Consumer News & Alerts

October 6, 2008

By Martin H. Bosworth
ConsumerAffairs.Com

THE BAILOUT: THE END, OR JUST THE BEGINNING?
After days of intense negotiations and the slapdash addition of numerous tax breaks for business and favors for key representatives, Congress passed the most sweeping economic legislation in decades this week, which President Bush quickly signed into law. The bailout plan would enable the government to assume the risk for mortgage-backed securities held by banks, in order to unclog the frozen credit markets and restart lending to businesses and individuals. The cost of the bailout plan alone is over $700 billion, with an additional $110 billion in earmarks, tax credits, and favors on top. Whether or not the plan actually does anything to help homeowners or stabilize the faltering economy remains to be seen. ConsumerAffairs.com readers wrote in droves to express their anger and resentment over what they saw as a giveaway to major banks and financial interests, while excluding individual homeowners and investors from any real help.Read more...

Follow the saga of the bailout...

• Betting on the Bailout How much you want to bet the sky's not really falling?

• The Bailout's Back; Senate Revives Measure Congress torn between angry voters and financiers' pleas.

• Not All Banks Need a Bailout Some financiers doing well even in face of economic crisis.

• Financial Crisis May Be Lengthy But stronger system may emerge from chaos, experts say.

• Voter Anger Rattles Congress; Bailout Fails Stock market plunges on news, world reaction may be swift.

• Congress Agrees On Compromise Bailout Bill Democrats insert executive pay limits, help for homeowners.

• Somber Washington Prepares for Bailout Partisan bickering crumbles talks.

CHANGES ARE COMING AT BREAKNECK SPEED
As big as the bailout is, it's only the tip of the iceberg of the new financial landscape the world finds itself in. The days of easy, available credit may be gone for good as banks tighten lending standards and cut credit lines to all but their most stable and profitable customers. Venerable investment banks with over a century's worth of history have vanished overnight, leaving commercial banks as the backbone of the financial sector. And as Mark Huffman writes, no matter whether you support Barack Obama or John McCain, the winner of the Presidential election will inherit a very different economy and a budget that's not likely to support very many significant new programs. Read more...

HOPE FOR HOMEOWNERS ACT: THE REAL HELP FOR CONSUMERS?
It didn't get nearly as much press as the bailout plan, but Congress earlier this year passed legislation that could offer more direct help for homeowners struggling to avoid foreclosure. The "Hope For Homeowners" program, enacted in July, enables borrowers in trouble to renegotiate their loans to smaller, more affordable mortgages backed by the government's Federal Housing Administration (FHA). The deal is contingent on Uncle Sam gaining a piece of any equity generated from the property's value in the future, and the lender agreeing to write down the value of the loan. In his first column for ConsumerAffairs.Com, San Jose, California-based real estate journalist Broderick Perkins explores the program, how it works, and how it may be quietly aiding more homeowners than anyone realizes. Read more...

WACHOVIA CHANGES PARTNERS, DANCES WITH WELLS FARGO INSTEAD OF CITIGROUP
The saying goes that "You got to dance with the one who brung ya," but apparently Wachovia never heard that. The troubled Charlotte, North Carolina-based bank was on the verge of collapse after high-level investors made a "silent run" on the bank, removing most of its available capital. Citigroup and the Federal Deposit Insurance Corporation (FDIC) partnered to buy the bank, with Citigroup purchasing the bank's assets while the FDIC assumed control of the deposits. But at the last minute, Wachovia decided to go with an offer from Wells Fargo that did not require assistance from the FDIC. Read more...

More economic and financial news...

• Payrolls Plunge in September Nine straight months of job losses.

• Wall Street Turmoil Has Little Impact on Sept. Job Cuts Computer, automotive sectors hit the most; Financial sector surprisingly strong.

• States Fault Foreclosure Prevention Efforts Lenders not doing enough to help borrowers stay afloat.

• FDIC Seeks Increase in Deposit Coverage Agency wants increase to $250,000.

• Mortgagees Who Live In Home Less Likely To Default Highest losses from housing slump come from speculators.

• Economic Turmoil Can Take Emotional Toll Stress from credit crisis can hinder smart decision-making.

DEALER ISSUES CAN MAKE OR BREAK AN AUTO SALE
It's true in flush times and even more so in these lean times -- whether or not you drive off the lot in a new car comes down to how well your salesperson performs. According to J.D. Power & Associates' 2008 Escaped Shopper Study, 80 percent of vehicles are rejected for a purchase only after the shopper has attended a car dealership. The top reasons cited for not buying a car included limited availability of the preferred vehicle, lack of professional customer service from salespeople, and better service from competitors. Read more...

This week's automotive news...

• Many Booster Seats Aren't Up to the Job 13 of 41 seats tested don't make the grade.

• Feds Propose New Safety Rules for Motorcycle Helmets DOT requires labels for certified helmets, certification for novelty helmets.

• New York Recommends Replacing Tappan Zee Bridge New $6.4 billion bridge, rapid transit bus system offered as replacements.

This week's recalls...

MELAMINE-TAINTED CANDY SHOWS UP IN U.S.
Despite repeated assurances from the Food and Drug Administration (FDA) that candy tainted with melamine was only a danger in China, products containing the dangerous chemical showed up on store shelves in the United States this week. Lisa Wade McCormick reports that White Rabbit Creamy Candy containing melamine was found in California and Connecticut, while a distributor of the candy recalled the product in several states due to contamination. Melamine is the chemical which was found in Chinese-made pet food last year, leading to the death of thousands of pets and promises by the Chinese government to improve its standards for product safety. Read more...

More about the melamine scandal...

• Hershey's Says Chocolates Are Safe from Chinese Melamine Scandal Candy-maker says U.S.-made products are untainted.

• Melamine Scare Spreads to Mr. Brown Coffee Chemical blamed for deaths of infants, pets found in instant coffee, tea milk products.

LAWYER BULLIES WEB SITE INTO SHUTTING DOWN
A Virginia lawyer has bullied and intimidated the owner of a Web site criticizing him into taking the site down using spurious claims, according to a lawsuit filed by Public Citizen. John Dozier, of Dozier Internet Law, has claimed that Ronald Riley, who owns the Web site CyberTrialLawyer-Sucks.com and has been frequently critical of Dozier, has been committing copyright and trademark infringement by using Dozier's name to link to unrelated Web sites. Riley and Public Citizen argue that the doctrine of "fair use" permits Riley to criticize whomever he wants, and should be considered "protected" speech under the First Amendment and the Communications Decency Act. Read more...

More consumer protection news...

• California First State to Pass Menu Labeling Law Chain restaurant menus must include calorie counts.

• Unstable Furniture Poses Deadly Danger To Children Large items can often tip over and cause injury if placed incorrectly.

• Campaign Launched to Protect Tweens' Hearing Promotes awareness on exposure to noise sources that harm youth.

• Green Consumers Don't Always Practice What They Preach Some eco-conscious buyers prefer fads over real changes.

• Technology Offers Revolution in Food Safety Testing New approach drills down to detect specific bacteria.

• Home Improvement Contractor Arrested for Scamming Senior Elderly widow paid $80,000 for improvements that were never made.

EXPERTS TACKLE "HOT LAPTOPS" PROBLEM
Anyone who's bought a laptop computer these days knows it's nearly impossible to sit one on your lap without burning yourself, due to faster processing speeds generating excess heat from the machine. Researchers at the University of Virginia's School of Engineering and Applied Science are attempting to resolve this burning issue through exploration of everything from nanotechnology to the Second Law of Thermodynamics itself. Will their research result in notebook computers that not only run cooler, but even faster and more efficiently? Read more...

More Internet and technology news...

• Congress Passes Broadband Data Improvement Act Bill would improve data collection on high-speed Internet in U.S.

• Consumers Trust Online Payment Providers More Than Traditional Banks New survey shows convenience, speed favor Internet experience.

• House Passes New Internet Radio Legislation Bill would enable negotiations on royalties to continue after Congressional recess.

STUDY FINDS MEDICAL RESEARCH IS OFTEN COMPROMISED
Patients and physicians alike rely on medical research reporting to give them accurate, unbiased information about new drugs and techniques--but the reporting is often funded by big pharmaceutical companies without any disclosure, according to a new report. Researchers at the Cambridge Health Alliance and Harvard Medical School found that not only do many publications omit that their articles were funded by industry sources, but the articles refer to drugs by commercial brand names rather than generic names--a tactic designed to increase brand awareness in the public's mind, but which can also lead to misdiagnoses through prescribing the wrong kind of drug. Read more...

This week's health news...

• Dietary Supplements Show Same Cartilage Loss Results as Placebos Osteoarthritis sufferers show no change in tests.

• FDA Recommends No Change In Use Of Statins Agency says little evidence of usage leading to ALS.

• "Light" Cigarettes May Have Just as Much Nicotine Even low levels can trigger receptors, leading to addiction.

• Tips For Surviving Flu Season Simple advice for staying healthy this year.

• It's Flu Season Again Understanding the most common of seasonal ailments.

• Vaccines Ready for Flu Season Six new additions to approved list.

• Headaches Need to Be Watched Many different types of migraines, even more causes.

WORDS TO LIVE BY
As everyone knows by now, daily newspapers are only slightly better off than your average investment bank (and for many of the same reasons, but that's another story). Sadly, many try to save themselves by cutting back the editorial content that is their stock in trade. The best and most experienced reporters are laid off, bought out or -- all too often -- simply decide the future lies elsewhere. Prime example: Vicki Parker, consumer reporter for the Raleigh News & Observer, leaving after nine years. In her last "Savvy Consumer" column, she passes on the top 10 lessons for being a good consumer. They're well worth reading.

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