America Saves Week gets us thinking about our financial future

CONSUMER FORUM

By Russ Van Arsdale, Executive Director, Northeast Contact

Posted Feb. 19, 2012, at 12:39 p.m.

The advice to consumers this week is about not spending money. It is America Saves Week and, for service people, Military Saves Week.

The goal of the educational campaign is to get all of us to think about ways to save for the future. While it may seem more difficult than ever given the state of the economy, now may be the most important time to start securing our financial futures.

In announcing Maine’s support of the effort, Gov. Paul LePage said “Our economic strength as a state is tied to the financial well-being of individual families.” He encouraged people to look at their saving habits and plan for their future needs.

One source of information is Maine’s Bureau of Financial Institutions. Resources from the Bureau are available at www.maine.gov/pfr/financialinstitutions or by calling 800-965-5235 (TTY 888-577-6690).

The state’s Department of Professional and Financial Regulation can help consumers avoid investment fraud. Officials remind us always to check credentials of investment advisers or brokers before handing over any money.

People in military service may want to look at a new publication from the Office of Securities called the Financial Field Manual. Administrator Judith Shaw said the booklet covers special home-buying resources for military families, advice to help protect investments when retiring and other topics. The Financial Field Manual is available at www.investors.maine.gov or by calling 877-624-8551 (TTY 888-577-6690). Safe investing tips for civilians are available as well.

Across the country hundreds of organizations are helping Americans learn more about saving. Find out more at www.americasaves.org or www.militarysaves.org.

In last week’s column, I made several points about the Bumbo baby seat with which its manufacturer, Bumbo International, took exception. Three clarifications should help to correct the record.

A Bumbo spokesperson wrote to say that a warning had been placed on the seat, as well as on the box and in printed instructions, before the 2007 voluntary recall; after the recall, a second warning was printed on the front of the seat. This was a reporting error.

I wrote that the Consumer Product Safety Commission (CPSC) was aware of 95 more injuries since the recall and that 50 of those happened while the seat was being used on the floor or when it was not clear where the seat was being used. Bumbo notes this statement confused incident reports with injuries. A CPSC news release says the Commission is aware of a total of 39 injuries. This was also a reporting error.

I also cited a story in USA Today about the possibility of adding a safety strap to the seat. The online version reads, “Asked why it doesn’t redesign the seat with a strap to keep kids from falling out, Bumbo International said Thursday that a safety strap would give parents a ‘false sense of security.’” Bumbo’s spokeswoman wrote to me that “the company has not said that a safety strap ‘would’ give a false sense of security but rather is concerned that any safety device could give the impress (sic) that the seat is safe for uses for which it is not designed,” namely, that it not be used above floor level.

The Bumbo spokeswoman also provided a copy of its statement to USA Today, which concluded, “The safety and health of all children who use the Bumbo seat is the company’s foremost priority.”

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We continue to encourage our readers to do their research when making purchases.  If the product was previously owned or is not in its original packaging, check  to see if  a recall has occurred or if there are safety warnings which may wear away with age. “Through SaferProducts.gov, consumers, child service providers, health care professionals, government officials and public safety entities can submit reports of harm (Reports) involving consumer products. Manufacturers (including importers) and private labelers identified in Reports will receive a copy of the Report, and have the opportunity to comment on them. Completed Reports and manufacturer comments are published online at www.SaferProducts.gov for anyone to search.”

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for more information, write: Consumer Forum, P.O. Box 486, Brewer 04412, go to http://necontact.wordpress.com, or email contacexdir@live.com.

Automobile Financing and Purchase Rights as Presidents’ Day Sales Approach

Maine’s Bureau of Consumer Credit Protection Outlines Consumers’ Rights

Agency Offering “Downeaster Guide to Consumer Credit”

GARDINER –  In advance of Presidents’ Day auto sales events, Maine’s Bureau of Consumer Credit Protection is encouraging consumers to evaluate vehicle financing options and to understand their rights.

“For most of us, a new or used vehicle is the second-largest purchase we’ll ever make, second only to buying a home,” said David Leach, Principal Examiner at the Bureau.  “We encourage the thousands of Maine residents who will visit auto dealerships during the upcoming sales to become familiar with financing details and their rights as consumers.”

The Bureau outlined key facts and recommendations to keep in mind when considering a vehicle purchase from one of Maine’s many reputable auto dealers.  Additionally, the agency is making a “Downeaster Guide to Consumer Credit” available by calling 1-800-332-8529 or visiting www.Credit.Maine.gov and clicking on “Consumer Guides.”  It’s a valuable source of information about financing various purchases and dealing with credit in general.

1) Assess your personal finances before you buy.  Understanding what you can afford is an important starting point.  Don’t commit too much of your income and savings at the expense of your household obligations over a four, five or six year auto contract. 

2) Learn all you can about the car or truck you want to purchase.  Various magazines, books and reliable internet sites offer reviews of mechanical reliability, overall owner satisfaction, pricing information, and depreciation rates of cars and trucks.  Many dealerships also list their inventory and prices online.

3) Compare sources of credit.  Contact your local bank or credit union to determine their loan rates for new and used vehicles, and determine the available annual percentage rate (APR) and other credit terms.  Then compare the APR and terms to those offered by the dealer.  Negotiate the vehicle price first, then use the information from lenders to separately evaluate credit plans available from the dealership.

4) Get the best price for your trade-in.  Using print and internet sources, gain a clear understanding of the value of your trade-in to help you negotiate all aspects of the transaction with the dealership.

 5)   Limit the repayment term.  Some dealers now offer 7-year financing.  Consumers should consider whether the vehicle last that long, and avoid financing for longer than its useful life.  While monthly payments may be lower with a longer contract, more interest will be paid over time. 

6) Avoid no-money down financing, if possible.  Making a down payment of at least 20% toward the vehicle’s sale price will help minimize the chance you’ll owe more than it’s worth.  If you need to sell the car, a down payment may help you to break even or even get some equity out of the sale. 

7) Understanding your rights.  The law does not provide a return policy or “cooling off” period for an auto purchase.  Once a deal is finalized, you do not have the legal right to change your mind and cancel the contract.  Make sure you are comfortable with all aspects of a transaction before agreeing to the purchase.

 “Maine has many outstanding auto dealerships that provide excellent service to consumers.  Dealers respect knowledgeable shoppers and are generally willing to work with them to arrive at a deal that is acceptable to both the consumer and the business,” Leach added.  “Buying a car should not be an impulse purchase.”

Are Bumbo child seats safe?

CONSUMER FORUM

By Russ Van Arsdale, Executive Director

Northeast Contact

Posted Feb. 12, 2012, at 4:08 p.m.

When the Bumbo International child seat came on the U.S. market in 2003, many parents were excited: here was a seat designed to hold a baby upright, a baby who until then was able to hold only his or her head up.

The manufacturer — Bumbo International Trust of South Africa — has sold about 3.85 million Bumbo Baby Sitter seats in the U.S. The seats are made from molded foam, soft enough for a baby but firm enough to keep the child upright — until the unexpected happens.

An infant can lean, lurch or tumble while in the chair and cause it to tip over, sometimes with enough force to cause serious injury. By 2007, Bumbo International and the U.S. Consumer Product Safety Commission, or CPSC, were aware of 28 injuries to young children aged three months to ten months.

Three of those injuries were skull fractures, and they happened after the seat had been placed on an elevated surface, such as a table. Bumbo International worked with the CPSC in 2007 on a voluntary recall. The company agreed to print the following warning on each chair:

“WARNING — Never use on a raised surface. Never use as a car seat or bath seat. Designed for floor level use only. Never leave your baby unattended as the seat is not designed to be totally restrictive and may not prevent release of your baby in the event of vigorous movement.”

On the chair we inspected, the print was tiny and some of it had rubbed off.

In a perfect world, the warning might have solved the tipping problem. Since ours is a less-than-perfect world, the tipping continued — 95 more injuries the CPSC is aware of since the 2007 recall. And 50 of those happened while the seat was being used on the floor or when it was not clear from reports where the seat was being used.

The CPSC and Bumbo International made a joint announcement last November strongly urging consumers never to put the seats on any raised surface. They also urged that a child never be left unattended.

While some find fault with caregivers for failing to heed the printed warnings, five consumer and safety organizations say the manufacturer and CPSC are not blameless. The Consumer Federation of America, Consumers Union, U.S. Public Interest Research Group, Kids In Danger and Public Citizen last week wrote to the CPSC. They said they have “grave concerns” about the safety of Bumbo seats, adding that “manufacturers of similar products have made design changes to address the safety concerns associated with these types of products — a step Bumbo International has refused to take to date.”

In their letter the groups are calling for a total recall of Bumbo seats. They said the chairs should stay off the market until the manufacturer redesigns them and makes them safer. On Thursday, Bumbo International issued a statement, saying its seat “is a safe product for infants when it is used as intended.” USA Today reported that, when asked why the company doesn’t add a seat belt to prevent children from falling out, Bumbo said a safety strap would give parents “a false sense of security.”

The future of the seat may rest with the U.S. District Court in Texas. Parents of a child injured in a tipping incident are suing Bumbo. The company maintains its product poses no greater risk of falls than “when a child is crawling, sitting or learning to walk.” An official with Kids In Danger says the number of injuries relative to total seats on the market may seem small, until it’s your child who’s hurt.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for more information, write: Consumer Forum, P.O. Box 486, Brewer 04412, go to http://necontact.wordpress.com, or email 

Recall of Tassimo Single-Cup Coffee Makers and Espresso T Discs due to burn hazard

click for FAQ

In cooperation with the U.S. Consumer Product Safety Commission (CPSC) and Health Canada, BSH Home Appliances Corporation is voluntarily recalling for repair Bosch-brand Tassimo brewers due to the fact that the plastic disc that holds the coffee or tea can burst and spray hot liquid and coffee grounds or tea leaves onto consumers using the brewer and onto bystanders, posing a burn hazard. There is no need for you to return your brewer. If you have a brewer that is included in this voluntary recall, we will send you a free replacement T DISC holder that has been designed to help prevent the discharge of hot liquid, coffee grounds or tea leaves from the machine. Consumers should refrain from using their brewer until the new T DISC holder has been installed.

Maine Joins $25 Billion Joint State-Federal Mortgage Servicing Settlement on Forclosure Wrongs: State share of national settlement estimated at $21,000,000

February 9, 2012

Attorney General William J. Schneider announced that Maine joined a landmark $25 billion joint federal-state agreement and the nation’s five largest mortgage servicers over foreclosure abuses, fraud and unacceptable nationwide mortgage servicing practices.

U.S. Attorney General Eric Holder, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan and a bipartisan group of 49 state attorneys general announced the national settlement today in Washington, D.C.

“This agreement lays out the best first step to get relief directly to eligible Maine borrowers who were harmed,” said Attorney General Schneider. “The statewide impact of these prohibited foreclosure practices will be offset through funding for foreclosure prevention programs, legal assistance to homeowners in foreclosure, and compensation to the state’s general fund.”

The state’s estimated share of the settlement is $21 million.

• Maine’s borrowers who are in default on their mortgages will receive an estimated $7 million in direct borrower relief through principal reduction, short sales, borrower transition efforts, etc.
• Maine’s borrowers who lost their home to foreclosure from January 1, 2008 through December 31, 2011 qualify for a cash payment from a $1.9 million fund set aside for this purpose.
• The value of refinanced loans to Maine’s underwater borrowers who are current on their loans would be an estimated $4.5 million.
• The state will receive a direct payment of $8.2 million for state foreclosure prevention programs, legal assistance to homeowners and the general fund.

Additional injuries prompt push for recall of Bumbo – WABI-TV

Wayne and Russ discuss the additional calls for recall of Bumbo child seats.

California Honda lawsuit could be model for other Civic Hybrid owners

CONSUMER FORUM

By Russ Van Arsdale, executive director,
Northeast CONTACT

Posted Feb. 05, 2012, at 11:09 a.m.

We have waited a while for a ruling in a case that might draw a number of consumers to small claims courts. So, while the ruling is far from final, it’s worth reporting.

A California woman took the American Honda Motor Company to small claims court, charging that the company had inflated the mileage that owners of the Civic Hybrid could expect. Heather Peters said that when she bought her 2006 Civic, ads had convinced her she would be getting around 50 mpg; she ended up getting around 30.

She wasn’t alone. A number of the roughly 200,000 Civic owners also were upset enough to threaten legal action. Honda urged them to join a class-action case to settle the thousands of grievances in essentially one large court proceeding. Each member of the class would receive $100-200 plus a $1,000 credit toward the purchase of another Honda. The plaintiffs’ lawyers would earn a whopping $8.4 million.

Peters — a lawyer not currently practicing — said, “No, thanks,” and headed for small claims court. On Wednesday, a judge ruled in her favor and awarded her $9,867, just under the $10,000 maximum allowed in small claims awards in California. Peters has set up a website,www.dontsettlewithhonda.org, urging others to avoid the small settlement through class action and take Honda to small claims courts in their home states.

Now, the California case does not mean a slam dunk for Civic owners here looking to make a quick $9,800 (especially since Maine law limits small claims awards to $6,000). Honda plans to appeal, saying claims that the Civic might get “up to 50 mpg” were not misleading, especially since it noted that mileage can vary. In a statement, Honda called the ruling “a radical and unprecedented departure from California and federal law.”

Trying your own case might seem tempting, but we’re not endorsing the approach on a wholesale basis. A consumer has to convince a judge that he or she has been wronged, and that judge might rule differently than in Peters’ case.

The party you’re suing can bring lawyers into small claims court in some but not all states. Peters represented herself as a consumer, not as a lawyer; when Honda sent its lawyers to the small claims courtroom, the judge sent them packing. In Maine, lawyers may represent either side.

A small claims case in Maine goes first to mediation. If there’s no mediated agreement, the case goes to District Court. While rules of evidence apply, the court tries to provide “a simple, speedy and informal court procedure for the resolution of small claims.” Decisions may be appealed to the Superior Court; if the original ruling is overturned, the case could be sent back to District Court to begin again.

The class action is still before the court in California. The judge is expected to rule in mid-March, and there has been speculation he may rule that Honda’s offer is not enough. In the meantime, more than one Civic owner has been quoted as saying the current offer is less than adequate.

Don’t be surprised if more of these cases end up in small claims courts across the country. If more rulings go in consumers’ favor, the sum total could cut into the company’s coffers and the lawyers’ anticipated payday. Peters plans to renew her law license and help others sue Honda.

For forms and information about small claims in Maine, you can visit the Maine government website at www.maine.gov and search for “small claims,” or visit Pine Tree Legal’s website,http://www.ptla.org/court-forms.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit necontact.wordpress.com or email contacexdir@live.com.

Recent ruling: Suit can be brought against telemarketers in federal court

CONSUMER FORUM

By Russ Van Arsdale, executive director, Northeast CONTACT

Posted Jan. 29, 2012, at 4:43 p.m.

The news items this month have been on consumers’ side when it comes to telemarketing.

Now, I’m not going to throw all telemarketers under the bus. Criticism will be reserved for those companies that tolerate or encourage harassment, high-pressure tactics or other abusive practices that give the entire industry a black eye.

Just a moment ago, literally in the process of writing this column, a robo-call came to our land line phone at home. We could win, the cheery woman’s recorded voice said, a trip to the Bahamas, just for responding to a 30-second poll on debt issues. Press one number to take the survey (and win), and another number to delete my name from their list.

Uh-huh. Let me get this straight. I take 30 seconds out of my busy day to answer one, maybe two questions… those answers will somehow yield enough information to justify giving me a trip to some island paradise… and I can even opt out and avoid more such calls by touching one button. Right.

The trick here is that the call is all robotic, all the time. The process is untouched by human hands, once the messages are recorded and the computers turned on. Pushing a button might get you a live person in real time, and this could lead to a little fun as we’ll see in a moment. But pressing that number in reality just tells the robo-caller that it’s reached a working number, and you’re on the list (or likely multiple lists) for further calls.

The national Do Not Call Registry was created to help consumers avoid many of these nuisance calls. We urge everyone who’s bothered by them to register — visit online www.donotcall.gov or call 888-382-1222.

Once you’ve registered, folks in the telemarketing industry have 31 days to find your name on their call lists and remove it. So, you may get additional calls in the month after you’ve signed up; the good news is most of those calls should cease after that. (The exceptions are calls with political messages, charitable solicitations and telephone surveys. Also exempt are companies with which you have a prior business relationship, so be extra cautious about giving out your phone number in the first place.)

You need to register land lines and cellphones if you want to curtail telemarketing calls to both. If you use the toll-free number, you must call from the phone you want on the Do Not Call list. You may register up to three numbers, but they must be for phones that you own; you can’t register a relative’s phone.

This is a do-it-yourself process. If you receive a call offering to put you on the Do Not Call list for a fee, hang up. The Federal Trade Commission maintains the list, and there is no charge to use it.

By law, robo-callers can target only land line phones. If you receive a pre-recorded call on a cellphone in an effort to sell you something, it’s a violation of federal law. Efforts to allow such calls to cellphones were met with fierce opposition last fall and went nowhere.

A ruling a few days ago by the U.S. Supreme Court gave us some further legal recourse. The court ruled that people who catch telemarketers violating the law can sue in federal as well as state courts.

If you’re called by a live person and have some time, you can have some fun by wasting the caller’s time. String the caller along by pretending you’re interested, and squash the deal when you’re tired of the game. The more time you take up, the less time that caller has to bother someone else. If enough people waste their time, the industry might someday get our message.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit necontact.wordpress.com or email contacexdir@live.com.

 

FMI from C.A.T.S. (Californians Against Telephone Solicitations)

Identity theft insurance not always worth the cost

CONSUMER FORUM

By Russ Van Arsdale, Executive director, Northeast CONTACT

Posted Jan. 22, 2012, at 8:30 p.m.

The phrase “identity theft” has become one of those terms that makes one’s blood run cold. We’ve heard so many stories of financial losses, ruined credit and related horrors that we react emotionally to the subject.

That emotional response has prompted many consumers to buy insurance that kicks in if some form of identity theft strikes the insured. The question before us is, is such insurance worth the cost?

There’s no simple answer, as is usually the case in consumer matters. The quick historical view back to 2006 finds Consumer Reports said such coverage was “typically not worth the money.” The magazine notes more than half of ID theft protection is sold by banks, and that those premiums amount to a consumer subsidy for federally required loss protection through credit card and bank account fraud. The passing of time hasn’t changed CR’s opinion that you can — and should — take more effective steps yourself to protect your credit and good name.

ID theft insurance typically costs $120 to $300 a year. That’s more than victims often incur through the theft and misuse of their credit card numbers, the most frequent type of ID theft. Federal law limits liability in such cases to $50 per card.

Those who sell the coverage point to the time-consuming process of restoring credit and correcting information on their credit histories. The insurers say their policies can help consumers cope with what can be a trying and frustrating process.

Most people in the insurance industry give the same advice they would when buying other types of coverage. Find out what the policy limits are; the National Association of Insurance Commissioners says most ID theft policies have policy limits of $10,000 to $15,000. If the policy covers lost wages, find out how the coverage is triggered and what limits apply. Know if there is a deductible; some policies require the holder to pay as much as $500 toward the cost of reclaiming your financial identity before the insurer pays a penny.

Before buying, check your homeowner’s insurance policy. It may include ID theft coverage, or you might be able to add coverage more affordably than buying separate coverage. If you decide to buy a separate policy, compare the coverage of several companies.

The insurance commissioners warn against becoming a victim of insurance fraud by making sure the agent and company you’re dealing with are licensed to do business in Maine. Find the Bureau of Insurance online ( http://www.maine.gov/pfr/insurance), by phone (207-624-8475 or TTY 888-577-6690) or by writing to the Bureau at 34 State House Station, Augusta ME 04333.

David Leach, principal consumer credit examiner for the Maine’s Bureau of Consumer Credit Protection, advises people to be their own advocates. Leach says it’s critical for each of us to get one free credit report from one of the reporting agencies (Experian, Equifax and Trans Union) every four months. Do this by visiting www.annualcreditreport.com and only that site. That, plus keeping a close watch on all credit card activity, will help keep identity thieves at bay.

As to separate insurance, Leach says, “Consumers who sign up for these types of services are paying close to $250.00 a year for a service they can essentially run themselves.” He notes that most financial institutions that issue credit cards will waive all losses in cases of identity theft or fraud. Visit the bureau’s website at www.credit.maine.gov.

For a rundown on federal ID theft laws and tips to protect yourself, visit the Federal Trade Commission website, www.consumer.gov/idtheft.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write: Consumer Forum, P.O. Box 486, Brewer 04412, or go to necontact.wordpress.com, or email contacexdir@live.com.

Attorney general warns of supplemental insurance scams — Bangor Daily News

Posted Jan. 20, 2012, at 7:14 p.m.

AUGUSTA, Maine — Attorney General William J. Schneider is warning consumers about recent reports of calls from people claiming to represent supplemental health insurance offers.

Schneider said he has learned that Maine seniors have received phone calls from individuals claiming to be from Medicare or from the “health office.”

The callers ask for the seniors by name and appear to be offering some sort of supplemental health insurance or prescription coverage.

“Seniors can protect themselves by never giving any personal information to anyone over the phone,” Schneider said.

Consumers with questions about Medicare should call 800-MEDICARE. Those who believe they may be the victim of a Medicare scam should call the Attorney General’s Consumer Protection Hotline at 626-8849.