time the children become toddlers. 

In a test involving infants that had been exposed to Zika in utero, researchers discovered that those who were born with Zika-related abnormalities had outgrown them a few years later, whereas those born free of any signs of Zika later experienced health complications. 

“It’s heartening that some babies born with abnormalities tested in the normal range later in life, though it’s unclear whether any specific interventions help to deliver these positive findings,” said researcher Dr. Sarah B. Mulkey. “And it’s quite sobering that babies who appeared normal at birth went on to develop abnormalities due to that early Zika exposure.” 

What exposure to Zika can look like

Dr. Mulkey and her team followed over 200 infants, all of whom had been exposed to the Zika virus in utero during an outbreak in Brazil. 

While all of the infants’ mothers showed visible signs of the Zika virus, not all of the babies did upon birth, so the researchers followed their health status and gave them regular check-ups from the time they were seven months until they were just shy of three years old. 

Perhaps the most notable finding from this study was how exposure to the Zika virus changed over time for many of these infants. Of the 216 infants involved in the study, 25 percent were born showing no abnormalities related to Zika, despite their mothers’ exposure to the virus; however, these children showed difficulties on both vision and hearing tests during assessments at 32 months. 

Conversely, nearly 50 percent of infants born with Zika-related abnormalities -- which included issues with fine motor skills, language abilities, and cognitive functioning -- saw their issues dissipate by the time they were 32 months old.

The researchers explained that the earlier in the pregnancy a woman is exposed to Zika, the greater the risk that the baby is born with abnormalities. However, they are unsure why this particular trend emerged from this study. Ultimately, the team encourages parents to continually test toddlers who were exposed to Zika in the womb, as it could be crucial to getting them the resources they need as early as possible. 

“This study adds to the growing body of research that argues in favor of ongoing follow-up for Zika-exposed children, even if their neurologic exams were reassuring at birth,” said Dr. Mulkey. “As Zika-exposed children approach school age, it’s critical to better characterize the potential implications for the education system and public health.” 

A new study conducted by researchers from University College London found that seniors can help reduce their risk of dementia by staying socially active. 

The researchers found that when adults have a solid social circle and regular social outings in their 50s and 60s, their risk of dementia in their later years is significantly reduced. 

“Here we’ve found that social contact, in middle age and late life, appears to lower the risk of dementia,” said researcher Dr. Andrew Sommerlad. “This finding could feed into strategies to reduce everyone’s risk of developing dementia, adding yet another reason to promote connected communities and find ways to reduce isolation and loneliness.” 

The benefits of socializing

To see how social interactions can help fight off dementia in later life, the researchers followed over 10,000 participants from the Whitehall II study. All of the participants were between the ages of 35 and 55, and they reported on their social life several times over the course of the study, which tracked participants from 1985 through 2013. 

The researchers had the participants complete questionnaires on a regular basis starting in 1997 to better assess their cognitive functioning. They also collected a final tally of participants’ medical records in 2017, at which point the researchers could determine how social lives affected the likelihood of developing dementia. 

On the whole, social interactions between the ages of 50 and 70 benefited consumers’ cognitive functions and helped reduce the risk of dementia in later life. However, the researchers learned that staying socially active at age 60 showed the greatest reduction in dementia risk, with a 10 percent reduction in risk for those who spent time with friends on a daily basis.

“People who are socially engaged are exercising cognitive skills such as memory and language, which may help them to develop cognitive reserve -- while it may not stop their brains from changing, cognitive reserve could help people cope better with the effects of age and delay any symptoms of dementia,” said researcher Gill Livingston. 

Benefits of a healthy lifestyle

While this study highlighted the importance of socialization on reducing the risk of dementia, recent studies have discovered how consumers’ health habits could also play a role in the risk of the condition. 

Researchers recently found that not engaging in regular physical activity can increase consumers’ risk of both dementia and Alzheimer’s, while changes in weight -- either weight gain or loss -- can also impact consumers’ likelihood of developing cognitive problems. 

“Both weight gain and weight loss may be significant risk factors associated with dementia,” the researchers wrote. “This study revealed that severe weight gain, uncontrolled diabetes, smoking and less physical activity in late-life had a detrimental effect on dementia development.”

Google has become the latest company to promise that it will be improving its sustainability efforts in the coming years. 

In a blog post on Monday, the tech giant announced that it will be using all recycled materials to create its hardware products by 2022. The pledge extends to all “Made by Google” products, including Pixel smartphones, Google Nest, Google Home speakers, and other gadgets and accessories. 

“We’re always working to do more, faster. But today we’re laying the foundation for what we believe will be a way of doing business that commits to building better products better,” said Anna Meegan, Google’s head of sustainability and consumer hardware.

Focusing on sustainability

In addition to making its “Made by Google” products from only recycled materials, Google says that it will ensure that all of its shipments going to or from customers will be carbon neutral by 2020. 

Officials say that the move is inspired by the idea that all of the company’s products eventually be designed so that they can last as long as possible while simultaneously being easier to recycle at the end of their life cycle. In an interview with Fast Company, Google hardware design team head Ivy Ross explains how sustainability came to the forefront of the design process.

“Some people think design is about making things look pretty or look good,” she said. “And really design is about solving problems for humanity...I said to the team, wait a minute, [sustainability] is just another problem and is probably the most important problem of our lifetime. Won’t we feel great as designers if we are taking that on?”

This isn’t the first hint that Google has been leaning towards sustainable practices. Meegan points out that the company was able to reduce its carbon emissions by 40 percent from 2017 to 2018. It’s also currently looking to provide Nest thermostats to 1 million “consumers in need” in hopes of reducing energy costs.