Consumer News & Alerts

March 12, 2007

CREDIT CARD INDUSTRY TAKES ITS LICKS
After years of docilely taking orders from banking interests, Congress is at last trying to assert a bit of independence, as evidenced by recent Congressional hearings that have spotlighted the abusive, predatory and usurious practices that have come to characterize the credit card industry. Just last week, a Senate committee called executives from Bank of America, Chase, and Citigroup on the carpet to grill them about practices that seem specifically designed to punish consumers simply for doing what the credit industry encourages them to do -- not paying off their balances in full, paying only the minimum balances, and so on.

So what's really likely to come of this? While Congress is -- for once -- trying to score some points with voters instead of campaign contributors, the Bush Administration is not likely to play along so the chance of any tough reforms making it into law are slim indeed. However, the hearings at least illuminate the more abhorrent practices, giving consumers fair warning of what they're in for if they don't read and understand the lopsided contract that comes with those little pieces of embossed plastic.

A Chill Wind Homeowners with adjustable-rate and interest-only mortgages -- once thought of as "creative" -- are having a hard time right now. And so, fittingly, are the lenders who wrote those mortgages. As defaults and foreclosures rise, the lenders are themselves having a hard time meeting their obligations. No one suggests we should lend them any sympathy but the end result is that many lenders are doing everything they can to cut their losses, which can mean more aggressive collection practices and a quick finger on the foreclosure button. Needless to say, almost no one is writing any such mortgages at the moment.

Home Prices Slump Given the bloodbath in the mortgage and predatory lending industries, home prices aren't doing so well either. Sales were off 11 percent in the last quarter of 2006 from the year before and the growth in prices was the slowest since 1999. Not surprisingly, phony foreclosure "rescues" and other scams aimed at financially-impaired homeowners are on the rise. One of the latest is the "surplus funds" scam.

Stock Market Making You Sick? The pain is not restricted to real estate. The stock market has not been having many good days lately but, as Fred Yager reminds us, those who have diversified their investments are in much better shape than those who've stuck all their money in one or two stocks.

The worst thing you can do -- other than not saving at all -- is to invest all your savings in your employer's stock. Ask any Enron or airline employee how well that turns out.

PEANUT BUTTER RECALL SPREADS
There's nothing chunky about it. The recall of Peter Pan and Great Value peanut butter has been smoothly spread all the way back to October 2004, as the FDA continues trying to find the source of the Salmonella outbreak that has sickened and killed an unknown number worldwide. The agency is also trying to trace where else the contaminated peanut butter may have wound up -- candies, packaged snacks and ice cream toppings are among the possibilities.

Congress Stirred Up Congress is now oozing with concern and a bit of righteous indigation about the peanut butter mess and there's increasing sentiment to do something. Of course, one might reasonably ask who it was that made this mess in the first place.

Anemia Drugs Get Black Box Procrit, Epogen, Aranesp are blockbuster drugs, meaning they're hugely profitable. They're widely prescribed for patients prone to anemia, primarily those with kidney disease and those undergoing chemotherapy. Only problem is, FDA says recent studies show pretty clearly that the drugs can cause heart attacks, strokes and blood clots, any of which could be fatal. Doctors should be more careful about prescribing the drugs and patients should be advised of the risk before taking them, FDA said.

FDA Green Lights New Blood Pressure Drug Meanwhile, FDA has approved a new Novartis potion -- Tekturna -- said to inhibit the production of renin, a kidney enzyme that is key to hypertension. The new drug has the potential to cut off the cause of high blood pressure, rather than trying to attack the problem after it's occurred.

Drink Carefully Tap water may not taste all that great but at least you know where it came from. The FDA is warning this week that bottled mineral water brands from Armenia may contain arsenic, a known toxin and carcinogen.

GAS PRICES GET SOME ZIP
The price of gasoline was just bobbing along for awhile but things have changed. High demand and rising world tensions have loosed the tiger from the tank. California once again is seeing $3 gas in much of the state and our weekly survey found no prices below $2. And what are we doing to conserve precious fuel? Not much. We burned 3.3 percent more gasoline in the four weeks that ended March 2 than in the same period last year.

Saab, Mercedes Hybrids on the Way But fear not. Those who want to feel they're doing something to reduce fuel consumption without driving anything too dowdy will soon be able to drive a high-powered, high-priced Saab or Mercedes hybrid. Europeans, who have some of the highest gas prices on earth, think we're nuts. They drive little cars with small gas-powered and super-clean diesel engines but if the American market wants hybrids, hybrids it will get.

For those who, on the other hand, don't give a damn, Ferrari has weighed in with the assurance that it will "never" build a smaller, cheaper, more fuel-efficient car. No one had the nerve to even ask whether there would someday be a Ferrari or Maserati hybrid.

Ethanol Driving Up Meat Prices Ethanol is the latest craze to hit the energy cabal. Trouble is, ethanol isn't chicken feed. Or rather, it was chicken feed -- i.e., corn -- before the farmers' lobby and the geniuses in Washington decided it was a politically cheap solution to the energy mess. So now that corn is being burned in Hummers, the chicken farmers are finding themselves priced out of the corn market, which will soon depress the job market for chicken pluckers and inject a bit of zest into the prices we pay for Perdue's finest. Doin' a heckuva job, fellas.

Grade Inflation You notice how many cars now get five-star ratings for various types of impacts? Kind of makes it hard to tell which models are the safest all-around, doesn't it? The feds are thinking of coming up with a new score -- sort of a final grade, you might call it -- that would combine all the ratings into one. Critics say the proposal's not tough enough, automakers say ... well, you know the rest.

NET NEUTRALITY IS PRO-CONSUMER
A study by disinterested academics finds that ending the unwritten policy of Internet neutrality would hurt consumers, eventually raising prices and reducing consumer choice in Internet content. The big telephone companies want to charge both ends -- the consumer and the content producers -- and many otherwise reasonable people think this sounds fair. What they don't seem to consider is that content producers are already paying big bucks for Internet connectivity and bandwidth usage. Being charged again is plain old price-gouging and would hurt -- possibly extinguish -- many of the smaller independent sites that make the Internet something more than just another corporate propaganda organ.

Google and Yahoo are frequently cited as big greedy monsters that shold pay more to keep Verizon and AT&T living in the style they so fondly treasure. In reality, it's sites like ours that would quickly become inaccessible if we had to pony up thousands more in bribes to the phone companies. The answer? If the phone companies are not willing to provide equal service to all, they should be re-regulated and treated as utilities. They'd be guaranteed a modest return and consumers would be guaranteed reasonable service.

Mean Friends in High Places Giveaway is the word you're looking for. Completely usurping municipalities' rights, the ideologically-hirsute Federal Communications Commission has decreed that Verizon and AT&T may simply ride roughshod over everyone else and start offering the video service they claim consumers are so desperately clamoring for. This is only fair. After all, how are AT&T and Verizon supposed to deal with such powerful bullies as Santa Clara, Skokie or, God forbid, Topeka?

Of course, in typical Dilbert fashion, the phone companies are finally getting around to building video networks just as YouTube and the like are moving the video experience out of the big box in the family room and into the laptop on the coffeetable. Sure hope things turn out as they planned.

Signing Off Internet radio, on the other hand, has hit a serious snag. A ruling by an obscure but powerful federal copyright board holds that Internet broadcasters must pay big licensing fees to the record companies whose songs they spin. Since traffic reports don't really make it on the Web, this leaves Internet broadcasters with a paltry few choices: talk, live performances of original compositions and, let's see ...

More telecom and privacy matters ...

• House Tries Once More to Pass Pretexting Bill Measure would make it illegal to get consumers' private phone records through fraud.

• Census Bureau Admits To Data Breach As ID Theft Levels Climb Employees were working at home when personal data was accidentally posted on a public Web site.

• Insurer Unlawfully Poached Consumers' Credit Reports New York insurance company accessed credit reports unlawfully, agrees to pay restitution.

ONE PLACE CELL PHONES ARE SAFE
Cell phones aren't aren't safe to use when you're driving and you really shouldn't use them when crossing busy streets. They might, just might, cause health problems over time. And, of course, they might catch fire. But a Mayo Clinic study finds that they do not -- do not -- interfere with diagnostic equipment in hospitals. In fact, the Mayo researchers go further and say the phones are a great convenience for patients and visitors.

Was Dr. Atkins Onto Something? Most medical authorities have pooh-poohed the Atkins diet, saying that low-carb regimens are not the answer to losing weight. But an NIH-funded study finds -- surprise -- better outcomes for those on low-carb diets than those who followed more orthodox recommendations.

More weight-loss news ...

• Soft Drinks, On the Other Hand ... New evidence more firmly links carbonated beverages -- sugar water, in other words -- to obesity. A strong diabetes connection was also found, lending credence to the notion that soda packs on the pounds regardless of physical activity and other factors.

• School Lunch Standards Kids are still getting too much fat and not enough fresh fruits and vegetables in their school lunches. The Senate is considering legislation that would tighten federal standards for school lunch programs.

• "Healthy" Foods Can Sabotage Your Diet Warning: Fat-free, cholesterol-free, all-natural products don't necessarily help you lose weight.

BOOMERITIS
Are the baby boomers in worse shape than their parents? They're supposed to be the healthiest generation ever but a new study finds those in their 50s complaining of more aches and pains than their predecessors.

Hearing Loss Affects One in Three Over 60 All those rock concerts add up. While hearing loss is common, it requires prompt medical attention.

RECALLS

FEDS CONSIDER BATTERY RULES
Taking your shoes off may not be enough. The feds are thinking about cracking down on laptop and maybe even cellphone batteries on airplanes. Recent fires aboard airliners have raised eyebrows. At the very least, the devices may be prohibited in checked baggage.

More travel notes ...

• Spirit Airlines Fiddles with Fare Structure Baggage, beverage fees go up, fares may come down.

• Long Tarmac Delays Still Common Continental Express, American, American Eagle take top spots in the runway delay derby.

• Problems Persist for US Airways Passengers Integration of US Airways/America West reservation system gets bumpy.

• Passport Rules Shift Spring Break Geography More collegians headed for mainland, Puerto Rico, U.S. Virgin Islands beaches.

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