DailyFinance.comhttp://www.dailyfinance.comDailyFinance.com%http://www.blogsmithmedia.com/BlogURL%/media/feedlogo.gifDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/5 Signs You're Getting Robbed at the Hospitalhttp://www.dailyfinance.com/2012/02/08/5-signs-youre-getting-robbed-at-the-hospital/http://www.dailyfinance.com/2012/02/08/5-signs-youre-getting-robbed-at-the-hospital/http://www.dailyfinance.com/2012/02/08/5-signs-youre-getting-robbed-at-the-hospital/#commentsFiled under: ,

hospital billsBy Amanda Buchanan

High hospital costs seem to be a fact of life that most Americans have reluctantly come to accept. What most people don't realize, however, is that not all of those charges are legit -- and in fact, many medical bills contain fraudulent charges.

In 2010 alone, Medicare and Medicaid paid an estimated $70 billion in improper hospital payments, according to a 2011 Government Accountability Office study. But it's not just nameless, faceless bureaucratic entities getting hit up for costs they shouldn't have to pay.

Brett Goldstein, author of The Retirement Crisis, started questioning his hospital bills after his daughter underwent a minor procedure that left him with unreasonably high bills. After digging into it, he realized he was being cheated in more ways than one.

Goldstein's experience can be used to help others make sure they're not being overcharged for medical care. Here are red flags to watch for the next time you get billed:


Gallery: 5 Signs You're Getting Robbed at the Hospital

1. Double billing:2. Bills for services not rendered3. Up-coding and up-selling4. Excessive fees5. Out-of-network doctors



Amanda Buchanan is a contributing writer for The Motley Fool.


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]]>Centers for Medicare and Medicaid Servicesdoctorsdouble billDoubleBillexcessive feesExcessiveFeesGoogle SearchGovernment Accountability OfficeHealthhealth careHealthCarehospitalmedical errorsMedicalErrorsMedicareout of network benefitsOutOfNetworkBenefitsoverchargingup-codingupsellingThe Motley FoolWed, 08 Feb 2012 09:25:00 ESTBank Fee Backlash Cost Big Financial Institutions More Than 2 Million Customershttp://www.dailyfinance.com/2012/02/07/bank-fee-backlash-cost-big-financial-institutions-more-than-2-mi/http://www.dailyfinance.com/2012/02/07/bank-fee-backlash-cost-big-financial-institutions-more-than-2-mi/http://www.dailyfinance.com/2012/02/07/bank-fee-backlash-cost-big-financial-institutions-more-than-2-mi/#commentsFiled under: , , ,

Bank feesNobody likes to leave their bank. Apart from the hassle of setting up a new account, switching your direct deposit, re-entering all of your automatic bill payment information, and getting used to a new network of ATMs, there's the fact that banks are supposed to be our partners.

That's how they advertise themselves, after all -- as the steady friends who hold our money, gently push us towards our dreams, and even pay us a little bit of interest for hanging around. Looked at from this perspective, leaving a bank isn't a spur-of-the-moment decision like switching from Pepsi to Coke or McDonald's to Wendy's: It's more like breaking up with your friendly-but-slightly-abusive girlfriend.

The emotional roller coaster aside, thousands of people switch banks every day, for a host of reasons: better interest rates, easier access to their money, or because they're leaving one town and moving to another. Last fall, however, an estimated 610,000 people dumped their significant bankers for a very specific reason -- to protest steep bank fees.



According to a recent study by Javelin Strategy and Research, 11% of the 5.6 million people who switched banks over the last three months did so as part of "Bank Transfer Day," an event inspired by Bank of America's (BAC) decision to begin charging its customers $5 per month to use their debit cards for purchases. BofA ended up scrapping the plan, but it, and many other banks, added a variety of other fees. In fact, as a 2011 Pew study showed, the average bank account has 49 fees, many of which -- like the confusing "'Staff Assisted Requests for Any Item or Statement Copy' fee, the 'Foreign Check Clearing Services for up to US $5,000 Drawn from Canadian Banks' fee, the 'Online External Transfer to Your Accounts at Other Financial Institutions' fee and the 'Large Amount of Coins Deposited' fee" -- charge for services that used to be free.

(Full disclosure: The author recently discovered a new $25 monthly fee that his bank is now charging him because his balance is below $15,000. This fee was added late in 2011, and was not part of the original banking agreement. The author is currently trying to get his money back, is exploring other banking options, and is attempting to remain unbiased in his discussion of the greedy, soul-sucking clever, fee-adding folk who run many of America's largest financial institutions.)

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On the one hand, Bank Transfer Day was hardly the overwhelming consumer uprising that big banks might have feared and activists had hoped for. More than 218 million Americans have some form of bank account, so in the grand scheme of things, the transfer tidal wave of 610,000 was more like a trickle. Even so, many banks -- including Citigroup (C) and Bank of America -- managed to give themselves PR black eyes as they called in security guards and police officers to keep protesters from withdrawing their money. Predictably, videos of these skirmishes found their way online, vignettes that are eerily reminiscent of the bank run scene from Mary Poppins.

But while the number of customers who were able to move their money on Bank Transfer Day itself was relatively small, many others have joined them over the following months. As Javelin reports, a further 26% of people who switched banks during the last 90 days -- about 1,456,000 customers -- also cited new bank fees as the reason for their moves.

This pattern of a slow diaspora from big banks dovetails with the demographic data that Javelin collected. Judging by the videos of Bank Transfer Day skirmishes, one might assume that the bank exodus of 2011 was largely composed of wild-eyed radicals -- or, as one Javelin researcher reported, "young, low-income hipsters." Not so: According to Javelin, people who switched banks "trended toward higher incomes." As these higher-wealth, generally older consumers continue to consider their banking options, it seems likely that America's largest banks are going to continue hemorrhaging customers.

Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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]]>bankbank feesBank of America Corpbank transfer daybank+feebank+of+americabankfeeBankFeesbankofamericaBankTransferDayBruce Watsoncanadian+bank+feescanadianbankfeesCitigroupcredit unionsCreditUnionsDebit CardsDebitCardsFinanceprotestorsTwitterBruce WatsonTue, 07 Feb 2012 13:20:00 ESTWhen 6 Percent Interest Is Too Good to Be Truehttp://www.dailyfinance.com/2012/02/02/when-6-percent-interest-is-too-good-to-be-true/http://www.dailyfinance.com/2012/02/02/when-6-percent-interest-is-too-good-to-be-true/http://www.dailyfinance.com/2012/02/02/when-6-percent-interest-is-too-good-to-be-true/#commentsFiled under: ,

MangoSavers have taken it on the chin for years, with banks paying almost nothing on checking and savings accounts while happily charging big fees. So when one new financial website offered a 6% interest rate on an insured savings account, you can bet it got a lot of attention.

If you've never heard of Mango Financial, you'll probably see a lot about it soon. The company signed actor George Lopez to a five-year marketing agreement, and Wednesday, it started its national "Save With Mango" campaign to promote its high-interest savings account -- as well as some other products.

Where's the Catch?

If the last several years haven't trained you to be suspicious of bank offers, you haven't been paying attention. Various big banks have tried to charge fees on everything from talking to a teller to not talking to a teller by using an ATM, from making too many transactions on your account to not making enough.

Mango tries to tap into that resentment of Wall Street, calling itself "the fresh way to manage money." Its FDIC-insured savings account promises no monthly maintenance fee and pays 6% interest on deposits up to $5,000.

But if you think that Mango's paying you a sky-high rate out of the goodness of its heart, think again.

Sign Here. And Here, Too.

You see, Mango doesn't let you open a savings account to get that 6% rate unless you also sign up for its Mango Card prepaid program. And that's where the fees start.

Sponsored Links

Mango charges a $5 monthly fee, but that's waived if you load at least $500 onto your card every month. Want money from an ATM? That'll cost you $2, plus whatever the ATM owner tacks on top of that. And although there's no charge to load the card from another bank account or by direct deposit, its Green Dot (GDOT) cash load feature comes with a $4.95 charge.

Granted, if you actually want a prepaid card, Mango's fees are actually lower than many of its competitors. And the extra interest from the savings account can certainly offset fees from the card.

For an intended audience that has gotten almost no attention from traditional banks, Mango should have broad appeal. But if all you want is a high-yield savings account without all the complications of a prepaid card, Mango's not the answer.
More on credit and debit cards:

Motley Fool contributor Dan Caplinger wishes banks would do the right thing. You can follow him on Twitter here. He doesn't own shares of the companies mentioned.




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]]>bank feesBankFeeschecking accountCheckingAccountFinancegeorge lopezGeorgeLopezhigh interest rate savings accountHighInterestRateSavingsAccountMango FinancialMangoFinancialPrepaidCardsSave With MangoSaversSaveWithMangoSuze OrmanTwitterDan CaplingerThu, 02 Feb 2012 13:02:00 ESTHow the Chevy Volt Became a Political Punching Baghttp://www.dailyfinance.com/2012/01/26/how-the-chevy-volt-became-a-political-punching-bag/http://www.dailyfinance.com/2012/01/26/how-the-chevy-volt-became-a-political-punching-bag/http://www.dailyfinance.com/2012/01/26/how-the-chevy-volt-became-a-political-punching-bag/#commentsFiled under: , , ,

Chevy VoltThere's one thing about General Motors (GM) CEO Dan Akerson: He doesn't shy away from a fight.

Called before a congressional committee on Wednesday to testify about a safety investigation into the Chevrolet Volt, Akerson was blunt.

The political hullaballoo around the car cast "an undeserving, damaging light on a promising new technology," said Akerson, who drove to the hearing in a Volt. "We did not engineer the car to become a political punching bag."

Tough words. But then, rescuing the high-tech Chevy's reputation is going to be a tough fight.

A Lot of Trouble for a Little Car

This all started back in June, when a wrecked Chevy Volt -- a car that had been totaled in a government crash test three weeks earlier and left to sit in a lot -- caught fire, all by itself.

The Volt, of course, is a hybrid, but an unusual one. Essentially, it's an electric-powered car with a gas-powered on-board generator. It uses a lithium-ion battery pack, a newer kind of battery than those used in most hybrid cars. The fire raised questions about the safety of the new battery technology.

After the fire, the National Highway Traffic Safety Administration -- the federal agency that conducts crash testing -- notified GM, which sent engineers to examine the car. Attempting to replicate the fire, GM and NHTSA engineers conducted a bunch of experiments, including one where they mounted a Volt battery pack in a wooden frame and smashed it in a particular way.

A few days later, it too caught fire. Clearly, GM needed to take action.

GM accelerated its efforts to educate first responders and body shops on ways to reduce post-accident fire risks. (The key is to drain the batteries, just as you'd drain the gas tank of a crashed car before working on it.) It put production of new Volts on hold and later offered to buy back cars from any customers who were concerned. And the company started designing a fix: extra protection for the battery pack that could be retrofitted into existing Volts.

But it wasn't until November, six months after the initial fire -- and only after Bloomberg got hold of the story -- that NHTSA opened a safety investigation and notified the public.

That time lag has turned out to be a problem.

From Shining Example of American Ingenuity to 'Political Punching Bag'

If the Volt were just another car and GM just another company, this whole thing would probably be no big deal.

NHTSA gets 40,000 reports of vehicle safety problems every year. Only a few of those turn out to be serious enough to lead to action by the agency, and most of the time, those actions are routine: The manufacturer comes up with a fix, issues a recall, and updates the affected cars.

All auto manufacturers, from Ford to Ferrari, have recalls every now and then. As long as nobody's injured, they're no big deal, and they get handled in the ordinary course of business.

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But the Volt's no ordinary car. It really is a high-tech masterpiece, a great example of American ingenuity -- and a pretty nice car to boot. But it cost a fortune to develop, and some of that was funded by government loans and grants. GM has tried to make the Volt a symbol of its renaissance, but in some minds, it has become a symbol of the still-unpopular auto industry bailouts instead.

House Republicans and pundits have made a lot of hay out of the issues around the Volt, even going so far as to suggest that the Obama administration covered up a potential safety defect to protect its ownership stake in GM, a relic of those 2009 auto bailouts.

That's probably not true. And it's largely moot at this point. Last week, NHTSA gave the Volt (with GM's fixes incorporated) a clean bill of health, closing its investigation.

The Damage Has Been Done

GM will start installing those fixes in customers' cars in a few weeks and will resume production of the Volt next month. But the task of fixing its car's reputation will take a lot longer. Akerson's appearance before Congress coincided with the launch of a new GM marketing campaign that touts the Volt's efficiency and safety.

But given the concerns surrounding the Volt, and an election-fueled debate about whether government should help promote green-car development, the Volt's tenure as a political punching bag may not be ending any time soon.

At the time of publication, Motley Fool contributor John Rosevear owned shares of Ford and General Motors. The Motley Fool also owns shares of Ford, and Motley Fool newsletter services have recommended buying shares of General Motors and Ford. Motley Fool newsletter services have also recommended creating a synthetic long position in Ford.

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]]>Chevrolet Voltchevy volt batteryChevyVoltBatteryElectric carElectricCarGeneral Motorshybridlithium ion batteriesLithiumIonBatteriesNational Highway Traffic Safety AdministrationNHTSArecallrepublicanssafetyvolt fireVoltFireJohn Rosevear, The Motley FoolThu, 26 Jan 2012 11:15:00 ESTValentine's Scams: Don't Be a Fool for Love Onlinehttp://www.dailyfinance.com/2012/01/19/valentines-scams-dont-be-a-fool-for-love-online/http://www.dailyfinance.com/2012/01/19/valentines-scams-dont-be-a-fool-for-love-online/http://www.dailyfinance.com/2012/01/19/valentines-scams-dont-be-a-fool-for-love-online/#commentsFiled under: ,

ValentinesCupid is getting ready to shoot his arrows, but if love-struck consumers aren't careful, they'll get hit with more than red hearts, chocolates and "I love yous."

Valentine's Day offers Internet con artists a great cover for their illegal craft. According to data from security researcher McAfee, the percentage of spam emails containing the word "Valentine" in the subject header rose dramatically last year between Jan. 20 through Feb. 7.

Using love as a lure, scammers sweet-talk their victims out of personal information -- everything from phone numbers and credit card information to details about their friends and crushes. "The thieves are looking for credit card information, or your username and password to use on other sites to make purchases," says David Marcus, director of advanced research and threat intelligence for McAfee.

Those who fall prey to these less-than-cherubic fraudsters may also unwittingly download malware disguised as a love song, romantic picture, or some other heart-be-still goodie supposedly sent from a loved one -- software that, once downloaded, can be used to remotely gain control of the user's computer.

Here's some of the Valentine's Day scams lovers should be on the lookout for:

Social Media Scams

Internet thieves using social media for their Valentine's Day scams were out in force last year, according to security firm researchers.

Facebook users were duped by Valentine's Day scammers who tricked them into clicking on links they believed came from friends who'd posted messages on their walls, says Chester Wisniewski, senior security adviser for Sophos. "The exposure on social media is fast. If you have 500 friends who see the message on your wall, they're tempted to click on it because they think it came from you," he says.

In this case, the evil link professed to indicate who your Valentine would be in 2011, or promised to deliver instructions on how to post a heart or love poem on your lover's wall. This example of the scam was posted on Sophos' blog last year:


scam

In the case of the Facebook "Valentine's Day" and "Special Valentine's Day" rogue apps, those who clicked on the links saw a bogus splash screen that asked for permission to post status messages to their wall and glean basic information about them. The conniving cupids would also display a "Facebook anti-spam dialog box," which in actuality was a survey form from a company that paid commissions to the scammers for each one filled out.

Each time a user posted the rogue app to his wall, his friends would unwittingly help spread the scam at rapid spreed, Wisniewski says.

Valentine's Day Scams Snuck into Searches

When looking for gift ideas for Valentine's Day, where do you start your search? A search engine, of course. And that can lead to trouble, says Marian Merritt, Norton's Internet safety advocate.

It turns out Internet thieves know this, too. They create bogus websites they hope you'll land on after pulling them up with the search results, Merritt says. "They'll steal your credit card information but never deliver the goods."

V-Day Spam and Phishy E-cards

Another ploy scammers use is the promise of astronomical discounts on everything from flowers to Rolex watches, warns McAfee's Marcus.

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In most cases, clicking on a scammer's link will take a user to a fake website where these cunning cupids ask for credit card information or usernames and passwords to be used on other sites.

Valentine's Day e-card scams, meanwhile, tend to be successful where users are asked to click on a link to send an e-card or to view an e-card after filling out a form. Filling out that form, Marcus says, gives the so-called bad guys more personal information about the lovelorn user that they can try to later use to enrich themselves.

Don't be heartbroken: How to protect yourself

  • Before clicking on a link or downloading an app from a friend's page, check out software security sites such as Sophos, McAfee, or Symantec to see which Valentine's Day scams are making the rounds on social networking sites.
  • If an email or advertised offer sounds too good to be true, it probably is. Don't click on any links you suspect. Also, take an especially skeptical look at the grammar and punctuation used in that spam email offering a "rOLex" watch for your loved one.
  • Want to send an e-card? Seek out a legitimate source for it by proactively going to branded websites that offer such Valentine's Day poems or e-cards, such as BlueMountain.com, Hallmark.com or Americangreetings.com.
  • When using search engines to hunt for Valentine's Day items, be as specific as you can -- include brand names and trusted manufacturers. Also, scrutinize URLs and everything on the page if you are directed to an unfamiliar website.

Motley Fool contributor Dawn Kawamoto does not own stock in any of the companies mentioned. However, she is heavily invested in Valentine's Day and the notion of romance.


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]]>CupidDavid MarcusFacebookfraudidentity theftIdentityTheftinternet con artistsInternetConArtistsmalwareMcAfeerogue appRogueAppRolexScamsSophosspammersvalentines dayValentinesDayvirusDawn Kawamoto, The Motley FoolThu, 19 Jan 2012 13:05:00 ESTConsume with a Conscience: The Rise of Ethical Shoppinghttp://www.dailyfinance.com/2012/01/16/consuming-with-a-conscience-the-rise-of-ethical-shopping/http://www.dailyfinance.com/2012/01/16/consuming-with-a-conscience-the-rise-of-ethical-shopping/http://www.dailyfinance.com/2012/01/16/consuming-with-a-conscience-the-rise-of-ethical-shopping/#commentsFiled under: , , ,

Ten thousand villiagesJessica King, 37, has been shopping at the Ten Thousand Villages store near Lancaster, Pa., since she was in grade school. She remembers her mother buying gifts like note cards, candles and soaps at the fair-trade retailer, which sells handmade merchandise crafted by artisans in developing and impoverished countries.

"It was easy to compute for a kid: This stuff is made by these women in Bangladesh [for example], and it's creating a job for somebody," she says. So for King, the notion of shopping with a social-conscience "got ingrained really early on."

These days, more and more of us are waking up to what King tuned into long ago: Citizen consumerism -- a fitting topic on Martin Luther King Jr. Day, when our thoughts turn to matters of social consciousness.

Shoppers are increasingly finding ways to make more of their purchases purposeful, be it by choosing fair-trade products or merchandise that supports a cause.

It's a sign of the times, says Carol Cone, managing director and executive vice president of brand and corporate citizenship for public relations firm Edelman.

The lingering economic malaise and the Occupy Wall Street movement have combined to keep the financial misfortunes of many Americans -- as well as people around the world -- in the spotlight. And the discourse on the Internet and on social media sites has kept the conversation going, "empowering people to not only comment" but engage, Cone says.

Edelman's goodpurpose study, which explored consumers' attitudes about their expectations of brands and companies' commitment to social issues, signaled the rise of the "citizen consumer," she says.

The study revealed that 87% of American consumers surveyed believe businesses need to place at least as much weight on society's interests as they do on business interests.

That comes as little surprise to Cone. In today's economy, social ills such as homelessness, hunger and poverty "have hit closer to home," she says. "There are people who don't have a job and are having problems feeding their family ... It could be your kid's [classmate]. It's very much in your face."

These factors have stirred consumers' charitable and social shopping impulses, she says.

Purposeful Shopping Year-Round

Many national retailers run cause-related promotions on an event basis. Shoppers can participate in programs like Macy's Go Red For Women for the prevention of heart disease, St. Jude's Children's Research Hospital at Kay Jewelers to support research and treatment of childhood cancer and other diseases, or Toys R Us' Autism Speaks campaign -- as well as countless others -- but only few times a year.

Those shoppers inclined to link their purchases to causes year-round have to work a little harder.

Ten Thousand Villages, which bills itself as the country's oldest and largest fair-trade retailer, started out of founder Edna Bauer's garage in 1945, and has grown into a retail chain with 70 nonprofit stores throughout the country, as well as an e-commerce site.

"It's interesting that we've been able to grow in this economy," when many other traditional retailers have been struggling, Michele Loeper, marketing manager of retail and brand strategy for the merchant, tells DailyFinance.

As more national chains have begun to sprinkle fair-trade products into their product assortment, it has raised awareness of ethical shopping, Loeper says.

"People are really reevaluating what they're spending their money on," she says. "There's an increased popularity in shopping with a social conscience."

Ten thousand VilliagesTen Thousand Villages strictly adheres to the tenets of fair trade, which include providing sustainable income, empowering women -- rather than exploiting women and children -- and making a long-term commitment to developing countries, Loeper says.

The average length of a Ten Thousand Villages purchasing relationship from a developing country is 13 years, and some have been going on for as long as 60 years, Loeper says.

The retailer imports products from 35 developing nations, placing orders for everything from jewelry, home decor and toys to soaps and creams from artisan groups in places "where there's not a lot of income opportunity."

So an order for 80 condiment bowls from Vietnam, for example, will provide sustainable income to the women artisans who made them.

The shopping-for-a-cause movement has also been building momentum online. Shopkick, for one, which designs retailers' smart phone applications, created an app that rewards shoppers when they check into a particular store on their cell phone with points that can be redeemed for advertiser-funded donations to charitable causes, such as the American Red Cross.

Meanwhile, at shopping portal GoodShop, consumers can tap into coupons and deals at more than 2,400 online retailers, and have a percentage of every purchase donated to one of 100,000 charities or schools.

And on sites like Recoup.com, shoppers purchase daily deals, and direct part of the proceeds from the purchase to a favorite cause.

Consumers interested in vetting the cause-worthiness of their purchases can also consult the GoodGuide, Cone says, which has become known as a definitive source of information on the health, environmental and social impacts of retail consumer products.

Ethical Shopping Headed For The Mainstream?

It's unclear yet how widespread shopping for a cause will become. But the pattern of the environmental movement's rise suggests it just might.

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Over the last decade, the idea of eco-friendly products moved from the margins into the mainstream, shedding much of its crunchy-granola image along the way. Today, many of the biggest consumer products companies boast "green" lines and products, from laundry detergent to compact-fluorescent light bulbs to organic linens.

Now, as the idea of targeting your everyday purchases to also promote your social values seeps into the consciousness of American consumers, some major chains -- among them Target, (TGT) Whole Foods (WFMI), Starbucks (SBUX) and McDonald's (MCD) -- have been been finding ways to link those purchases to causes year-round.

Shoppers who use Target's Redcard credit card can have 1% of their purchase donated to a K-12 school in need of funding via the retailer's Take Charge of Education program.

And in November, Starbucks launched Create Jobs for USA, a program designed to address the nation's economic crisis, said CEO Howard Schultz during a meeting this fall at AOL's New York headquarters.

Starbucks customers can now buy $5 "indivisible" bracelets along with their venti lattes. Proceeds will go to the Opportunity Finance Network, a nonprofit organization that supports hundreds of Community Development Financial Institutions, local organizations that lend money at low interest rates to small business owners in under-served areas.

With the government in political gridlock, the onus is now on business leaders to take constructive steps towards solving the jobs crisis, Schultz told a room of reporters at AOL's offices.

Could Walmart Go Fair Trade?

There was even talk that Walmart, the nation's largest retailer, was gearing up to launch a line of fair-trade products.

In October, Huffington Post Arts reported that the retailer was in discussions with nonprofit group Aid to Artisans to sell handicrafts from artisans in developing countries. Giving that it has more than 4,400 U.S. stores, the proceeds from such a line could make a big economic impact on the people and communities in the partnering countries.

When asked recently about the possibility, Brooke Buchanan, director of sustainability communications for Walmart, told DailyFinance that although the retailer provides funding to Aid to Artisans, "we have not made any decisions related to them" about a line of fair-trade products.

And while the retailer has made some commitments to sustainable business practices and merchandise -- the company has promised that all of its products will use sustainable palm oil (as opposed to non-sustainable palm oil, a major cause of rain forest deforestation) by 2015 -- Walmart does not have fair-trade goals per se, Buchanan says.

However, fair trade products, such as cherries, bananas and coffee, are sold at Walmart stores and through its Sam's Club division, she says.

Jessica King has picked up Equal Exchange fair trade coffee from Ten Thousand Villages, where she still shops.

Also, "I'm a sucker for their jewelry -- earrings and necklaces -- textiles and table clothes," she says.

King, who is the executive director of Assets Lancaster, which helps low and moderate income entrepreneurs devise business plans, says her exposure to Ten Thousand Villages at a young age directly shaped her career path.

"It was the first example I saw of that model -- using business for social change," she says.




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]]>American Red CrossAutism SpeaksBangladeshcause marketingCauseMarketingcharityEdelmanfair tradeFairTradeHoward SchultzMartin Luther King, Jr.Occupy Wall StreetOpportunity Finance Networksocially consciousSociallyConsciousSt. Jude Children's Research HospitalTen Thousand VillagesBarbara ThauMon, 16 Jan 2012 00:00:00 ESTSupport Builds for LEGO Anti-Sexism Drivehttp://www.dailyfinance.com/2012/01/13/support-builds-for-lego-anti-sexism-drive/http://www.dailyfinance.com/2012/01/13/support-builds-for-lego-anti-sexism-drive/http://www.dailyfinance.com/2012/01/13/support-builds-for-lego-anti-sexism-drive/#commentsFiled under:

LEGOA petition challenging LEGO Group's recent advertising campaign of its Friends product line is gaining steam faster than a youngster building a skyscraper with the tiny plastic blocks.

In less than a month, the SPARK Movement and Powered by Girl petition has generated more than 42,000 signatures and plenty of commentary, with allegations lobbed at LEGO for taking a sexist approach in developing and marketing its Friends product line.

SPARK and Powered by Girl are calling on LEGO to "go back to advertising and offering all LEGO to boys and girls."

At the center of the controversy is the use of short-shirted girl figurine characters with loads of pink and other pastel coloring in both marketing materials and the product line.

One parent named Susan James says on the petition blog site:

Because I am girl who played with LEGOs and I became an engineer. When I was growing up, they weren't boy or girl toys. They just were toys for everyone. Maybe if you showed more girls playing with your toys you wouldn't have to resort to the lame girl sets.

LEGO, meanwhile, is fighting back, rather than watch its work on Friends crumble. In a statement Thursday, the company had this to say:

We want to correct any misinterpretation that LEGO Friends is our only offering for girls. This is by no means the case. We know that many girls love to build and play with the wide variety of LEGO products already available. LEGO Friends joins this global collection of products as yet another theme option from which parents may choose the best building experience for their child's skill and interest.

We listen very carefully to the opinions and input that people share. We will continue to do so as we develop the LEGO brand to deliver the best experiences with the strongest appeal, and we will review our communications to ensure that we represent LEGO play for all children. We are proud to have developed a collection that is receiving positive feedback and reviews from parents and children who are now trying it at home, and we hope that we will engage even more girls in the skill-developing experience of LEGO play.


The hordes of parents who made LEGO what it is today by buying its products will, in the end, be the ultimate judge of whether the move to introduce and market Friends was a wise one. And it will become clear, not brick by brick, but rather dollar by dollar.

Motley Fool contributor Dawn Kawamoto does not own any stock in the companies mentioned.


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]]>boysEntertainmentgirlsLEGO FriendsLEGO Holding A/SLegoFriendsmarketingpetitionsexismtoysDawn Kawamoto, The Motley FoolFri, 13 Jan 2012 15:30:00 ESTFinancial Scams 2012: The Latest Twists in the Ever-Evolving Art of the Conhttp://www.dailyfinance.com/2012/01/05/financial-scams-2012-latest-con-artist-twists/http://www.dailyfinance.com/2012/01/05/financial-scams-2012-latest-con-artist-twists/http://www.dailyfinance.com/2012/01/05/financial-scams-2012-latest-con-artist-twists/#commentsFiled under: ,

money scamsIt's a new year and the perfect time to make the next 12 months more prosperous than the previous year. But not everyone's fresh start is based on good intentions: Among con artists, hackers, and scam artists, their plans for financial self-improvement always come at someone else's detriment.

In order to protect yourself and your financial Fort Knox from the bad guys, you must first know what to watch out for. So here are some highlights from scams that made the rounds in 2011 -- and will likely be back in some form or another this year.


Gallery: Financial Scams 2012: The Latest Twists in the Evolving Art of the Con




Motley Fool contributor Dawn Kawamoto does not own stock in any of the companies listed. The Motley Fool owns shares of Bank of America and Citigroup. Motley Fool newsletter services have recommended buying shares of Walt Disney and eBay, as well as writing puts on eBay.


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]]>CitigroupFalse advertisingFalseAdvertisinghackersidentity theftIdentityTheftInternet fraudInternet marketinginternet scamsInternetScamsirsmoney scamsMoneyScamsPayPalScamsSocial SecurityUnited States Computer Emergency Readiness TeamWalt DisneyDawn Kawamoto, The Motley FoolThu, 05 Jan 2012 07:00:00 ESTAn Unappetizing Truth at Butterball: Turkey Abusehttp://www.dailyfinance.com/2011/12/30/an-unappetizing-truth-at-butterball-turkey-abuse/http://www.dailyfinance.com/2011/12/30/an-unappetizing-truth-at-butterball-turkey-abuse/http://www.dailyfinance.com/2011/12/30/an-unappetizing-truth-at-butterball-turkey-abuse/#commentsFiled under: ,

ButterballWhen consumers think of the Butterball brand, they think turkey. But on Thursday, unappetizing images of poultry in peril emerged that might cause many Butterball buyers to ponder what really went on before their holiday turkey dinners reached their plates.

Animal rights group Mercy for Animals went undercover and caught workers at a North Carolina Butterball-affiliated turkey facility on video abusing the birds. The footage reveals that workers stomped, kicked, threw, and dragged the animals.

If that's not enough to cause you to lose your lunch, some turkeys had untreated wounds and injuries such as open sores, infections, rotting eyes, and broken bones.

Butterball abuseMercy for Animals presented the footage and filed a formal legal complaint with local law enforcement, resulting in a warrant and raid on the facility Thursday morning.

In response, Butterball said it's working with Hoke County officials regarding the allegations, and that it has "zero tolerance" for cruelty to its birds. It also said it's conducting its own investigation, both internally and through third-party audits.

Butterball claims it trains employees to use humane treatment and has a company policy in place requiring workers to report any abuse they witness. Obviously, though, something went terribly wrong at Butterball; purported company policy and the images caught on video are at odds.

Supply and Demand (for Better Animal Treatment)

Major companies like Butterball need to be on the ball when it comes to eradicating such behavior. Consumers are becoming increasingly aware of animal welfare in various supply chains.

In November, The Humane Society of the United States filed a complaint against Smithfield Foods (SFD) regarding its continued use of gestation crates for sows. The Humane Society saw McDonald's (MCD) as guilty by association; Smithfield is a major supplier of the fast-food giant's pork.

Smithfield has since recommitted to its timeline to phase out the inhumane crates by 2017, a vow it had previously put off two years ago.

McDonald's must really be getting the picture, because later in November, it ditched egg supplier Sparboe after Mercy for Animals caught video footage of that farm's ugly treatment of birds.

Good Treatment, Better Business

If you think it's frivolous for companies like Butterball and McDonald's to care, think again. It's economics.

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Studies have shown that aggregate meat demand has decreased as consumers have become more aware of animal welfare issues in factory farming.

For example, last year, researchers Glynn Tonsor and Nicole Olynk, agricultural economists at Kansas State University and Purdue University, released a study showing that without the increase in animal welfare media coverage from 1999 through 2008, pork and poultry demand would have been 2.7% and 5% higher, respectively.

An agribusiness survey has even shown consumers' increasing distaste regarding inhumane treatment at factory farms. More than 40% of those surveyed stated that the U.S. is "on the wrong track" in terms of food production, and 20% are uncomfortable with the soundness of the food supply here in the U.S.

Making Moral Progress

Gandhi once said, "The greatness of a nation and its moral progress can be judged by the way its animals are treated." More American consumers seem to realize that there's no good reason why animals should be abused and tortured before they make their way to Americans' plates.

Surely American companies can innovate to cut inhumane treatment from their operations and supply chains. They'll have to, as more and more consumers are asking for that kind of moral progress.

Motley Fool analyst Alyce Lomax does not own shares of any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of McDonald's.



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]]>animal crueltyanimal rightsAnimalCrueltyAnimalRightsButterball turkey abuseButterballTurkeyAbuseHealthHumane societyHumaneSocietyMcDonald'sMcdonald's CorpMercy for AnimalsMercyForAnimalsSmithfield Foods IncThe Motley FoolAlyce Lomax, The Motley FoolFri, 30 Dec 2011 12:20:00 ESTTwo Recalls Dampen Holiday Cheerhttp://www.dailyfinance.com/2011/12/22/recalls-dampen-holiday-cheer/http://www.dailyfinance.com/2011/12/22/recalls-dampen-holiday-cheer/http://www.dailyfinance.com/2011/12/22/recalls-dampen-holiday-cheer/#commentsFiled under: ,

enfamil infant formula recallThis is the time of year when retailers can't seem to move product out of their stores fast enough, but now we have Target (TGT) and Walmart (WMT) scrambling to get some of their merchandise back.

The country's two largest discount department store chains have issued product recalls this week.

Walmart's situation is the graver of the two. A 10-day-old baby died from a rare bacterial infection in Missouri, and it may have been the result of Mead Johnson Nutrition's (MJN) Enfamil sold at Walmart.

The retailer is pulling the infant formula batch with the problematic lot number as investigators determine whether the Enfamil powder, the water used to mix the formula, or something else led to the infant's tragic death.

There's obviously a fair chance that the formula itself had nothing to do with the baby's passing, and even if it is the case, it will be Mead Johnson Nutrition taking the real hit here. Shares of Mead Johnson were trading as much as 12% lower today on the news.

Target's recall involves excessive levels of lead paint in a kids travel case, but there have been no reports of any children getting sick. Target sold 139,000 of the Circo travel cases between April and August of this year, and the retailer is initiating a recall of the Chinese-made products because the surface coating on the cases exceed the federal lead paint standard.

Recalls happen all the time, and the real challenge is simply getting the word out. How many of those 139,000 buyers will ever know that their kids are toting around a travel case coated in excessive lead paint?

Retail isn't perfect, especially now, during the madcap holiday shopping season.

Walmart is one of 11 rock-solid dividend stocks singled out in a special Motley Fool report. Want to know the other 10? It's a free report, but it won't be around forever, so check it out now.

At the time this article was published The Motley Fool owns shares of Wal-Mart Stores. Motley Fool newsletter services have recommended buying shares of Wal-Mart Stores as well as creating a diagonal call position in Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Copyright (C) 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.




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]]>Child safetyChildSafetyEnfamilFinancelead paintLeadPaintMead JohnsonMead Johnson Nutrition CoRecallsTargetTarget AustraliaTarget CorporationThe Motley Fooltravel caseTravelCaseWal-MartThe Motley FoolThu, 22 Dec 2011 14:50:00 ESTVictoria's Secret: Busted for Undies With an Ugly Pasthttp://www.dailyfinance.com/2011/12/21/victorias-secret-busted-for-undies-with-an-ugly-past/http://www.dailyfinance.com/2011/12/21/victorias-secret-busted-for-undies-with-an-ugly-past/http://www.dailyfinance.com/2011/12/21/victorias-secret-busted-for-undies-with-an-ugly-past/#commentsFiled under: , ,

Victoria's SecretThe Victoria's Secret chain has a secret, all right, and it's a dirty one. Its undies that are purported to be made with "fair trade" organic cotton actually utilize some unseemly labor practices in the early stages of the supply chain.

In other words, many of their unmentionables are already sullied before the first wearing -- by child labor and forced working conditions.

Controversial Cotton

The issue is with the Victoria's Secret underwear bearing the following message: "Made with 20 percent organic fibers from Burkina Faso." Cotton is one of the major exports of the West African nation of Burkina Faso, second only to gold. Burkina Faso also happens to be one of the poorest countries in the world, ranked at No. 161 out of 169 on the UNDP Human Development Index last year.

Products that are organic and particularly those labeled "fair trade" are supposed to imply a better quality of life for the people involved in their manufacture or farming. Sadly, coerced workers and child laborers aren't uncommon in Africa, but merchandise that's supposed to be "fair trade" is the last place you'd expect to find child labor and forced working conditions.

According to a recent Bloomberg report, children as young as 12 or 13 were forced to work and subjected to beatings administered by the cotton farmers. (Burkina Faso cotton is sent to India and Sri Lanka after harvest to be transformed into cloth, sewn, and finished, and both those countries utilize child labor as well.) Meanwhile, Burkina Faso's entire organic cotton crop was purchased by Victoria's Secret, and it's also scheduled to purchase most of the next harvest too.

The Failings of 'Fair Trade'

Victoria's Secret has responded to the allegations by stating that this behavior is "contrary to our company's values and the code of labor and sourcing standards we require of all our suppliers," and that the company is "vigorously engaging with stakeholders to fully investigate this matter."

Sponsored Links

Obviously, many stakeholders must be actively involved to make sure "fair trade" is truly fair -- and guaranteed free of blights like child labor and cruelty.

We can't entirely blame Limited Brands' (LTD) Victoria's Secret for the fact that the intended purpose and spirit of "fair trade" may be subverted at times. The largest certification agency for this segment, Fairtrade International, actually vouched for the Burkina Faso organic crop meeting standards.

Fairtrade International deserves a great deal of heat for this failure of the true spirit of fair trade, and hopefully the public attention will prove to be an impetus to improve the standards farms adhere to in order to gain a truly "fair trade" status.

Motley Fool analyst Alyce Lomax owns no shares of Limited Brands.


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]]>Burkina Fasochild laborChildLaborcoerced laborCoercedLaborcottonFair TradeFairtrade InternationalFairtradeInternationalLimited BrandspantiesSri LankaunderwearVictoria's SecretAlyce Lomax, The Motley FoolWed, 21 Dec 2011 15:05:00 ESTCost of Christmas: Are Live Trees or Artificial the Better Deal?http://www.dailyfinance.com/2011/12/09/cost-of-christmas-are-live-trees-or-artificial-the-better-deal/http://www.dailyfinance.com/2011/12/09/cost-of-christmas-are-live-trees-or-artificial-the-better-deal/http://www.dailyfinance.com/2011/12/09/cost-of-christmas-are-live-trees-or-artificial-the-better-deal/#commentsFiled under:

Cost of Christmas: Are Live Trees or Artificial the Better Deal? Christmas is just a couple weeks away, and consumers are heading out to snap up Christmas trees so Santa knows where to put the gifts. So, what'll it be? Live or artificial?

It's not just a matter of aesthetic preference or family tradition: Cost is certainly a factor during these tough economic times.

Industry trade groups have provided plenty of fodder for consumers to consider when weighing the costs of a live versus an artificial tree.

The American Christmas Tree Association says artificial trees cost an average of $100 and can save consumers 70% over a 10-year period, the average life span of an artificial tree.


Source: American Christmas Tree Association

But the National Christmas Tree Association, which represents only the live Christmas tree industry, says bah humbug to such figures.

In its list of the 10 Biggest Myths About Christmas Trees, the organization cites two in particular that pertain to the live vs. faux debate:
MYTH #4: It's better to use a fake tree because you can reuse it each year.
BUSTED: That's a very short-sighted perspective. According to research, most fake trees are only used 6 to 9 years before they're disposed. Even if you would use one for 20 years or more, it will eventually be thrown away and end up in a landfill. And unlike Real Trees, which are biodegradable and recyclable, fake trees are always a burden to the environment.

MYTH #6: Real Trees cost too much.
BUSTED: Like anything else, you can find a wide range of prices, and spend what you want to spend. It all depends on what you're looking for in a tree. Prices vary by many variables including: location of retail lot, where the tree was harvested, species, size, grade, who's selling it and even sometimes day of the week. The bottom line is, you can spend $15 to over $200 on a tree in many places.

My favorite part is when fake tree people try to use this as a selling point. "You can get your investment in a fake tree back in as little as three years...blah, blah." That's called "funny math" where I'm from. If I spend $20 on a Christmas tree from a farm each year and you spend $300 on a fake tree, you'd have to use it for 15 years (way past the average) before I will have spent the same amount as you.
Holiday Math

Perhaps the best step to take on pricing an artificial tree versus a live tree is to take an ultra-conservative approach.
Start with the estimated six-year life span of an artificial tree, based on the low end of the range given by the National Christmas Tree Association. Multiply that by a range of $20 to $50 to purchase a live tree. Over a six-year period, a live tree would cost $120 to $300, similar to a price of a relatively decent artificial tree.

In other words, it's pretty much a wash, financially.

Of course, the cold hard numbers don't make the decision any easier for some. "I don't know if Christmas tree buying is that rational. It can be irrational. It's more about the special time with the family and the emotional fabric of getting together and feeling good," says Stew Leonard Jr., owner of the Stew Leonard's grocery chain, one of the nation's largest Christmas tree retailers.

Other Costs to Consider

A couple considerations Christmas tree consumers may take into account is whether they already have sunk an investment in lights and a stand for a live tree, or whether they're willing to bear additional costs to switch out of an artificial tree.

Sponsored Links
Some artificial trees come with lights already attached and all have a stand, while live trees require the purchase of lights and a stand. On average, it costs $5 per foot to decorate a tree in lights, according to Leonard, while tree stands can go from as low as $7 to as high as $100 or so.

Trendiness is another consideration. Artificial tree owners can choose from a wide selection of colors outside of traditional Christmas tree green, like the popular pink, white or silver, Jami Warner, executive director of the American Christmas Tree Association, said in an email interview. Buyers, however, would likely be locked into that color for at least several years given the typical lifespan of an artificial tree.

So where will Santa put your gifts this year? Weigh in below on the artificial vs. real tree debate.

Motley Fool contributor Dawn Kawamoto does not own stock in any live or artificial Christmas tree grower, manufacturer, or retailer. She is, however, heavily invested in the spirit of Christmas.

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]]>artificial christmas treeArtificialChristmasTreeChristmas treelive christmas treesLiveChristmasTreesDawn Kawamoto, The Motley FoolFri, 09 Dec 2011 12:00:00 ESTHow the Postal Service Cuts Will Affect Youhttp://www.dailyfinance.com/2011/12/06/how-the-postal-service-cuts-will-effect-you/http://www.dailyfinance.com/2011/12/06/how-the-postal-service-cuts-will-effect-you/http://www.dailyfinance.com/2011/12/06/how-the-postal-service-cuts-will-effect-you/#commentsFiled under:

How the Postal Service Cuts Will Effect YouThe impending changes to the U.S. Postal Service are about to give new meaning to the term "snail mail."

When the post office makes cuts to mail service come spring to stem billions of dollars in losses, it will not only slow mail delivery, but eliminate the possibility of first-class letters and other mailings being delivered to nearby areas in one day. Currently, around 42% of first-class mail travels from mailbox to destination in a single day.

The U.S. Postal Service, suffering through a major and extended financial crisis, has announced plans to shutter about 252 of its 487 mail processing centers. The cuts are critical to the post office's survival: For the fiscal year that ended Sept. 30, the Postal Service racked up a $5.1 billion net loss, Darleen Reid, senior public relations representative for the USPS, tells DailyFinance. "Any business that has no customers has to make changes."

Here's what you need to know about the unprecedented changes to the U.S. mail delivery system, and some tips that will keep you from going, well, postal.

Your Daily Paper Could be a Thing of the Past

Currently, first-class mail promises delivery to homes and businesses in one to three business days. The proposed cuts will shift that to a two- to three-day window, according to the USPS.

Sponsored Links

Based on that, consumers in the habit of getting their media the old-fashioned way -- by regular mail -- might want to rethink those choices. If you or your business relies on the mailed delivery of daily newspapers and time-sensitive periodicals, you may find yourself running behind the times.

Because the post office will be operating with fewer processing facilities, "Customers could receive their daily publications a day later than they regularly do," she says. "It's more likely than not that we will not be able to provide same-day service."

To avoid that delay, consumers should consider subscribing to publications online.

And if you're a Netflix (NFLX) fan who still prefers to receive DVDs-by-mail, you might want to consider switching to the company's streaming-video service, says Jim Corridore, an analyst with S&P Capital IQ who follows the shipping industry. Companies such as Amazon.com (AMZN) and Hulu (GOOG) also offer streaming video services.

Plan Ahead, Pay Online

If you're sending something through the mail that must reach a destination by a certain time, plan ahead, says Sue Brennan, a spokeswoman for the USPS.

"Consumers sending checks or bill payments out should give [it] an extra day, but this only applies to mail in a localized area," Brennan says. "If they are sending mail across the country, it will still be delivered in a three-day period."

Those people who are still wedded to dropping their bills in the mail would be wise to switch to online bill-paying, Corridore says. Virtually every bill can be paid over the Internet: "Your mortgage bill can be paid online, your cable bill can be paid online."

No Slowdown for Mail-Order Prescriptions

The Postal Service cuts have also raised concerns for the millions of Americans who rely on mail-order pharmacies for prescription drugs. Will this group -- which includes many people with limited mobility, such as some seniors and the home-bound -- still be able to get their medications in a timely fashion?

Rest easy, says Brennan: "Mail order prescription drugs are sent via package services or Priority [mail], and there won't be any change in that," she says.

More broadly, delivery times for most of the more-expensive classes of mail, such as Priority Mail and Express Mail, will not change.

Medco, the pharmacy benefit manager which runs one of the nation's largest mail order pharmacy, says it doesn't foresee delivery disruptions. "Our commitment is to make sure that our members get the right medication in a timely fashion," Jennifer Luddy, a spokeswoman, tells DailyFinance.

The company, which shipped 110 million prescriptions last year, relies on the U.S. Postal Service for most of its shipments, but augments that service with UPS (UPS) and FedEx (FDX).

"The bottom line is that we don't anticipate the [postal] changes will have any meaningful affect," she says.




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]]>Amazon.com IncExpress mailFedex Corpfirst-class mailFirst-classMailHuluNetflix Incnext day deliveryNextDayDeliverypost officePostal Service cutsPostalServiceCutsPostOfficeUnited Parcel Service Inc (UPS)United States Postal ServiceBarbara ThauTue, 06 Dec 2011 09:40:00 ESTThe (Reality) Check's in the Mail for Postal Service as Doomsday Approacheshttp://www.dailyfinance.com/2011/12/05/the-reality-checks-in-the-mail-for-postal-service-as-doomsday/http://www.dailyfinance.com/2011/12/05/the-reality-checks-in-the-mail-for-postal-service-as-doomsday/http://www.dailyfinance.com/2011/12/05/the-reality-checks-in-the-mail-for-postal-service-as-doomsday/#commentsFiled under: ,

The news broke over the weekend ... but you probably wouldn't hear about it till Wednesday if you had to get the story by regular mail.

In a last-ditch effort to save itself from bankruptcy, the U.S. Postal Service is forging ahead with plans to close half of its 500 mail processing centers and roughly 3,700 of America's post offices. As a direct result of these moves, "one-day delivery" of first-class letters sent via USPS will become a thing of the past. For now on, two-to-three-day delivery will be the norm.

The Numbers Behind the Closures

Here's how the numbers work: Across the nation, 500 processing facilities currently work to service and distribute the 170.6 billion pieces of mail that move through the system annually. The more facilities there are, the closer each one is to a mail sender, and the closer another is to a mail recipient. But as facilities close, the distance from each remaining facility to sender/recipient increases -- and the amount of time it takes to cover that distance likewise increases.

The post office will still be able to achieve its stated goal of getting a letter across the country in no more than three days, but with growing distances, one-day delivery of first-class mail will become physically impossible.

Even in the best-case scenario, USPS says that cutting 250 processing facilities will only save it $3 billion a year. Add in 3,700 post office closures and perhaps 100,000 layoffs of postal employees -- and the savings rise to $6.5 billion. And that still isn't enough.

In fact, the post office has warned that without cutting costs, it would be running $20 billion a year in the red by 2015. So even a whopping $6.5 billion worth of cuts leaves your friendly postal carrier still stuck in a $13.5 billion-deep ditch.

A Sluggish Delivery Scenario

In order to finish closing the gap, USPS has put additional cost-cutting measures up on the whiteboard. One of the money-saving scenarios is eliminating Saturday deliveries.

Say you run out of stamps Monday, miss the pickup Tuesday, and as a result, don't get around to mailing Grandma's postcard until Wednesday. Send that postcard over the mountains and through the woods for two days out of a potential three, and it still won't reach Grandma's house when USPS closes its doors Friday. With Saturday delivery now out of the picture, and Sunday, too, you're probably looking at a Monday delivery -- five full days after you dropped that postcard in the mailbox.

The scenario's even uglier for Netflix (NFLX) users, who could find themselves hit both coming and going on their rent-DVDs-by-mail plans. We're talking potential 10-day round trip service here, folks. (And by the way, how smart was Reed Hastings to try and exit the DVDs-by-mail game?) Yet according to USPS data, this scenario will be occurring more and more frequently in the future, as the 42% of first-class mail that's currently delivered in a single day morphs into more and more two-, three-, and perhaps even five-day deliveries.

Forget Rain, Sleet or Snow -- It's Congress to Blame

If USPS' plans seem tailor-made to boost business at private parcel posts UPS (UPS) and FedEx (FDX), well, they are. But it's not entirely USPS's fault.

In a lament included in the service's 2010 Annual Report, USPS cries out against the Postal Act of 2006, which imposes "pricing constraints" that "have severely hampered our ability to remain financially solvent." As USPS explains, by imposing caps on the prices it can charge for service, Congress has deprived the post office of the "financial flexibility we need to remain viable into the future."

And much as it galls me to admit it, USPS is right. Yes, the post office needs to pick up the pace of "service" that it provides customers at its branches. Yes, it must operate more efficiently, and cut costs -- which rose 5% last year even as the amount of mail it was asked to deliver declined 3.5%. But the real solution here is elegantly simple: USPS must be allowed to charge enough for its services to cover the cost of providing them.

Consider: USPS' most alarmist warnings predict a $20 billion revenue shortfall in 2015. That's a big chunk of change, but here's the real surprise. USPS collected $67 billion in revenue last year. Seems to me, making up the $20 billion revenue gap could be easily accomplished by simply upping the price of a postage stamp by a third.

So, $0.45 per first-class stamp becomes $0.60 each, and... problem solved!

This oversimplifies the solution, of course. Postage stamps don't account for all of USPS revenues, and first-class mail doesn't comprise all of its deliveries. (Speaking of which, USPS might also consider charging bulk mailers the same rates it charges the rest of us.) But you get the point. Raise the price of a postage stamp and hike the rates on everything else proportionally, and USPS should, in theory, be back in the black.

And all it takes is an act of Congress.

Motley Fool contributor Rich Smith does not own shares of any companies named above. The Motley Fool owns shares of United Parcel Service and FedEx. Motley Fool newsletter services have recommended buying shares of Netflix and FedEx.



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]]>CongressdeficitFedex Corpfirst class mailFirstClassMailNetflix Incnext day deliveryNextDayDeliveryPost office closuresPostal ServicePostOfficeClosuresSaturday DeliverySaturdayDeliverystampsUnited Parcel Service Inc (UPS)Rich Smith, The Motley FoolMon, 05 Dec 2011 17:45:00 ESTOnline Shopping Emergency? Please Hold for a Humanhttp://www.dailyfinance.com/2011/12/03/online-shopping-emergency-please-hold-for-a-human/http://www.dailyfinance.com/2011/12/03/online-shopping-emergency-please-hold-for-a-human/http://www.dailyfinance.com/2011/12/03/online-shopping-emergency-please-hold-for-a-human/#commentsFiled under: , , , , , , , , , , , , ,

Online Shopping Emergency? Please Hold for a HumanAs the days remaining in the holiday season grow fewer and fewer, frantic shoppers become even more frantic. Those who want to avoid crowds and long lines at local stores and malls turn to their computers to shop online. After all, the convenience is hard to beat.

But if shopping online will be more of a pleasure with some retailers, it'll be more of a headache with others.

Uh-oh, I Need Human Help

If you find everything you need at your chosen retailer's website, it has done its job well, designing a site that's easy to navigate and intuitive to use. But sometimes customers have questions and need to reach a customer service representative. How much of a headache will that cause?

The folks at STELLAService recently studied how responsive various retailers are. Here are some of their findings.

Phone Responsiveness

STELLAService found that during a particularly busy time -- the period from Black Friday to Cyber Monday -- the time it took to reach customer service varied widely. Overall, callers were waiting on hold more than twice as long as they normally would -- and Cyber Monday was the worst, making the caller wait more than seven minutes on average.

Here are some familiar names and how they fared, in minutes and seconds:

Online Retailer
Average Wait Time
Nordstrom (JWN)
0:18
Overstock.com (OSTK)
0:44
L.L.Bean
0:46
Zappos.com
1:09
Target (TGT)
1:18
Sears Holdings (SHLD)
1:22
Amazon.com (AMZN)
1:40
Gap (GPS)
2:22
Walmart (WMT)
2:24
Best Buy (BBY)
3:43
Newegg.com
6:56
J.C. Penney (JCP)
7:23
Dell (DELL)
8:17
Kohls.com (KSS)
9:04
HSN.com
9:25
Sony (SNE)
11:20
Source: STELLAService.

Zappos (owned by Amazon.com) and Nordstrom actually sported lower wait times than usual during this period, suggesting that they braced for extra calls and staffed up to prepare for them.

Email Responsiveness

As for email, most customers know that an immediate reply isn't common. Still, a reply within 24 hours seems reasonable, doesn't it? Well, STELLAService sent the top 24 retailers (according to 2010 revenue) a series of emails on Black Friday and the following two days and found that just four of them responded to all of the emails within 24 hours. Here are a few of the best and worst performers in the group:

Online Retailer
% of Emails Answered Within 24 Hours
Hewlett-Packard (HPQ)
100%
Overstock.com
100%
Toys R Us
100%
Amazon.com
100%
Sears
92%
Kohl's
92%
Nordstrom
92%
Buy.com
92%
Best Buy
25%
Gap
8%
Avon (AVP)
8%
J.C. Penney
0%
Source: STELLAService.

Whether it's Black Friday or any other day, these retailers, on average, respond to emails within 24 hours only about 70% of the time. That's frustrating for shoppers, but it's also bad for business, as some shoppers with questions will take their business elsewhere.

Live Chat Availability

As an alternative to waiting on hold or sending an email inquiry, some retailers offer the opportunity to conduct a "live chat" with a service rep.

Out of the top 25 retailers (by 2010 revenue), STELLAService found that 56%, or a little more than half, offer live chatting. Apple (AAPL), Amazon.com, and Gap, do, while Best Buy, Macy's (M), Walmart, and QVC don't.

If you're thinking that isn't such a big deal, consider this: According to a survey by the E-Tailing Group and Bold Software, live chatting was the preferred way to communicate with retailers for 20% of respondents.

The best strategy for most of us when it comes to holiday shopping is to not put it off too long, lest we end up in a panicked, last-minute shopping frenzy. If that happens, though, know that some retailers are working to make your experience as hassle-free as possible.

Longtime Motley Fool contributor Selena Maranjian owns shares of Walmart Stores, Amazon.com, and Apple, but she holds no other position in any company mentioned. The Motley Fool owns shares of Walmart, Gap, Best Buy, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Dell, Walmart, and Amazon.com; writing covered calls in Best Buy; creating a bull call spread position in Apple; and creating a diagonal call position in Walmart.




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]]>Black Fridaychristmas shoppingChristmasShoppingcustomer serviceCustomerServiceCyber Mondayecommerceonline shoppingOnlineShoppingOverstock.com IncSelena Maranjian, The Motley FoolSat, 03 Dec 2011 06:00:00 ESTDangerous Toys: What to Leave Off Your 2011 Gift Listhttp://www.dailyfinance.com/2011/11/29/dangerous-toys-what-to-leave-off-your-2011-gift-list/http://www.dailyfinance.com/2011/11/29/dangerous-toys-what-to-leave-off-your-2011-gift-list/http://www.dailyfinance.com/2011/11/29/dangerous-toys-what-to-leave-off-your-2011-gift-list/#commentsFiled under:

It's been a long time since Dan Aykroyd's Mainway Toys was satirically exposed on Saturday Night Live for selling such hazardous playthings as "Bag o' Glass," "Teddy Chainsaw Bear" and "Johnny Switchblade." But some new toys still hold hidden risks -- and for parents, it's no laughing matter.

The U.S. Public Interest Research Group's 26th annual Trouble in Toyland report found a number of hazardous toys on store shelves this season. The leading dangers continue to be those with pieces small children might choke on, and toys that violate new lead and phthalate limits. Also making the list are toys that are potentially harmful to children's hearing, with noise volumes that exceed the standards recommended by the National Institute of Deafness and Other Communication Disorders.

And unlike Irwin Mainway's fictional company, the offenders include brands you've probably heard of -- household names like Disney, Honda, Hello Kitty and the Sesame Workshop.

Over the last 26 years, the Consumer Product Safety Commission has either recalled or taken corrective action on more than 150 toys called out in the PIRG surveys. CPSC is still evaluating the 2011 results, says Ed Mierzwinski, consumer program director for U.S. PIRG.

The 2011 Hall of Shame

The following toys were found to be potentially dangerous due to higher levels of lead or other toxic chemicals than PIRG considers acceptable: Funny Glasses (Joking Around), Sleep Mask (Claire's), Little Hands Love Book (Piggy Toes Press), Whirly Wheel (LL), Spritz Medals (Spritz), Hello Kitty eyeshadow/keychain (Hello Kitty), Tinkerbell Watch (Disney Fairies), Peace Sign Bracelet (Family Dollar), Honda Motorcycle (Honda).

These toys have pieces that are choking hazards: Wooden blocks set (ToySmith), Sesame Street Oscar Doll (Sesame Workshop), Dinosaur multi pack, similar sea life and turtle packs (Greenbrier International), HABA fruit in a bag (HABA), Green rubber grape (iwako), Orange bear (4M2U), Flat baby blocks and square counting blocks (Greenbrier International), 4 dollar box items (Rhode Island Novelty) and Play ball x2 (Squishland).

The noise hazards list includes: Elmo's World Talking Cell Phone (Fisher-Price), Victorious Stereo Headphones (Nickelodeon) and Hotwheels' Super Stunt RAT BOMB (Hotwheels).

What's Missing From the Lists

Even if none of the toys mentioned above are ones your child wants or has, don't feel too comfortable. "Parents and toy givers need to know that the CPSC doesn't test all toys and that our report includes only a sampling of potentially hazardous toys," warns Mierzwinski. "Toys not on our list could pose hazards."

Last year, the CPSC recalled almost 200,000 individual toy units for violations of lead standards. Lead, when ingested, interferes with nervous system development and causes a host of other health issues. That makes it hazardous for anyone, but extra dangerous for children -- and a bad idea on anything they might put in their mouths.

Also last year, the CPSC recalled more than 3.5 million toys and other children's products because of choking hazards. Since 1990, of the more than 400 children's deaths associated with toys, more than half were caused by choking on balloons, small toy parts and small balls.

Protect the Little Ones in Your Life

Toys with small parts are banned for kids under age 3 and should be kept away from any children who still put things in their mouths, regardless of age. Small balls are especially risky.

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Latex balloons are not recommended for children under 8. Broken latex balloon parts on the floor are very dangerous to toddlers and crawlers, but even older children are at risk for inhaling a piece of a balloon that explodes while being inflated.

"It is very important for parents who have older kids, as well as little ones who still put things in their mouth, to keep the older kids' small toys and balls away from the younger children," says Mierzwinski.

To test whether a toy or toy part is a choking hazard, use a standard toilet paper tube -- it'll be about 1.75 inches in diameter. If a toy, toy part or ball fits in it, it's too small for kids who put things in their mouths. (And in fact, that toilet paper tube is actually bigger than the standard "small parts tester." U.S. PIRG wants the standard to be made bigger, because some kids have choked on items that wouldn't fit into the current standard tester.

To avoid lead hazards, don't buy metal jewelry for kids. Don't let kids chew on brightly colored plastic or wooden toys. And pay attention to the age labels on toys -- those aren't just recommendations: There are safety implications to those labels.

"Think about how the child you are shopping for plays with toys. Do they put things in their mouth? Do they have younger siblings?" asks Rachel Weintraub, director of product safety and senior counsel for the Consumer Federation of America.
If so, avoid buying toys with small parts -- and be safe.

For more information, visit www.saferproducts.gov and www.cpsc.gov/cpsclist.aspx.











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]]>child deathsChildDeathschildrens healthChildrensHealthchoking hazardChokingHazardConsumer Federation of AmericaDan Aykroyddangerous toysDangerousToysHealthholiday shoppingholiday spendingHolidayShoppingHolidaySpendinglead poisoningLeadPoisoningPhthalatesPIRGproduct safetyProductSafetytoxic chemicalsToxicChemicalstoy safetytoysToySafetySheryl Nance-NashTue, 29 Nov 2011 10:30:00 ESTSanta's Customer Service List: Who's Naughty, Who's Nicehttp://www.dailyfinance.com/2011/11/23/santas-customer-service-list-whos-naughty-whos-nice/http://www.dailyfinance.com/2011/11/23/santas-customer-service-list-whos-naughty-whos-nice/http://www.dailyfinance.com/2011/11/23/santas-customer-service-list-whos-naughty-whos-nice/#commentsFiled under: , , , , , , ,

Santa's Customer Service List: Who's Naughty, Who's Nice When it comes to how they treat their customers, some companies follow Santa-like policies. Others are more like the Grinch. But which is which?

Consumer Reports offers the skinny on how a number of high-profile businesses behave with its Naughty & Nice Holiday List. Here's a rundown of their consumer friendly -- and not so consumer friendly -- shopping policies.

The Nice
Amazon.com (AMZN): The online retail giant is big on reducing all that wasteful packaging that's also hard to open. It urges shoppers to share photographs and feedback with manufacturers, who can then modify their packaging designs and submit them to Amazon's engineers to see if they qualify as "frustration free." So far, hundreds of consumer products suppliers have worked to meet the criteria, according to Consumer Reports.

American Express (AXP): If a cardholder buys a covered item with an American Express card and tries to return it, but a retailer refuses the return, American Express will refund the full purchase price up to $300, or $1,000 per account annually, within 90 days.

Bi-Lo: The Southern supermarket chain takes returns, no questions asked, and offers a money-back guarantee on all items it sells.

Cablevision (CVC): Subscribers to the cable company's free Optimum Triple Play -- Internet, phone and TV service -- rewards program get perks such as free movie tickets on Tuesdays and big discounts on other days.

Crutchfield: When a shopper buys from the electronics retailer, they're guaranteed installation services, 24/7 troubleshooting help and technical support for the life of the item purchased.

Costco (COST): The warehouse club offers a generous return policy and free tech support for many electronics products. The retailer also automatically extends the manufacturer's warranty on TVs and computers to two years from the date purchased.

Live Nation (LYV): The world's biggest live-entertainment company and ticket distributor allows fans three days to cancel their ticket order and get a full refund at participating venues.

Microsoft (MSFT): Although most retailers won't give shoppers refunds if they try to return software they've already installed, Microsoft will. Buyers who are unhappy with their Microsoft software or hardware can send it back to the company within 45 days for a refund.

Orvis: Many e-commerce companies handle customer service questions by phone or email. But this outdoor clothing and fishing gear merchant provides another help outlet: If a shopper lingers over a product online for a period of time, a customer service agent will strike up a dialog via live chat.

REI: The outdoor gear and sporting goods retailer accepts returns and exchanges at any time for any reason, and makes it easy to do so. Shoppers can return an item by mail or to any REI store regardless of where it was originally purchased, even if the item was bought online.



The Naughty

AirTran (AAI): The Orlando-based airline charges passengers who want to book and select their own seat on coach and sale flights online an extra $6 to $20 each way.

American Apparel (APP): The hipster clothing chain offers two different return policies: Online shoppers have 45 days to return merchandise for a full refund or store credit. Store shoppers need to make their returns sooner, within 30 days, and receive only merchandise credit.

GameStop (GME): The video game retailer with 6,500 stores worldwide has a long list of conditions regarding product returns and exchanges, including, "We reserve the right to refuse any return."

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Liberty Travel: The travel company advertises low prices to entice would-be vacationers. But Liberty Travel's quotes can be misleading, sometimes excluding high taxes and fees, Consumer Reports found. And if travelers want to change a flight, it will cost them as much as $200 extra.

Radio Shack (RSH): The electronics chain sometimes offers different prices for the same item online and in its brick-and-mortar stores, Consumer Reports says. For example, the store price for an audio-video cable was twice as much as the online price.

SiriusXM satellite radio (SIRI): Subscribers who want to receive their bills in the mail and pay by check will be penalized for their old-school ways with a $2 surcharge every month.

The Swiss Colony: The mail-order food company pegs delivery fees to the dollar amount of an order as opposed to the size and weight of the package. So if an order adds up to $25, shipping and processing is $5.95, but if it costs a cent more, the freight fee jumps to $7.95.

Southwest Airlines (LUV) : Passengers who book a flight can check in early online and nab their preferred seat, as well as which overhead bin space they prefer -- for an extra $10 per flight. "It sounds benign enough," says Tod Marks, senior editor with Consumer Reports, in a statement. Yet it's a reminder that "price conscious customers can get penalized if they don't go for the upgrade."

Verizon Wireless (VZ): Consumer Reports found that the company alerted customers who exceeded their monthly allotment of minutes, text messages or data only after the fact, although Verizon tells the Federal Communications Commission that it warns customers before they're about to incur overage fees.


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]]>Amazon.com IncAmerican Apparel IncAmerican Express Cobest companiesBestCompaniesBi LoCablevision Systems CorpConsumer ReportsCostco Wholesale Corpcustomer serviceCustomerServiceFinanceGameStop CorpgrinchRadioShacksantaSouthwest Airlines CoVerizon WirelessBarbara ThauWed, 23 Nov 2011 10:00:00 ESTStarbucks Drops Bean Surchargehttp://www.dailyfinance.com/2011/11/15/starbucks-drops-bean-surcharge/http://www.dailyfinance.com/2011/11/15/starbucks-drops-bean-surcharge/http://www.dailyfinance.com/2011/11/15/starbucks-drops-bean-surcharge/#commentsFiled under: ,

BOSTON (AP) - Starbucks (SBUX) has stopped tacking on a fee for bags of coffee beans that weigh less than a pound. The Seattle coffee company eliminated the fee at its stores nationwide this month after a Massachusetts consumer-protection agency fined the company over the practice.

The Massachusetts Office of Consumer Affairs and Business Regulation found in August that the coffee chain failed to notify customers either in the store or on their receipts that it was adding a surcharge of about $1.50 for buying a partial bag of beans.

Starbucks allows customers to buy a less than the traditional one-pound bag of beans. But doing so requires an employee to break open a pre-sealed bag to sell customers a portion size of their choosing. Starbucks would then charge the customer for the portion of beans, plus a roughly $1.50 fee to cover the extra labor and packaging

That meant beans listed at $11.95 per pound ended up costing $7.45 for a half-pound - not $5.98, or half the price.

Under Massachusetts law, retailers are required to post signs in the store notifying customers of surcharges, or employees must tell them.

"While Starbucks, and any retailer, is allowed to charge any additional fees it wants on a product, those additional fees have to be clearly and conspicuously disclosed to the consumer before the purchase," Barbara Anthony, undersecretary of consumer affairs in Massachusetts, told the Boston Globe, which first reported the fine and policy change

Starbucks says it has never sold many of these smaller packages but had the charge in place to cover the additional labor and packaging to accommodate the request. The company said it has not received complaints or faced fines in other states for the practice.

Anthony said she discovered the charge herself this summer. Her office then sent inspectors to a sampling of Starbucks shops across the state and found that other stores also were assessing the surcharge. She even asked relatives and friends in other states to check Starbucks stores, and found the surcharge was applied across the nation.

Massachusetts then fined Starbucks $1,575 for overcharge violations at five stores.

"People have the right to know how much they are paying for a commodity," Anthony said.
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Anthony does not know how long Starbucks had assessed the service charge, but her office estimated that 75,000 Massachusetts customers have paid surcharges.

Starbucks Corp. stopped adding the surcharge nationwide Nov. 7. The company has nearly 11,000 stores.

"We are pleased to be able to now offer our customers alternative sizes of whole bean coffee in all of our U.S. stores, free of any service charge," Starbucks spokesman Alan Hilowitz said in a statement.

Customers were largely ignorant of the extra charge for smaller bags.

"They don't charge you a fee when you buy half a pound of bologna at the supermarket," said Frank Kidd, 67, outside a Boston Starbucks with his wife on Sunday.

Anthony points out that the agreement to drop the surcharge is not a legal settlement and said the state was in discussions with Starbucks regarding how customer would be compensated.

___

Information from: The Boston Globe, http://www.boston.com/globe



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]]>starbucksThe Associated PressTue, 15 Nov 2011 12:50:00 ESTFormer Google Exec Jumps Into Payday Lending with ZestCashhttp://www.dailyfinance.com/2011/11/09/former-google-exec-jumps-into-payday-lending-with-zestcash/http://www.dailyfinance.com/2011/11/09/former-google-exec-jumps-into-payday-lending-with-zestcash/http://www.dailyfinance.com/2011/11/09/former-google-exec-jumps-into-payday-lending-with-zestcash/#commentsFiled under: , ,

Former Google Exec Jumps Into Payday Lending with ZestCash A former Google executive has moved from the world of Internet searches to the world of high-interest, short-term lending. He says his operation, ZestCash.com, offers an innovative way to help the poorest borrowers avoid financial emergencies. But is this just a slick veneer putting a shine on the classic payday lending business?

One-time Google Chief Information Officer Douglas Merrill founded online-only lender ZestCash, which uses some fairly high-level Google-esque algorithms to assess its borrowers' creditworthiness. And the site certainly looks better than your typical payday lender. Those sketchy outfits usually operate out of rundown storefronts in lower-income neighborhoods, offering quick cash infusions at jacked-up interest rates to people with nowhere else to turn.

But friendly looking ZestCash does essentially the same thing: Its loans ring up at triple-digit interest rates. For example, a three-month $800 loan will cost nearly $550 in interest and fees at the 412% interest rate that ZestCash charges.

The site is one of a number of new businesses popping up to cater to a growing segment of Americans: The poor and credit-challenged who don't -- or can't -- use a bank. As high unemployment and falling wages continue to push more Americans into poverty, financial innovators like Merrill are on the lookout for new ways to milk profits out of this demographic.

Firmly on the 'Loan Shark' End of the Spectrum

Merrill says that his new model for assessing a borrower's creditworthiness and setting installment payments means he can offer lower rates than standard payday operators. But when one is talking in either case about interest rates of more than 400%, the degree of difference is arguably meaningless. The Center for Responsible Lending, a national policy advisory nonprofit for lending issues, defines any operation charging more than 36% interest -- a rate cap that 17 states have put in place -- as a loan shark, regardless of the secret formula it uses to underwrite its high-risk loans.

ZestCash says its rates are up to 50% lower than other payday lenders -- but some of that nuance is hard to calculate, and depends the ability of the borrower to repay the loan on its due date. If you can't make the weekly $101 payment, add a $35 ZestCast late fee to your balance. If the payment bounces, that's $35 plus a possible overdraft fee of up to $35 from your bank. And if you can't pay $101 this week, what are the chances you'll be able to afford $237 next week?

This is hardly better than online quick-cash lender, Checkngo.com, which offers a 14-day payday loan for $800 in the state of Utah, with a $200 fee, for a total of $1,000 due after two weeks. But if you can't repay the money then and have to roll over the loan, an annual interest rate of more than 650% kicks in. Multiply that by six payday periods -- or the equivalent of three months (and there is no maximum term length in Utah) -- and that $800 could cost at least $1,789.63 on the principal alone, not including interest on the $200 fee or other rollover fees. Checkngo.com did not respond to a call for comment.

Currently ZestCash is available to residents in Missouri, Utah, Idaho and South Dakota, which do not have maximum interest rates for payday loans. Four more states will be added to the roster soon, the company said.

Your Profile Includes Everything They Can Glean (and That's Plenty)

Using a formula similar to the one Google uses to rate the quality of a website, ZestCash determines a borrower's credit worthiness based on thousands of factors from cell phone behavior to an in-person interview to your Internet trail. ("Almost everyone has one," Merrill says.) They don't use a more traditional credit scoring mechanism, like a FICO score, because it is too narrow -- and if you're getting a quick loan, chances are your credit score doesn't really mean much.

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But, for example, a phone number coupled with third-party data can say more about a borrower than bankruptcy, says Merrill. Using related data points -- such as how often a borrower switched phone providers, the frequency of switching, the type of provider -- and in addition to other variables plus some fancy math, ZestCash says it can determine more accurately whether a borrower is a good loan risk.

"Many of the [people without bank accounts] have prepaid cell phones," Merrill says, explaining that continuity of month-to-month plans are a good signifier of baseline financial stability. "Not having a cell phone is a negative signal because it signals that you don't even care enough to have connectivity."

Mathematically Strong, Ethically Shaky

Care enough? Or can't afford it? It's the use of factors like that one that has some critics say saying these kind of underwriting formulas are akin to economic profiling.

"What if there was a correlation between eating at McDonald's and not paying back debt?" asks Deborah Thorne, a professor at Ohio University who specializes in debt and bankruptcy issues. One of the problems with tying cell phone patterns, for example, to credit worthiness is that it unfairly targets the poorest as a justification to charge exorbitant rates, she says. In other words, super-strength math can quickly turn into fuzzy ethics.

Merrill argues the industry charges sky-high interest rates to compensate for its average 44% default rate, and that his company's default rate is already lower than that, though he didn't specify a percentage.

Using a borrower's data trail to gauge creditworthiness breaks new ground in the evolving realm of privacy. Increasingly, transaction data is being used by third-party clients to direct targeted ads. Harvesting transactional information -- like cell phone behavior -- to predict repayment odds could be the next frontier for evaluating borrowers with otherwise spotty financial pasts.

Dartmouth economist Jonathan Zinman suggests it's often not APR or how their credit risk is evaluated that is as important for consumers, but rather the economic outcome of the loan. "Is it an investment? Are borrowers taking this loan to prevent job loss or income loss?"

Catherine New can be reached at catherine.new@huffingtonpost.com.

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]]>borrowingcredit worthinessCreditWorthinessDouglas MerrillDouglasMerrillFinancegoogleinterest ratesInterestRatesloan sharksLoanSharksonline lendingOnlineLendingPayday Lendingpayday loansPaydayLendingPaydayLoanspersonal financePersonalFinancepoor credit historyPoorCreditHistoryusuryzestcashCatherine NewWed, 09 Nov 2011 06:00:00 ESTSenators Take Aim at Bank Accounts' Fine Printhttp://www.dailyfinance.com/2011/11/08/senators-take-aim-at-bank-account-fine-print/http://www.dailyfinance.com/2011/11/08/senators-take-aim-at-bank-account-fine-print/http://www.dailyfinance.com/2011/11/08/senators-take-aim-at-bank-account-fine-print/#commentsFiled under: ,

Senators Take On Bank Account Fine PrintHave you ever really read all the disclosures that came with your bank account? Nope -- we haven't either. And that should come as no surprise: The average length of banks' fee disclosures and checking account policy paperwork is 111 pages, according to a survey by Pew Charitable Trusts.

That's way too much fine print, say Sens. Dick Durbin (D-Ill.) and Jack Reed (D-R.I.). Last week, the two called on all banks to make those disclosures just one page long.

They offered as an example a one-page disclosure that Pew designed. On Monday, Durbin pressed banks in Illinois to adopt the new disclosure box.

"Consumers have demonstrated that they will no longer stay with banks and credit unions that disrespect them by failing to charge fees in an upfront and fair manner," Durbin wrote in a letter to the financial institutions, reported The Hill.

The cost of not reading and understanding those disclosures adds up to big costs for bank customers. A 2009 study of 917 consumers found that households paid a median of $43 a month in credit card and checking account fees, including credit card interest, ATM and overdraft fees.

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"People are unhappy with fees, but where are they going to go?" says Susan Weinstock, director of Pew's Safe Checking in the Electronic Age Project. "They [could] end up worse off because they won't read 111 pages of disclosure [for a checking account]."

The new proposed disclosure format outlines all the basic checking account terms and conditions -- including interest rates, ATM fees, overdraft penalties and account closing fees -- in clear terms, using a uniform reporting style across all financial institutions.

The senators also asked the new Consumer Financial Protection Bureau to lend a hand on enforcement, and require banks and credit unions to post this disclosure on their websites, the Los Angeles Times reported.

Two large credit unions are already on board -- the Pentagon Federal Credit Union and North Carolina State Employees Credit Union -- the Washington Times reported. The Consumer Bankers Association is also supporting fee disclosure simplification.

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]]>ATM feesATM usage feesAtmFeeschecking account feesCheckingAccountFeescredit cardsCreditCardsDick DurbindisclosureFinanceJack ReedLos AngelesoverdraftPentagon Federal Credit Unionpew research centerPewResearchCenterThe Pew Charitable TrustsCatherine NewTue, 08 Nov 2011 09:45:00 EST