Current Events in November 2022

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2022

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    Because of declining affordability, many people are buying their ‘second home’ first

    A study also shows large numbers of buyers are ready to move to more affordable locations

    Rising mortgage rates are making homes much less affordable in the nation’s largest housing markets, prompting first-time buyers to get creative. Buyers in these high-priced markets are expanding their horizons.

    A study by ConsumerAffairs found that 81% of prospective homebuyers were considering buying a “second home” first, while continuing to rent their primary residence. A few said they would use their purchase as a vacation getaway but most said they would try to generate revenue from it.

    The study found that the youngest cohort of potential buyers, Gen Z, is the most likely to consider this move. Eighty-seven percent of all first-time buyers said they believed buying an investment property would enable them to purchase their primary residence within three years.

    The favorite region of the U.S. for second home shopping is the South Central region, selected by 48% of those in the study. The South Atlantic region was closed behind at 43%. Those areas tend to have the lowest median home prices.

    Growing trend

    Real estate professionals say they have seen evidence of this trend. Rose Ciardiello, an agent with William Raveis Real Estate, a Connecticut-based firm, says the trend actually began early in the COVID-19 pandemic and continues.

    “Some of these buyers are renting out their ‘second’ homes while they are occupying rentals in the cities, and others keeping it unoccupied so they can escape whenever they wish,” Ciardiello recently told us. “Some will experiment with both – renting out their home while they’re not there, but keep it on reserve for specific weeks of the year so they can enjoy themselves.”

    The ConsumerAffairs study found declining home affordability in the most expensive markets may be contributing to the trend. Nearly all first-time buyers – 92% – said they could not afford a mortgage in this current interest rate environment – even though most earned good salaries – prompting them to consider buying elsewhere.

    On second thought, maybe we'll just move

    Not only buying but moving. Among Gen Z respondents, 79% said they are considering relocating to a more affordable state or city so they can afford to purchase a home as a primary residence. 

    Other generations are also considering packing up. More than 60% of millennials and Gen X are considering moves and even baby boomers, nearing or in retirement, are looking for greener pastures.

    “To me, one of the most surprising elements of the study on second homes was that 43% of baby boomers we surveyed said they planned to move to a cheaper state to afford a home,” said Cassidy McCants, deputy editor at ConsumerAffairs.

    “Sixty-four percent of all respondents, including Gen Z, millennials and Gen X, said the same but the fact that such a significant percentage of the older population is still struggling to afford a home indicates how much is left to be desired across the board in the current housing market. Boomers we interviewed also said they needed to save $20,557, on average in order to buy their first home — and that they were willing to go $1,976 over their monthly budget to afford a mortgage.” 

    According to the National Association of Realtors (NAR), the average mortgage payment in Los Angeles County is now $3,510, up from $2,590 12 months ago. In contrast, the average monthly mortgage payment in Hamilton County, Ohio (Cincinnati) is $1,034, up from $705 a year ago.

    There appear to be plenty of affordable markets to choose from. The NAR data show that 40.7% of U.S. counties have median home prices of $150,000 or less.

    Rising mortgage rates are making homes much less affordable in the nation’s largest housing markets, prompting first-time buyers to get creative. Buyers in...

    Ed tech company Chegg charged with being careless with its users data, landing itself in hot water with the FTC

    The FTC isn’t the only one complaining about the company – reviewers are, too

    Education technology provider Chegg, a company that’s built its fame and fortune on high school and college student services like textbook rentals and online tutoring, got a Halloween surprise it probably wasn’t expecting. 

    The Federal Trade Commission (FTC) has taken action against the company for its “lax data security practices.” Not guarding its customers' and employees’ sensitive information like email addresses, passwords, and Social Security numbers as best as it could, led to four security breaches amounting to 40 million user files stolen since 2017. 

    Basic information like email addresses and Social Security numbers is rather pedestrian in today’s world of data collection, but Chegg apparently went way beyond that. For example, as part of its scholarship search service, the agency claims Chegg collected information about users’ religious preferences.

    “Chegg took shortcuts with millions of students’ sensitive information,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s order requires the company to strengthen security safeguards, offer consumers an easy way to delete their data, and limit information collection on the front end. The Commission will continue to act aggressively to protect personal data.”

    The trickle-down effect

    More than 90% of the reviews Chegg has received from ConsumerAffairs customers in the last 12 months have been 1-star reviews. In reviewing those, Chegg’s guardianship of data came into question again.

    “I used this service once and then could not cancel it. I'm charged $19.95 a month and will have to cancel my credit card to stop the charges,” wrote Rene of Pilot Point Texas. “I have spent at least four hours on text and phone with them and they say they can't cancel because they can't find my account. They cannot put me in contact with their billing department."

    Sean of Fort Washington Md. had mixed feelings about Chegg. He gave a thumbs-up to his perception that the company’s services gave good answer support at times, but he railed against them for what he called an “incompetent safeguard system."

    “[That system] will almost 100% guarantee suspend your account under false allegations of being a 'shared account.' Complaints are disregarded and while you wait days for your account to be re-enabled, you won't get credited back for the days stolen. Final verdict: Terrible company. Avoid at all costs,” he said.

    What the FTC says Chegg must do to correct the situation

    To get itself back into good graces with the FTC, Chegg is going to have to walk the straight and narrow for a while. The FTC’s proposed order requires the company to bolster its data security, limit the amount and type of data the company can collect and hold onto, offer users multifactor authentication to secure their accounts, and allow its users to access and delete their personal data.

    Chegg is going to have to walk the straight and narrow, not just for a while, but for 20 years if it doesn’t want the FTC to show up on its doorstep again. The order will terminate then, and only then if Chegg doesn’t violate any provisions of the order.

    Education technology provider Chegg, a company that’s built its fame and fortune on high school and college student services like textbook rentals and onli...

    Despite what you may have heard, clocks are turning back this weekend

    The effort to keep the U.S. on Daylight Savings Time failed to pass Congress

    Daylight Savings Time (DST) ends this weekend with clocks in most of the U.S. rolling back one hour at 2:00 am Sunday.

    It’s an Autumn ritual but there has been some confusion about the status of time this year. That’s because earlier this year Congress took steps to end the twice-a-year time change but didn’t finish the job. 

    Every year people complain about the disruptive effects of either turning back the clocks or pushing them forward. The Senate unanimously voted for a bill introduced by Sen. Marco Rubio (R-Fla.) that would keep the nation of Daylight Savings Time year-round.

    But by the time the legislation reached the House of Representatives, there was far from a consensus. Some critics pointed out that mornings in the dead of winter would remain dark until around 8:00 am. 

    But as he introduced the bill in March, Rubio said that trade-off would be worth it. 

    "There’s some strong science behind it that is now showing and making people aware of the harm that clock-switching has," Rubio said on the Senate floor.

    Rubio pointed to a 2020 study that documented a 6% increase in fatal traffic accidents in the week after the start of Daylight Savings Time. Other studies have suggested changing the time twice a year leads to more injuries and health issues.

    As of now, there is little push in Congress to eliminate the twice a year time changes. Because of that, clocks in most of the U.S. will be reset to 1:00 am at 2:00 am Sunday, Nov. 6.

    Clocks in Hawaii and most of Arizona won’t change since those states observe Standard Time all year.

    Daylight Savings Time (DST) ends this weekend with clocks in most of the U.S. rolling back one hour at 2:00 am Sunday.It’s an Autumn ritual but there h...

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      Geico, Humana, J&J, and PBM Nutrionals agree to class action settlements

      The deadlines for claims all expire this month

      Several more major corporations have agreed to class action settlements, handing out millions of dollars. But affected consumers have no time to waste as the deadlines for filing a claim expire this month.

      For starters, Humana has agreed to settle a lawsuit brought over its 2020 data breach. Settlement documents did not disclose how much the health benefits provider has agreed to pay. It affects those who were notified by Humana that their personal health information was compromised when hackers broke into the company’s network.

      Hackers got access to sensitive health information as well as personal identifying information, such as Social Security Numbers. The deadline for filing a claim is Nov. 15.

      Two Geico settlements

      Geico is settling two class actions this month. In the first, the auto insurance company is paying $19.1 million to resolve claims that it did not pay sales tax and other fees when paying California customers who suffered a total loss.

      The settlement covers California policyholders who did not get compensated for the tax and fees for total loss claims submitted between June 27, 2015, and Aug. 27, 2020. The deadline to file a claim in the settlement is Nov. 11. 

      Geico has also agreed to pay an undisclosed amount to resolve a class action suit that it underpaid healthcare providers in Florida for treating covered patients. That claim deadline is Nov. 28.

      Consumers who purchased the drug Remicade (infliximab) between April 5, 2016, and Feb. 28, 2022 may be eligible for a cash settlement from Johnson & Johnson and its subsidiary Janssen. The companies have agreed to a combined $25 million payment to settle claims they violated antitrust laws by suppressing generic competitors.

      The suit claimed that action resulted in higher prices for Remicade, a prescription medication to treat Chrone’s disease. To be eligible for compensation, consumers must submit claim forms by Nov. 30.

      Baby formula misinformation

      Amidst an ongoing baby formula shortage, PBM Nutritionals has agreed pay $2 million to settle a class action lawsuit that claimed the company’s baby formula product doesn’t produce the advertised number of servings.

      Consumers who purchased Well Beginnings, Meijer Baby, Little Journey, Wesley Farms, Burt’s Bees Baby, Berkley Jensen, Parent’s Choice, Earth’s Best Organic, Comforts, Up & Up, Babies “R” Us, Member’s Mark or Bobbie Baby brand baby formula between Jan. 1, 2017, and July 21, 2022 may be eligible for compensation.

      Claims in that case must be filed by Nov. 30.

      Several more major corporations have agreed to class action settlements, handing out millions of dollars. But affected consumers have no time to waste as t...

      Google set to debut new Search features to help shoppers get better deals

      Shoppers will be able to compare deals side by side and see which coupons are valid

      As consumers are in full swing with holiday shopping, Google is rolling out new Search features that are designed to make it easier for shoppers to save money this holiday season

      The update comes with three new additions: price insights, new labels for coupons and promotions, and side-by-side price comparisons. 

      “The holiday season is upon us, and many are already getting into the (shopping) spirit,” wrote Shashi Thakur, vice president and general manager of consumer shopping at Google. “Deals are particularly top of mind this year: Among Americans planning to shop for the holidays, 43% are planning to look for deals and sales more than last year. So we’re sharing a few new features to help you easily find those discounts and get the perfect gift at the right price.” 

      Saving more money this holiday season

      Google Search’s new features were designed to help make holiday shopping easier – and cheaper – for shoppers. Here’s a look at what consumers can expect from the search engine: 

      • Price Insights: This feature helps shoppers compare how the price of the item they have their eye on stacks up at other retailers. On top of that, Google will start showing whether the list prices are low, average, or high for the item. This will help shoppers understand whether or not they’re getting a good deal, overpaying for a must-have gift, or can get something cheaper elsewhere. 

      • New Coupon and Promotion Labels: There is no shortage of coupon codes floating around the internet. With this new feature, Google will show which sales are going on right from the Search menu, and which coupon codes are active and valid. This update will tag which items are on sale, what the sale is, and the code that’s needed to activate the discount. This may help speed up consumers’ shopping process, as all of this information is now available after doing a search with no need to click through retailers’ websites. To make things even easier, shoppers can also now clip coupons. After clicking on the promo, the coupon code will save to your clipboard for easy access to paste into checkout. 

      • Price Comparisons: The side-by-side price match feature was also designed to make online shopping faster and more efficient. When looking for a good deal on something specific, it can get time-consuming going through website after website. Now, a quick Google Search will show offerings for your specific item – from different stores – offering an immediate price comparison. 

      Google plans to roll out these updates in full by the end of the month – right at the height of Black Friday and Cyber Monday sales. 

      As consumers are in full swing with holiday shopping, Google is rolling out new Search features that are designed to make it easier for shoppers to save mo...

      Mattress Firm to host Black Friday deals through December 6

      Consumers who have put off getting a mattress may want to take advantage of these deals

      Getting ahead of the holiday season has been a theme this year, and several retailers have already announced plans for Black Friday deals that last the entire month of November – Macy’s, Walmart, and Target, among others. 

      Now, Mattress Firm is joining that list, with Black Friday sales that are running now through December 6. This is the earliest that the mattress store has ever announced Black Friday deals, and consumers can find sales both online and in-store. 

      Get your next mattress for less

      One such discount shoppers can expect is purchasing a king mattress for the price of a queen, or a queen mattress for the price of a twin. While certain brands aren’t eligible for this specific discount – Sealy Hybrid, Tempur-Pedic, Purple, and Nectar, among others – consumers can still expect to save on their next mattress. 

      For those who have or open a Mattress Firm credit card, there will be 0% interest for five years on purchases of $1,999 or more. For consumers who spend $2,999 or more on their Mattress Firm credit card, there will be 0% interest for six years. 

      Additionally, shoppers will earn up to $100 bonus cash for each purchase they make. From November 9-29, those who spend $500-$1,499.99 will earn either a $25 bonus in cash to spend online or $50 in bonus cash to spend in-store. Similarly, those who spend $1,500 or more will receive $50 online bonus cash or $100 in-store bonus cash to be spent between December 7-27. 

      Customers will also receive up to $700 off select mattresses, plus a free adjustable base. 

      With over a month of savings available both online and in-store, consumers can choose when and how to pick out their next mattress this holiday season. 

      Getting ahead of the holiday season has been a theme this year, and several retailers have already announced plans for Black Friday deals that last the ent...

      Student loan borrowers are being targeted with dangerous new scam

      The scammer is targeting individuals after gathering sensitive information about them

      Since the White House announced its student loan debt forgiveness program, scammers have come out of the woodwork, seeking to convince borrowers they should pay for unnecessary and non-existent services related to loan forgiveness.

      Lately, a new scam has emerged that appears to be among the most dangerous that have been reported so far. Instead of randomly targeting people who may or may not have student loans, these scammers have gathered specific information about their intended victims.

      Some victims of this scheme have reported the scammer had their name, the date they graduated, their Social Security number, and even their FAFSA (Free Application for Federal Aid) information.

      The contact usually comes by phone. A call comes out of the blue from someone who claims to be associated with the Department of Education’s loan forgiveness program. Because they know their victim’s name and have information about them, the caller may have added credibility.

      How it works

      However, no one from the Department of Education or from any part of the government’s loan forgiveness program cold-calls borrowers.

      After gaining credibility with the victim, the caller says the borrower must pay an upfront fee of several hundred dollars, then a monthly fee until the loan forgiveness has been completed. That’s another sign of a scam, since demanding upfront fees for services is illegal.

      The scammer also tells the intended victim that their services can result in having as much as $60,000 in student loans wiped clean. Not true. The White House plan allows for forgiveness of up to $10,000 in student loan debt and $20,000 for borrowers who took Pell Grants.

      What to do

      Student loan borrowers contacted in this manner with these kinds of promises should assume from the start that it is a scam. If there is any doubt, contact StudentAid.gov directly to verify the information.

      Never pay a fee to participate in a free government program. A legitimate agency will not ask for a payment, only scammers will. 

      Be highly suspicious of phone calls that come out of nowhere. Government agencies, especially, don’t make unsolicited phone calls.

      If the caller is aggressive or pushy and warns you will miss out if you don’t act immediately, that’s yet another red flag. The hallmark of a scam is to close the net quickly before the victim has time for rational thought.

      While all scams are scary, this one appears to be particularly dangerous. The scammer is targeting specific individuals using sensitive information they have obtained from either a data breach or from the dark web. 

      Student loan borrowers should consider changing the passwords to their FAFSA accounts and taking other steps to protect their personal information.

      Since the White House announced its student loan debt forgiveness program, scammers have come out of the woodwork, seeking to convince borrowers they shoul...

      Winter heating bills may not break the bank after all

      Natural gas prices have plunged from their record highs

      Not long ago the headlines were filled with dire warnings about skyrocketing home heating bills this winter. It could still happen, but industry experts say a sudden and unexpected drop in natural gas prices could help consumers cope.

      The market price of natural gas is now down 40% from the record highs it hit in August, which set off alarm bells. High gas prices, brought on by shortages in Europe and caused by the Russian-Ukraine war, raised the possibility that millions of Americans, already struggling with inflation, might be faced with difficult choices this winter.

      Then, it got warmer – especially in Europe, which needed less gas from the U.S. Here at home, mild weather also prevailed in much of the country during October. 

      At the same time, producers have racked up record production levels. The Wall Street Journal reports gas storage facilities are filled to the brim.

      Of course, we’re still in the fall months. Winter still lies ahead but industry analysts have revised their forecasts, saying natural gas prices in 2023 might even be lower than their 2022 average.

      Nearly half of U.S. homes heat with gas

      Nearly half of U.S. homes are heated with natural gas, according to the U.S. Energy Information Administration (EIA). But even consumers heating with electricity could catch a break since many electric power plants are fueled by natural gas.

      Besides a surge in domestic production, other factors may be weighing down natural gas prices as we head into the home heating season. Economic concerns, including the possibility of a global recession next year, have tempered demand and prices.

      Whether the natural gas price break extends into the depths of winter will likely depend on the weather. The Old Farmer’s Almanac, which has been remarkably prescient over the years, advises Americans to bundle up.

      “We believe that most of the U.S. will be colder than normal this winter, although summer will be mostly warmer than usual,” the authors write. In addition to a neutral to perhaps weak El Niño, important weather influences will include a continued warm phase of the Atlantic Multidecadal Oscillation (AMO), a neutral to positive North Atlantic Oscillation (NAO), and a negative Pacific Decadal Oscillation (PDO). Oscillations are linked ocean-atmosphere patterns that can have long-term effects on the weather.”

      But at the National Oceanic and Atmospheric Administration (NOAA), forecasters are expecting the U.S. will generally have a mild winter. The agency said it expects warmer-than-average temperatures for the Southwest and along the Gulf Coast and eastern seaboard.

      Not long ago the headlines were filled with dire warnings about skyrocketing home heating bills this winter. It could still happen, but industry experts sa...