FTC uses kid gloves on ChoicePoint's 2nd data breach

At least 340 million personal records held by corporations, government agencies, and other entities have been compromised by security breaches since January 2005, according to the Privacy Rights Clearinghouse, a non-profit consumer organization that keeps a running tally that isn’t even a complete listing.

Why are corporations so reckless in handling other people’s personal and financial data, when you rarely hear that a corporation accidentally gave away records revealing its own secret financial information?
 
My theory is that, because the authorities are very polite and socially graceful with corporations that lose your data, and because offenders can pass the cost of penalties on to their customers or insurers, this leads the data-losers to believe they’ve really done nothing wrong. A recent settlement between ChoicePoint and the Federal Trade Commission makes the point.
 
After ChoicePoint, one of the largest U.S. data brokers, got caught carelessly handling the personal information of 163,000 consumers in 2005—resulting in 800 cases of identity theft—the Reed Elsevier subsidiary got sloppy again three years later, at least allegedly, according to an October FTC press release. 

The 2005 data breach was serious enough for ChoicePoint to get tagged by the FTC, which filed a 2006 complaint that resulted in a settlement and a court order.

Following the standard etiquette of government settlements, the FTC agreed to resolve the matter, “without Defendant admitting the truth of, or liability for, any of the matters alleged in the Complaint.”

I don’t know about you, but when I got caught doing something wrong as a kid, earning back my parents' trust required an admission of guilt. ChoicePoint had to do no such thing, which allowed it to assure its stockholders in a subsequent annual report, that the company “does not admit to the truth of, or liability for, any of the matters alleged by the FTC.”

Look for bigger, better, and earlier deals this holiday season

Jack Abelson has been following the retail beat for years. He’s an analyst, consultant, and industry expert, and I’ve called on him from time to time for more than a decade for his unique insider’s take on how the latest trends and issues impact consumers.

With retailers fighting for survival in tough economic times and shoppers wondering what sort of deals will be available this holiday season, I asked Abelson, who operates Abelson & Associates out of Leawood, Kansas, what consumers might expect to see online and in stores.

TT: Did holiday promotions begin earlier this year and are the discounts more aggressive early on than in the past? It seems like many retailers have been cutting prices and dangling deals since Labor Day. Am I imagining things, or have retailers, in fact, been promoting holiday sales/savings earlier?

 Abelson: For over 25 years, retailers have embraced promoting (read, "sale") as the main driver of their business.  In order to achieve sales gains over the year before, the discounts have to be deeper and more prolonged.  Add to this a skittish consumer and the result is very predictable. So, the answer yes.

CR Index: 25% to spend more on personal electronics

A quarter of Americans–24.9 percent–expect to spend more this month on personal electronics, according to the Consumer Reports Index, a composite of five indices measuring consumer behavior, attitudes, and consumption patterns. And short-term plans to purchase major home electronics rose slightly, to 10.7 percent from 10 percent in October, the highest level since June.

In addition, perceived financial problems, including difficulties making credit-card payments and covering medical bills, may be stabilizing, according to the Consumer Reports Trouble Tracker and Stress indices, two components  of the Consumer Reports Index. In the West and South, survey respondents reported fewer troubles in early November than in the prior month. In the Midwest, perceived troubles appeared to be slightly (up 2.4) worse. Northeasterners’ opinions stayed about the same.

Those optimistic results are the bright spots in a report that generally shows consumer plans and attitudes at a slow simmer. Two weeks before the official start of the holiday shopping season, planned purchases were flat or lower in most categories, including appliances, yard and garden goods, cars and homes, according to the Consumer Reports Next-30-Day Retail Index. (The survey underlying the Index was completed before Congress extended and expanded a one-time $8,000 tax credit for new-home buyers.)

Ed Farrell, a director of the Consumer Reports National Researcher Center, which created the Index, posed a cautionary note. “The economy remains in a precarious position where further decline is possible but is slightly less likely,” Farrell said. “Unless consumers can see concrete improvements in their lives and retail activity picks up, any near term recovery is improbable.” 

For more details and information on how the Consumer Reports Index is conducted, click here.

Considering a layaway purchase? Read this

Last year at this time, Sears and Kmart helped consumers rediscover the old-fashioned concept of the layaway purchase, in which shoppers make periodic payments to a special account to save up for big-ticket goods and take them home only after they’re paid for in full.

With so many Americans still struggling financially and reeling under credit-card debt  -- our recent holiday poll reveals that an estimated 13.5 million consumers are carrying debt leftover from last Christmas – layaway is likely to be an even more attractive alternative to pay for gifts this holiday season. Beside Sears and Kmart, major retailers offering layaway plans include Toys “R” Us, Babies “R” Us, TJ Maxx, Marshall’s, and Burlington Coat Factory.  Layaway is also available for many online purchases through third-party firms like eLayaway, which has an affiliate relationship with more than 1,000 merchants such as Best Buy, Bass Pro Shops, Apple Store, and The Home Depot.

If you’re unfamiliar with the layaway process, here’s how it works:  You enter into a contract and make an initial deposit based on a percentage of the purchase price, along with a service fee to administer the plan and keep the item in storage. There are no interest payments, since you don’t actually take possession of the merchandise until you’ve paid for it.

Like any transaction, you can avoid potential pitfalls by doing some preliminary legwork. Toward that end, the Better Business Bureau just released a checklist of key questions to ask before opening a layaway account:

• How much time do I have to pay off the item? The usual timeframe is usually 30 to 90 days.

• What’s the minimum down payment? Ten to 20 percent is common.

• When are payments due? After the initial down payment, some contracts require additional contributions weekly or every two weeks; some let you make payments whenever you want during the timeframe.

• Are there storage or service-plan fees? Kmart charges a flat $5; Toys “R” Us has a $10 fee.

• What happens if a payment is missed? Are there penalties? Does the item return to inventory? If you miss a payment or fail to pay the minimum due, you might have to double up on your next scheduled payment.  At some stores, the merchandise is returned to the shelf as soon as 7 days after a missed payment.

• Can I get a refund or store credit if I no longer want the item after making a few payments? Cancellation fees typically range from around $5 to $10. At Burlington Coat Factory, layaway deposits and payments are non-refundable, but may be converted to a gift card if layaway is cancelled. In addition, the company won’t give you a refund if you decide to return an item you’ve paid for in full, only a gift card.

• What happens if the item goes on sale after I’ve put it on layaway? Kmart won’t make any price adjustment after 7 days from the date you open a layaway account. Sears gives customers a 30-day window.

• Get it in writing. Don’t take the salesperson’s word for it. Ask for the complete terms and conditions in writing. And be sure to keep detailed and accurate records of all payments made.

Layaway plans aren’t specifically regulated by Federal law, although the Federal Trade Commission can go after a company for unfair or deceptive practices. Click here for information about filing a claim. Check with your state attorney general, local consumer protection agency, or the local Better Business Bureau  to find out if state or local laws cover layaway purchases.

 

Want to save more? Ask for a text reminder.

The Wall Street Journal today reported on a study showing that individuals who were reminded by text messages to save increased their savings account balances by 6 percent. The researchers concluded that attentiveness plays a part in savings discipline. Consumers were particularly motivated by reminders of certain personal goals. Those who were offered particular incentives by their banks upped their savings by 16 percent, on average. Negative messages were no help at all.

If you'd like a regular nudge to urge you to save, you may be able to set up electronic reminders through an online personal finance service. Consumer Reports Money Adviser looked at a few online services recently. (Note: Intuit, which now owns Mint, is reported to be shutting down its original online personal finance service, Quicken Online, and moving customers to Mint.) 

You also can easily automate savings by arranging periodic transfers of funds from a checking account to an online savings account. Consumer Reports offers tips for ramping up your savings. And Consumer Reports Money Adviser judges several online banks.–Tobie Stanger

Ready or not, here come the holidays

Although the Halloween decorations may still be tacked to the door and most of us haven’t thought about our Thanksgiving menus, it’s not too early to begin talking about holiday shopping and everything that goes with it – the traffic, the crowds, the long lines, and the deals.

 As you may have read here on the Money blog last week, the results of our first holiday poll, designed to gauge what Americans will be buying this season, how much they’ll be spending, and whether the ongoing economic crisis is dampening their festive spirit, indicate that 2009 is likely to be a carbon copy of last year.

Once again, consumers said they plan to cut back this season. Sixty-five percent of those polled, in fact, said they intend to do less traveling, entertaining, and spending on gifts. That’s on top of the three-quarters of consumers who told us last year they planned on tightening their belts.

It’s easy to understand why so many consumers continue to watch their wallets. Statistics released today by the U.S. Bureau of Labor Statistics reveal that the unemployment is at its highest since April 1983. In October, unemployment rose from 9.8 percent to 10.2 percent, as the ranks of the nation’s out-of-work force swelled by 558,000, to 15.7 million. In retailing alone, more than 40,000 jobs were lost last month.

Despite the grim statistics, Americans remain largely optimistic. Eighty-seven percent of survey respondents said they expect to be at least as happy this holiday season as they were last year; 33 percent are predicting they’ll be even happier. So hope does spring eternal.

While we can’t do much in the cheer department, we can offer advice on how to take advantage of the latest retailing trends in order to stretch your shopping dollars. And that’s what we’ll be doing over the next couple of months. The results of our second poll, due out soon, promises to offer insights into the nation’s shopping habits – the extent to which the Internet is figuring more prominently in our purchasing plans, where consumers think they’ll find the biggest bargains, and the must-have presents on their Black Friday shopping list. We’ll also be identifying the most annoying aspects about holiday shopping, also based on a nationwide survey.

As you put together your shopping list, here are a few tidbits to keep in mind, based on a closer look at the results of our first poll:

 • Gift cards. They’re one of the most popular gifts to give and receive, yet one of four recipients still haven’t used at least one of the cards they were given last year, mainly because they couldn’t find anything they wanted to buy.  Moreover, 65 percent of those who used their gift cards – especially women -- purchased an item that priced in excess of the card’s face value. That explains why retailers push card sales so aggressively.

 • Who doesn’t like clothes? Clothing is the biggest holiday gift category and, like gift cards, people love to give and receive apparel. But survey respondents told us that clothing also tends to disappoint the most. If you want to be a hero for the holidays avoid giving socks, shirts, sweaters, and ties, the least desireable of garments and accessories. Also making the most-reviled list this year for the first time: slippers.

 • New favorites. Most people tend to give and get the same presents year in and year out. But our poll revealed several new items that made the list of gifts respondents said they’d be thrilled to receive: boots, purses, pajamas, and guns. The latter’s not a typo, and we’ll avoid making any value judgment. We’re just reporting the facts.

• Fewer people are planning to give money. Despite the fact that money ranks behind only electronics and gift cards as the present they’d most like to receive, Americans won’t be opening their wallets as wide this season. Only 44 percent are considering giving a cash or check this year vs. 61 percent in 2008.

 • Women more likely to scale back on gifts to others. Here’s a statistic we didn’t see coming. When asked whose gifts do you plan cutting back on to save money, women were more likely than men to target family (including their children), friends, co-workers, and service providers (hair stylist, deliver person, etc) instead of themselves. Men, on the other hand, more willing than women to cross teachers and the family pet off their lists.

Holiday regifting: How to do it right

Consumer Reports Holiday Shopping Poll recently reported that this year, 36 percent of Americans plan on regifting–that is, giving a gift they received to someone else. That's up from 31 percent the year before. Our own Tightwad Tod discusses the phenomenon here. 

If you think you'll be among that population passing on the wealth, consider these tips, adapted from Regiftable.com, a Web site sponsored by Money Management International, a not-for-profit credit-counseling service: 

•Ensure the gift is something you really can give again. Handmade or one-of-a-kind items are taboo for regifting. Same for signed books and monogrammed items. Appropriate goods might be bottles of wine, unopened boxes of candy, new household items and inexpensive jewelry. 

•Check the condition. Give only new, unopened packages.

•Consider the gift's desirability. If you don't like it, do you really think someone else will?  

•Think: Can you get away with it?  Make sure you don't give back the gift to the giver. Regift to folks unlikely to see or know the original giver. And consider whether you can keep the secret, without guilt.

•Wrap it up nice. Use new wrapping paper and a new card or gift tag. Only reuse gift bags in good condition.

•Explore other options. You also could donate the gift to a charitable group's thrift shop or holiday gift drive. Assuming you know its value, you could get a tax deduction in the deal, as well.

Give up my rights to save $10? No thank you!

Here's a new twist on how credit-card companies are attempting to get around the consumer-friendly Credit CARD Act, due to go into effect in February. 

Our sister Web site, The Consumerist, this week featured a reader's account of a telephone conversation with Capital One, in which the credit-card company offered to lower the fellow's overlimit fee to $29 per transaction from $39, if he chose not to be covered by one of the Credit CARD Act's consumer protections. (Click here for The Consumerist's update.)

The new law disallows overlimit fees, unless folks opt in for overdraft protection. But that $10 savings for opting in doesn't sound like much of an incentive, in our view.

If you have a story to report about a similar offer, or a unilateral decision, by your credit-card company, tell us about it at Consumers Union's Credit Card Reform.org. We'll be collecting consumers' anecdotes and commenting to the Federal Reserve to encourage more restrictions on credit-card company abuses.

And click here for Consumer Reports tips on taking control of your credit-card debt and avoiding credit-card company atrocities.–Tobie Stanger

Cheapest college towns for retirees

Retiring to a leafy college town is a fantasy shared by many people I know, me included. We envision good, cheap restaurants; abundant movies, lecture series, and book stores; a happy, youthful vibe in the air— and no requirement that we do any actual school work.

So it was interesting to see real-estate giant Coldwell Banker’s new survey of 120 college markets
across the U.S., ranked in terms of affordability. (The survey uses a 2,200-square-foot, four-bedroom, two-and-a-half bath home for comparison purposes, and while that may be bigger than many of us will need, it’s probably a pretty good proxy for housing prices generally.)

My own alma mater came in near the bottom, with an average house in excess of $663,000, which makes it unlikely I’ll be heading back there, older and wiser, when the day comes. But many other places on the list had average prices well under $200,000.

The three most affordable college towns were: Akron, Ohio, home to the University of Akron (house price: $122,000); Muncie, Indiana, with Ball State University ($145,000); and Ann Arbor, Michigan, with the University of Michigan ($148,000).  In case a Midwestern winter isn’t your idea of retirement bliss, three Texas cities also made the top 10: Fort Worth, Denton, and Houston. You can read the full list of 120 college towns by clicking on the link above.

We have other advice on this site that may help in making your “where to retire” decision, including:

• A blog post with links to two recent lists of best places to retire.
• Our own retirement readiness quiz. 
• Retired readers talk about their best (and worst) planning moves in an exclusive Consumer Reports survey.
• An overview of places to retire, including college towns, with tips on how to compare them.

— Greg Daugherty

Greg writes the “Retirement Guy” column each month in the Consumer Reports Money Adviser newsletter.

Shafted by your credit-card company? Tell us your story by Nov. 20.

If you're mad as hell at your credit-card company, here's your chance to let federal regulators know--and maybe even get something done about it! 

Credit Card Reform.org, a project of Consumers Union, publisher of Consumer Reports, is collecting stories from consumers who feel they've been shafted by their credit-card company, particularly in the last few months. As we've reported, credit-card companies have been busy as bees jacking up interest rates, changing fixed rates to variable rates, increasing penalties, and doing other maneuvers to gain the most before the consumer-friendly Credit CARD Act of 2009 goes into effect next February. 

Consumers Union supports current efforts to push forward the effective date of the law to December 1 of this year. We're also providing information on the credit-card companies' obnoxious behavior to the Federal Reserve, which in theory regulates such practices. Lauren Bowne, a CU staff attorney coordinating the effort, hopes to highlight a range of abuses by having consumers "share their story with the Fed as a way to highlight the attempts by the card companies to circumvent the law," Bowne says. 

If your credit-card company has done any of the following (or something new we've not mentioned here), we want to hear about it:

•Added a new fee or raised an old fee.

•Increased your interest rate.

•Closed your account.

•Lowered your credit limit.

•Took away rewards.

•Raised the minimum payment.

•Made the fixed interest rate a variable rate.

How to save $30–or more–with online do-it-yourself advice

Before blindly replacing something that’s broken or otherwise needs attention, check the Internet for repair and installation help. You may save yourself a small fortune.

Recently, I was having trouble with my kitchen faucet. The sprayer worked, but there was hardly any pressure from the spout. I couldn’t find a problem after removing the handle, washers and springs. So I spent $30 on a new faucet. 

But before installing it, I decided do some investigating using various Web searches. I came up with instructions on the Delta Web site explaining how to remove the spout and access what’s known as a diverter assembly, which diverts water from the spout and sends it to the sprayer (I didn’t even know there was such a thing, which was hidden behind the spout.)

I followed the instructions and found debris lodged in the assembly, causing it to stick. I cleaned it out and reassembled the faucet. Now everything works fine. The entire job took just a few minutes. I returned the new faucet, saving my $30.

So whether it’s a Web site or forum where you can ask questions of experts or other users, don’t forget those Web resources. There are plenty of great sites, such as do-it-yourself.com, do-it-yourself network, monkeysee.com, and newsgroups and other forums (use a Web search or visit Google Groups). (Here's our blog on the stellar resources of appliancerepair.com.) Using these sites, you never know how much money and aggravation you’ll save. Plus, you’ll get the satisfaction of doing it yourself. 

Consumer Reports Home and Garden pages also include lots of tips to help save money buying, installing, and using products around the house. We've compiled a useful treasury of great do-it-yourself weekend projects, complete with how-to tips. 

Do you have your own examples of how the Web helped you with a project?  If so, then post a response below. We’d like to hear them.—Anthony Giorgianni

What would you pay for World Series tickets?

How much would you pay for a ticket to the tonight’s World Series Game 6 at Yankee Stadium? $500? $750? For that kind of chump change you better bring your binoculars. Expect to pony up at least $1,500 for a sweet view, and thousands more to rub elbows with celebrities in the Legends sections.

With four hours until the first pitch, we found thousands of tickets for the taking on resale sites including StubHub, TicketsNow, RazorGator, and FanSnap, as the Yankees go for the clincher and the Philadelphia Phillies try to stay alive for a winner-take-all finale in Game 7 tomorrow evening in the Bronx. 

The World Series is one of those star-studded events in which ticket supplies can’t come close to the demand. Forget about double-digit unemployment, 401k losses, and plummeting home values. It doesn't seem to matter. This Series is setting a record for prices as stratospheric as any Ryan Howard or Alex Rodriguez home run. 

Tonight’s game is the highest-grossing event in StubHub’s 9-year history, according to Joellen Ferrer, spokeswoman for the company, which serves as the official “fan-to-fan marketplace” for Major League Baseball. Game 2 (also at Yankee Stadium) ranks as the second-highest grossing event, followed by Super Bowl XLIII (Arizona Cardinals vs. Pittsburgh Steelers), World Series Game 1 (in New York as well), and the 2009 BCS national college football championship game (Florida vs. Oklahoma).

Ferrer says fans are paying an average price of $984 to attend tonight’s game. Tickets have gone for as little as $175 for a bleacher seat (that’s what a buyer paid several weeks ago; the going rate today is around $480) to $10,001 near the Yankees' dugout.

As you might expect, prices are being driven up by Yankee fans seeking to witness history on their home turf. Forty-six percent of buyers are from New York; only 6 percent are from Pennsylvania. Ninteen percent of buyers are from New Jersey.

With many fans anticipating a possible Game 7, prices are slowly starting to climb as well, though relative bargains are still to be had because the market for a deciding game is still in flux. As of this writing, the average price paid for a Game 7 ticket is $807, Ferrer says, and prices will invariably increase should the Phillies tie the Series tonight. (If a seventh game isn’t played, you get a refund.)

When it comes to spending, however, it's not just Yankee fans who have deep pockets. The Philly faithful, too, are willing to dig down to watch their beloved Fightins’. The average price paid on StubHub for a ticket to Games 3, 4, and 5 in the City of Brotherly Love was $770, $863, and $603, respectively. Fans spent and average of  $655 and $751, respectively, for tickets to Games 1 and 2 at Yankee Stadium.

Overall, the current average sale price of a World Series ticket in New York is $789 vs. $736 in Philly.

We thought we unearthed an incredible bargain when we found a ticket for Game 6 on TicketsNow for $170. When we looked a little closer, however, we realized it wasn’t a ticket for the game itself; it was a ticket for a preferred parking spot.

Gold's at nearly $1,100 an ounce. Here's how to sell your stuff.

With gold prices historically high--today's morning price was nearly $1,100--it's tempting to heed those radio and TV ads to trade your unwanted gold jewelry for cash. Earlier this year, Consumer Reports sent its mystery shoppers to price gold jewelry at pawn shops and jewelry stores in three states, and through three mail-in gold-buying companies: Cash4Gold, GoldPaq, and GoldKit. Click here for the prices we got, and advice on getting the most for your jewelry.

Avoiding post-holiday debt: Don't be among the 13.5 million!

This holiday season, it may be more important than ever to avoid impulse buying that leaves you with a holiday debt hangover in the New Year. A survey we conducted in early October showed that six percent of adults, or roughly 13.5 million consumers, were still saddled with debt from last year’s holiday spending.  

Odds are you’ll be paying especially hefty finance charges this year if charging a lot of gifts leaves you carrying a balance on your cards. That’s because many banks are jacking up rates or imposing other finance charges in the form of annual fees before their ability to do so is crimped by federal credit card reform rules that become effective in February. For instance, Wells Fargo recently notified cardholders it plans to raise interest rates by 3 percentage points starting Nov. 30, while Citibank in late October hiked rates for many of its customers to 29.99 percent.

The good news is that many consumers already are making progress in slashing their card debt. A recent Consumer Reports survey found that more than a third of consumers polled said they had paid off and closed a card account this year.  And the Federal Reserve’s latest monthly Consumer Credit Report showed that revolving credit, which is largely card debt, decreased at an annual rate of 13 percent in August, to a total of  $897.6 billion. That’s down from $988.2 billion at the end of 2008.

Tightwad Tod offers some helpful tips on how to avoid holiday debt headaches here.-Andrea Rock

How to access newsgroups when your ISP dumps Usenet

Verizon recently joined the likes of Comcast and Time Warner, becoming the latest Internet service provider to stop giving its customers access to newsgroups on Usenet, a decades-old collection of thousands of message boards worldwide.

In announcing its decision, Verizon mentioned a Web site that lists third-party commercial “news servers” that provide Usenet access for around $10 a month. Some offer free or low-cost trials.

What Verizon didn’t tell customers is that they can get free access to Usenet and other types of message boards through Google Groups. A Web-based service like Google isn’t as convenient as using news reader software, such as Windows Outlook Express or Windows Mail. But unlike with software, you can use Google to search the so-called Usenet archive, a database of more than 800 millions posts going back to 1981.

You also may find free news servers by searching the Web. We found a couple of sites that list them, including Newsparrot and the DMOZ open directory project. Some of the information we saw was out of date. But on Monday, we were able to post messages through one free server, news.gmane.org. For information about adding a news account, check your newsreader’s help files.