Current Events in May 2020

Nearly all of the large public companies that accepted money through the government’s Paycheck Protection Program (PPP) had access to other forms of capital while the coronavirus pandemic was underway, according to a CNBC analysis. 

Large public companies must return emergency relief funds provided by the government by Thursday May 14, but many of them are keeping their loans. According to filings reviewed by CNBC, many of the largest public companies were able to raise millions of dollars by selling stock or tapping unused credit lines. 

Such factors should have rendered them ineligible to participate in the program. However, most public companies who had access to other forms of capital haven’t discussed returning the federal funding. 

Businesses keeping PPP money

Of the $1.32 billion in federal funding taken by public companies in the form of 407 loans, only 61 loans totaling $411 million are being returned, according to data analytics firm FactSquared.

CNBC said, for example, that California-based Cutura -- which makes beauty devices -- raised more than $26 million last month by selling shares on the open market and received the money the same day its PPP loan application came through. The company also could have kept its business afloat by using $19.5 million in cash and liquid investments or a $25 million credit line from Wells Fargo.

CNBC found that other companies may also have improperly taken federal funding. Some of these businesses included OncoCyte, which develops early detection cancer tests; Xeris Pharmaceuticals, a maker of diabetes medication; and Applied Optoelectronics, a Texas-based maker of fiber-optic networking products. 

In April, the Small Business Administration (SBA) gave companies two weeks to return money that officials suspect they weren’t qualified to receive. Treasury Secretary Steven Mnuchin has warned of “severe consequences” for companies that took loans but weren’t struggling financially in the way that so many small businesses are in the midst of the pandemic. 

While many parents worry about how much time their kids are spending playing video games, the fear around video game addiction has only grown.

Now, a new study conducted by researchers from Brigham Young University has explored video game addiction and found that the overwhelming majority of those playing do so in a healthy way. However, 10 percent of gamers do struggle to detach from the hobby. 

“The aim of this particular study is to look at the longer-term impact of having a particular relationship with video games and what it does to a person over time,” said researcher Sarah Coyne. “To see the impact, we examined the trajectories of pathological video game-play across six years, from early adolescence to emerging adulthood.” 

Addiction affects 10 percent of players

The researchers studied nearly 400 young adults over the course of six years to determine how their video game play affected their mental and emotional well-being. 

Questionnaires were used to assess how often the participants were playing video games and how that time affected their levels of depression, anger, empathy, and financial stress, among several other factors. In tracking these items each year, the researchers could clearly see how video games affected participants’ daily lives as they transitioned into adulthood. 

The researchers found that just 10 percent of the participants showed signs of consistent video game addiction that could interfere with other parts of life; the overwhelming majority had a healthy relationship with gaming. For this 10 percent, the signs associated with video game addiction increased during each year of the study, while the majority of participants stayed in the low to moderate level each time. 

Social concerns

The researchers primarily worry about how video games could close consumers off from socializing with friends and family or completing certain tasks. Not being able to detach from a game is certainly cause for concern. 

While too much screen time can be detrimental for anyone, the researchers reminded parents that video games aren’t to be feared, as most kids will play in a way that isn’t disruptive to their day-to-day lives. 

“I really do think there are some wonderful things about video games,” said Coyne. “The important thing is to use them in healthy ways and to not get sucked into the pathological levels.” 

Uber Chief Executive Dara Khosrowshahi announced during a conference call on Wednesday that, starting Monday, all drivers and riders must wear face masks to mitigate the spread of COVID-19. 

The ride-hailing company will also take several other measures to alleviate consumer concern about the possibility of exposure to the illness, including requiring drivers to have to take a photo of themselves with their mask on before they begin driving and confirming that they aren’t experiencing any COVID-19 symptoms.

Drivers will also have to prove that they sufficiently sanitized their vehicle and agree to drive with their windows down. Khosrowshahi noted on the call that Uber has allocated $50 million for masks and sanitation products for its drivers.

"As countries reopen, Uber is focused on safety and proceeding with caution. Today, we continue to ask riders to stay home if they can, while shipping safety supplies to drivers who are providing essential trips. At the same time, our teams are preparing for the next phase of recovery, where we will all have a role to play," said Uber's head of safety communications Andrew Hasbun in a statement to CNN Business.

Virus prevention measures

Starting Monday, May 18, Uber will also limit the number of passengers allowed in each vehicle to three. Additionally, passengers won’t be allowed to ride in the front seat in order to ensure proper social distancing. 

“We do not want them to be in the front seat because we want them to be physically distanced as much as possible from the driver,” Sachin Kansal, Uber’s head of safety, said in a video conference with reporters. “We want all the members of that party to be sitting in the backseat.” As for passengers crammed into the backseat, Kansal said, “These are people who are typically from the same household, so they’re already living together.”

Uber’s business has been hit hard by the pandemic. Khosrowshahi said on the call that Uber drivers have seen their income drop by as much as 80 percent. The company announced this week that it would lay off 3,500 full-time employees. 

A subsidiary of CVS Health has settled charges leveled by the U.S. Justice Department that it dispensed controlled substances, including opioid painkillers, without valid prescriptions.

Omnicare, which operates “closed-door” pharmacies that are not open to the public, has agreed to settle the charges by paying a $15.3 million civil penalty. U.S. Attorney for the Central District of California Nicola Hanna said the company was accused of allowing opioids and other controlled substances to be dispensed without a valid prescription, mostly at nursing homes and other long term care facilities (LTCF).

The complaint specifically alleged that Omnicare violated the federal Controlled Substances Act in its handling of emergency prescriptions, its controls over the emergency kits, and its processing of written prescriptions that lacked required elements such as the prescriber’s signature or DEA number. 

A resulting federal investigation found that the company failed to control emergency kits by improperly permitting LTCFs to remove opioids and other controlled substances from emergency kits days before doctors provided a valid prescription. 

Inadequate documentation

Investigators also charged that Omnicare repeatedly failed to document and report oral emergency prescriptions of Schedule II controlled substances.

“Omnicare dispensed powerful opioids without valid prescriptions and failed to inform federal authorities of significant losses of opioids and other drugs,” Hanna said. “With the opioid crisis still a very real concern, every entity that handles dangerous drugs will be held accountable to ensure powerful narcotics are properly dispensed and not diverted to the black market.”

In addition to paying the $15.3 million penalty, Omnicare also agreed to a Memorandum of Agreement with the Drug Enforcement Administration (DEA) that will require the company to increase its auditing and monitoring of emergency kits placed at LTCFs.

Facebook has agreed to pay $52 million to settle a complaint filed in 2018 by former content moderators who said they developed mental health conditions on the job.

Under the settlement, current and former moderators (all 11,250 of them) will get a minimum of $1,000 each. Plaintiffs will be eligible for additional compensation if they are diagnosed with post-traumatic stress disorder or related conditions. 

In the original class action lawsuit, which was filed in September 2018 by contractor Selena Scola, Facebook employees complained that they developed psychological conditions -- including post-traumatic stress disorder (PTSD) -- because they frequently viewed violent and disturbing content on the platform.

Psychological trauma

Scola said she developed PTSD after nine months of viewing content that often included violent behavior, beheadings, suicides, and animal cruelty. Attorneys argued that the psychological trauma suffered was in violation of a California law which requires that companies provide a safe working environment. 

The settlement has been preliminarily approved by the Superior Court of the State of California. 

As many as half of the current and former moderators involved in the suit may be eligible for extra compensation related to mental health issues linked with their time working for Facebook, according to lawyers. Individual compensation could be up to $50,000 each in cases where moderators developed severe trauma-related mental health conditions. 

“We are so pleased that Facebook worked with us to create an unprecedented program to help people performing work that was unimaginable even a few years ago,” Steve Williams, a lawyer for the plaintiffs, said in a statement. “The harm that can be suffered from this work is real and severe.”

Rolling out changes

As part of the settlement, Facebook has agreed to enact several changes to protect the mental health of its moderators. Those changes include muting audio by default and changing videos to black and white. 

Moderators who regularly view graphic and disturbing content will get access to weekly mental health counseling sessions, and Facebook will also make monthly group therapy sessions available to moderators.

The company said it’s “grateful to the people who do this important work to make Facebook a safe environment for everyone” and added that it is “committed to providing them additional support through this settlement and in the future."

Ford Motor Company is recalling about 5,100 model year 2014-17 Transit Connect vehicles with the panoramic vista roof.

An improper bond may exist between the panoramic roof and the vehicle body that could result in wind noise, water leaks and -- in some cases -- separation from the vehicle.

There are no reports of accident or injury.

What to do

Ford will notify owners, and dealers will remove, clean and reinstall the panoramic roof glass at now charge.

Owners may contact Ford customer service at (866) 436-7332. Ford's number for this recall is 20S22.

Coronavirus (COVID-19) tally as compiled by Johns Hopkins University. (Previous numbers in parentheses.)

Total U.S. confirmed cases: 1,372,855 (1,354,504)

Total U.S. deaths: 82,548 (80,900)

Total global cases: 4,298,269 (4,215,514)

Total global deaths: 293,514  (287,809)

WHO cites ‘potentially positive’ treatments

The World Health Organization (WHO) reports that some coronavirus (COVID-19) treatments appear to be limiting the severity or length of the disease. The next step, it says, is to learn more about four or five of the most promising ones.

Margaret Harris, a spokesperson for the organization, told reporters that early studies show some treatments have been effective when given to patients. But she says research is in its early stages.

Harris stopped short of naming the treatments and admitted that, while the results are promising, “we do not have anything that can kill or stop the virus.”

Elusive profits for food delivery companies 

With so many consumers stuck at home, you would think companies that deliver food would be doing a banner business. While it’s true they’re as busy as they’ve ever been, The Wall Street Journal reports that those extra trips aren’t resulting in extra profits.

“Companies including Grubhub Inc. and Uber Technologies Inc.’s Uber Eats division, are losing money on delivery orders or barely breaking even,” the publication reports. “And they say they aren’t sure how many diners will stick with delivery after stay-at-home orders are relaxed.”

Even so, credit card data -- along with company statements -- show that sales for GrubHub, Uber Eats, DoorDash, and Postmates have grown in the last 60 days.

Back to school

A day after Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, cast doubt on school resuming in the fall, Dr. Scott Gottlieb, former Food and Drug Administration (FDA) commissioner, expressed a more optimistic view, at least in terms of higher education.

“I think we’ll be in a position where we’re going to give a try at opening schools, opening residential college campuses in the fall because I’m hopeful that coming off of July and August, we’re going to see some declines in cases in the summer,” Gottlieb told CNBC this morning. “I think there will be a seasonal effect here.”

In a remote appearance before a Senate committee Tuesday, Fauci said he didn’t think there would be treatments in place by the fall, and therefore children should not return to the classroom.

U.S. preparing for future vaccine

The U.S. Defense Department and the Department of Health and Human Services have awarded a contract for up to 500 million “medical-grade injection devices” that would be used to administer a vaccine against COVID-19, whenever one is approved.

The $138 million contract with ApiJect Systems America for “Project Jumpstart” and “RAPID USA” is aimed at expanding U.S. production capability for domestically manufactured devices to administer a vaccine, starting in October.

“The contract will support ‘Jumpstart’ to create a U.S.-based, high-speed supply chain for prefilled syringes beginning later this year by using well-established Blow-Fill-Seal (BFS) aseptic plastics manufacturing technology, suitable for combatting COVID-19 when a safe and proven vaccine becomes available,” said  Lt. Col. Mike Andrews, a Defense Department spokesman.

Powell warns of deep economic damage

The Federal Reserve has been active in supporting businesses and industries that have been hammered by the economic effects of the coronavirus, but Chairman Jerome Powell says there’s a limit to those measures’ ability to limit the damage.

In a speech to the Peterson Institute for International Economics today, Powell suggested it will take longer for the economy to recover than many people think. If things get really bad, he says it would leave “lasting damage” to economic productivity.

Powell’s colleague, Cleveland Fed President Loretta Mester, has expressed an equally sober view, saying she expects unemployment to hit or top 20 percent and second-quarter economic activity to plunge by 40 percent before the economy begins to recover in the second half of the year.

Around the nation

• California: Two men were arrested at a Los Angeles Target after they refused an employee’s order to put on masks and got into a fight. According to CNN, the Target employee got the worst of it, suffering a broken arm.

• Texas: State officials are sending 1,200 vials of the Gilead drug remdesivir to Texas hospitals to treat coronavirus patients. The state this week received 30 cases of the experimental drug from the federal government. 

• Vermont: Gov. Phil Scott says Vermont has the third-lowest rate of growth in coronavirus cases in the nation, but he’s taking a cautious approach to reopening the state. Retail stores will be allowed to open next week at 25 percent capacity and must abide by health and safety requirements.

If you’ve been in a supermarket in the last two months, you’ve probably noticed a lot of empty store shelves. It’s not just toilet paper and hand sanitizer that’s selling out.

Acosta, a sales and marketing agency in the consumer packaged goods industry, has been following the rapid evolution of shopping trends in the post coronavirus (COVID-19) world and has noted the way many consumers have responded.

Darian Pickett, CEO of Acosta, says consumers appear to be less concerned about the virus after two months and are eager to get things back to normal. At the same time, they’re well aware that many of the consumer products they want are in short supply, so they have turned to the internet.

"E-commerce has grown at an accelerated rate — by two or three years — and a new trend we are seeing is shoppers turning to online subscription services, many for the first time,” Pickett said. “This serves as a way to work around out-of-stocks they've experienced while also allowing consumers to stay out of physical stores.”

The Acosta analysis shows health and beauty and alcohol are popular subscription categories since these stores have not yet re-opened in many states. The biggest driver of subscriptions is the disruption of the supply chain.

As of the week of April 4, two-thirds of shoppers said just over half of the products they wanted were available. Those numbers had improved by the week of April 17. Forty-three percent of shoppers were able to find acceptable substitutes for at least half the missing products.

Lots of first-timers

Thirty-eight percent of shoppers made an online subscription order in the last four weeks. Of those who ordered fresh food and beverages, 55 percent were subscribing for the first time. Of those who subscribed to meal kits, 47 percent did it for the first time. Forty-six percent of people subscribing to alcohol delivery were first-time subscribers.

Some popular subscription services include Dollar Shave Club, Blue Apron, Hello Fresh, and Barkbox. Once the order is placed and the frequency determined, the consumer doesn’t have to take any action until they’re ready to unsubscribe.

Food subscriptions have become especially popular since the pandemic began to spread, with specialty subscription companies like Green Chef, Dinnerly, and Home Chef seeing strong sales.

ConsumerAffairs has thousands of reviews of some of the best meal delivery services here.

Amazon has made moves to suggest that it is easing COVID-19 shipping restrictions, such as delaying shipments of nonessential items. 

Over the weekend, the company began informing third-party sellers that it would no longer limit the number of units that sellers could send per order to its warehouses. Amazon previously placed a cap on nonessential inventory restocks as it dealt with the sudden surge in consumer demand for products on its marketplace.  

Now, sellers have been informed that they can send in an unrestricted quantity of inventory. 

“We removed quantity limits on products our suppliers can send to our fulfillment centers,” Kristen Kish, an Amazon spokeswoman told CNBC. “We continue to adhere to extensive health and safety measures to protect our associates as they pick, pack and ship products to customers, and are improving delivery speeds across our store.” 

Amazon has also brought back the “Featured deals” and “Frequently bought together” sections on its website, indicating that the company isn’t as crushed by demand as it was in the initial stages of the pandemic. 

The e-commerce giant hasn’t yet restored its one- and two-day delivery options, but next-day delivery is now starting to come back online for select cities in the U.S.

Hazard pay for workers

In addition to loosening some shipping restrictions, Amazon will be extending hazard pay to warehouse workers through the end of May. The company will stop offering the extra pay in June, according to a Recode report.  

Amazon has faced criticism over its treatment of front-line workers during the pandemic. Lawmakers and activist groups have argued that the company isn’t doing enough to protect warehouse workers who have continued to work during the health crisis and have been forced to work in facilities where other employees have tested positive for COVID-19.

Amazon is currently being investigated by The National Labor Relations Board (NLRB) over its recent firing of at least four workers who spoke out about the company’s allegedly unsafe working conditions during the coronavirus crisis. 

In mid-March, the company increased warehouse and delivery employee pay by $2 per hour and instated double overtime pay. After extending the pay hike several times, the increases will now end on May 31.

“We continue to see incredible demand from customers right now and … our team’s response in coming back to work has been really great as well,” Dave Clark, Amazon’s senior vice president of worldwide operations, told Recode. “We think it’s the right thing for employees and the right thing for customers to keep it on for a couple of weeks.”

Travel vouchers or a cash refund? If you said vouchers, one travel insurer thinks you should reconsider.

Even though airlines are feeling additional pressure to offer a cash refund for a canceled flight, they’d probably prefer sidelined passengers to take a voucher so they can keep the cash in hand. When faced with that decision, travel insurance comparison site Squaremouth’s Karsara Barto says consumers need to do their homework to understand what they’re getting with a voucher.

“If you're buying travel insurance now, it is important to understand that coverage may be impacted if you're using a voucher to book your trip. Coverage varies depending on the provider and can be dependent upon the documentation from your travel supplier,” she told ConsumerAffairs.

Those variants may be few in number, but Barto urges travelers to hit the pause button and think about a few key considerations.

The value of the voucher may not be insurable

There’s a veritable plane full of travel insurance companies. Still, they’re not all alike, and they all have a clause here or there that’s particular to their coverage that consumers should scrutinize closely. 

Some travel insurers lump vouchers in the same category as non-reimbursable expenses, like they do with reward points or frequent flyer miles. In this situation, Squaremouth says travelers should not pay to insure the value of their voucher because they may not be reimbursed if they wind up having to cancel their trip.

When ConsumerAffairs was working on our recent piece on airline refunds, a spokesperson for Airlines for America (A4A) pointed out that carriers were offering “future credit opportunities and other incentives” alongside the traditional voucher. While a “credit opportunity or other incentive” may sound like a viable consolation cocktail, it’s probably wise to call the travel insurance provider and make sure that any non-traditional incentive is covered just in case.

If the travel supplier goes belly-up, refunds for vouchers are doubtful

If the company in charge of your trip goes bankrupt or is unable to provide a service, consumers will need to make sure the value of their trip is covered.

“With major travel providers like Norwegian Cruise Line and Virgin Atlantic warning of possible bankruptcy, travelers may turn to travel insurance to protect their voucher value,” Squaremouth says. 

On the other hand, if a travel supplier goes belly-up and files for bankruptcy before a trip is booked and insured, any traveler holding an unused voucher has little to no recourse. 

Time-sensitive benefits may not apply

If you’ve already got a trip booked but think that the open-ended nature of the pandemic calls for buying insurance, there are certain time-sensitive benefits to consider. Examples would be pre-existing condition coverage and Cancel for Any Reason coverage, which is typically only available for a limited period after a trip is first booked. 

That “first booked” part is important because if any portion of the new trip was rescheduled and not canceled completely, the original trip’s booking date will still apply. In that case, travelers may not be eligible for time-sensitive benefits.

In an email to employees on Tuesday, Twitter CEO Jack Dorsey said his company’s team members will have the option of working from home indefinitely, according to BuzzFeed News. 

Dorsey said it was unlikely that offices will open back up before September -- but even after the worst of the pandemic is over, employees can remain at home. 

“Opening offices will be our decision,” a company spokesperson said. “When and if our employees come back, will be theirs.”

Dorsey noted that Twitter was one of the first companies to move to a work-from-home model when the health crisis began unfolding. He said the company will “continue to put the safety of our people and communities first.”

Working from home forever

Given that COVID-19 mitigation efforts are still active and the virus is continuing to spread, Twitter has cancelled all in-person events for the remainder of the year. Twitter officials said they will assess plans for 2021 events later this year.

The company also increased its allowance for work-from-home supplies to $1,000 for all employees. Twitter said the past two months have proven that it’s possible for remote workers to thrive and produce quality work.

“The past few months have proven we can make that work,” a spokesperson said. “So if our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen. If not, our offices will be their warm and welcoming selves, with some additional precautions, when we feel it’s safe to return.”