ConsumerAffairs News

Peer-to-Peer Car Rental Can Be Risky

Truman Lewis — Thu, 31 May 2012 02:01:55 +0000

It sounds great but renting your car to strangers carries serious legal risks

May 31, 2012

Peer-to-peer car rental services, like RelayRides, are gaining quite a bit of attention but an attorney specializing in asset protection planning says they can also present a serious risk to your financial well-being.

RelayRides went nationwide in March this year after launching in Boston in 2010. Many participants loan their cars as a good deed to open up parking along busy urban streets, promote environmentally sound habits or simply to help those in need of a ride. Most, however, opt to rent their vehicles for a variable rate – usually about $10 per hour.

“Every car loaned or rented through the program gets $1 million in liability insurance coverage from RelayRides, but even that may not be enough,” says attorney Hillel L. Presser.

“When there’s an accident involving serious injuries, the victims simply have no choice but to sue for at least $1 million, and often more. If you rented the car and you have assets, you could become a target.”

Earlier this year, a man who rented a car through the program was killed in an accident while driving the wrong way on a highway, Presser says, citing a New York Times report. Four people in the car he hit were seriously injured.

“Medical expenses are expected to exceed RelayRides’ insurance coverage,” Presser says. “The owner of the car is a part-time Google systems administrator – which means she probably makes good money. Who will pay the overage, and who might be sued, is still yet to be determined.”

In today’s world, lawyers have gotten very creative in what they’ll go after, which is why comprehensive protection of assets is absolutely crucial, he says.

While it's fine to complain about lawyers, the harsh truth is that $1 million is not very much money if one or more victims of an accident are severely injured and face years of costly care and reduced earning capacity. Lawsuits in such cases often produce awards of many millions of dollars.

Presser doesn't just talk about such disasters, he's written a book about them, called Financial Self-Defense. He offers these tips:

• Account for ALL of your assets: Not sure of what you have? Don’t wait for a plaintiff’s lawyer to tell you exactly what that is before he or she takes it from you. Take stock of valuable domain names, telephone numbers, intellectual property, potential inheritances, and other non-liquid assets.

• Liability insurance is no guarantee: Buy as much insurance as you can; it’s cheap and it helps you sleep at night. But realize that 70 percent of claims will not be covered. Your coverage may be inadequate for a particular suit, and your insurance company may go bankrupt. Having insurance and an asset protection plan is the belt-and-suspenders approach for hanging onto your pants.

• Convert non-exempt assets into exempt assets: State laws protect some personal assets from lawsuits and creditors. Those assets typically include your primary residence; personal items such as furniture and clothing; pensions and retirement funds; and life insurance. Find out the exemptions for your state and convert non-exempt assets, such as cash, into exempt assets, such as life insurance.

• Transfer your assets to a protective entity: The key to asset protection is to own nothing while controlling everything. Transfer any non-exempt assets out of your name to protective entities such as trusts, limited liability companies, limited partnerships and others.

• Don’t loan out your car – even to your kid: If your children are going to drive, they should drive cars titled in their name alone. And if they pay for the cars themselves, you add another layer of protection. Courts may find that parents who are obviously paying for their children’s cars liable to some degree, even if the car title is in the child’s name.

More Favorable Car Financing Rates Ahead

Daryl Nelson — Thu, 31 May 2012 01:36:26 +0000

Lower interest rates, relaxed lending standards helping spur car sales

By Daryl Nelson of ConsumerAffairs

May 31, 2012

If you've been wanting to replace yoru car but couldn't because of poor credit scores, things could be looking upward for you in the near future.

According to a report from Experian Automotive, lower interest rates, coupled with increased loan terms now allows more purchasing opportunities for the consumer.

According to the quarterly report, the average credit score for financing a new car decreased six points to 760, and decreeased four points to 659 for used cars. This is down from 2008 when first quarter credit averages were 753 for new vehicles and 653 for used ones.

"During the first quarter of 2012, car shoppers definitely found more favorable conditions for their vehicle loans," said Melinda Zabritski, director of automotive credit for Experian. "A reduction in average credit scores, lower interest rates and a lengthening of loan terms are all very good signs for the market and offer great opportunities for consumers looking to make a deal on a new or used vehicle."

Interest dropping

With new vehicle loan interest rates dropping to 4.56 percent and used vehicle rates dropping to 9.02 percent, consumers could be seeing lower monthly payments. Also, the terms of a vehicle loan are being extended, as new vechicles now come with a 64-month loan, and used vehicles 59.

The report also showed a rise in the average amount financed, as new vehicles increased by $589 in the first quarter of 2012, totaling $25,995, and for used vehicles a $411 increase brought its average total to $17,050.

"Our report shows automotive lending is as healthy as it's been since the market bottomed out in 2008," continued said Zabritski.

"With consumers doing a good job of paying back loans on time and the percentage of dollars at risk reaching its lowest point in six years, lenders are able to extend terms and provide lower rates. This thawing of the credit pipeline has been good for everyone, from consumers to lenders to automotive retailers."

Additional findings of the report include:

Auto repossession rates are down by 37.1 percent.
Thirty-day delinquencies dropped by 7.6 percent; 60-day delinquencies dropped by 12.1 percent
Vehicle loans to nonprime, subprime and deep-subprime customers increased by 11.4 percent
Banks and credit unions gained market share. Banks grew by 7.5 percent to 40.21 percent market share, while credit unions grew by 10.5 percent to 16.89 percent market share.

Homeowner Bill of Rights Moves Ahead in California

Truman Lewis — Thu, 31 May 2012 01:30:50 +0000

Measure would put some teeth in consumer protection laws

By Truman Lewis of ConsumerAffairs

May 31, 2012

Kamala Harris

Homeowners and renters are frequently targeted by scams that often go unprosecuted but a package of legislation that's moving through the California Assembly and Senate would put some teeth in existing laws and give prosecutors more enforcement power.

By far the nation's largest state, California is often a trend-setter in consumer protection and the progress of the measure is being carefully watched by consumer advocates and lawmakers around the country.

"California was the epicenter of the mortgage and foreclosure crisis and scammers have been preying on vulnerable citizens who simply want to keep their homes," said Attorney General Kamala D. Harris. "These bills will aid our efforts to prosecute and convict these criminals."

The bills enhance the Attorney General's enforcement powers and allow the Attorney General to use special grand juries to prosecute multi-jurisdictional financial crimes. The Mortgage Fraud Strike Force established by the Attorney General has been investigating and prosecuting a wide range of crimes related to mortgages, foreclosures and real estate.

These are two of the six bills in the California Homeowner Bill of Rights. Other portions of the package are being considered in a Joint Legislative Conference Committee, including elements to restrict unnecessary foreclosures and protect the due process rights of borrowers and homeowners.

Special grand jury

One set of bills would allow the Attorney General to convene a special grand jury to investigate and indict the perpetrators of financial crimes involving victims in multiple jurisdictions. Both bills passed out of their respective houses unanimously with bipartisan support.

The special grand jury would convene in cases involving fraud or theft that occurs in more than one county and where all potential charges are against a single defendant or multiple defendants working together.

Crimes of a financial nature often occur in multiple jurisdictions. Under current law, crimes where the fraud victims are all over the state require separate grand juries and charges filed in each county where the defendant committed the crime. This legislation would provide for the option of a special grand jury that can investigate financial crimes beyond the scope of single-county grand juries.

"The Attorney General is currently engaged in the investigation of significant crimes," Senator Loni Hancock (D-Berkeley) said. "Unfortunately, county-by-county grand juries do not work well in dealing with large-scale wrongdoing in multiple jurisdictions. With this bill, the Attorney General can investigate multijurisdictional crimes - it will provide protection when Californians need it the most."

In addition, AB 1950, by Assemblymember Mike Davis (D-Los Angeles), will extend to three years the statute of limitations on mortgage related crimes. The current statute of limitations of one year can make it difficult to prosecute crimes such as the prohibition on charging up front fees for loan modification services. Because the foreclosure process is so protracted, some homeowners may not even realize that they have been the victim of a scam before it is too late for prosecution.

"AB 1950 equips the Attorney General to do her job; to go after the bad actors that have taken advantage of homeowners. It accomplishes this by providing the Attorney General with appropriate time to investigate and prosecute those who prey on California homeowners," said Davis. The bill passed out of the Assembly on a 46 to 18 vote.

Real Estate Indicators Turn Negative

Mark Huffman — Thu, 31 May 2012 01:17:58 +0000

But market may still be on an upward path

By Mark Huffman of ConsumerAffairs

May 31, 2012

Progress is often defined by taking two steps forward and one step back. While the real estate market has made important strides in recent weeks, this week has seen a retreat.

Two reports highlight the challenges still facing housing. First, the National Association of Realtors (NAR) reported pending home sales - the measure of signed contracts that have yet to close - fell in April after three straight monthly gains.

The Pending Home Sales Index declined 5.5 percent to 95.5 from a downwardly revised 101.1 in March but is 14.4 percent above April 2011 when it was 83.5. So, while the numbers show a drop-off from March to April, they also suggest that the market is still better than it was a year ago.

“Home contract activity has been above year-ago levels now for 12 consecutive months," said Lawrence Yun, NAR's chief economist. "The housing recovery momentum continues."

Home prices still falling

Perhaps, but that isn't being reflected in the average home's sale price. The S&P/CaseShiller Home Price Indices, which tracks U.S. home prices on a monthly basis, showed that all three headline composites ended the first quarter of 2012 at new post-crisis lows.

The national composite fell by 2.0 percent in the first quarter of 2012 and was down 1.9 percent versus the first quarter of 2011. The 10-and 20-City

Composites posted respective annual returns of -2.8 percent and -2.6 percent in March 2012.

For consumers who would like to buy a home, declining prices might sound like a good thing, but the opposite is true. One of the reasons it is so difficult to get a mortgage is banks are skittish about lending money for assets that are still losing value.

And of course, if you already own a home you see equity slip away each month that prices decline.

S&P Case-Shiller notes that the declines were minor and that many markets actually showed encouraging gains. Five cities - Atlanta, Chicago, Las Vegas, New York and Portland, Ore.- also saw average home prices hit new lows. However, this is an improvement over the nine cities reporting new lows last month.

“While there has been improvement in some regions, housing prices have not turned,” says David M. Blitzer, Chairman of the Index Committee at S&P Indices. "Moreover, there are now seven cities – Charlotte, Dallas, Denver, Detroit, Miami, Minneapolis and Phoenix – where the annual rates of change are positive. This is what we need for a sustained recovery; monthly increases coupled with improving annual rates of change. Once we see this on a broader level we will be able to say the market has turned around."

How Low Will Oil Prices Go?

Mark Huffman — Thu, 31 May 2012 01:14:47 +0000

Crude prices are headed lower because the economy may be weakening again

By Mark Huffman of ConsumerAffairs

May 31, 2012

What a difference a couple of months makes. In March oil prices were still rising and gasoline prices were marching toward $4 a gallon.

Today, the price of oil produced in the U.S. has dropped well below $90 a barrel and gasoline prices, which have been slower to reflect the cheaper oil, are also coming down. The national average price of regular self-serve gas is around $3.62 a gallon, 20 cents cheaper than just a month ago.

The reason for the drop? Mounting worries about Europe's debt problem and the potential to throw much of the world into recession. If Greece, Spain, Italy, or other European countries default on their debts, the banks holding those bonds could reap huge losses.

Other banks that have loaned money to those banks could also feel the pain. With world economies in recession, there will be less demand for oil. Richard Suttmeier, Chief Market Strategist at ValuEngine.com, thinks the lower oil prices will show up in the coming weeks, falling to $80.

Going down

"Between now and the end of June we'll test $79.83, which is a semi-annual value level from my model for crude oil, Suttmeier said in a webcast interview on Yahoo! Finance.

Suttmeier said while international concerns are a drag on oil prices, the impact on the U.S. economy when retail gasoline prices approached the $4 mark is a major factor weighing on oil.

"I just think the economy is not on track, we're not creating jobs and even though the housing data has been good of late, it's not good enough to say things have turned the corner," Suttmeier said.

In 2008, when Lehman Brothers declared bankruptcy, bringing on the credit crisis, oil prices dropped to $40 a barrel, with retail gas prices plunging to below $1.70.

Nutrition Degrees May Offer Above-Average Job Security

Daryl Nelson — Thu, 31 May 2012 01:12:34 +0000

Looking for a growth field? Look no further than nutrition and food science

By Daryl Nelson of ConsumerAffairs

May 31, 2012

For those college students who still haven't declared a field of study and are eyeing basket weaving or archery, it may be time to consider nutrition as a major.

A recent report by the The Bureau of Labor Statistics says the nutrition and dietitian field will expand 20 percent faster than other specialty within the next eight years.

With consumers growing more health-conscious by the day, and companies trying to tap into the health food and organic markets, experts believe now is the ideal time for undecided college students to become nutrition or dietician majors to ensure job security upon graduation.

According to Payscale.com., entry level nutritionists made about $55,000 annually as of June 2011, with salaries swelling over $65,000 a year in bigger U.S. cities. Not bad for a college student whose sole income was that $100 monthly check sent by mom and dad along with a care package.

Benedictine University in Lisle, Illinois for example, has a program offering a degree in nutrition and wellness, combined with a Master of Science degree. And similar programs around the U.S. are not only preparing college students for the growing nutrition industry, but also helping to train them through hands-on internship programs.

Food safety

Benedictine University notes that consumers heavily rely on professionals such as agricultural scientists, food inspectors, and nutritionists to dictate what is safe for the public to consume and what consumers should stay away from, thus making the role of the nutritionists a very important and highly needed specialty.

According to a survey by the Council for Responsible Nutrition, 69 percent of adults in the U.S. use dietary supplement products, which are also regulated by nutrionists, thus driving the demand for such experts even higher.

Benedictine also says that more health programs being implemented by public officials, due to First Lady Michelle Obama's Let's Move! campaign, further increase the demand for nutrionists and dieticians even more, showing even further the many career paths students with nutrition degrees can eventually take.

In fact, experts say the sheer amount of career options for those who obtain a nutritionist's degree is quite unique compared to other fields, which is one of the main draws for choosing such a career path.

Here are some of the various ways a nutritionists degree can be used:

Hospital Nutritionists and Dieticians
Registered Dietician
Certified Nutritional Consultant
School Nutritionists and Dieticians
Clinical Dietitians
Community Dietitians
Management Dietitians
Consultant Dietitians
Food Scientists

Researchers Say Tart Cherries Can Reduce Pain in Your Joints

Daryl Nelson — Thu, 31 May 2012 01:15:10 +0000

Daily use of tart cherries found to lower arthritis and muscle pains

By Daryl Nelson of ConsumerAffairs

May 31, 2012

Tired of those perpetual aches and pains? Does it hurt to do simple things like.... exist? Well, if you suffer from aching joints and chronic inflammation, pop a couple of cherries in your mouth.

And not some nasty cherry flavored pain concoction, but actual cherries. According to Oregon Health & Science University (OHSU) tart cherries instead of sweet ones can help eliminate all types of joint pains and discomfort.

Reported at the American College of Sports Medicine Conference, in San Francisco, researchers said that tart cherries may assist in the reduction of joint pain as well as arthritis. Reason being, is tart cherries have the "highest anti-inflammatory content of any food", which can be an asset when it comes to managing pain, specifically those with osteoarthritis (OA).

Wear and tear

OA is wear and tear on the joints, and usually happens to people as they grow older.

"With millions of Americans looking for ways to naturally manage pain, it's promising that tart cherries can help, without the possible side effects often associated with arthritis medications," said Kerry Kuehl, M.D at Oregon Health & Science University, and the studies lead researcher. "I'm intrigued by the potential for a real food to offer such a powerful anti-inflammatory benefit – especially for active adults."

According to the National Library of Medicine, OA occurs in both men and women when they hit their mid 50s, and pain symptoms can be infrequent, acute or chronic.

OA can also be hereditary and those who are overweight may suffer from the disease regardless of age. Also, those who do heavy squatting, kneeling or lifting through work or exercise, also have a high risk of getting the annoyingly painful joint condition.

OHSU conducted a study of twenty women between the ages of 40 and 70, who all suffered from inflammatory Osteoarthritis. The study revealed that drinking tart cherry juice twice each day for a three week period led to substantial decreases in "important inflammation markers," especially for women sufferers.

Good for athletes

Scientists have also suggested that athletes use tart cherries. A previous study showed that drinking the tart cherry juice while athletes were training for a marathon or long distance run, said they had less pain after working out than those who didn't drink the cherry juice.

A past study conducted by Baylor Research Institute confirmed that daily use of tart cherries helped lower osteoarthritis pain by more than 20 percent for most men and women, and also for athletes while they're recovering from joint soreness or muscle pain.

Some sport nutritionists and trainers have incorporated tart cherries into training regiments for athletes, namely Leslie Bonci who is a sports nutritionist at the University of Pennsylvania Medical Center for Sports Medicine. She says cherries are a wonderful way to manage pain and are far better than awful tasting oral medications, that sometimes have side effects. And tart cherries are also better than messy ointments or joint creams.

"Why not eat red when there's so much science to support the anti-inflammatory benefits of this Super Fruit?" she said. "And for athletes whose palates prefer the tart-sweet flavor profile of tart cherries, it's the optimal ingredient."

So the next time you're in the grocery store, pick up some tart cherries for your joint pains. Even if you haven't been diagnosed with osteoarthritis, they'll still make a pretty decent snack.

Sick Patients See Increasing Costs for Specialty Drugs

Daryl Nelson — Wed, 30 May 2012 18:12:41 +0000

Employers cut back on insurance, leaving consumers stuck with the bill

By Daryl Nelson of ConsumerAffairs

May 30, 2012

If you are one of the millions of Americans who take specialty medications, you may have noticed your hand digging deeper into your pocket.

Specialty drugs are those medicines that are higher in cost, and used to treat complex and chronic ailments like multiple sclerosis, hemophilia or cancer for example. In recent years, specialty drug users only had to shell out a $20 or $50 copay, but now patients have to pay a percentage of the drug's cost, along with copays, which can amount to yearly costs in the thousands.

The Los Angeles Times reported of an HIV patient who paid a copay of $80 per month for his specialty medication, but now has to secure $450 per month to maintain his health. Many employers are no longer using the copay model for medicines, and they're able to do so by reclassifying certain medications, forcing patients to take on more of the financial responsibility or copayments.

Specialty drugs have no cheaper generic version; so many times patients have no alternative than to spend the high costs to remain well.

No alternative

"All of a sudden you're starting to count pills and asking friends to borrow some," said Robert Gomer in an LA Times interview. "It was a very stressful situation to be faced with."

Many drugs are made from chemicals; therefore they can be used to produce both generic and brand-name varieties. However, specialty drugs are often extracted from living organisms, so no alternatives can be used.

Employer health plans are also finding it more and more expensive to offer these drugs under coverage, as the cost can exceed $1,200 a month per employee, according to Ha Tu, researcher at the Center for Studying Health System Change.

Tu recently created a report on specialty drugs that breaks down the financial challenges for Employers, health plans and its enrollees.

Tu also says that although specialty drugs are prescribed for merely one in every 100 health plan enrollees, they account for nearly 12 to 16 percent of "commercial prescription drug spending", and costs are expected to keep rising.

VBID

In an effort to combat exorbitant treatment costs, many employers have adopted the "Value-based insurance design" (VBID), that provides employees with monetary incentive to select high-value health treatments, while turning down treatments that have a history of being ineffective or over prescribed.

According to a Mercer survey, 17 percent of employers with 500 employees or more, used VBID in 2011, in effort to cut out expensive and unnecessary treatments, and many believe this same policing can be applied to expensive specialty drugs.

But critics of VBID feel employers shouldn’t regulate what type of medicines its workers should use, and many of VBID’s selected treatments still come with high copays and coinsurance.

Julie Stone, a senior consultant with the benefits consultant company Towers Watson, says shopping around for cheaper medications isn’t the best method for patients with serious and chronic illnesses.

"With people as sick as the patients we’re talking about, I don’t think they’re going to say, ‘Is there a less expensive injectable drug I can take?’ " she says. "It’s a whole different dynamic," she told the Washington Post.

And the tug of war continues between insurance companies, employers, and the sick consumer who is in need of specialty medications. Hopefully there will be a time in the United States, when health and people come before dollars and profit. We'll see though.

Having It Both Ways on Climate Change

Truman Lewis — Wed, 30 May 2012 18:06:19 +0000

Half of reviewed companies misrepresent climate science despite public expressions of concern

By Truman Lewis of ConsumerAffairs

May 30, 2012

It's not just politicians who talk out of both sides of their mouths. A new analysis finds many of the nation's leading corporations say one thing about climate science in public while taking contradictory action behind the scenes.

The analysis published by the Union of Concerned Scientists (UCS) examined 28 companies in the S&P 500 that participated in climate policy debates over the past several years. All of them publicly expressed concern about climate change or a commitment to reducing emissions through websites and public statements, but half (14) also misrepresented climate science in their public communications.

Many more contributed to the spread of misinformation about climate science in less direct ways, such as through political contributions, trade group memberships, and think tank funding.

Francesca Grifo

“Corporations' increased ability to influence policy should come with an increased responsibility to let the public know how they are doing so,” said Francesca Grifo, director of UCS's Scientific Integrity Program and a contributor to the report. “Companies may play a role in policy discussions, but right now, it’s simply far too easy for them to get away with misrepresenting science to achieve their goals.”

Utilizing an array of publicly available data, the report systematically examines how corporate influence fosters confusion on climate change. The analysis found that some American companies, including NRG Energy, Inc., NIKE, Inc. and AES Corporation, accept the findings of climate science and have taken actions in support of science-based policy.

Other corporations, including Peabody Energy Corporation, Valero Energy Corporation, and FMC Corporation, have worked aggressively to undermine climate policies and have misrepresented climate science to do so.

Despite efforts to deny or downplay the existence of climate change, however, consumers display a high level of concern and anxiety, according to a ConsumerAffairs analysis of about 2.2 million comments posted on social media over the last year.

The computerized sentiment analysis finds consumers consistently negative about the effects of climate change with many blaming lack of action by the governments of the industrialized nations.

"Climate change is an evil caused by the greedy industrial nations," tweeted Hassan A.halim Daour. In Britain, which was experiencing the coldest May in 100 years, one poster said, "I blame the evil climate change." Many noted that CNN meteoroligst Michelle Malkin blamed recent Texas tornadoes on climate change.

Creepy crawly

Several companies stand out for taking contradictory actions on climate change, the UCS study found.

Caterpillar Inc., for instance, highlights its commitment to sustainability and climate change mitigation on its website. But the company also serves on the boards of two trade groups that regularly attempt to undermine public understanding of climate science: the U.S. Chamber of Commerce and the National Association of Manufacturers. Caterpillar also funds the Cato Institute and the Heritage Foundation, two think tanks that have misrepresented climate science.

Similarly, ConocoPhillips says on its website that it recognizes human activity is “contributing to increased concentrations of greenhouse gases in the atmosphere that can lead to adverse changes in global climate.” But in comments to the Environmental Protection Agency, the company criticized scientific evidence on the ways climate change can harm public health.

“The difference between what many of these companies say and what they actually do is quite stark,” said Gretchen Goldman, an analyst in the UCS Scientific Integrity Program and a report contributor. “And because we know only limited amounts about their activities, it’s relatively simple for companies to show one face to the public and another to policymakers.”

Lobbying expenditures

The report found that companies also utilized their considerable financial resources to oppose climate policy. Lobbying expenditures for energy sector companies increased by 92 percent from 2007 to 2009, when climate change bills were actively debated in Congress. Meanwhile, Valero Energy Corporation donated more than $4 million to the Yes on Prop 23 campaign, which sought to undermine California’s climate change law, but was ultimately rejected by voters.

“The actions of many of these companies come right from the tobacco industry playbook, where the end goal is delaying sensible regulations that protect our health and safety,” said Grifo. “Companies generally find that complying with new rules is not as burdensome as they first imagined. But that doesn’t prevent them from obfuscating the science to create confusion and delay.”

This report, while as comprehensive as possible, is limited because companies are not required to reveal sufficient information about their activities—such as the purpose of lobbying expenditures and contributions to political action committees, industry advocacy groups and think tanks.

“This lack of disclosure of how corporations spend their money means they can get away with taking different positions on climate change with different audiences,” said Goldman. “Greater transparency would allow citizens, investors, and policymakers to make better-informed decisions and hold corporations accountable.”

Simple steps

Rep. Van Hollen

There are several relatively simple steps that would allow the public and policymakers to better hold companies accountable, including expanded reporting requirements to the Securities and Exchange Commission and passage of the DISCLOSE Act, which would require corporations to share more information about their political spending.

“This report quantifies and reinforces the urgent need to shine a light on the special interest money that is designed to distort science and influence our public policies,” said Congressman Chris Van Hollen (D-Md.), who joined UCS in its launch of the report. “As this report documents, the amount of money dedicated to influence our debates is dramatically increasing and, unfortunately, is frequently channeled through third parties.”

Van Hollen said that the problem has increased due to the Supreme Court’s Citizens United v. FEC decision allowing secret money from outside groups to flow into elections. He said legislation like the DISCLOSE Act will inject much needed transparency into elections and should be brought for a vote in Congress without delay.

“Voters have a right to know who is bankrolling the campaign ads that are designed to influence their votes,” said Van Hollen. “An informed electorate is essential to our democracy.”

Research: Abusive Credit Card Lenders Lose Money

Mark Huffman — Wed, 30 May 2012 17:28:02 +0000

It may help a bank's bottom line to be nice to their credit card customers

By Mark Huffman of ConsumerAffairs

May 30, 2012

Credit card lenders that use unfair or deceptive practices aren't just hurting consumers. They're also hurting themselves.

That's the underlying message of a recent report by the Center for Responsible Lending that finds onerous policies have unintended consequences. The study found that high-cost penalty fees and interest rates were not used to mitigate risk - as credit card issuers claimed - but instead were the risk that led to higher default rates.

Banks with more consumer-friendly policies in place had lower default rates. The researchers attribute that to the fact that customers aren't getting hit with as many expensive fees.

In fact, the study found that bad practices are a better predictor of consumer complaints and an issuer’s losses during a downturn than an institution’s type, size or location.

Safeguards

Consumer safeguards on credit cards enhance banks’ financial health, contrary to issuers’ past claim that safeguards undermine it, the research found. Credit card issuers with higher loss rates before the recession did not on average have a bigger jump in losses during the recession, indicating that having more high-risk customers did not predict which company’s problems would grow fastest.

New credit card rules have curbed or ended many of the unfair practices the study examined, such as doubling interest rates on existing balances for being a day late in making a payment. But some persist, and none of the new rules apply to business credit cards. The authors suggest regulators need to better police those areas.

“CRL thinks the report’s findings apply equally to high-cost fees and interest rates banks charge for overdraft and payday loans,” the consumer group said in its report. “These charges — like their predatory cousins in credit card lending — don’t reflect a borrower’s risk of default, but are the risk that too often pushes a customer into financial hardship or default.”

Report: Groundwater Depletion Threatens Food Supply

Mark Huffman — Wed, 30 May 2012 18:08:10 +0000

Irrigated agriculture may not be sustainable for much longer, scientists say

By Mark Huffman of ConsumerAffairs

May 30, 2012

A growing population increases demands on the water supply. Add to that the demands of irrigated agriculture and what you have is a threat to the food supply, according to a study appearing in the journal Proceedings of the National Academy of Sciences.

The study, prepared by researchers at the University of Texas, paints a grim picture of how groundwater depletion varies across space and time in California's Central Valley and the High Plains of the central U.S. Researchers say they hope this information will enable more sustainable use of water in these areas, although they think irrigated agriculture may be unsustainable in some parts.

"We're already seeing changes in both areas," said Bridget Scanlon, senior research scientist at The University of Texas at Austin's Bureau of Economic Geology and lead author of the study. "We're seeing decreases in rural populations in the High Plains. Increasing urbanization is replacing farms in the Central Valley. And during droughts some farmers are forced to fallow their land. These trends will only accelerate as water scarcity issues become more severe."

Worrisome

Three results of the new study are particularly worrisome. First, during the most recent drought in California's Central Valley, from 2006 to 2009, farmers in the south depleted enough groundwater to fill the nation's largest man-made reservoir, Lake Mead near Las Vegas—a level of groundwater depletion that is unsustainable at current recharge rates.

Second, a third of the groundwater depletion in the High Plains occurs in just four percent of the land area. And third, the researchers project that if current trends continue some parts of the southern High Plains that currently support irrigated agriculture, mostly in the Texas Panhandle and western Kansas, will be unable to do so within a few decades.

California's Central Valley is sometimes called the nation's "fruit and vegetable basket." The High Plains, which run from northwest Texas to southern Wyoming and South Dakota, are sometimes called the country's "grain basket."

Combined, these two regions produced agricultural products worth $56 billion in 2007, accounting for much of the nation's food production. They also account for half of all groundwater depletion in the U.S., mainly as a result of irrigating crops, according to the study.

Survey: Apple Brand Suffers Without Steve Jobs

Daryl Nelson — Wed, 30 May 2012 17:20:23 +0000

But the survey may not reflect the views of hard-core Apple users

By Daryl Nelson of ConsumerAffairs

May 30, 2012

Steve Jobs wore a lot of hats. Designer, businessman, animator, inventor. But most associate him as being Apple's co-founder, as he was the face, the pitch person and the catalyst to giving people a bevy of fun, practical and cool looking gadets.

The question is how do consumers perceive the Apple brand now that Jobs is gone? Do they have the same amount of confidence in Apple products? A new survey finds that 11 percent say their perception of Apple have worsened -- results that are at odds with a ConsumerAffairs analysis of 36 million consumer comments on social media over the last year.

Earlier this month, iGR conducted a survey among U.S. consumers that focused on today's gadetry craze, like how good are WiFi signals outside of the home? Or how mobile handsets, smartphones and tablets are really used by today's consumer. But one of the more intresting survey questions was how participants viewed the Apple brand since Steve Jobs is no longer at the company's healm.

The survey showed that only one percent of respondents said their image of Apple had "much improved" since Jobs passed away, about 3.5 percent said their perception of the company improved a small amount, and 84 percent said their image of the company had not changed at all.

The survey also reported that 9.4 percent of respondents said their view of Apple has gotten worse, and 1.7 percent said their perception of Apple had "greatly worsened."

The ConsumerAffairs analysis, however, found no significant change in the net consumer sentiment, which has hovered around the 50% positive mark for the last year, with a slight dip in October when consumers expressed sadness over Jobs' passing.

Casual users?

The question is though, whether the 11 percent of participants that considered the Apple brand worse off after Jobs died, are hard-core Apple users. It is typical for casual users of a brand to merely associate the success of that brand with one person, one product, or one era or period of time. This is the reasoning Apple executives are using to justify the percentages of respondents who have a lower view of the mega-company.

"iGR believes this is important for Apple's future. While a significant number of people said that their perception of the company had worsened, the core Apple user base seems to be unmoved in their views of the company," said Iain Gillott, president and founder of iGR, a market research consultancy focused on the wireless and mobile industry. "While they may mourn the passing of Jobs, it seems that the Apple faithful are staying put."

The survey also went on to show that those with a worsening image of Apple were 12 to 18 percent more likely to be men over the age of 45. Also, the 11 percent that had a worsened perception of Apple are more likely to have higher household incomes, higher education, and married.

In closing, the survey went on to show that 12 percent of the unhappy Apple consumers are more likely to prefer Android smartphones, made by Samsung or Motorola.

New College Grads Need Parents' Help to Find Employment

Daryl Nelson — Wed, 30 May 2012 17:00:29 +0000

Expert: Recent grads lack real-world experience, need help making connections

By Daryl Nelson of ConsumerAffairs

May 30, 2012

College graduation brings about many things. Feelings of accomplishment, feelings of closure, but for many what it doesn't bring is gainful employment.

According to career expert Don Philabaum, the economy is creating less than 150,000 jobs per month for a graduating class of 2 million in 2012. As grads walk across the stage to receive their degrees, their real challenge begins once they get off that stage and face the unforgiving and sometimes cut-throat world.

Philabaum who authored the new book The Unemployed Grad, And What Parents Can Do About It, says parents should be completely involved with their children's transition from the dorm room to the board room.

Along with the book, Philabaum offers free Webinars so parents can be better equipped in helping their college graduates find good jobs. He also states that 80 percent of the 2012 graduating class will be unemployed upon graduation, and students' first course of action should be to sit down with their parents, and come up with an effective course of action to maximize their new degrees.

Could be worse

Although the 2012 graduating class will have their fair share of challenges locking down a job, graduates of 2011 had it even worse.

The National Association of Colleges and Employers recently reported that employers will be hiring 10.2 percent more new college grads in 2012 than they did in 2011. Also, 44.2 percent of of new grads who looked for employment actually received offers.

However, Philabaum believes a different course of action is needed for the grad who is stuck at home still looking for work. Many parents may attribute unemployment to a lack of ambition on their children's part, but the book and the Webinar suggest that it's a lack of true-world experience that makes it hard for young adults to compete with a competitive job market. Or, recent graduates simply don't know where to begin after leaving school.

Research shows that 27.2 percent of graduates will never visit the career center, 16.1 percent will visit only one time, and 18.2 percent will visit twice. Again, this may not always be attributed to laziness, as much as it should be attributed to students simply not knowing the proper course of action.

According to a survey from Talent Marks, 95 percent of grads didn't have a written or thought-out job search plan, and 60 percent spend only one and five hours weekly looking for a job. And once students leave the college campus once and for all, they no longer have career centers and counselors at their immediate disposal.

"Graduates don't have a clue about how to look for a job", says Philabaum. " Surveys show grads don't spend enough time looking for a job, have not learned how to professionally use social media, or network with alumni on LinkedIn. Why? The college career center is no different than a club on most campuses. Students are not required to visit, or for that matter take ownership of their career."

To assist both the grad and the parent Philabaum is offering three free Webinars that users can access here. The Webinars will be on June 12, June 21 and June 30, 2012, at 8:30 PM Eastern standard time.

Sale of Pep Boys Falls Through

Mark Huffman — Wed, 30 May 2012 14:52:49 +0000

Private equity firm cites deteriorating business

By Mark Huffman of ConsumerAffairs

May 30, 2012

Struggling automotive services provider Pep Boys appears to be stalled once again. Hopes had risen for a turn-around after the private equity firm Gores Group agreed to buy the company for $4 billion. But now, the deal is off.

The deal was put together back in January but earlier this month the closing was delayed. Gores cited “serious deterioration” in Pep Boys' business, which was apparently the reason it finally scuttled the deal.

Pep Boys reported a slight profit in its most recent quarter but reported a loss the previous three months.

Consumers posting complaints at ConsumerAffairs have voiced frustrations in dealing with various Pep Boys stores on a wide range of car issues. Maria, of Sherman Oaks, Calif., says she had brake pads replaced earlier this month at her local Pep Boys shop.

Complaints

“As I was driving my car away from the shop and I stepped on the brake paddle, it almost went to the floor,” Maria wrote. “I drove back to tell the mechanic what just happened and he in turn inspected the car, 'bleeding the brakes,' I was told. After that, the paddle seemed a little more responsive but it was still feeling like a "marshmallow" making it very difficult to stop.”

Maria said she continued to drive the car a few more days but said she felt very uneasy. That's when she said she took it to another Pep Boys location for a brake inspection.

“The mechanics there were shocked when they took off the wheels from my car and saw how the brakes had been installed, backwards metal to metal.,” Maria wrote. “They were in disbelief that I was driving under those conditions.”

Gregg, of Hesperia, Calif., reported a similar experience when he bought tires.

“The guys in Pep Boys Automotive Service put new tires on my truck,” Gregg wrote in a ConsumerAffairs post. “They put the wrong size twice and did not check the air pressure when they were asked to do so. They did not do anything to help resolve my complaint. When we went to their manager, they would not work with us to satisfy us.”

Strong headwinds

Every business draws some complaints, of course, but when added to other factors, it can create strong headwinds for trying to move a business out of a rough patch.

And with the recession, more consumers are working on their cars themselves. Forbes notes that Pep Boys has faced strong competition from Auto Zone, Advance Auto Parts and O'Reilly Automotive.

FDA Warns Teva's Adderall May Be Counterfeit

James Limbach — Wed, 30 May 2012 13:48:54 +0000

Some tablets may contain the wrong ingredients

By James Limbach of ConsumerAffairs

May 30, 2012

The FDA is warning consumers and health care professionals about a counterfeit version of Teva Pharmaceutical Industries’ Adderall 30 milligram tablets that is being purchased on the Internet.

FDA’s preliminary laboratory tests revealed that the counterfeit version of Teva’s Adderall 30 mg tablets contained the wrong active ingredients. Adderall contains four active ingredients – dextroamphetamine saccharate, amphetamine aspartate, dextroamphetamine sulfate, and amphetamine sulfate. Instead of these active ingredients, the counterfeit product contained tramadol and acetaminophen, which are ingredients in medicines used to treat acute pain.

Adderall, which is approved to treat attention deficit hyperactivity disorders (ADHD) and narcolepsy, is a prescription drug classified as a controlled substance – a class of drugs for which special controls are required for dispensing by pharmacists.

The counterfeit Adderall tablets are round, white and do not have any type of markings, such as letters or numbers. Authentic Adderall 30 mg tablets produced by Teva are round, orange/peach, and scored tablets with "dp" embossed on one side and "30" on the other side of the tablet.

Anyone who believes they have the counterfeit version of Teva’s Adderall 30 mg tablets should not take or should stop taking the product. Consumers should talk to their health care professional about their condition and options for treatment.

Auto Warranty Firm Settles Charges With Missouri

Mark Huffman — Wed, 30 May 2012 12:52:48 +0000

Company agrees to clean up its sales practices

By Mark Huffman of ConsumerAffairs

May 30, 2012

As soon as you buy a used car, your mailbox quickly fills with urgent messages from companies that want to sell you an extended service contract, often called extended warranties.

Missiouri Attorney General Chris Koster says his office has reached a settlement with one of the companies that sends out these notices, Dealership Warranties, Inc., a company that is now doing business as National Vehicle Protection Services.

Under the settlement, the company will restructure the way it sells vehicle service contracts. Dealership Warranties will also pay $18,500 to the state in restitution and costs.

No deceptive sales tactics

The consent judgment against Dealership Warranties prohibits deceptive sales techniques in the sale of vehicle repair coverage. The judgment also requires the company’s sales people to describe during sales phone calls the details of the written contract. In the past, the company has drawn complaints from consumers.

“I signed up with a warranty with this company because I received a notice that my warranty was going to expire,” Lisa, of Allentown, Pa., wrote in a ConsumerAffairs post. “When I signed up with them, I realized with my bank that I already have an extended warranty that I'm already paying for on a monthly basis. I tried call Dealership Warranties to cancel this transaction, but after 30 minutes I received the run around. They already charged $395 to my bank and expect to receive $208 monthly for 12 months, which I've already closed my banking account to avoid any further transaction.”

Alan, of Eugene, Ore., said he got a postcard in the mail from the company that made this suspicious.

“We received a card in the mail from this company requesting 'Immediate Response,”'' Alan wrote to ConsumerAffairs. "'This notification is to inform you that your factory warranty has expired or may expire soon based on mileage or age. To avoid the high cost of automobile repairs, call us immediately with you Vehicle Identification Number (VIN) & exact miles to extend coverage on your vehicle.'"

Will provide more information

In many cases, recipients of these communications are confused and act without fully understanding the transaction. Under the settlement the company will provide more information, including:

The identity of the service contract provider (the party responsible for paying claims under the contract, which is not Dealership Warranties);
Information about what is not covered and the limits of coverage provided;
Any deductibles under the contract;
Requirements for prior approval of vehicle repair;
Obligations of the consumer to perform and document past or future maintenance;
The procedures for canceling and the consumer’s right to cancel the contract within a certain period of time and receive all of his or her money back; and
The consumer’s right to a pro rata refund if the contract is canceled before the full term of the contract.

Rights

“Missouri law says consumers have a right to see a written service contract and agree to its terms,” Koster said. “Customers who purchase vehicle repair coverage by telephone often later realize the significant limits to coverage in the written contract. It is important for Missouri consumers to protect themselves by carefully reviewing vehicle service contracts to make sure they contain the provisions promised.”

If Dealership Warranties completes the contract in a telephone transaction, it is required under the consent judgment to record the transaction electronically and to mail the written contract within three business days.

Not All Distractions Are in the Front Seat

Mark Huffman — Wed, 30 May 2012 12:48:44 +0000

British insurance company finds back-seat drivers contribute to accidents

By Mark Huffman of ConsumerAffairs

May 30, 2012

Public safety officials have, in recent months, stepped up their campaign against “distracted” driving, which usually focuses on using a cell phone behind the wheel, fiddling with a car's music system, eating or putting on makeup.

But Confused.com, a British website offering comparisons of insurance policies, has found some of the biggest distractions for drivers are sitting in the back seat.

In a recent survey, the site found two thirds of British motorists have been victims of unwanted attention from self-appointed backseat drivers, and almost one in four have been in an accident while dealing with the distractions of other passengers.

The company has placed a price tag on these distractions, estimating the accidents they cause cost the average motorist about £500, or $783 in repair bills.

The research also reveals that the worst backseat pests are bus drivers, train drivers and delivery men who obviously forget that they're off duty. On the other hand, teachers are the most patient of passengers and usually put up with the driver's bad habits.

Family members are the worst

Most respondents also confessed that they would rather travel with colleagues than loved ones. This is because partners are apparently the worst backseat drivers, with husbands and boyfriends disrupting the driver most often and 45 percent of them voicing their traffic-tips several times during the shortest of trips.

Women and the elderly are the most likely to be the victim of backseat distractions. Over two thirds of women, and a shocking 70 percent of drivers over the age of 55 find themselves on the receiving end of this bad etiquette, the researchers note.

"As motoring costs continue to rise at a meteoric rate, it's never been more important for drivers to keep their costs as low as possible,” said Gareth Kloet, Head of Car Insurance at Confused.com. "Our research shows that having other people in the car can distract us from the road, and lead to accidents which in turn increase the cost of our car insurance policies."

Big Drop in Used Car Prices Expected

Mark Huffman — Wed, 30 May 2012 12:46:03 +0000

Falling gas prices reduce demand for compacts

By Mark Huffman of ConsumerAffairs

May 30, 2012

If you have been thinking about buying a used car but have put it off, the delay may work to your advantage. It turns out the recent relief at the gas pump is yielding dividends on the car lot as well.

After double-digit percentage gains from January through May, prices on many popular used compact and midsize cars are expected to drop up to up to five percent in June compared to May, according to Jonathan Banks, senior analyst with the National Automobile Dealers Association (NADA) Used Car Guide.

"The trend of rising prices for used cars will reverse course in June because of declining gasoline prices combined with a normal seasonal slowdown in consumer demand for used cars," Banks said.

Car prices will fall faster than truck prices

Used car values are expected to fall by about two percent, while truck values will decline by about one percent or half of the amount of cars, according to the June edition of the NADA Official Used Car Guide. Prices for used compact and midsize cars will fall by an average of 2.4 percent and many used cars will see larger declines.

For example, after appreciating by $1,200 or 11 percent from January through May, the value of a 2009 Honda Civic Sedan 4D LX will fall by $600 in June.

"Prices on the Toyota Prius will drop even more dramatically in June," Banks said. "Rapid depreciation for hybrid vehicles is not uncommon after surging gasoline prices reach a peak and then begin to quickly fall."

After increasing in value by $2,350 from January through May, prices on the 2011 Toyota Prius Liftback 5D will fall $900 in June, according to the NADA Used Car Guide.

Volatile hybrid prices

"During periods of rapidly changing gasoline prices, values of hybrid vehicles become more volatile because consumer demand for hybrids rises and falls along with the price of gasoline," Banks said.

For example, when gasoline prices increased during the first four months of 2011, the 2009 Toyota Prius increased in value by about $4,500 from January through April 2011. In the fall of 2011, the Prius dropped in value by $4,800.

The value of a 2010 Hyundai Elantra rose 13 percent from January through May, but is expected to fall by $500, or four percent, in June. A 2011 Nissan Versa increased in value by 11 percent in the first five months of the year, but should also go down by four percent in June. A 2009 Toyota Camry rose in price by 15 percent from January through May, but is expected to sell for five percent less in June.

Still, you don't have to be in a rush. Looking ahead to July, the NADA Used Car Guide is forecasting that depreciation for small and midsize cars, which experienced the greatest appreciation over the first part of 2012, will see values continue to drop sharply.

Samsung Competes With iTunes For Download Dominance

Daryl Nelson — Wed, 30 May 2012 12:40:36 +0000

Music Hub houses 19 million songs in a cloud catalog

By Daryl Nelson of ConsumerAffairs

May 30, 2012

Companies dueling it out to win the dollars of consumers are similar to little kids on a playground vying for a vacant swing, or a place on the monkey bars. Usually there is one playground king, or sometimes bully, that gets first dibs on all of the cool playground attractions.

But after watching from the sidelines, there's always one kid who is brave enough to face down the playground king and compete for dominance. Well, Apple is the playground king when it comes to offering downloadable music, and Samsung is the once uncertain kid that is now completely certain that it's ready to go to battle.

Samsung has just began a service that lets users purchase songs onto their Galaxy S III smartphone. The new service has been rolled out to 28 countries in Europe and will be released to other parts of the globe in the near future. The service called "Music Hub" houses 19 million songs from a cloud-based catalog, and users can also stream music on to their devices for a monthly fee, if they choose not to purchase individual songs.

Following in the digital footsteps of Apple's iPod device and iTunes music store, users do not need an internet connection to listen to songs, unlike Sony Corp., which also released a music service in order to win over some of iTune's loyalists.

mSpot

Samsung recently partnered with mSpot, a mobile content provider to provide a wide musical catalogue for today's music listener, who typically isn't loyal to only one genre or brand of music.

"When you ask yourself, 'what do I want to listen to?' there is now one simple answer, for every mood, every place and everyone," explained TJ Kang, Senior Vice President of Samsung Electronics' Media Solution Center. "With the new Music Hub, we're bringing the joy back to music -- listening, collecting and sharing."

Customers can either download a free version of the Music Hub, or purchase a premium version in Europe for £9.99 (about $15), where users have access to an unlimited amount of streams for a fixed amount.

In June 2011, it was reported there were 1 billion iTunes customers, which seems like a huge consumer hill to climb for Samsung. But as previously reported by ConsumerAffairs, Samsung has been making its way up the mobile device ladder, by beating out the Amazon Kindle for the number two spot in first quarter device sales.

With Apple still holding the number one spot, Samsung's Music Hub could be all the leverage it needs to really make a run for the top tier position and finally get its turn on the swing-set.

Here are the included features of Samsung's Music Hub:

Scan & Match Cloud Locker: Upload your music to the cloud so you can play it anywhere. Music Hub utilizes scan & match technology to decrease upload time and ensure high-quality playback. Any unmatched songs are directly uploaded from your library so you can access rare or personal recordings (100 GB of storage for all unmatched songs). When you edit playlists or purchase music, your collection stays automatically updated across all authorized devices
Radio: Listen to the music you like with personal radio and programmed stations. Create personal stations based on songs and artists you love, or browse genre stations recommended and tailor-crafted by the Music Hub team. Hear a song you like? Tag it so you can find it later and play it again whenever you want.
Optimized for Mobile: Music Hub is optimized specifically for the Samsung device. Advanced streaming and downloading options let you save storage space, play music when offline, and cut down on cellular data usage. Audio settings are designed to prolong battery life and ensure smooth streaming even under spotty network coverage.
Web Player: In addition to the mobile app, users can access their music library and the Music Hub catalog/store online at www.musichub.com. The Web Player allows users the freedom to play their music easily on any PC.

Consumers Send Mixed Signals About Their Mood

Mark Huffman — Wed, 30 May 2012 12:31:24 +0000

Weeks of optimism seem to disappear overnight

By Mark Huffman of ConsumerAffairs

May 30, 2012

For a while, it seemed like consumers had gotten their mojo back. Since the Great Recession they've paid down debt and started spending more. Last week's University of Michigan Index of Consumer Confidence showed a healthy gain over April.

But The Conference Board's Consumer Confidence Index shows just the opposite. The Max index fell to a four-month low of 64.9, down from a revised 68.7 April reading. Even falling gas prices failed to lift consumers out of their funk.

“Confidence plays a major role in the willingness to spend, especially when changes in outlook are linked to economic factors,” said economist Joel Naroff, of Naroff Economic Advisors, in Holland, Pa. “It looks like households may be a little more uncertain about the shape of the economy right now and that does not bode well for consumption.”

Households are not only less certain about the future but their reading of the current situation dropped markedly as well. In particular the view on the labor market turned more sour as a growing proportion of people think jobs will be harder to get in the near future while fewer think there will be more jobs available.

More respondents also noted that it is harder to get a job and in an economy where job availability equates to job security, that is not good news.

Facebook's a drag

The news from Wall Street hasn't been particularly good lately, either. The Facebook IPO debacle seems to have dampened enthusiasm, once again exposing market excesses and miscalculations.

The Facebook fallout continued this week as the price of the stock, initially priced at $38, fell below $30 in Tuesday's trading, continuing to wipe out millions of dollars in wealth. Now that options trading has begun, investors can “short” Facebook, in essence betting that its price will fall even lower.

Meanwhile, there is more finger-pointing and “I-told-you-sos” in the investment community. A look back at the events leading up to the IPO show that the offering was initially valued at $5 billion but suddenly surged to over $100 billion.

On May 9 Facebook amended its IPO, cautioning that it had doubts about how it was going to monetize its mobile platform. Despite those doubts, the company increased the number of shares in the IPO by 25 percent a week later.

And the carnage may be far from over. Marketwatch columnist Mark Hulbert devised a valuation formula, based on the average revenue growth rate for all recent IPOs, and came up with a price of $13.80 a share for Facebook.

How to Convince Your Boss to Let You Work From Home

Mark Huffman — Tue, 29 May 2012 19:19:17 +0000

Conference Board report may offer ammunition for your argument

By Mark Huffman of ConsumerAffairs

May 29, 2012

Working from home, not to be confused with home-based “business opportunities,” is a growing trend.

According to a new report from The Conference Board, the proportion of employees who work predominately from home or another remote location has, over the last decade, more than tripled in many industries, while nearly doubling nationwide among all full-time, non–self-employed U.S. workers.

"A confluence of factors, led by the rapid expanse of sophisticated, secure, and relatively inexpensive communication technologies, has sparked a quiet revolution in where and how many Americans do their jobs,” said Amy Lui Abel, director of human capital research at The Conference Board and a co-author of the report. “To take full advantage of the opportunities teleworking provides—while avoiding the many potential pitfalls—employers and employees must engage in an open dialog that establishes the mutual expectations and responsibilities that come with this new workplace culture. Our report should serve as a catalyst for beginning that conversation."

For the employee, the benefits are obvious. With no commute, employees enjoy time with loved ones during precious morning and evening hours. Based from home, they gain the flexibility to adjust their schedules as job and personal demands arise.

How do you convince your boss to let you telecommute? The Conference Board report offers some bullet points that you can use to shape your argument.

It saves money

Steady technical refinement has made teleworking an increasingly attractive business proposition. As a case study,the report cites IBM's long-term holistic strategy, which grew out of the 1970s and the idea of installing access "terminals" in employees' homes.

By 1995, 10,000 IBM employees were mobile, allowing the company to move from a traditional 1:1 workspace-to-worker ratio to 1:4. In just that first year, a $41.5 million investment in worker training returned $74 million in savings.

Teleworkers are often more productive

The Conference Board report notes that companies and organizations that have telecommuting employees have found those working from home are often more productive. They have the ability to focus on work priorities free of the stress of distractions and office politics. In addition, they arrive at their desks each day without having had to endure the stresses of a commute.

Accessibility

Employees who commute to the office often have a “time clock” mentality. Once the workday is over they punch out and head home, often not thinking about work until the next day. In some respects, telecommuters are “always on,” often returning to work in the evening or odd parts of the day.

Working for home can be used as incentive

Whether opportunities for telework are reserved for the best-performing employees, promoted across an organization, or used to attract standout applicants from a wider talent pool - such as disabled veterans, semi-retired experts, and parents with young children – offering a virtual office can help shape a happier, more motivated workforce. But leaders must establish formal, transparent guidelines if the concept is to be a real success.

"Research concurs that the dual lynchpins of effective teleworking are strong management and robust IT," said co-author Gad Levanon, director of macroeconomic research at The Conference Board. "With support from HR, managers at all levels must make the 'mental shift' to trusting that employees are getting the job done without seeing them every day—and to have the strength to act decisively when they're not. On the technology side, the right hardware and software choices backed up by abundant support staff can make the difference between a seamless transition and hundreds or thousands of man-hours lost to bugs and faulty connections."

States Warn Veterans Targeted by For-Profit Colleges

James Limbach — Tue, 29 May 2012 19:13:50 +0000

22 state attorneys general want Congress to close loophole

By James Limbach of ConsumerAffairs

May 29, 2012

The attorneys general of 22 states are urging Congress to close a loophole in the federal Higher Education Act that can be used to target veterans with high-pressure recruiting tactics by schools seeking to maximize federal funding.

The so-called 90/10 rule prohibits for-profit colleges from deriving more than 90 percent of their revenue from U.S. Department of Education (Title IV) funding sources. Currently, for-profit schools can obtain 90 percent funding from Title IV funds and the remaining 10 percent from government veterans’ programs – instead of from non-federal sources, as the law intended.

“The point of the 90/10 rule was to instill greater accountability in the industry,” Connecticut Attorney General George Jepsen said. “Instead of limiting the amount of taxpayer dollars that for-profit colleges can obtain, this loophole has made it possible for proprietary colleges to achieve 100 percent funding from the federal government. Equally troublesome are the alleged recruiting tactics that exploit our veterans and service men and women.”

Federal lawmakers enacted the original 90/10 rule in 1998 following congressional investigations of for-profit colleges. At the time, veterans’ benefits were not a substantial source of potential income for proprietary colleges. However, in 2008, Congress enacted the Post 9/11 GI Bill, making billions in educational benefits available for veterans and their families.

“In essence, this creates a system where for-profit colleges can derive 100 percent of their funding from the federal government and taxpayers,” Kentucky Attorney General Jack Conway said. “The loophole is creating high-pressured enrollment tactics that are directly targeting our veterans who are returning from battle and their families. This is unacceptable and unconscionable.”

“Allowing Department of Veterans’ Affairs (VA) and Department of Defense (DoD) benefits to not count toward the 90 percent government-funding limit violates the intent of the law and harms taxpayers,” said Conway. “The loophole has created a feeding frenzy for proprietary colleges looking to get their hands on veterans’ benefits. Many of our bases are being overrun with for-profit recruiters who are more interested in getting their hands on these benefits than they are in educating our service members.”

More leverage

Under current law, for-profit colleges are able to use the military benefits to leverage even more Title IV funds because each dollar obtained from Department of Defense or Veterans’ Affairs can be used by for-profit colleges to obtain an additional nine dollars in Title IV funds.

“The purpose of the 2008 bill was to help returning veterans get the educational benefits they need to return to the workforce, not to enrich for-profit institutions,” Jepsen said.

New App Lets Users Check a Charity's Legitimacy

Daryl Nelson — Tue, 29 May 2012 18:34:30 +0000

New Jersey compiles info on 26,000 charities that solicit in NJ

By Daryl Nelson of ConsumerAffairs

May 29, 2012

U.S. consumers have been known to show levels of altruism towards the troubled and the unfortunate. Whether it's due to a natural disaster, a hunger problem, or a medical condition, consumers can be quite charitable at times.

But how does one know their money is ending up in the right place? New Jersey's Division of Consumer Affairs has answered this question by creating an app that lets you investigate before you donate. Consumers can also track how their charities are applying the donated funds.

The app is called "Charity Lookup" and it's for iPhone, iPad, and iPod touch users. In theory, the app provides the needed background information to a charity or cause, so users can become more educated and feel more confident when donating to a charity.

The New Jersey Division updates the app each week with info from its own database. It gathers the financial records of 26,000 charities and nonprofits that solicit New Jersey residents.

New Jersey state officials say not all charities use donated funds in the same way, and this app will allow users to not only feel better about donating, but also see exactly how much of their donations are being given to the actual cause.

Smart donors

"Savvy consumers do their research before they make a purchase or an investment-- and they should do the same before giving to a charity," cautioned Attorney general Jeffrey S. Chiesa.

"When you look at the numbers you'll learn some so-called charities dedicate only 10 or 20 cents of each donated dollar to actual charitable programs, and give the rest to fundraisers. Other organization spend virtually every penny on worthwhile charitable projects. With this app we've made it easier than ever to know where you money will go, before you donate, he said."

Like most apps, it's built to be very user-friendly. The user would simply type in the name of a nonprofit, then by clicking on the organization's name, users can view background information of the charities expenses and revenues. The breakdown of each organization is pulled from its most recent fiscal year report.

Eric T. Kanefsky, acting director of the New Jersey Division of Consumer Affairs said consumers have a right to know the full intentions of a charity, as with any other organizations they deal with.

"While the Supreme Court has ruled that states can't force charities to spend more money on charitable causes than on fundraising or management costs, we owe it to consumers to bring transparency to the ways charities use the donations they receive," he said.

"This app, like our Charities Registration Hotline, provides an important service. It will help shine a spotlight on the state's most un-charitable charities, and bring well-deserved recognition to the organizations that put donated dollars to valuable use."

65 percent

Kanefsky also added that charities should be donating at least 65 percent of its donations toward its charitable programs, and no more than 35 percent toward fundraising efforts.

For now, only those with Apple mobile devices can use the app, but Android users and those who use other devices will soon be able to use it too. Those interested can either download it here, or by going to an Apple App store on their mobile device and doing a search for "New Jersey Charity Search."

But even those without the app can check the legitimacy of a charity or non-profit. Consumers can simply phone a charity and ask them how its money is spent. If a charity is unwilling to give this info to you, it may be an indication that it's not reputable.

Although rolled on in the State of New Jersey, other states should be seeing similar applications. But in the meantime, getting all of the background information on a charity, coupled with asking a bunch of questions, should allow the donator to make a more educated donation, since donating blindly to a cause can do more harm than good.

Survey: Many Teens Believe Distracted Driving Isn't a Big Deal

Daryl Nelson — Tue, 29 May 2012 16:18:49 +0000

Only 30 percent feel it's very dangerous, Consumer Reports finds

By Daryl Nelson of ConsumerAffairs

May 29, 2012

When it comes to teenage driving, most parents would probably prefer their teens drive by themselves, as opposed to having a car full of other teenagers to distract them. But a Consumer Reports survey shows that having peers in the car can actually keep teenage drivers from being distracted by cell phone use or texting.

Though the report shows that younger drivers are less likely to text or use cell phones when driving, many teens surveyed believed that distracted driving isn't really a big danger.

Only 36 percent of survey participants between the ages of 18 to 29 admitted to being concerned with the issue of distracted driving. A mere 30 percent felt it was very dangerous to use a handheld phone while driving, while 53 percent of respondents aged 30 or older said distracted driving is extremely problematic.

But more people believed that texting was a harmful act, as 76 percent felt that texting while driving is very dangerous, and 83 percent said to be in favor of distracted driving laws when it came to texting. This may be a response to national efforts by several organizations to build awareness of texting while driving and highlight its dangers.

Teens surveyed

The report also included a series of interviews conducted by Consumer Reports, that asked teen drivers what they thought needed to be done to eliminate texting and cell phone use while driving. Their suggestions included:

"Make it safe and acceptable to pull over to do such tasks."
"Stiffer penalties, parents applying consequences for minors, and more education/awareness programs."
"Adults don't discipline like it's a problem; parents are blind to it. They tell us do not drink and drive, but don't say do not use the phone."
"I think that apps … that prohibit a user from receiving or sending text messages while traveling over 10 mph are very helpful and should be more widely used."
"Parents should let us kids have a Bluetooth headset so we wouldn't be tempted to use our phones and take a hand off the steering wheel."
"I know that my friend texts a lot while she's driving, but whenever I'm in her car, I make her give me the phone and tell me what she wants me to write. …Peer pressure is such a powerful force when you have it in your corner."

In a written statement, Rik Paul, Consumer Reports auto editor said "Our survey showed that while far too many young people are driving while distracted, they are less likely to do so when their parents, friends or siblings set a good example."

Additional findings in the report showed that, 84 percent of younger drivers saw other younger drivers talking on their cell phones while behind the wheel, and 71 percent said they've witnessed teenagers texting while driving.

Also, 48 percent of respondents witnessed their parents talking on handheld phones while driving, 15 percent saw their parents texting, and 8 percent of the respondents even admitted to using a smartphone app while behind the wheel.

The distracted driver survey was conducted online, between Nov. 23, 2011 to Dec. 13, 2011. A total of 1,049 questionnaires were filled out by adults ranging from 16 to 21.

One Million More Turbocharged Vehicles On the Road This Year

Mark Huffman — Tue, 29 May 2012 16:08:45 +0000

Consumers find cheaper, proven technology more attractive

By Mark Huffman of ConsumerAffairs

May 29, 2012

An aftermarket Cartech turbo mounted on a Ford engine

With gasoline prices at elevated levels in recent years, consumers are looking for more fuel efficient cars. In some cases that means looking at smaller cars with smaller engines.

But going small doesn't mean giving up power. Automakers increasingly are offering models with turbocharged, or “turbo” engines that offer fuel economy and power.

A turbocharger works by compressing a greater amount of air through the combustion chamber, resulting in more power and efficiency. A turbocharger uses exhaust gases that otherwise would be wasted to increase air flow into the combustion chambers providing big engine power performance with small engine efficiency and reduced emissions.

Better efficiency and power

It allows automakers to use a smaller, more gas-stingy engine without giving up zip. Turbo engines are popular in both gasoline and diesel powered engines.

As automakers introduce new turbo models, consumers appear to be gravitating toward them. Honeywell Turbo Technologies estimates the number of turbocharged commercial and passenger vehicles sold in North America is projected to reach 3.2 million in 2012, up from 2.2 million in 2011.

Passenger vehicles alone account for nearly 850,000 additional turbo engines – a 61 percent increase from 2011.

"With fuel prices being a significant concern for consumers and businesses, turbochargers are a smart choice for getting more miles to the gallon," said Tony Schultz, vice president for the Americas, Honeywell Turbo Technologies. "It's a proven technology that can be used across market segments and does not put the consumer in an extended payback period like other technologies to realize its benefits.”

Proven technology

And while hybrids and the emerging electric vehicles (EV) are relatively new automotive technologies, Schultz points out that turbocharging technology has been a fuel economy driver for decades in the United States for the on- and off-highway commercial vehicle market, as well as in global passenger vehicle markets like Europe.

While there are more turbos on the road, there are decidedly fewer eight-cylinder engines. According to J.D Power and partner firm LMC Automotive, turbochargers were fitted in only two percent of gasoline or flex-fuel vehicles produced in the United States in 2008, but that figure jumped to 9.5 percent in 2011 and is expected to more than double to 23.5 percent in 2017.

A smaller turbocharged engine can provide a 20 percent to 40 percent fuel economy improvement and deliver the same performance as a larger engine. Industry data illustrates the ongoing downsizing trend as the average engine size in North America is decreasing from 3.6L in 2007 to a projected average of 2.9L by 2016, according to Honeywell.

Turbocharged automobiles, such as Ford's EcoBoost lineup and the Chevrolet Sonic and Chevrolet Cruze have been among the best-selling vehicles in the U.S. this year. The Cruze Eco and Sonic, which both offer turbocharged engines among its models, can deliver 40 miles per gallon or higher on the highway and have starting prices below $20,000.