Current Events in October 2019

Consolidation in the auto industry continues with the announcement that Fiat Chrysler (FCA) intends to merge with Groupe PSA, best known for its Peugeot brand.

The merger would create the fourth largest automaker in the world in terms of unit sales and expand both companies’ product line-up. For example, the combined company would offer vehicles across the luxury, premium, mainstream passenger car, SUV, and truck and light commercial product lines.

Both brands would increase their international reach since FCA is strong in North and South America and Groupe PSA has a foothold in Europe. When it comes to specific brands, the new auto company will offer FCA’s line-up of Jeep, Chrysler, Dodge, and Ram trucks, along with Maserati, Alfa Romeo, and Fiat.

PSA brings to the table its full line-up of brands of Opel, Citroen, Vauxhall, and DS cars, along with Peugeot.

Unsuccessful merger with Renault

Earlier this year, FCA made an unsuccessful bid to expand into Europe by failing to merge with French automaker Renault. Before the deal fell through, FCA said the mergerl would help both companies increase their expertise in electric vehicles.

Negotiations broke down a month later. FCA reportedly backed away from the deal because it was concerned about alleged “meddling” by the French government, which owns a stake in Renault.

Automakers appear fixated on getting bigger through mergers and acquisitions. The Financial Times reports that emerging technologies make these deals even more important since one company may lack the necessary resources to make needed investments.

Declining sales

Another factor pushing competing carmakers into the same camp is declining auto sales. Sales  in North America peaked in 2017 and have leveled off since then, though there has been no dramatic fall-off.

The popularity of ride-sharing services could be one factor that is depressing sales, but it’s also a fact that many younger consumers simply can’t afford the average transaction price (ATP) of a new car, which is now around $37,000.

FCA and Groupe PSA apparently hope a merger will put them in a better position to compete in the changing automotive landscape. The “merger of equals” would give shareholders of both companies 50 percent of the new entity. 

According to the Detroit Free Press, the combined companies would have revenues of $189 billion and profits of more than $12 billion.

Starting November 3, AT&T will begin rolling out modified versions of three Unlimited plans. Two new unlimited plans will be offered -- AT&T Unlimited Starter and AT&T Unlimited Extra. 

The cheapest plan, the Unlimited Starter plan (which is replacing the current Unlimited & More plan), starts at $65 for a single line or $35 per line for four lines. The plan has no high-speed data cap -- however, in areas where there is data traffic congestion, the subscriber is subject to having his or her data speed throttled.

The Unlimited Extra plan starts at $75 per month (or $40 per line each month for a family of four) and adds 15GB of mobile hotspot data. It has a data cap of 50 GB per month. 

The third plan that will be offered is called AT&T Unlimited Elite. It will cost $85 monthly, or $50 per line for four lines, and include HBO, higher video streaming resolution, 30GB of mobile hotspot per line, and 100GB of data before it gets throttled.

Rollout begins November 3

The new AT&T Unlimited Starter and AT&T Unlimited Extra plans will launch on November 3, while the AT&T Unlimited Elite plan will be available in the coming weeks. AT&T added that it will “share more information on 5G for consumers” relative to the new plans later this year.

“AT&T remains laser focused on offering the best unlimited options on the nation’s best and fastest network,” David Christopher, general manager, AT&T Mobility said in a statement. “These plans offer incredible value with performance, speed and reliability on the network you deserve.”

On the heels of a separate agreement with General Motors (GM), the United Auto Workers (UAW) union has settled on a tentative four-year labor deal with Ford, CNBC reports.

The proposed deal must still be approved by local union leaders and members, but it includes $6 billion in new investments from Ford and the creation or retention of 8,500 jobs. Neither Ford or UAW disclosed additional details of the contract.  

“These were long and hard hours, but I feel confident they were able to secure a contract that protects our member’s future,” UAW President Gary Jones said in a release announcing the deal.

Similarities to GM deal

The deal is “expected to share many of the same terms as the union’s recent contract with General Motors,” CNBC noted. 

That deal, which ended a strike that idled vehicle production for nearly six weeks, includes a mix of wage increases and one-time bonuses, as well as a shorter path for temporary employees to achieve permanent positions. UAW said it planned to use the GM deal as a template for negotiations with Ford and Fiat Chrysler. 

“Our negotiating team worked diligently during the General Motors strike to maintain productive negotiations with Ford,” said Rory Gamble, vice president of the UAW Ford Department. “The pattern bargaining strategy has been a very effective approach for UAW and its members to secure economic gains around salary, benefits and secured over $6 billion in major product investments in American facilities, creating and retaining over 8,500 jobs for our communities.”

Discussions between Ford and UAW progressed relatively quickly, and the contract on the table is roughly a week or two from being approved or rejected by rank-and-file union members. 

Local UAW leaders and Ford’s UAW members must also vote to approve the deal before it can go into effect. Once an acceptable contract is approved, UAW will begin discussions with Fiat Chrysler. 

The union’s discussions with Fiat Chrysler are “expected to be more contentious than those with Ford amid a federal probe into union corruption that started with the Italian-American automaker,” CNBC said. “There’s also uncertainty about the company’s future amid a potential merger deal confirmed this week with French automaker PSA Group.” 

Twitter CEO Jack Dorsey announced on Wednesday that the platform will no longer display any political advertising beginning November 22. In a series of tweets, Dorsey said the move is meant to prevent advertisers from being able to ‘“pay to increase the reach of political speech.” 

“A political message earns reach when people decide to follow an account or retweet,” Dorsey wrote. “Paying for reach removes that decision, forcing highly optimized and targeted political messages on people. We believe this decision should not be compromised by money.”

Dorsey added that it wouldn’t be “credible” for Twitter to tell users that it’s dedicated to stemming the spread of misinformation on its platform while still allowing advertisers to target users with political ads. 

Twitter said it will have developed a detailed policy by November 15, and that policy will be implemented starting November 22. 

Axing political advertisements 

Under the change, all political advertising -- which the company defines as any message that refers to an election or candidate or that advocates for or against "legislative issues of national importance” -- will be banned. However, ads that encourage voter registration will still be allowed on the site. 

“This isn’t about free expression. This is about paying for reach,” he said in a comment seemingly lobbed in the direction Facebook CEO Mark Zuckerberg, who has defended his company’s decision to keep even misleading political ads on his platform in the interest of protecting free expression. 

“Paying to increase the reach of political speech has significant ramifications that today’s democratic infrastructure may not be prepared to handle. It’s worth stepping back in order to address,” Dorsey said.

Earlier this year, Twitter announced that it would start labeling tweets from government officials, political leaders, and world leaders that violate its rules. The company provided additional details on the plan a few weeks ago, adding that users won’t be able to like, retweet, or share the content in question when the feature is used. 

Twitter’s new policy barring political ads is similarly intended to keep potentially problematic political content from gaining steam through likes and shares.

"While internet advertising is incredibly powerful and very effective for commercial advertisers, that power brings significant risks to politics," Dorsey said.

A new study conducted by researchers from Temple University Health System found that rilpivirine, a drug used to treat HIV, was found to be successful in fighting the Zika virus, a disease transmitted to humans via infected mosquitoes.  

According to the researchers, both Zika and HIV rely on the polymerase enzyme to stay alive in humans’ cells. That allowed rilpivirine to be effective for both conditions, and the researchers believe this could be a huge breakthrough in Zika treatment. 

“HIV and Zika are distinct types of RNA viruses,” said researcher Kamel Khalili, PhD. “By discovering that rilpivirine blocks Zika virus replication by bonding to an RNA polymerase enzyme common to a family of RNA viruses, we’ve opened the way to potentially being able to treat multiple RNA virus infections using the same strategy.” 

Finding new value in existing treatment options

With previous history as a treatment option for HIV, the researchers sought to determine if rilpivirine would create similar results when used for Zika, which they have explained is a biologically similar disease to HIV. 

Using mice as their test subjects, the researchers infected the animals with the Zika virus and treated some of them with rilpivirine. Much to their surprise, the drug worked in minimizing the progression of Zika, and the mice began to exhibit reduced symptoms of the infection. 

“We found...that when treated with rilpivirine, the animals survived,” said researcher Jennifer Gordon, PhD. “Our conclusion is that rilpivirine disrupted the virus’ usual course of infection.” 

The researchers were pleased with these findings, as the Zika virus has been found to lead to neurological issues in extreme cases, or even to Guillain-Barre syndrome, an attack on the nervous system that could lead to muscle paralysis. 

While Zika is biologically similar to HIV, it is also closely related to other mosquito-borne illnesses, like Dengue, West Nile Virus, hepatitis C, and yellow fever. The findings indicate that this course of treatment could be effective for large populations of infected people. 

“We now have a clear path forward,” said Dr. Khalili. “We have a starting point from which we can find ways to make these drugs even more potent and more effective against flaviviruses.” 

The Federal Reserve, as expected, announced a quarter-point reduction in the federal funds interest rate Wednesday, the third interest rate cut in 2019.

But Federal Reserve Chairman Jerome Powell signaled that the reduction could be the last for a while unless economic conditions change for the worse.

The reduction lowers the target rate for banks that need to borrow money overnight to between 1.5 percent to 1.75 percent. That rate also influences banks’ prime lending rate, which is used to set rates on revolving loans like auto financing, home equity loans, and credit card debt.

“The (Open Market) Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate,” the statement said.

Two members of the Open Market Committee voted against lower the key interest rates, just as they did at the prior Fed meeting. Odysseas Papadimitriou, CEO of the personal finance site WalletHub, also saw no reason for the Fed to cut interest rates.

Skeptics

“Actually, the motive for cutting rates is starting to appear more and more political because the fundamentals of the economy are still strong,” Papadimitriou said. “My worry is that we’re playing a card that could be worth a lot later on down the road at a time when it gets us very little. And there’s no getting it back.”

Papadimitriou said the most recent Fed rate cuts haven’t helped consumers that much since credit card lenders have been slow to lower their rates.  Sara Rathner, credit card expert at NerdWallet, is also skeptical of the benefits to consumers who have a lot of credit card debt.

“Interest rate cuts sound exciting, but credit card debt will continue to be expensive,” Rathner said in an email to ConsumerAffairs. “A quarter of a percent decrease isn’t going to rescue anyone.”

Not a strong reason for cutting

In its statement, the Fed couldn’t really point to a strong reason for cutting its interest rate. It noted that the labor market appears to remain strong and that economic activity has been rising at a moderate rate.

“Job gains have been solid, on average, in recent months, and the unemployment rate has remained low,” the Fed said in its statement.

It said business investments and exports have been weak lately but noted those declines have been offset by rising consumer spending. Inflation remains in the Fed’s target range, just below 2 percent.

Daimler Vans USA is recalling 15,160 model year 2016-2019 Mercedes-Benz Metris vehicles.

The integrated backup battery compartment located underneath the front passenger's seat may not have its own cover, potentially exposing the battery when the seat is moved forward.

If conductive material, such as metal, unintentionally drops into the opening and contacts the terminals on the battery, an electrical short can occur, increasing the risk of a fire.

What to do

DVUSA will notify owners, and Mercedes-Benz dealers will install covers over the battery compartment area free of charge.

The recall is expected to begin November 22, 2019.

Owners may contact DVUSA customer service at (877) 762-8267. DVUSA's number for this recall is VS2SITZAB.

In a lawsuit filed Tuesday, a former Juul executive accuses the e-cigarette maker of shipping a million contaminated pods earlier this year and not issuing a recall, according to BuzzFeed News.

The suit was filed by Siddharth Breja, Juul’s former senior vice president of global finance. Breja said he attended an executive meeting back in March, during which it came to his attention that Juul had shipped approximately 250,000 Juul “mint refills kits” (the equivalent of one million pods). 

The former executive claims that he pushed Juul to issue a product recall or public safety notice, but Juul allegedly dismissed the idea since doing so would cost it billions of dollars. Breja claims he was fired a week after expressing concern about the contaminated pods.

According to the lawsuit, former CEO Kevin Burns -- who was replaced by former Altria executive K.C. Crosthwaite in September -- responded to Breja’s concerns by saying: "Half our customers are drunk and vaping like mo-fo's, who the f*** is going to notice the quality of our pods?"

In a statement to BuzzFeed News, Breja's lawyer Harmeet Dhillon said that his client "became aware of very concerning actions at the company, and he performed his duty to shareholders and to the board by reporting these issues internally.” 

“In exchange for doing that, he was inappropriately terminated,” Dhillon continued. “This is very concerning, particularly since some of the issues he raised concerned matters of public safety."

Juul responds

Juul called Breja’s claims “baseless” and refuted the claim that he was fired after voicing concerns about the contaminated pods. 

“He was terminated in March 2019 because he failed to demonstrate the leadership qualities needed in his role,” a company spokesperson said in a statement issued to various media outlets. “The allegations concerning safety issues with Juul products are equally meritless, and we already investigated the underlying manufacturing issue and determined the product met all applicable specifications.” 

Juul added that it intends to “vigorously defend this lawsuit."

Juul has been singled out for fueling the current vaping epidemic, as its flavored products have been found to appeal to younger users. At this point, however, the current outbreak of lung illnesses tied to vaping hasn’t been linked to Juul specifically. Health officials say a majority of the more than 1,600 people who have gotten sick reported using THC-containing products.

The vaping industry itself is still under intense scrutiny as investigators seek to uncover a more specific cause behind the sudden rise in vaping-related lung illnesses and deaths. 

In a hearing before the U.S. Senate Committee on Commerce, Science, and Transportation, Boeing officials admitted that there were insufficiencies in the company’s safety assessments of the 737 Max. 

The testimony came a year after the first of two Boeing 737 Max jets crashed within a five-month time frame. The two crashes killed 346 people and prompted aviation officials to ground the planes until safety improvements were made.

The hearing on Tuesday was attended by more than a dozen relatives of people who were killed in the Boeing 737 Max crashes, and Boeing CEO Dennis Muilenburg opened with an apology to those families. 

“On behalf of myself and the Boeing company, we are sorry, we are deeply and truly sorry,” Muilenburg said. “We’ve made mistakes and we got some things wrong.”

Preventable accidents

Boeing has admitted that issues with the plane’s MCAS flight-control software were a factor in the crashes. The MCAS “responded to erroneous signals from a sensor that measures the airplane’s angle of attack,” the company said.

“Both of these accidents were entirely preventable,” Sen. Roger Wicker (R-Miss.), chair of the Commerce Committee, said to Muilenburg during the hearing. 

Members of the Committee criticized Boeing for failing to properly inform pilots about modifications that were made to the new model of the plane. 

“You set those pilots up for failure,” said Sen. Tammy Duckworth (D-Ill.)

Proposed fixes on the way

The testimony will continue on Wednesday before a House committee. Prepared remarks indicate that Muilenburg will say that his company is making changes to prevent similar disasters from taking place in the future. 

Last week, Boeing submitted its “final software load” containing proposed fixes for the 737 Max’s software. The Federal Aviation Administration is still reviewing the fixes. Before the planes can be cleared to return to service, the 737 Max will have to undergo a certification test flight. 

Muilenburg said over the summer that Boeing is aware that it will need to work “to earn and re-earn the trust of the flying public” in the wake of the two deadly crashes. 

“We are taking all actions necessary to make sure that accidents like those two ... never happened again,” he said. 

The student loan market is big -- like big enough to be its own economy. 

Following the money, there’s an estimated $1.5 trillion worth of student loan debt affecting more than 40 million borrowers -- or about 35 percent of the students who take out those loans. Eventually, those loans go on to back securities to the tune of $171 billion. Like we said -- big.

The average student loan is close to $40,000, which can put students in a bind for decades. Research has shown the average bachelor's degree holder takes 21 years to pay off his or her loans. 

While it’s nearly impossible to escape paying back a student loan, there is a glimmer of hope for borrowers within that cloud of debt. It’s called the Public Service Loan Forgiveness (PSLF) program, a government initiative that provides indebted professionals with a way out of their federal student loan debt by working full-time in public service. 

That’s the good news.

The bad news is that it’s nearly impossible to get a loan forgiven through PSLF. The most recent numbers from the Department of Education (June, 2019) show that out of the 110,729 applications, 91 percent were rejected. And one of the institutions handling the PSLF program -- the Pennsylvania Higher Education Assistance Agency (PHEAA) -- reportedly gave the thumbs-down to 99 percent of applicants. It’s that inexplicable metric that’s caught the attention of some of the most powerful representatives in the U.S. Senate.

Applicants “deserve better”

Twenty-three senators -- including Democratic presidential hopefuls Cory Booker, Kamala Harris, Amy Klobuchar, Bernie Sanders, and Elizabeth Warren -- have asked the Consumer Financial Protection Bureau (CFPB) to look into how that Pennsylvania program was managing its role in PSLF.

According to a letter from the senators to the CFPB, government watchdogs have been on PHEAA’s trail for years as it denied one application after another -- mostly due to PHEAA’s “flawed payment processing, botched paperwork, and inaccurate information.” The senators also cited a 2019 Inspector General investigation that found the PHEAA had a “pattern of noncompliance and was among the worst federal student loan providers.”

Fortunately for consumers riddled by student loan debt, there’s a lot of attention being given to this matter. On top of the House Committee on Labor and Education’s unhappiness of how PSLF is being handled, a separate group of senators hammered home their own disgust in a letter to Secretary of Education Betsy DeVos. 

“The Trump Administration’s flawed implementation of loan forgiveness programs, resistance to recommendations to improve its processes, failure to properly hold student loan servicers and debt collectors accountable, and recent interference with state and federal law enforcement agencies, has combined to create a disaster for public servants applying for loan forgiveness,” the Senate Democrats wrote. “The millions of public servants who pursued careers in education, public health, the military, and other public service work deserve better.”

Why not just cancel all student loan debt?

In a perfect world where all would be forgiven, canceling student loan obligations would call for quite the celebration. Unfortunately, it’s probably not going to happen The simple reason for that is because the nation’s $1.5 trillion in student debt fuels a lot of other initiatives.

However, Klobuchar, for one, says some options should be looked into further. While she believes that offering free college tuition or forgiving student debt is unrealistic, she supports allowing students and former students to refinance school loans at a rate somewhere around 3 percent.

At a town meeting at St. Anselm College in Manchester, New Hampshire earlier this year, Klobuchar said her wish list includes expanding Pell Grants and revisiting President Obama’s proposal to make community college completely free.

“I wish I could staple a free college diploma under every one of your chairs -- I do,” Klobuchar told St. Anselm’s students. “Don’t look. It’s not there. I wish I could do that but I have to be straight with you and tell you the truth.”

A new study conducted by researchers from the Hospital del Mar Medical Research Institute found that where consumers live could affect a rather serious health outcome. 

The study revealed that consumers who live in big, loud cities are 30 percent more likely to suffer more serious strokes than those who live in quieter, more suburban areas. The teams says those who lived in areas with more green spaces were 25 percent less likely to suffer the same experience. 

“We have observed a gradient: the more green spaces, the less serious the stroke,” said researcher Dr. Rosa María Vivanco. “And the more noise, the more serious it is. This suggests that factors other than those traditionally associated with stroke may play an independent role in the condition.” 

Managing noise levels

To understand the health aspect of the study, the researchers analyzed nearly 3,000 patient records from the Hospital del Mar in Barcelona and a noise map of Barcelona to determine how both noise levels and air pollution played a role in patients’ health outcomes. 

The researchers then compared the patients’ health records with the National Institute of Health Stroke Scale (NIHSS) to determine the severity of the patients’ strokes. They focused specifically on the World Health Organization’s (WHO’s) recommendations for exposure to traffic noise during both daytime and nighttime hours. 

Ultimately, the researchers learned that when participants lived in areas that exceeded WHO’s recommendations for exposure to traffic noise, they were more likely to experience more severe strokes. However, participants who were exposed to noise within limits and lived closer to green spaces were at a reduced risk.  

The researchers hope that these findings can catch the attention of city decision-makers, as they could make a difference in the overall health of countless consumers. 

“The severity of a stroke depends on various factors, including the extent of the brain injury, the specific area of the brain affected, the subtype of the stroke, the existence of associated risk factors (diabetes, atrial fibrillation, atherosclerotic load), and so on,” said researcher Dr. Jaume Roquer. “The fact that we have demonstrated, in addition to all these factors, that environmental aspects like green spaces and urban noise levels affect the severity of a stroke and therefore our health, shows that this information must be taken into account by political and health planners.” 

As a way to determine the safety and preparedness of countries around the world, researchers from Johns Hopkins University’s Center for Health and Security teamed up with experts at other national agencies to create the Global Health Security (GHS) Index. 

The GHS Index ranks countries out of 100 possible points for how prepared they be should in the event of a serious disease breakout. However, the researchers determined that out of the 195 countries included in the Index, the nations scored a collective 40 points, which shows how poorly prepared countries around the world are when it comes to these emergencies. 

“The GHS finds that no country is fully prepared for naturally occurring, intentional, or accidental infectious disease outbreaks,” said researcher Jennifer Nuzzo. “Knowing that there is work to do, countries can use the index to identify gaps, build preparedness and best practices, and track progress over time.”

What are countries prepared for? 

The experts compiled 140 questions that would determine each country’s preparedness in the event of an epidemic or pandemic. The index covered six different categories: prevention, detection, response, health system, compliance with international norms, and risk environment.

Information from national organizations was used to compile the answers to these questions, and it ultimately allowed each country to receive an overall Index score. 

Across the board, countries were the most insufficient in having a healthcare structure in place that would treat infected residents. Immediate detection of the outbreak and subsequent work to limit the spread was also a huge weakness for the overwhelming majority of the countries involved. 

The United States did rank as the top country in the GHS Index, garnering a score of 83.5 points, with the United Kingdom coming in second at 77.9 points. The Netherlands, Australia, and Canada rounded out the top five most prepared countries, with 75.6, 75.5, and 75.3 points, respectively. 

Beyond the top five, though, there was a big drop off when it came to preparedness. The researchers determined that the 60 wealthiest nations averaged a score of just under 52 points. The team is encouraging world leaders to take the necessary steps to be as prepared as possible for potential epidemics or pandemics, as doing so can ultimately save the lives of millions. 

“Whether they be natural, accidental, or deliberate, infectious disease outbreaks can cause significant harm to health, peace, and prosperity if countries are not adequately prepared,” said Tom Inglesby, the Director for the Center for Health Security. “It is important for national leaders to understand the risks that infectious diseases pose and commit to making improvements in preparedness for these events.” 

The full Global Health Security Index, including the experts’ recommendations for all countries moving forward, can be found here. 

After paying out millions of dollars in judgments claiming its baby powder contained a cancer-causing substance, Johnson & Johnson says third party tests show the powder is clean.

The company announced 15 tests on the baby powder that the Food and Drug Administration (FDA) said contained trace amounts of asbestos, and the tests showed the powder was free of the carcinogen. The FDA issued a statement saying it stands by its previous findings.

In March, a California jury ordered the company to pay $29 million in the latest lawsuit alleging a link between its talcum powder products and cancer.

Terry Leavitt said that she had used Johnson’s Baby Powder and Shower to Shower gel, both of which contain talc, in the sixties and seventies. She was diagnosed with mesothelioma in 2017. Her lawsuit charging that the products contained talc contaminated with asbestos began in January and concluded last week with a $29.4 million verdict against the company.

Johnson & Johnson commissioned the tests to show that its baby powder products do not contain asbestos, as claimed by a number of plaintiffs. The tests focused on the same lot of the product that the FDA tested.

FDA not convinced

FDA officials were quick to respond, telling Reuters that it disputes the finding that the powder is free of asbestos. Johnson & Johnson has already recalled nearly 33,000 containers of baby powder after the FDA said it found trace amounts of asbestos in powder taken from a bottle the agency purchased online.

“Rigorous and third-party testing confirms there is no asbestos in Johnson’s Baby Powder,” the company said in a statement. “We stand by the safety of our product.”

Johnson & Johnson recalled one lot of Johnson’s Baby Powder that was manufactured and distributed in the U.S. last year. It took the action based on the FDA’s findings.

It was the first time Johnson & Johnson recalled its baby powder product for possible asbestos contamination. Until now, the FDA had not announced a potential problem with the product.

Johnson & Johnson’s defense of its baby powder product is nothing new. A year ago, when a Reuters news report first suggested the product contained asbestos, the company vigorously denied it.

At the time, Johnson & Johnson CEO Alex Gorsky said “thousands of studies” had demonstrated that the company’s baby powder is free of asbestos.

The First Amendment gives publishers wide leeway when it comes to politics, but government regulators are vigorous fact-checkers when it comes to describing a product or service.

The Federal Trade Commission (FTC) has gone to court to stop a publisher from targeting seniors with what the agency says are bogus cures for diabetes and a “phony” plan to cash in on a government-affiliated check program. The complaint, filed in federal court, charges Agora Financial LLC of misleading consumers into purchasing its books and newsletters.

“If you’re trying to get the FTC’s attention, making up stories about disease cures and government checks is a good way to do it,” said Andrew Smith, director of the Bureau of Consumer Protection. 

The complaint charges the company and some of its affiliates of targeting older consumers with its “Doctor’s Guide to Reversing Diabetes in 28 Days.” Type 2 diabetes can be reversed, but doctors say it takes changes in diet and exercise. The FTC claims the Doctor’s Guide offers a “scientifically-proven cure” that doesn’t require that. The publication sells for $249.

Various media outlets have sought comment from company officials but report that they have been unsuccessful.

‘Lifetime income’

The complaint also says the company markets misleading or false financial publications. The FTC cites a newsletter called the “Lifetime Income Report” and a book with the title “Congress’ Secret $1.17 Trillion Giveaway to Consumers.” The agency says the book falsely promises that readers can learn how to claim hundreds of thousands of dollars they are entitled to in “Congressional Checks” or “Republican Checks.”

“These cash distributions are contractually required by the U.S. government… So if you don’t collect someone else will,” the defendants wrote in one of their publications. The agency further charges the company of using phony testimonials from consumers who allegedly received the money.

Marketing issues

The FTC’s complaint also takes issue with the way the company markets the publication. It says the book is described as “free” except for a shipping and handling fee of $4.95.

However, consumers have 30 days to submit a cancellation to an automatic subscription to the Lifetime Income Report newsletter, which costs $99 a year -- a practice known as negative option marketing.

All of this, the FTC alleges, is a violation of the FTC Act. The suit is asking for a court order to stop the company from marketing it publications and refund money to consumers.

While other pillars of the economy have become wobbly in the second half of the year, it’s been consumers who have kept the economy humming through their spending habits.

But lately, there are signs consumers may be running short of enthusiasm. The Conference Board reports that its Consumer Confidence Index declined slightly in October for a second straight month.

The decline was minor, and the Index still stands at a healthy 125.9, down from 126.3 in September. But it’s clear that consumers are beginning to express some doubts about the future. The Expectations Index – based on consumers' short-term outlook for income, business and labor market conditions – declined from 96.8 last month to 94.9 this month.

"Consumer confidence was relatively flat in October, following a decrease in September," said Lynn Franco, director of Economic Indicators at The Conference Board. "The Present Situation Index improved, but expectations weakened slightly as consumers expressed some concerns about business conditions and job prospects. However, confidence levels remain high and there are no indications that consumers will curtail their holiday spending."

Good news for retailers

That comes as good news for retailers who are benefitting from consumers’ upbeat mood. Over the last few days, as publicly traded companies have reported third-quarter earnings, it has been consumer staples that have performed the best, along with health care.

There’s no doubt that consumers’ optimism has been fed by low oil prices, which have produced relatively low gasoline prices that are about 22 cents a gallon lower than they were at this time last year.

On the positive side of the ledger, there was an increase this month in the number of consumers who say current business conditions are “good.” There were also fewer consumers labeling business conditions as “bad.”

But consumers' assessment of the job market was mixed. There were slightly fewer consumers saying job openings are “plentiful” and more who said jobs are “hard to get.”

And if consumers think times are good, they seem less sure about how long that will last. The percentage of consumers who think business conditions will improve over the next six months fell from 20.0 percent to 18.6 percent.