Current Events in July 2022

Back-to-school shopping is underway, and despite inflation that is running at 9%, shopping at major retailers is producing a surprising number of bargains. Food and gasoline may cost more, but shoes, apparel, electronics, and school supplies are getting marked down.

When it reported second-quarter earnings this week, Walmart disclosed that it is feeling one of the many distortions caused by the pandemic. It aggressively ordered inventory over concerns about supply chain bottlenecks.

The goods arrived in abundance at just about the time consumers shifted from buying products during the pandemic to spending more on services and travel. Walmart executives said that left the retailer with piles of inventory that it will need to mark down to sell.

Good timing for back-to-school shoppers

The timing couldn’t be better for parents who are getting their children ready to return to school. Justice girl T-shirts that usually sell for $17 have been marked down to $6.80.

A refurbished Apple 13.3-inch MacBook Air that was originally priced at $269.99 is now selling for $219. It comes in a bundle that includes a headset, case, and wireless mouse. 

Walmart.com is promoting a big sale on apparel, with savings of up to 60% off. The deals are only available to online shoppers.

Walmart isn’t the only major retailer in the position of having to liquidate merchandise, almost at any price. Target announced in May that it was overstocked in a wide range of inventory, with many items now on sale. Kids' shoes are now 20% off, kids’ jeans have been marked down by 30%, and the retailer is selling school supplies starting at 25 cents.

A package of pencils is 50 cents, and a package of three pens is 99 cents. Binders also start at 99 cents.

Savings on electronics

When it reported earnings this week, Best Buy said its inventory levels are about the same as during the pandemic. But the company said it is seeing slower sales because of inflation and is marking down some items to move them.

A check of the Best Buy website shows that a stainless steel Cuisinart air fryer toaster oven has been marked down by $100, to $129.00 – a discount usually reserved for Black Friday.

The best deals are offered to Best Buy Members, who can save up to $370 on select Windows laptops. Inflation-weary consumers may find other bargains at other stores.

"There are [pricing] problems in apparel, home furnishings, furniture and, to a certain extent, electronics," Neil Saunders, the managing director of GlobalData, told NBC News "Those three areas going to be the ones where you'll see the most discounting."

The voice on the phone is soft and reassuring, eager to deliver some good news amid the economic turmoil of inflation and recession.

“This is Lisa Wilson, and I’m calling from the employee refund department. I’ve been assigned your case because your business is eligible to receive up to $26,000 for every employee you retained during the pandemic. Give me a call at your earliest convenience so we can go over your refund options.”

The call is an obvious scam attempt. Though “Lisa” didn’t say it, the implication is that the U.S. government is still handing out money to businesses through the Paycheck Protection Program (PPP) if they retained employees during the early days of the COVID-19 pandemic.

That program ended on May 31, 2021. Meanwhile, the Justice Department continues to prosecute fraudsters who collected millions of dollars for nonexistent employees while the PPP was operational.

Real fees on nonexistent loans

Jon Clay has worked in the cybersecurity space for over 25 years and currently publicizes threat research and intelligence at Trend Micro. He says this PPP scam would likely seek money and information from its victims.

“In most cases, these bad actors are looking to scam victims out of money by claiming purported fees on the loan, in this case, the PPP loan,” Clay told ConsumerAffairs. “Another objective that scammers may have is obtaining PII (Personally Identified Information) – information that can be utilized to carry out further targeted scams on the victim.”

A review of the Better Business Bureau’s Scam Tracker found numerous complaints about scammers who claimed they could help small businesses get forgivable loans while collecting fees and bank account information from victims in the process.

“The most likely scenario is the scammers claiming that the targeted businesses owe them fees pertaining to the loan, which is probably done via wire transfer to the scammer's bank account,” Clay said. “They may also include a document or webpage for detailed information such as contact and bank account information.”

Apparently, the scammers are targeting people who have small businesses and have published their telephone numbers online. People who get these calls should ignore them. There is no current federal program that pays businesses for retaining employees.

The price of gasoline remains much higher than normal, but at least it’s moving in the right direction. Prices fell sharply just about everywhere this past week.

AAA’s daily fuel price survey shows that the national average price of regular gas is $4.25 a gallon, down from $4.41 a week ago. Despite the rapid decline over the last three weeks, the average price remains above the previous record price of $4.11 a gallon that was set in July 2008.

The average price of premium gas is $5.00 a gallon, which is 16 cents lower than last Friday. The average price of diesel fuel is $5.31 a gallon, which is 14 cents less than last week.

Prices have fallen for two reasons: Oil prices have retreated from recent highs, and demand has fallen. With motorists driving less, fuel supplies remain plentiful. But there are signs that this situation could change in the coming days.

Patrick DeHaan, head of petroleum analysis at GasBuddy, reported Thursday that U.S. gasoline demand is up 1.04% from last week and is the highest of any Sunday through Wednesday period so far this year, exceeding the week ahead of July 4. That could mean prices at the pump will level off soon. In the meantime, many states enjoyed large declines in gas prices.

The statewide average price of regular dropped by 25 cents a gallon in Oklahoma and Kansas this week. The average price dropped by 18 cents in Illinois and Kentucky; 17 cents in Texas, Arkansas, and Tennessee; and 16 cents a gallon in South Carolina.

States with the most expensive gas

These states currently have the highest prices for regular gas, according to AAA:

• California ($5.66)  

• Hawaii ($5.48)    

• Alaska ($5.18)   

• Oregon ($5.11)  

• Nevada ($5.10)    

• Washington ($5.06)  

• Idaho ($4.95)  

• Utah ($4.87)       

• Illinois ($4.73)    

• Maine ($4.60)   

States with the cheapest gas

AAA reports that these states currently have the lowest prices for regular gas:

• Texas ($3.78)  

• South Carolina ($3.79)   

• Georgia ($3.82)  

• Mississippi ($3.83)

• Tennessee ($3.85)    

• Alabama ($3.86)   

• Arkansas ($3.86)     

• Louisiana ($3.88) 

• Oklahoma ($3.88)  

• Kentucky ($3.91)    

Stormberg Foods is recalling various sizes and batches of Beg & Barker Chicken Breast Strips Dog Treat, Billo’s Best Friend Chicken Breast Strips Dog Treat, and Green Coast Pets Chicken Crisps Dog Treat.

The products may be contaminated with salmonella. No illnesses have been reported to date.

A list of the recalled products, packaged in branded plastic bags and sold nationwide in retail stores and online, may be found here.

Coding information can be found on the back of each package to the left or right of the UPC code.

What to do

Customers who purchased the recalled products and/or have pets who have become ill should notify the company by email at stormbergship@gmail.com immediately with all product information to receive return or proper disposal information.

Consumers with questions may contact the firm at (919) 947-6011 Monday through Saturday from 3:00 a.m. to 9:00 p.m. (EST) or by the email address listed above.

General Motors is recalling 242 model year 2022 Chevrolet Silverados and GMC Sierras equipped with an accessory sport bar.

The accessory sport bar contains a high-mounted brake light that may not function. In addition, it may block the vehicle's existing high-mounted brake light.

An inoperative high-mounted brake light can reduce visibility to other drivers and increase the risk of a crash.

What to do

Dealers will inspect the installation of the accessory bar and provide the correct vehicle wiring -- if necessary -- free of charge.

Owner notification letters are expected to be mailed on August 15, 2022.

Owners may contact GM's customer service at (888) 988-7267 or Chevrolet customer service at (800) 222-1020. GM's recall number for this recall is N222368110.

Southwest Airlines is saying goodbye to expiration dates on vouchers. In a first-of-its-kind policy shift, the Dallas-based airline says any unexpired Southwest flight credits will be good forever as of July 28, 2022. Vouchers created on or after that date will also be treated the same way.

“The more than 62,000 People at Southwest share a renewed pride in our unmatched access to flexibility that once again reshapes the landscape of Hospitality and value in the industry,” said Southwest Airlines CEO Bob Jordan. 

“Flight credits don’t expire aligns with the boldness of a philosophy to give our Customers definitive simplicity and ease in travel, just like Bags fly free, just like No change fees, just like Points don’t expire — they’re a first-in-our-industry combination of differentiators that only Southwest offers."

In reviewing the fine print of Southwest’s promise, ConsumerAffairs found little that travelers will have to worry about. The only minor note that travelers should be aware of is that flight credits for non-refundable fares will be issued as long as the reservation is canceled more than 10 minutes prior to the scheduled departure.

Airline officials also noted that while the credits are now good “forever,” a customer’s account will show an expiration date of 12/31/2040 until the company's systems are updated. 

Will other airlines follow suit?

Will Southwest’s move create a domino effect in the airline industry? It’s too early to tell, but recent moves made by other carriers suggest that it's a possibility.

When millions of Americans were forced to deal with canceled flights during the pandemic and were issued $10 billion in vouchers, most of those were only good for 12-24 months. That didn’t sit well with Senators Edward Markey (D-MA) and Richard Blumenthal (D-CT), nor members of the U.S. Senate Committee on Commerce, Science, and Transportation. The lawmakers thought that consumers needed more time to use the vouchers they were issued because of the volatility of flight schedules during the COVID-19 pandemic.

Among the other four largest airlines, Delta and United seem to be the only ones that reacted positively to regulators' concerns. Both carriers pushed the expiration date on vouchers to the end of 2023.

When ConsumerAffairs reviewed American’s policy, we found that the company is sticking to its guns on its eVouchers. Unless things change, American vouchers are valid for one year from the date of issue, “and we won’t reissue them past the expiration date,” the airline said.

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

Total‌ ‌U.S.‌ ‌confirmed‌ ‌cases:‌ 90,977,761 (90,739,623)

Total‌ ‌U.S.‌ ‌deaths:‌ 1,028,819 (1,027,924)

Total‌ ‌global‌ ‌cases:‌ 573,920,711 (572,665,174)

Total ‌global‌ ‌deaths:‌ 6,393,783 (6,389,649)‌

New COVID-19 cases on the rise in nursing homes

At the beginning of the COVID-19 pandemic more than two years ago, staff and residents of America’s nursing homes were the first to suffer outbreaks. Health officials now say nursing homes are seeing a new increase in cases.

AARP reports that one in 35 nursing home residents in the U.S. tested positive for COVID-19 in June. That’s a 27% increase from May. The death rate also nearly doubled, rising to 0.07 deaths per 100 residents.

“This is a level of cases that’s comparable to what we saw during the first COVID summer in 2020,” said Ari Hauser, a senior analyst for AARP’s Public Policy Institute.

Drug companies struggle to improve vaccines

The current COVID-19 vaccines are highly effective against the original strain of the virus, but they offer less protection against the variants and subvariants that are currently causing most infections. The White House has urged drug companies to come up with more effective versions of their vaccines.

“The vaccines we have are terrific, but we can do better than terrific,” said Ashish Jha, the White House's COVID-19 response coordinator.

But according to Science Magazine, drugmakers face challenges. Not only is funding for new research tight, but the sense of urgency surrounding the pandemic has dissipated. While current vaccines are much less effective at blocking infections, infections in vaccinated people tend to be much less severe.

Sensory loss can last for months

One of the symptoms of COVID-19 is a loss of taste and smell. It's usually just a temporary condition, but it can last for a very long time for millions of people who suffer from a condition called “long COVID.”

An analysis published in the BMJ (British Medical Journal) found that about 5% of former COVID-19 patients – about 27 million people globally –couldn’t smell or taste for months after recovering from the virus.

The analysis looked at 18 previous studies of sensory loss around the world. About three-quarters of those affected by a loss of taste or smell from COVID-19 were able to regain those senses within 30 days of recovery.

Around the nation

• Florida: During the first year and a half of the COVID-19 pandemic, Florida enjoyed a boost in its population. People moved to the state for a number of reasons, including fewer pandemic restrictions. The Demographic Estimating Conference reports that the state’s population is still growing, but it has slowed from its pandemic peak.

• Pennsylvania: Only four counties are considered to have a high risk of COVID-19 transmission, according to the Centers for Disease Control and Prevention’s (CDC) latest analysis. Cases have jumped in the last week in Mercer, Fayette, Washington, and Montour counties, and residents have been asked to mask up indoors.

• Oregon: State health officials say hospitals are under increasing stress from COVID-19 caseloads, even though cases remain well below their pandemic peak. “They are extremely stressed and doing everything they can to provide quality care for everyone across our state,” state epidemiologist Dr. Dean Sidelinger said at a news briefing.

• Minnesota: With school starting in just a few weeks, public health officials say only 7% of Minnesota's eligible preschool-aged children have received their first shots. The vaccination rate was sharply higher when young children first became eligible.

• New York: Hospital admissions for COVID-19 treatment have soared in New York City. The city has recorded the highest admission rate since mid-February. Across the state, the hospitalization rate per 100,000 surged by 50% in the last 30 days, with nearly 2,800 COVID-19 patients being admitted as of Wednesday.

Spirit Airlines has finally decided which of its two suitors it wants to partner up with. Early Thursday, the company’s board of directors announced that they have chosen JetBlue’s proposal as the winning pitch.

The companies have signed off on a definitive merger agreement that would create America's fifth-largest airline -- one that will now have a 10.2% market share of miles flown by passengers on domestic flights.

“We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling JetBlue to bring our unique blend of low fares and exceptional service to more customers, on more routes,” said JetBlue CEO Robin Hayes.“Spirit and JetBlue will continue to advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines."

Frontier had Spirit’s attention for a long time, and Spirit honored its original commitment to become part of Frontier’s family after JetBlue pursued a hostile bid and offered a higher price. But, as JetBlue said in an SEC filing, it was fearful that a successful Frontier-Spirit merger would prove to be a larger competitor that could possibly affect its competitiveness. 

Spirit had its reservations too. It may have given in to JetBlue’s advances sooner, but it was concerned that regulators wouldn’t sign off on a deal because of the issues JetBlue was already facing with the “northeast alliance” that it had created with American Airlines.

What this will mean for travelers

It’s too early to tell how all of this will shake out, but airline experts aren't necessarily buying Hayes' comment about industry-disrupting fares.

One issue that could lead to higher fares is JetBlue’s cost of converting Spirit’s jets to its existing configuration – a schematic that has 10-15% fewer revenue-producing seats. “There is no way JetBlue can deliver profitable operations on fewer total seats flying without raising the prices on those seats,” wrote PAXEX.AERO’s Seth Miller.

“[JetBlue] will have to operate the legacy Spirit fleet at fares higher than what Spirit charges today. Plus, with a lower fare competitor eliminated JetBlue likely can afford to raise fares beyond what it charges today.”

You also have to factor in what the big four airlines – American, Delta, United, and Southwest – might do in their reaction to any change in JetBlue-Spirit fares.

"Spirit and Frontier play a big role in the fare you pay, even if you never fly either one," Scott Keyes, founder of discounted fare-finding website Scott's Cheap Flights, told ConsumerAffairs. "When Delta announced the basic economy fare in 2012, they described it to investors as a 'Spirit-matching fare,' because their lunch was getting eaten by the budget carriers of the world. I'm not a fan of either merger, but I like the JetBlue option even less."

Sprite, Coca-Cola’s lemon-lime soft drink, has always come in a distinctive green bottle. Starting on Aug. 1, consumers will find it in a clear plastic bottle.

Coke executives say the reason is simple. The current bottles contain green polyethylene terephthalate (PET). Those bottles can be recycled into other products, but they can’t be turned into new plastic bottles. 

Currently, green PET plastic bottles are converted into single-use items like clothing and carpeting. During the sorting process, green and other colored PET is separated from clear material to avoid discoloring recycled food-grade packaging required to make new PET bottles. 

Coke executives say they want to be able to turn all of their soft drink plastic bottles back into new bottles.

“Taking colors out of bottles improves the quality of the recycled material,” said Julian Ochoa, CEO of R3CYCLE, a company working with Coca-Cola Consolidated to enable bottle-to-bottle recycling across the largest U.S. bottler’s 14 state-territory. “This transition will help increase the availability of food-grade rPET. When recycled, clear PET Sprite bottles can be remade into bottles, helping drive a circular economy for plastic.”

Coca-Cola acquired Sprite in 1960 from one of its bottlers who developed the soft drink. From the very start, it came in distinctive green bottles and was Coke’s answer to 7-Up, which was growing in popularity. 

At that time, all soft drinks came in glass bottles, which were often reused. Over the years, soft drink bottlers abandoned the more environmentally friendly – but also more expensive – glass bottles for plastic.

Single-use plastic is increasingly viewed as a major environmental problem because it doesn’t degrade over time. Millions of plastic bottles and other items end up in the world’s oceans, creating threats to the marine ecosystem.

DASANI doubles down on recycled plastic

In addition to the change in Sprite bottles, Coke has announced that most of its DASANI water products will be bottled in 100% recycled PET plastic starting this summer. DASANI has pledged to remove the equivalent of 2 billion virgin plastic bottles from production by 2027.

According to Coca-Cola, DASANI’s transition to 100% recycled plastic is projected to save more than 20 million pounds of new plastic when compared to 2019. It is also projected to cut more than 25,000 metric tons of greenhouse gas emissions in 2023 alone. 

For more than 20 years, LASIK eye surgery has been a big business. Now, the U.S. Food and Drug Administration (FDA) wants consumers to know more about the risks and benefits before they undergo the operation.

The FDA has issued draft guidance to help improve the flow of information to both patients and health care professionals so that everyone knows what to expect with a successful procedure and what could go wrong.  

"It is important to provide patients with comprehensive labeling that clearly describes the risks involved with LASIK surgery, including potential adverse effects such as dry eye, pain and discomfort, and visual symptoms," said Dr. Jeff Shuren, director of the FDA's Center for Devices and Radiological Health. "These proposed labeling recommendations, based on extensive consultation with stakeholders and patients, are intended to present information about LASIK in language that is easy to read and understand."

Shuren said the draft guidance is designed to support discussions that patients should have with their eye care providers to help them make an informed decision before proceeding with the surgery. 

LASIK is performed using lasers on an outpatient basis. It’s a procedure that permanently reshapes the cornea to change the way the eye focuses light rays onto the retina at the back of the eye. 

Corrects common vision problems

Doctors who perform LASIK surgery use it to correct common vision problems such as nearsightedness, farsightedness, and astigmatism. It can also reduce a patient’s need to wear glasses and contact lenses.

According to the Mayo Clinic, there can be complications that result in a loss of vision, but they are very rare. Clinic doctors say other side effects of LASIK eye surgery -- particularly, dry eyes and temporary visual problems such as glare -- are fairly common.

A prominent Russian eye surgeon, Dr. Svyatoslav Fydorov, discovered the LASIK procedure in 1974 by accident when he was treating a young boy’s eye injury. The FDA approved the procedure in 1999. Since then, an estimated 10 million Americans have had the operation.

New FDA guidance

The FDA’s draft guidance includes the agency’s recommendations for both the content and format of patient labeling for LASIK devices. It includes:

• General information about the surgical procedure

• Indications for use, benefits, procedure alternatives, contraindications, warnings, and precautions

• Risks

• What to expect before, during, and after surgery

• Clinical study information

• Manufacturer contact information

The draft guidance also proposes the inclusion of a decision checklist as part of the labeling information that physicians provide to their patients prior to the procedure. 

To help patients fully understand the decision checklist, the FDA said it will provide information about who is a good candidate for LASIK and a summary of the long-term risks. 

Monti Kids of Orinda, Calif., is recalling about 1,500 Monti Kids Toy Box with Bins products.

A small dowel can become exposed and detach from the toy box, posing a choking hazard to young children.

The firm has received five reports of the small dowel being exposed after separating from the outer cabinet. No injuries have been reported.

This recall involves the Box with Bins included in the Monti Kids’ Level 5 of the Monti Kids Program subscription box. The box is made of wood and has three bins colored blue, red, and yellow. The product measures approximately 13 x 5.5 x 5.5 inches.

This recall includes toys with lot numbers 0D41 and 1A41. The following text can be found on the bottom of the toy: "Montessori designs, Ethically Made in Vietnam, and ASTM CPSIA Safety Certified."

The products were sold online at www.montikids.com from July 2021, through February 2022, for about $35 (Box with Bins) and about $300 (Level 5 Monti Kids Subscription Box toy set), respectively.

What to do

Consumers should immediately stop using the recalled Box with Bins and contact Monti Kids for instructions to receive a $35 refund. The firm is contacting all known purchasers directly.

Consumers may contact Monti Kids by phone at (800) 674-3845 from 9 a.m. to 5 p.m. (PT) Monday through Friday, by email at customercare@montikids.com, or online for more information.

Despite the Internal Revenue Service (IRS) considering cryptocurrency a taxable item, two U.S. Senators – Pat Toomey (R-PA) and Kyrsten Sinema (D-AZ) – are pushing to make smaller digital transactions tax-free.

Those lawmakers believe the current tax code stands in the way of cryptocurrency’s ability to become part of Americans’ everyday lives. The pair are pushing for a Senate version of the Virtual Currency Tax Fairness Act of 2022, which was a piece of legislation originally introduced in the House earlier this year. The bill would allow any transaction up to $50 or any trade where someone earns less than $50 to be tax exempt.

The IRS first addressed the issue of taxing cryptocurrency in 2014 when it stated that virtual currencies should be treated as property for tax purposes because “it operates like ‘real’ currency.”

“That classification was a major setback for adoption because taxpayers were required to track gains and losses in the value of virtual currency each time it was used, hindering retail adoption,” said Perianne Boring, the founder and CEO of the Chamber of Digital Commerce. 

Even now, eight years later and well into cryptocurrency’s wider acceptance, the tax code states that a “taxable event” occurs each and every time someone uses cryptocurrency – no matter whether it’s paying for breakfast with bitcoins or making a couple of dollars on an Ethereum investment. 

“While digital currencies have the potential to become an ordinary part of Americans’ everyday lives, our current tax code stands in the way,” said Senator Toomey. “The Virtual Currency Tax Fairness Act will allow Americans to use cryptocurrencies more easily as an everyday method of payment by exempting from taxes small personal transactions like buying a cup of coffee.”

Cryptocurrency experts weigh in

Toomey and Sinema said cryptocurrency experts are already lining up with support. Jerry Brito, the executive director of the Coin Center, said the new cryptocurrency bill would "foster use of crypto for retail payments, subscription services, and microtransactions."

Brito noted that cryptocurrencies should have the same exemption for small, personal transactions that Americans already have when they use foreign currency. Kristin Smith, Executive Director of the Blockchain Association, agrees with that assessment.

“The use of virtual currencies for retail payments continues to increase in popularity, making it critical for Americans to understand their tax obligations,” Smith said. “By providing an exemption for small everyday purchases, the Virtual Currency Tax Fairness Act eases the burden for consumers and allows for greater use of virtual currencies for more people.”

Hyundai has run afoul of the Consumer Financial Protection Bureau (CFPB) in what the agency says is the largest ever Fair Credit Reporting Act case against an auto servicer – one that impacted 2.2 million consumer accounts. 

The agency claims that Hyundai’s use of outdated methods and systems led to repeatedly providing incorrect information to credit reporting companies about consumer payments on loans and leases that it purchased and serviced between 2016 and 2020. This resulted in some consumers being flagged for being delinquent on their loans, which lowered their credit scores and negatively affected their access to credit. 

The CFPB says it is fining the company $19 million because it failed to take proper measures to address inaccurate information once the error was identified.

Tarnished credit reports

In addition to paying a fine, the agency's order requires Hyundai to do whatever is necessary to prevent this situation from happening again. Officials say $13 million of the fined amount will go to affected consumers who were inaccurately reported as delinquent on their installment plan or lease for 30 or more days. 

“Hyundai illegally tarnished credit reports for millions of borrowers, including by falsely reporting them to credit reporting companies as being delinquent on their loans and leases,” said CFPB Director Rohit Chopra. “Loan servicers must be complete and accurate when furnishing information that affects a borrower’s credit report.”

ConsumerAffairs reached out to Hyundai for comment, but the company did not immediately respond.

If any consumer is having an issue with their auto loan, their credit report, or another consumer financial product or service, the agency says they can submit a complaint by filing online or calling (855) 411-CFPB (2372). 

Employees who believe their company has violated federal consumer financial laws are also encouraged to send information about what they know to whistleblower@cfpb.gov.