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Consumer News & Alerts

January 22, 2007

TESTED BY FIRE
American Express Travelers Cheques. More popular than cash or bank accounts in many countries, they're touted as the world's safest currency. And guaranteed to be replaced "quickly and easily" if they're lost or stolen -- usually within 24 hours. So when a rural Kansas family's home burned to the ground, taking $9,500 worth of Travelers Cheques with it, they expected a quick and trouble-free refund. No such luck.

Months went by. There were times the family was so short of money, they sold parts of their van for cash to buy diapers for their twin girls. It wasn't until ConsumerAffairs.com intervened that the company finally loosened its purse-strings, coughing up a partial refund.

Why? Good question, one that our Lisa Wade McCormick explores in this week's cover story -- Tested by Fire: American Express Travelers Cheques.

ATTACK OF THE KILLER PHONES
We've said this before -- don't sleep with your cell phone. It was last March that a 15-year-old North Carolina boy barely escaped serious injury when his Motorola cell phone burst into flames as he slept with it beside him. Fortunately, his dog was beside him too and barked the alarm. Last week in California, a 59-year-old man's cell phone caught fire in his pants pocket. The motel sprinkler system put out the fire but at last word Luis Picaso was in critical condition with second- and third-degree burns.

It's the batteries, of course, that can turn cell phones into molten metal, just as they can cause laptop computers to ignite. The latter problem has ignited a class action lawsuit against Dell in Canada. The plaintiffs say the company knew its laptops could ignite but kept selling them anyway.

The "Other" Problem Then there's the potential, but still unproven, risk of cancer from long-term cell phone use. The British government is undertaking a five-year study of up to 200,000 cell phone users, hoping to get a definitive reading on just how risky exended cell phone use is.

In other telecommunications tales ...

• Verizon Cuts Off Northern New England After years of consolidation, local telecom giants are beginning to shed less profitable regions. Thus, Verizon is spinning off its local telephone lines in Vermont, New Hampshire and Maine to FairPoint Communications. The deal saddles FairPoint with a huge debt but the company says it's confident it can improve on Verizon's record.

• iPhone Deflation Likely Analysts say Apple has built so much profit into its highly-hyped iPhone that after a few months of soaking early adopters, it will be able to reduce prices dramatically. Message: Don't be the first on your block to buy one, unless you have a money tree out back.

• Netflix Goes Online The wildly successful DVD-by-mail company will begin offering free movies on customers' computers. The movies will be "streamed" -- available only for live viewing, so you won't be able to built an illicit stash of thrillers. Your editor finally got around to subscribing to Netflix and we were amazed to get the first three movies two days after we ordered them. It wasn't long ago it would take longer than two days to download three movies, let alone mail them.

CARFAX SETTLES SUITS
As we reported last October, CARFAX car history reports are far from fool-proof. They rely on public records, which vary wildly in accuracy, a fact CARFAX doesn't exactly emphasize. In a class action settlement, the company promises to be more explicit about the limitations of its data and agrees to give previous customers such goodies as, you guessed it, free or reduced-price CARFAX reports.

Infant Seat Tests Disputed A few weeks ago, Consumer Reports charged that many infant car seats sold in the U.S. tended to fail in fairly routine accidents. We added some heart-rending tales of infant fatalities submitted by our readers. But wait, says the National Highway Traffic Safety Administration, the taxpayer-supported federal agency that's supposed to, well, make highway travel safer. NHTSA took issue with CR's tests, basically arguing the seats are safer than the tests indicated, and CR has agreed to run the tests again, using a new protocol. That won't bring back those dead babies though, now will it?

Toyota Recalls 533,000 Trucks Consumers who think of trucks and truck-based SUVs as big and brawny often fail to consider the effect all that weight has on the suspension system. Some are better than others, of course, and Toyota has agreed to toughen up the ball joints in a recall of more than half a million of its Tundras and Sequoias.

GAS PRICES DIP
Yes, they've taken their time about it, but gas prices are finally starting to follow oil prices' downward trend, with pump prices dipping below $2 in some areas. It only makes sense, after all, that if crude oil prices are down, gas prices should follow. OK, so that brings us to the next question: Are oil prices likely to remain depressed? This is like asking what the weather will be like two weeks from Tuesday but one veteran analyst warns that no one should put any big bets on oil prices. They can, and do, change quickly.

Consumers seem to have gotten this message. Despite the recent dip in gas prices, more and more of us are buying compact cars. The latest figures show compacts' market shareup from 27.9 percent in 2005 to 31.2 percent in 2006.

Tax Breaks for Oil Companies Democrats in the House have passed a bill that would cut tax breaks for Big Oil. They say their bill would reduce reliance on foreign oil, Republicans say it would increase it. It's one of a number of contentious issues that House Democrats pushed through during their first few weeks. Joe Enoch enumerates who did what to whom in this week's Capitol Critters.

MYSPACE MOLESTERS
First, Rupert Murdoch's publishing empire pulled the plug on O.J. Simpson's semi-confessional, now it's trying to placate parents and prosecutors who are up in arms about MySpace. The popular site lures teens and young adults into what is essentially an unchaperoned free-for-all. There are a mounting number of lawsuits filed by the families of children who have been molested and even killed, allegedly through the kind auspices of MySpace. Now, the site says it has developed a new security tool that will give parents a little more control over what their kids are up to. Time will tell if it's adequate.

Record Companies Attack Satellite Radio It's OK for Rupert to lure children into an online predator's palace but Congress is not going to sit idly by and let those damned consumers record songs off their satellite radios. No sir. Enough is enough. Someone has to strike a blow for justice and in a true display of bipartisanship, Sens. Lamar Alexander (R-TN) and Dianne Feinstein (D-CA) have introduced legislation to protect the big recording companies who are -- ahem -- very important constituents in Tennessee and California.

"New radio services are allowing users to do more than simply listen to music," Feinstein said. "What was once a passive listening experience has turned into a forum where users can record, manipulate, collect and create personalized music libraries." Thankfully, we have courageous senators willing to protect us from such despicable activity.

Hackers Hit T.J.Maxx, Marshalls On the rare occasions we're dragged into one of these stores, it seems that half of America is there with us, so the crooks who broke into the computers that store customer data got a lot for their trouble. Anyone who's used a credit or debit card at these stores should keep a careful eye on their credit records for the next decade or so.

AGING HEALTHILY
The fact that so many Americans are over 50 may be giving Fed Chairman Fred Bernanke heartburn, but for those who suddenly find themselves a lot older than they used to be, aging presents a multitude of health questions that aren't of much concern to callow youths. A new weekly feature aims to answer some of those questions. It's called "The Healthy Geezer" and those who find the title insulting should consider that the columnist, Fred Cicetti, is older than most other people and thus feels free to use whatever self-descriptive term he wants. Fred's first two columns deal with "floaters" in the eye and shingles.

More health notes ...

• Cigarette Companies Raised Nicotine Level Harvard researchers find an 11 percent increase in addictive nicotine over eight years.

• Fertility Clinic Web Sites May Be Misleading Study finds many sites don't conform to accepted advertising standards.

• Big Purse, Big Pain Shouldering too much weight can spell big trouble, doctors warn.

• Ordering: Tomato-Broccoli Combo Researchers find the two eaten together are more effective in fighting prostate cancer than when eaten separately.

• Flu Shot May Reduce Risk of Stroke More research needed, but studies point to reduced risk of both stroke and heart attack in seniors who got their flu shots.

• Chinese Herb Reduces Blood Pressure Danshen, an herb long used in Eastern medicine, may be as effective as some prescription medicines.

• 7UP Drops "All Natural" Claim Lawsuit threat gets company's attention.

STILL GOUGING TAXPAYERS
There've been some reforms but refund anticipation loans -- "instant refunds" -- are still gouging working-class taxpayers. Interest rates can exceed 1,000 percent on these totally unnecessary, expoitative loans that prey on low-income taxpayers. New figures reveal that RALs drained about $960 million in loan fees, plus over $100 million in other fees, from the wallets of nearly 9.6 million American taxpayers in 2005.

The same tax preparation companies that shamelessly rip off taxpayers with instant loans also often fail to notice when their clients are eligible for the "earned income tax benefit" -- a special tax credit available to the working poor. ACORN and other non-profit organizations are operating free tax assistance once again this year -- a must-not-miss opportunity for taxpayers who count every penny.

The IRS, meanwhile, says it has "improved" its Free File program, which in past years has lured low-income taxpayers into what they think is a free online tax-filing opportunity. All too often, it has turned out to be a trap that snares unwary taxpayers into paying a lot more than they should for online filing. This year the IRS says it will not allow its private "partners" to trick taxpayers into expensive refund loans.

THROW ME SOMETHIN' MISTER
What is left of New Orleans is trying to put on a happy face as Mardi Gras approaches. The French Quarter and parts of St. Charles Avenue have been cleaned up for tourists but, truth be told, the place resembles the thin stands of pine that line the highways through much of Maine. You'd think you were driving through a forest primeval but in fact, it's just a thin line of trees left standing by the loggers who don't want to upset the tourists. Nevertheless, our Dan Schlossberg, just back from the Big Uneasy, gives it a fairly positive review as a venue for dining and carousing. Coming up in a few weeks: swamp denizen Leonard Earl Johnson will give us his take on the situation.

Registered Traveler Program Pushes Back The program that speeds frequent flyers through security lines is finally moving beyond Orlando. It's now operational in one terminal at New York's JFK and also opens soon in Indianapolis, Cincinnati and San Jose.

Shrinking Capacity Hits Consumers' Wallets Business is better than it's been for years for the airlines. They're repaying long-suffering travelers by reducing flights and using smaller planes, keeping fares high and further reducing what little comfort remains aloft.

SCAMS & OUTRAGES

• Counterfeit Check Scams Consumers can lose big if check turns out to be bogus.

• Phishing Phraud Small Wisconsin bank is among the latest to be targeted.

• Dial 9 For Scam Old scam makes a reappearance, tricking businesses into running up huge long-distance bills.

RECALLS

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