Needed: Protection from bad financial products

A bill recently was introduced in the Senate by Sen. Richard Durbin (D-Il), and co-sponsored by Sen. Charles Schumer (D-NY), and Sen. Edward Kennedy (D-Ma), to establish the Financial Product Safety Commission, a single federal agency to oversee the myriad financial products that bombard consumers.

"The Nation’s multiagency financial services regulatory structure has created a dispersion of regulatory responsibility, which in turn has led to an inadequate focus on protecting consumers from inappropriate consumer financial products and practices," the bill says.  "The absence of appropriate oversight has allowed excessively costly or predatory consumer financial products and practices to flourish."

Defend Your Dollars, a Web site sponsored by the advocacy arm of Consumers Union, offers an amazing gallery of people who've been victimized by financial fraud and chicanery. After reading some of them, you'll understand why CU and many other organizations support the establishment of such an agency. Click here for CU's fact sheet about the bill. And if you have faced or are facing foreclosure, share your story with us.—Tobie Stanger

Women more likely to delay retirement

A couple of days ago we reported on a new survey that found people with greater wealth were more likely than their less-affluent peers to consider putting off retirement. I speculated on some reasons for that, and several commenters weighed in with their own theories.

Now, another study says working women are more likely than their male counterparts (61 percent vs. 45 percent among 50- to 64-year-olds surveyed) to be planning to postpone.

This latest study, from the Pew Research Center, also found that the younger workers were, the less likely they were to be thinking of postponing. For example, a mere 20 percent of 18- to 29-year-olds were pondering postponement, compared to 36 percent of 30- to 49-year-olds and 52 percent of 50- to 64-year-olds.

Frankly, I'm surprised that many 18- to 29-year-olds are thinking about retirement at all, let alone about postponing it, but I suppose that's another sign of the times. —Greg Daugherty

PS: We recently posted this basic advice for retirement planners of all ages.

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

Best 529 college savings plans

If you're a parent of school-aged kids looking for an anxiety trigger, here it is: Today is "529 College Savings Day." Just the phrase, "college savings" is enough to cause palpitations in many folks.

Seriously, though, "529 College Savings Day" is intended to remind parents, grandparents and others of the benefits of tax-advantaged Section 529 college savings and prepaid tuition plans, according to the sponsor, College Savings Plans Network, a not-for-profit association representing states that administer such plans.

Recently, Consumer Reports Money Adviser's Money Lab analyzed state 529 plans and found five that earned A's. Click here for the report.

Best recession bargains now: Part 4

If your finances are still in reasonable shape, now could be the time to take advantage of some recession bargains. In this, the final of four posts, the folks from Consumer Reports Money Adviser recommend products and services that are great buys now, along with strategies that will help you save the most. But before you shop, heed another lesson the recession has taught us: Charge only if you know you can pay the bill right away.

Gas grills

Between the summers of 2007 and 2008, grill sales dropped from 10.3 to 9.6 million, the lowest since 2005. Very good deals should be available this year around Memorial Day and July Fourth.

Size up your needs. It doesn’t pay to get a grill that’s too big. Buy one whose cooking area is appropriate for the number of people you typically feed.

Look over construction materials. No-rust painted steel or porcelain-coated steel models are easier to maintain than stainless steel. Grates made of porcelain-coated cast iron or stainless steel should outlast ones made from other materials.

Don’t get burned up. Burners are prone to repairs, so look for a 10-year or lifetime burner warranty. 

Click here for more advice from Consumer Reports on buying and maintaining gas grills. 

Why doesn’t Starbucks make low-fat ice cream?

In the great scheme of things, this doesn’t amount to a hill of beans. Coffee beans, that is. But since life is made up of little things, here’s my gripe of the day.

Crackdown on phony police, fire and veterans charities

The Federal Trade Commission and officials from 48 states have announced 76 enforcement actions  against individuals, fund-raising firms, non-profits, and purported non-profits, as part of a crackdown on fraudulent telemarketing on behalf of police, firefighters, and veterans.

The series of court complaints and proposed settlement orders targeted defendants who the officials say falsely claimed that donations would support military families, or police or firefighters disabled in the line of duty. In some cases, they said, defendants “used legitimate-sounding names and described sympathetic causes to give their sham organizations a veneer of credibility.”

Fundraising on behalf of police, fire and veterans organizations can be lucrative because of the public’s interest in giving to those who have put their lives at risk. But even when legitimate, those fundraising campaigns often return little to the actual organization or individuals they are supposed to benefit.

To make sure your charitable donations are used effectively, never give to a telemarketer. Instead, hang up and investigate any organization before giving. You can obtain information from your state’s charity regulators and from non-profit watchdogs, such as the American Institute of Philanthropy, the BBB Wise Giving Alliance; and Charity Navigator.

Some Better Business Bureaus provide reports on local charities, and the national BBB offers a free online guide, Donating to Police and Firefighter Organizations.

If you’re intrepid, you can examine the tax returns non-profits are required to file, known as Form 900, at GuideStar. The forms provide details on how organizations raise and spend their money. Free registration is required. For more information, check our tips for selecting a charity—Anthony Giorgianni

Best recession bargains now: Part 3

If your finances are still in reasonable shape, now could be the time to take advantage of some recession bargains. In this, the third of four posts, the folks from Consumer Reports Money Adviser recommend products and services that are great buys now, along with strategies that will help you save the most. But before you shop, heed another lesson the recession has taught us: Charge only if you know you can pay the bill right away.

Clothing

You can still find clothing sales of 50 percent to 75 percent off, but they’re not as common as they were at the end of 2008. “Stores are not bringing in as much new merchandise due to slumping sales, so you’ll have to hunt for discounts,” says Gabriele Goldaper, a garment-industry consultant.

Shop sample sales online. You can find big discounts on designer duds on sample-sale Web sites like www.gilt.com, www.hautelook.com, and www.ruelala.com. For example, a men’s Marc Jacobs blazer that retailed for $358 sold on Rue La La for $89. A $420 silk chiffon Vera Wang dress went for $148 at Gilt Group.

Think inside the box. Big-box stores carry some designer labels at low prices. Alexander McQueen designs for Target, Kohl’s sells a Dana Buchman line, and Norma Kamali is in Walmart.

Check out thrift shops. Prices at second­hand stores are 50 percent to 90 percent off retail. To find stores near you, go to the National Association of Resale and Thrift Shops site.

Richer more likely to delay retirement

We hear a lot these days about Americans planning to postpone retirement as a result of recent financial calamities. An interesting new survey looks at those likely postponers, and if the results are right, it’s the wealthiest among us who are apt to be working longer.

According to the McKinsey & Company survey, 39 percent of people with net worths in excess of $1 million are now planning to postpone, compared to 26 percent, on average, of the total population. 

While it may seem counterintuitive that people with the most means to retire would be the least likely to do so, I suppose it makes sense. For one thing, high earners may tend to enjoy their jobs more or have greater leeway in retiring when they wish to. Plus the post-work lifestyles they envision for themselves could require more loot than they happen to have at the moment.

Whatever your net worth, as we’ve reported in the past, postponing retirement by even a few years has some definite advantages if you have any choice in the matter. —Greg Daugherty

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

Best recession bargains now: Part 2

If your finances are still in reasonable shape, now could be the time to take advantage of some recession bargains. In this, the second of four posts, the folks from Consumer Reports Money Adviser recommend products and services that are great buys now, along with strategies that will help you save the most. But before you shop, heed another lesson the recession has taught us: Charge only if you know you can pay the bill right away.

Digital cameras

Prices have dropped by an average of $200 in three years, according to the Consumer Electronics Association. 

Look for seasonal sales. Discounts on older models can be found when new cameras hit the market during two periods, March through May and September through November.

Watch out for refurbs. Too-good- to-be-true offers are often for refurbished cameras that may not have warranties.

Don’t go pixel crazy. No matter what the salesperson says, a 6-megapixel camera should be fine for most users. Click here for more digital camera buying advice from Consumer Reports.

Bucking the trend: One credit card issuer lowers its interest rate

Many credit cardholders already have been hit with higher interest rates on their cards in the wake of the economic meltdown, and industry analysts anticipate that credit card reform also may lead to more annual fees and stingier mileage or cash-back perks on rewards cards, as has been reported by The New York Times and The Wall Street Journal.

For the moment, however, at least one major card issuer is bucking those trends.  In a recent mailing sent to some of its United Mileage Plus Visa cardholders, JP Morgan Chase actually offered to lower the purchase interest rate on the card to the prime rate plus 7.99 percent, or 11.24 percent.  down from a rate of 13.49 percent for the cardholder account we examined. The lower variable rate would kick in during the July billing cycle and last for 12 months. 

The promotional letter announcing the new terms hints at Chase’s intent:  “Now if you use your United Mileage Plus Visa card to make all of your purchases—including those that life can throw at you unexpectedly—your new lower rate can lead to smarter borrowing decisions.”  Motivating cardholders to use the card more frequently obviously generates more transaction fee income for Chase at a time when many consumers are cutting back on using credit cards.

Chase also underscores the other comparative advantage it is providing that could motivate consumers to use the card more often:  “You’ll still earn miles for all of your purchases—even at a time when other rewards programs may be cutting back.” 

It remains to be seen whether other card issuers will follow suit by offering similar lures to encourage cardholders in good standing to charge more on their cards.  Even if they do, however, to be on the safe side, our previous advice about stockpiled reward points still stands: use them before you lose them.—Andrea Rock