Current Events in January 2025

Joann Fabrics has once again filed for Chapter 11 bankruptcy protection and said it would try to sell the business.

“The company is seeking court approval to begin a process for the sale of substantially all of its assets under section 363 of the Bankruptcy Code, pursuant to which Gordon Brothers Retail Partners would serve as the stalking horse bidder,” the company said in a statement on its website.

A stalking horse bidder is one that would set the floor for bids for the company’s assets. The winning bid would have to equal or be higher than that.

If the sale to Gordon Brothers is ultimately completed, Gordon Brothers has indicated that it intends to pursue a liquidation of the company’s assets and conduct going-out-of-business sales at all store locations. In the meantime, Joann stores and Joann.com remain open for business.

‘Significant challenges’

“Since becoming a private company in April, the board and management team have continued to execute on top and bottom-line initiatives to manage costs and drive value,” said Michael Prendergast, Joann Fabric’s interim CEO. 

“However, the last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step.”

Prendergast said the board determined that beginning a court-supervised sale process would be the best route to maximizing shareholder value.

The chain that would become Joann Fabrics was founded in 1943, with a single store in Cleveland. The name was changed to Joann Fabrics in 1963. The company operates 800 stores in 49 states.

In the last year, GLP-1 drugs like Ozempic became so popular as weight loss drugs that there was a mid-year shortage. These drugs are also expensive.

Newly published research from the University of Colorado Boulder suggests there could be a low-cost alternative that doesn’t involve working out or starving yourself: beneficial bacteria.

Published in the journal Brain, Behavior and Immunity, the study found that animals injected weekly with a microorganism found in cow’s milk and soil were essentially immune to weight gain from a high-fat, high-sugar diet. 

"What is so striking about this study is that we saw a complete prevention of diet-related weight gain in these animals," said Christopher Lowry, the study's senior author and a professor of integrative physiology. 

“This suggests that exposure to beneficial bacteria can shield us from some adverse health effects associated with the typical Western diet.”

Reconnecting with ‘old friends’

Scientists say this research highlights the benefits of "old friends," a term for healthy bacteria that evolved alongside humans but have become less prevalent as societies have shifted to more sterile, urban environments. Lowry notes that losing contact with these bacteria has heightened our risk for inflammatory diseases.

In previous studies, Lowry demonstrated that Mycobacterium vaccae (M. vaccae), found in cow’s milk and soil, can prevent stress-induced inflammation and related health issues in mice. These findings have led him to explore the potential for a "stress vaccine" derived from these microbes.

In the current study, Lowry and PhD candidate Luke Desmond investigated whether M. vaccae could also mitigate brain inflammation and anxiety linked to poor diets. Adolescent mice were divided into groups, with some receiving a standard diet and others consuming a high-fat, high-sugar diet akin to junk food. Half of each group received weekly injections of M. vaccae.

Despite consuming similar calorie amounts, the untreated junk food group began gaining significantly more weight than the healthy eaters after six weeks. By the study's conclusion, they weighed about 16% more and had more visceral fat, which increases the risk of heart disease and diabetes. Remarkably, the junk food group that received M. vaccae injections showed no difference in weight gain compared to the healthy eaters and had less visceral fat.

"This finding suggests that M. vaccae effectively prevents the excessive weight gain induced by a Western-style diet," Desmond explained.

Practical implications

While more research is needed to understand how M. vaccae prevents weight gain and whether it can do so in humans, Lowry is optimistic. He hypothesizes that M. vaccae may directly influence immune cells to reduce inflammation, enhance fat health, and boost metabolism.

Future studies may explore whether oral consumption of M. vaccae has similar effects and if it could aid weight loss in overweight individuals. For now, Lowry advises reconnecting with beneficial bacteria by spending time in nature, gardening, and consuming fresh vegetables.

Despite the challenges of avoiding junk food, which Lowery says constitutes over half of grocery store offerings, the researcher emphasizes the potential of restoring exposure to these "old friends" to prevent weight gain and other health issues, even consuming a Western diet.

Los Angeles landlords are facing accusations of price gouging after volunteers have collected hundreds of rental listings with eye-popping price hikes following devastating fires.

Rent prices have shot up an average of around 41%, often by thousands of dollars, among more than 400 LA rental listings since the fires broke out as of Jan. 14, according to a ConsumerAffairs analysis of online rental listings in a public spreadsheet collected by volunteers.

More than two dozen of the rentals more than doubled their prices.

ConsumerAffairs didn't independently verify all entries, but excluded a handful of outliers that appeared to have data-entry errors.

Volunteers have collected more than 800 submissions and around half have been reviewed by the volunteers, based on price history for the rental properties on websites such as Zillow and Redfin.

Chelsea Kirk, an LA native and community organizer with the LA Tenants Union, started the volunteer project.

She told ConsumerAffairs the project went viral after the LA Tenants Union encouraged people on X, formerly Twitter, to submit examples of price gouging through an online web form.

"It's been crazy," Kirk said. 

Kirk said there is now a team of volunteers reporting alleged price gouging and helping review submissions.

“This price gouging is profoundly shameful," she said.

The figures suggest that price gouging is taking place in violation of California law.

Price gouging occurs when sellers increase prices on consumers goods and services during an emergency or disaster, according to the California attorney general. 

California’s Penal Code 396 prohibits raising prices by more than 10% after an emergency declaration, including on permanent or temporary rental housing, motels, hotels and mobile homes.

The office of California’s attorney general, Rob Bonta, also warned of the penalties for price gouging following the fires, saying it can result in a year in jail-time or a fine of up to $10,000.

In a Monday press conference, Los Angeles County District Attorney Nathan Hochman continued to warn against price gouging. 

“The criminals have decided that this is an opportunity, and I’m here to tell you that this is not an opportunity,” he said during the conference. “You will be arrested, you will be prosecuted and you will be punished to the full extent of the law.”

Know more about price gouging? Write to dholger@consumeraffairs.com and asandhulongoria@consumeraffairs.com.

The Food and Drug Administration (FDA) has banned the food dye Red 3 from use in foods, beverages, oral drugs, and dietary supplements, addressing a decades-long controversy.

Red 3 has been banned from use in topical drugs and cosmetics since 1990, when the FDA itself determined that the dye causes cancer when eaten by animals. But it continued to be allowed in foods, supplements, and oral drugs until today, more than 34 years later.

The ban is in response to a color additive petition filed by the Center for Science in the Public Interest (CSPI) in 2022. The organization called today's action "a win for public health" and said it was long overdue.

Where would you find it?

Products  containing this carcinogenic additive will still be on shelves. until Jan. 16, 2027, when the ban takes effect. This is where you might find Red 3, according to a list compiled by CSPI:

Seasonal candies. Many candies, particularly those available during Halloween and Valentine's Day, often contain Red 3. Common products include conversation hearts, cherry cordials, candy corn, PEZ, original Dubble Bubble gum, and some flavors of Ringpop.

Maraschino cherries. The cherry industry is the largest purveyor of Red 3-dyed products in the US and in Europe. Though some brands have switched to Red 40, check product ingredient lists, where Red 3 is required to be listed by name, to avoid Red 3. 

Fruit cocktails. Common brands of canned or packaged fruit medleys. This once included Dole but the company says it removed Red 3 from its fruit bowls in March 2023.

"The dye was replaced with carmine. The updated products are on store shelves throughout the U.S., featuring refreshed packaging with the updated ingredient lists," a Dole spokesperson told ConsumerAffairs. 

Red 3 and cancer 

Animal studies completed in the 1980s revealed that Red 3 causes thyroid cancer in rats. When studies reveal that an additive causes cancer in humans or animals, the Delaney Clause—a provision of the Federal Food, Drug, and Cosmetic Act—obligates the FDA to deem it unsafe and prohibit it from use in food, drugs, and cosmetics.

FDA relied on the Delaney Clause to ban Red 3 from topical products in the US in 1990, and it did so again today in banning the dye from food products. 

Why did it take so long?

“It cannot be coincidence that all of a sudden, days before the FDA gets new oversight, it manages to ban a substance that doctors, nutritionists and parents have been asking be banned for years," said Los Angeles environmental attorney Vineet Dubey

FDA ignored CSPI's petition for years but in 2024,  California introduced, passed, and signed into law the California Food Safety Act, banning Red 3 and three other unsafe additives statewide, and other states subsequently introduced similar legislation—leaving the federal government to play catch-up.

“All Americans deserve foods free from harmful food additives,” said CSPI’s Principal Scientist for Additives and Supplements Thomas Galligan. “Removing Red 3 and other unsafe, unnecessary food chemicals from our food supply is a critical step for protecting consumers. We hope to see FDA and Congress act soon to reform the broken federal regulatory systems that have allowed unsafe chemicals to enter and stay in our food supply for so long.”

CSPI noted that President-elect Trump’s nominee for secretary of the Department of Health and Human Services, RFK, Jr., made color additives a national issue during this year's elections and as he takes aim at the food system. The Trump Administration could take steps to protect consumers from each of these chemicals and support the FDA’s broader post-market assessment efforts.

Attorney Dubey noted that, as is often the case, California legislators had already banned Red Dye No. 3 and that ban was set to go into effect in 2027.

"But California also banned a number of other unnecessary, hazardous additives which might now get serious consideration from the federal food regulators. These include chemicals like titanium dioxide, another food coloring linked to its ability to damage DNA; and other additives linked to hormone disruption, cancers and impact on the human nervous system."

The Food and Drug Administration (FDA) has proposed a new rule to limit the addictiveness of cigarettes and other tobacco products. 

The agency plans to lower the amount of nicotine in these products, ultimately helping curb consumers’ habits and prioritize their health. With the ruling, the FDA hopes that smokers looking to quit will have an easier time, and non-smokers won’t be tempted to start. 

“Multiple administrations have acknowledged the immense opportunity that a proposal of this kind offers to address the burden of tobacco-related disease,” said FDA Commissioner Robert M. Califf, M.D. 

“Today’s proposal envisions a future where it would be less likely for young people to use cigarettes and more individuals who currently smoke could quit or switch to less harmful products. This action, if finalized, could save many lives and dramatically reduce the burden of severe illness and disability, while also saving huge amounts of money. I hope we can all agree that significantly reducing the leading cause of preventable death and disease in the U.S. is an admirable goal we should all work toward.”

What this would mean

The FDA explained in its proposal that nicotine won’t be banned under the ruling. Instead, any tobacco-based products sold in the U.S. would be made with significantly less nicotine than is currently being used. 

Under the rule, tobacco products would be capped at 0.7 mg of nicotine. By comparison, most standard cigarettes currently contain an average of 10-12 mg of nicotine.  

Here are the products that would be affected by the ruling: 

• Cigarettes

• Cigars – little cigars, cigarillos, and most large cigars

• Roll-your-own tobacco

• Pipe tobacco 

• Cigarette tobacco 

Here are the products that would not be affected by the ruling: 

• E-cigarettes 

• Nicotine pouches 

• Noncombusted cigarettes – heated tobacco products that meet the definition of a cigarette

• Waterpipe tobacco (hookah)

• Smokeless tobacco products

• Premium cigars 

Long-term health benefits

As part of the proposal, the FDA also utilized its population health model to determine how this rule would affect consumers’ health over the long-term. 

They estimate that within five years of the ruling being finalized, 19.5 million people who smoke cigarettes would stop doing so. After just one year, it’s estimated that nearly 13 million smokers would quit. 

In the next 35 years, the FDA estimates that nearly two million tobacco-related deaths could be prevented. By the year 2100, the agency estimates that the ruling would prevent roughly 48 million young adults from ever smoking cigarettes. 

“Today, we’re taking a critical step in the rulemaking process by providing the public with a proposal they can review and engage on,” said Brian King, Ph.D., M.P.H, director of the FDA’s Center for Tobacco Products. 

“This proposal allows for the start of an important conversation about how we meaningfully tackle one of the deadliest consumer products in history and profoundly change the landscape of tobacco product use in the United States.”

Consumers are able to voice their opinions on the ruling now through September 15, 2025. More information on how to do so is available on the FDA’s website. 

The $84,249 Lexus GX 550 is a big brawny SUV that looks like something you'd take on an African safari. You'd better not, though, unless you park it under an elephant or find something else that's shady.

Owners of these behemoths are taking to social media to bemoan the state of their mirrors -- their outside mirrors, that is. The problem is that they've melted, or at least gotten kind of soft and squishy looking.

Why would this happen? Toyota fans are saying it's symptomatic of a general decline in the quality of Toyota products. It's not just mirrors either. The plastic trim that manufacturers slap on SUVs to make them look rugged is also getting that wavy look on some of the trucks and, some say, getting pretty hot to the touch. That's perhaps not too surprising for something that's been out in the sun but maybe $84,249 should guard against that somehow.

All goopy looking

A motoring fan named Paul Yelton is the poster boy for this crusade. He has complained that he left his GX 550 parked in his driveway for four days and when he came back, the mirror was all goopy looking. He was shocked to find out that Lexus didn't think it was a warranty issue.

There is one fact to take note of in Yelton's tale. He lives in Arizona.

Arizona is known for nothing if not its heat, so it's logical that if something was going to melt, Arizona would be a good place to do it. The author of this piece is embarrassed to admit that he once left a very expensive tape recorder on the white leather seat of his red sports car while he had lunch and kept a careful eye on it from his booth at Bob's Big Boy in Tucson. (It wasn't an expense account lunch).

When he returned to his car to race off to yet another news story, he discovered the tape recorder's black plastic case had melted all over his white leather seats. Now this was back in the day when professional audio gear qualified as portable as long as it had a handle, so it was not a delicate little flower.

So, somehow, to confirmed desert dwellers, Yelton's mishap doesn't seem that unusual. We all carry a supply of towels that can be draped over exposed parts if no nearby saguaro cactus casts its shade-giving arms over our parking spot.

In addition to record high home prices and interest rates once again north of 7%, many homeowners face another rising cost – homeowner association fees.

Not every home is connected to an HOA but most new ones are. The fees they charge can be fairly high, especially if the HOA has amenities that it must maintain, like streets, swimming pools and dog parks, just to name a few. A new report from Realtor.com found an increase in both the prevalence and cost of HOA fees for homes listed in 2024. 

The report reveals that 40.5% of for-sale listings last year included a nonzero HOA fee, up from 39.2% the previous year. The median monthly fee also rose to $125, compared to $110 in 2023.

Danielle Hale, chief economist at Realtor.com, emphasizes the financial burden these fees add to the already daunting costs of homeownership. 

"With a down payment and closing costs upfront, and then principal, interest, taxes, and insurance every month after that, purchasing a home is already a financially daunting task, before adding in the rising cost of HOA dues," Hale said. 

New homes more likely to have an HOA

The report identifies newly constructed homes as more likely to have HOA dues, with 69.9% of new builds in 2024 requiring such fees, compared to 37.1% of existing homes. Condos, rowhomes, and townhomes are particularly affected, with 83.8% of these listings carrying HOA fees, while only 33.6% of single-family homes do.

Geographically, areas with high concentrations of new construction or condos, especially in desirable beach or ski markets, are more likely to impose HOA fees. The top metropolitan area for HOA prevalence is Edwards, Colo., where 89.9% of listings have HOA dues, with a median monthly fee of $525. Other notable areas include Myrtle Beach, S.C., and Heber, Utah, with significant shares of listings subject to HOA fees.

However, there are locations where you are less likely to encounter fees. These are mostly smaller, inland markets with fewer new constructions and condos. Anniston-Oxford, Ala., and Elizabethtown-Fort Knox, Ky., are among the areas with the lowest share of listings with HOA dues, at 3.8% and 5.0% respectively, and considerably lower median fees.

Popular web hosting and domain name provider GoDaddy will have to improve its security measures under the terms of a settlement announced today with the Federal Trade Commission (FTC).

The FTC claims GoDaddy failed to secure its web hosting services from cyberattacks, leaving customers vulnerable. It said that since 2018, GoDaddy did not properly protect or monitor its hosting environments, and it misled customers about the security of its services.

As part of the settlement, GoDaddy must create a comprehensive security program similar to other companies’ programs that have settled with the FTC. This includes protecting customer data, monitoring security risks, and ensuring the company is honest about its security practices.

GoDaddy, one of the world's largest web hosting companies, has had several security breaches in recent years. These breaches allowed attackers to access customer websites, exposing visitors to possible risks. The FTC also alleges that GoDaddy falsely claimed it followed security standards like the EU-U.S. and Swiss-U.S. Privacy Shield Frameworks.

The settlement will require GoDaddy to stop misleading customers, implement a strong security program, and hire an independent third party to review its security measures regularly. The FTC’s decision is part of its broader efforts to protect consumers from poor data security practices.

Inflation ended 2024 by moving slightly higher. The U.S. Bureau of Labor Statistics reports a 0.4% increase in the Consumer Price Index for All Urban Consumers (CPI-U) on a seasonally adjusted basis for December.

That follows a 0.3% rise in November. The biggest drivers of inflation in December were energy and shelter.

The energy index climbed 2.6%, contributing to over 40% of the overall monthly increase. Within the energy sector, gasoline prices were up by 4.4%. Food prices also saw an uptick, with the index for food rising by 0.3%, affecting both food consumed at home and away from home.

Food consumed at home, the category for grocery prices, rose 0.3% in December but was only 1.8% higher over the last twelve months. The price of cereal and bakery items made the sharpest move in December, jumping 1.2%.

The price of meat, fish and eggs gained 0.6% last month and was up 4.2% on the year, with eggs accounting for most of the increase.

Restaurant prices still rising

Food consumed away from home – the category for restaurant prices – rose 0.3% in December and was 3.6% higher on the year, double the rate of food consumed at home.

Excluding food and energy, the index for all other items rose by 0.2% in December, a slight deceleration from the 0.3% increases observed in the previous four months. Notable increases were seen in the indexes for shelter, airline fares, used cars and trucks, new vehicles, motor vehicle insurance, and medical care. 

The cost of car insurance rose 0.4% in December and was up 11.3% for 2024. The cost of rent increased by 0.3% in December and gained 4.3% in 2024.

A few things cost less

Conversely, personal care, communication, and alcoholic beverages were among the few categories that experienced price declines.

Over the past year, the all-items index increased by 2.9%, up from the 2.7% rise recorded in the 12 months ending in November. The core index, which excludes food and energy, rose by 3.2% annually. While the energy index saw a slight annual decrease of 0.5%, the food index increased by 2.5% over the same period.

These figures highlight the ongoing challenges faced by consumers as energy and food prices continue to exert upward pressure on overall inflation, influencing economic decisions and policy considerations.

With sticky inflation and rising bond yields, mortgage rates continue to move higher. The Mortgage Bankers Association, whose readings are often slightly higher than Freddie Mac’s, says the average rate on the 30-year fixed-rate mortgage hit 7.09% at the end of last week.

It’s the first time the rate has exceeded 7% in several months and is a full percentage point higher than it was in September.

“Bond yields in the U.S. and abroad continued to move higher in response to concerns over a sticky inflation outlook and still too-high budget deficits, which pushed mortgage rates higher for the fifth consecutive week,” said Joel Kan, MBA’s deputy chief economist. 

“This time of the year is a particularly volatile time for application volumes, so it can be more helpful to focus on the level rather than the percent change.  Purchase applications were 2% and refinances were 22% higher compared to a year ago.”

“We expect a gradual reduction in mortgage rates could thaw the market, encouraging more buyers and sellers to re-enter after a relatively stagnant 2024, Edward Asher, vice president of Treasury at Better.com, told ConsumerAffairs. “However, lingering affordability concerns in metropolitan areas and tight new home construction could still place upward pressure on prices.”

Renters may be getting a break

Mortgage rates have risen for five consecutive weeks, adding to the challenge for homebuyers. But while its getting more expensive to purchase a home, a report from real estate broker Redfin suggests renting a home is getting more affordable.

The median asking rent was down 0.1% from a month earlier, and down 6.2% from its August 2022 record high of $1,700 per month.

The median asking rent per square foot dropped 1.9% year over year in December to $1.78, and fell 0.1% month over month. Rents are declining after a wave of apartment construction that has increased vacancy rates.

The December Consumer Price Index shows rent rose 0.3% from November and was up 4.3% year-over-year. The owner’s equivalent of rent – a category that measures home ownership costs – rose at a faster rate and was up nearly 5% in 2024.

Money is pouring into relief efforts for victims of the Los Angeles fires and you can be certain that scammers are trying to cash in, setting up dummy organizations with names that often mimic legitimate charities.

To make sure your donation actually helps someone and doesn’t line the pockets of a scammer, don’t respond to an unsolicited email asking for money. Instead, proactively contact an organization you know to be real.

Charity Watch monitors and grades charitable organizations, based on their administrative costs and overhead. The lower the amount spent on running the organization, the higher the grade.

Charity Navigator is another platform that helps donors ensure a charity group is legitimate. By entering the name of the group in the database, you not only learn if the group is real, Charity Navigator also rates it.

GoFundMe has set up a special page with different fundraising campaigns for fire relief, many of them narrowly targeted. In many cases, most of the donated money goes for the intended purpose.

Because anyone can set up a fundraising campaign, GoFundMe has assured donors that it makes sure anyone asking for donations for a cause is on the up and up.

GoFundMe says it uses a number of ways to verify that a campaign is legitimate and not a scam. The company uses a Trust & Safety team that constantly monitors fundraising efforts. It holds funds at a payment processor and only releases them once the campaign has been verified.

In the debate over the high cost of prescription drugs, pharmacy benefit managers are hotly contested. PBMs, the middlemen in many prescription drug transactions, say they help keep costs from being even higher.

Critics, on the other hand, claim PBMs add on unnecessary costs and make drugs even more expensive.

The Federal Trade Commission has weighed in on the issue, saying the three largest PBMs made more than $7.3 billion over the last five years by marking up the prices of generic drugs used to treat cancer, HIV and other diseases.

The FTC has singled out CVS Caremark, Express Scripts and OptumRx, accusing the companies of driving up prescription costs for consumers. Issue just a week before the end of the Biden administration, the FTC report is the strongest statement yet that holds PBMs accountable for high drug prices, an issue the incoming administration has vowed to address.

Big mark-ups

The report focuses specifically on generic “specialty” drugs that treat specific chronic diseases. The report claims that PBMs marked up prices for specialty generic drugs by hundreds and sometimes thousands of percent over their estimated acquisition costs from 2017 and 2022, noting that spending on these drugs more than doubled from $113 billion in 2016 to $237 billion in 2023. The report says there is no reason these drugs should have increased in cost by this much.

“Historically, specialty drugs were characterized by their need for special handling and administration,” the report’s authors wrote. “This is no longer necessarily the case. There is no standard definition for a specialty drug, and today specialty drugs may be characterized by a variety of factors, including their high cost.”

The report found that most of the highly marked up drugs were sold at pharmacies that were affiliated with the PBMs. The report also said that the three companies cited in the report almost always reimbursed their affiliated pharmacies at a higher rate for the drugs than unaffiliated pharmacies.

PBMS have pushed back against the FTC’s criticism. In September, ExpressScripts sued the FTC, saying a previous critical report was filled with "unsupported innuendo."