Consumer News & Alerts   |   October 16, 2006

WHAT YOUR HOTEL KEY KNOWS ABOUT YOU
Although the slender little hotel keycard seems like an inoffensive convenience, there are those who think it carries a small but not insignificant risk of identity theft, fraud and unauthorized charges. Periodically, there are even reports that hotel guests' names, address and credit card numbers have been founded encoded on the cards.

How serious is the threat? It's hard to tell because of the vociferous conduct of those who contend the risk is so slight it's not worth talking about. Web sites and self-appointed experts have "debunked" the threat and labeled it an "urban myth," which is going way too far.

Fact is, the cards are fully capable of causing all kinds of trouble, as our Martin H. Bosworth reports in this week's cover story, "Hotel Key Cards: Identity Theft Risk or Not?" Check out Martin's story for all the details ... or just heed this simple advice: take your keycard with you when checking out and shred it when you get home.

Oh, and also -- keep a careful eye on the keycard during your hotel stay. If it gets out of your control, it can in many cases be used to run up some pretty big charges in just a few minutes.

CONVENIENT BUT EXPENSIVE
Face it -- most things that are convenient carry a premium price tag. That's certainly true of "convenience" checks -- the ones your credit card issuer sends you. What's convenient about them is that you can write checks without having any money. What's expensive? Well, the fees and interest, which starts accruing as soon as the check is cashed. That's different from credit card charges that remain interest-free if you pay them off on time each month. Besides the instant-on interest, many card issuers also smack you with a whopping fee of 2 to 5 percent of the check amount. Convenience checks can be life-savers but they can also throw you overboard into a sea of debt, so look before you leap.

Hidden Fees, Murky Disclosures The Government Accountability Office went fishing in the consumer debt pool the other day and made quite a catch, including excessive credit card fees, unfair interest rates, and inadequate disclosure practices -- all painstakingly enumerated in a report by the Government Accountability Office (GAO). The report found credit card fees and interest rates continue to rise while disclosure statements remain as inpenetrable as ever. Something ought to be done about it, fumed Sen. Carl Levin (D-Mich.), who commissioned the report.

FREE TRADE DRIVES DOWN TRADING FEES
Banks are always complaining that other businesses are fishing in their pond but it works both ways, as discount stock brokers are finding out. Charles Schwab, which pretty much invented the discount brokerage business, is in deep water as Bank of America and other consumer banks wade into retail brokerage in a big way. BofA is offering free trades to anyone with $25,000 in deposits. This could be a good deal for investors who know what they're doing; it can be bad news for those not fully aware of the risks.

Hedge Funds Riskier Than Ever If mutual funds are a wading pool, hedge funds are an ocean beach with a strong rip tide. So says our Fred Yager as he wonders what in the world possesses managers of pension funds to stash retirees' savings in hedge funds, other than the ill-advised desire to see some quick returns. Problem is, hedge funds are just as likely to produce lightning-fast losses. Just ask Amaranth Advisors, which lost $6 billion of its $10 billion in a single week by betting too much on natural gas. Scary times.

Later this week, Fred Yager will take a look at exchange traded funds, another fast-growing phenomenon that has more than just an upside. Stay tuned.

SENIOR SCAM ALERT DVDs
Free review copies of our new Senior Scam Alert DVD have gone out to about 800 of our readers and many more copies are now ready for sale. Running about 15 minutes, the Senior Scam Alert helps seniors identify and avoid common telemarketing scams. Click to order and see a one-minute trailer.

IS TOYOTA'S QUALITY SLIPPING?
Toyota has been out there in the fast *** preparing to race past General Motors for the world title. The question now is whether it has taken its eyes off the road. The company lost ground in an annual vehicle value survey and some analysts think Toyota has been growing too fast to maintain the quality that is its main selling point. As our Joe Benton reports, we're hearing more complaints from consumers about serious problems with their Toyotas, including engine problems in cars and some pretty annoying glitches in the Tacoma and Tundra trucks.

Corolla Held Back Toyota isn't complacent about the quality problems. It's pushed back the U.S. introduction of the new Corolla model by one year to straighten out some shortcomings that have caused it major grief in the Japanese market, where consumers are much less forgiving than they are here.

Not So Flex, Ford Fighting to resurrect its image, Ford has been making a lot of noise about its flex-fuel cars but Public Citizen is charging the claims are false. Ford's flex-fuel cars won't run on ethanol, the consumer group says. Public Citizen claims that Ford has maneuvered around as much as $135 million in fines by marketing vehicles that are supposed to run on the gas-ethanol mix E85 when in fact they don't. It also said the company's ads are misleading.

It's Up to Us What will happen to hybrids, those fuel-efficient cars that have built a small but committed following? Well, at the rate things are going, not much. An Audi executive spelled it out last week: U.S. hybrid sales remain at just 1.2 percent of all newly-registered vehicles and the U.S. accounts for 70 percent of all hybrid sales worldwide. So if the market doesn't start to grow, it's not going to make economic sense for automakers to spend hundreds of millions of euros, dollars, etc., developing new hybrid models.

Gas Prices Fall More Slowly No longer plummeting, gas prices are now drifting downward. There's a lot of speculation about this but one reason is very simple: Americans cut back their driving and switched to smaller cars when prices shot up. Oil and gas are volatile commodities traded on the global market. When you buy more of a commodity, the price goes up. Buy less, it goes down. Thus, drive a Hummer or any of its thinly-disguised cousins and you not only waste your own money but everyone else's as well.

THIS CALL IS VERY IMPORTANT
Congress and big business -- oh, sorry, didn't mean to be redundant -- just hate it when they have to worry seriously about the voters. It gets in the way of business, you know? This is one of those times. AT&T, which not long ago was AT&T offshoot SBC, is desperate to get BellSouth back into the fold and gain 100ontrol of Cingular and, after all, why should the FCC mind? It's only putting the old AT&T monopoly back together in a big swath of the country. No biggie, right?

But it's almost Halloween, not to mention Election Day. If the FCC waits until after Election Day, some of AT&T's ghoulish pals may have been voted out of office (we should be so lucky) and the new bunch won't yet be properly, ah, indoctrinated. On the other hand, if it just goes ahead and blesses the deal, that might rile the voters and ... hey, this is really a hard game. No wonder these guys make so much money and wear such nice shoes.

Justice Department Moves Quickly No such qualms over at Justice. It green-lighted the AT&T/BellSouth deal faster than OPM can declare liberal leave when it gets cloudy in January (inside joke, sorry). Generally speaking, when the feds sneeze, it takes them 45 days to find a Kleenex but when AT&T speaks, the rubber stamps appear like magic.

IGNORED, MISTREATED, GOUGED
Non-profit hospitals like to portray themselves as being somehow above the fray but most of them are giant bureaucracies whose focus on the bottom line is just as intense as their cross-town for-profit competitors. Witness Loudoun Hospital, part of the Inova chain of non-profits that ring the Virginia suburbs of Washington, D.C. That's where Karen Chaffraix went when the pain she was suffering became too intense to bear. What happened next? It's not, as they say, a pretty picture.

E. Coli In Spinach Linked To Manure Investigators now know which strain of E. coli is responsible for the spinach-borne outbreak of sickness and they have traced it to manure from some of the suspect San Joaquin farms. But the continuing question is how the spinach became contaminated and what can be done to prevent future outbreaks. So far, there are more questions than answers.

Safe to Eat the Lettuce A California grower now says tests find no E. coli in its lettuce. The Nunes Co. of Salinas, California, had voluntarily recalled some of its lettuce but now says none of its product tested positive for the E. coli strain that has killed three people and make nearly 200 others sick. The company said its irrigation water may have been contaminated but the lettuce itself was not.

More health news ...

• Counterfeit Diabetes Tests Look out! The FDA says it has found counterfeit glucose strips that could give inaccurate readings. The strips are for use with LifeScan glucose monitors.

• Silicone Gel Breast Implants Public Citizen charges the manufacturer concealed data about safety problems.

• How Much Caf In That Decaf? You didn't really think there was no caffeine in decaf, did you? Sorry, researchers find enough caffeine in most decaf drinks to cause problems in sensitive individuals.

• Laser Surgery Safer than Contacts The risks of surgery pass quickly, while poking around in your eye every day is another matter. So finds a study of contacts versus laser eyeball shaving.

DATE WITH AN ANGLE
Online dating is risky anyway you look at it. That angel on the other end of the email may well by someone who's angling for physical or fiscal advantage. It's not just women who are at risk, as Edward of Mantua, N.J., demonstrates. He sent $13,000 to a certain someone in France, thinking his generosity would prove his devotion. We'd say it proves that it's unwise to send money to anyone you don't know, regardless of how convincing their story.

MORE SCAMS & OUTRAGES

• New Scam Targets MySpace Users Supposed "free music" link leads to bogus site seeking to mine personal data.

• Payback Time Tongue-in-cheek site recommends engaging scammers in time-wasting palaver.

• Craftmatic Beds Company settles with West Virginia, agrees to make restitution, lets consumers keep their beds.

• Michigan Identity Theft Scheme Trio allegedly used nursing home patients' identities to steal telephone service.

RECALLS

A GREAT START
As your editor dug desultorily through a stack of resumes last year, he was encouraged to find one from a young man who admitted upfront that he had been in hot water with his college administration because of the crusades he had undertaken on the school paper. We hired him pretty much on the spot and after he survived the ritual hazings involving tooth-jarring rides through D.C. traffic with crazed senior editors in ridiculously tricked-out Italian and Japanese hot rods, Joe Enoch went on to get his teeth around, and into, some pretty juicy stories, with many more to follow, we expect.

Last week, Joe was honored with the first annual Buffalo News Award for enterprise and investigative reporting for his efforts on behalf of ConsumerAffairs.Com and for the school paper at St. Bonaventure University. We expect to someday say we knew him when.

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