According to an Anonymous insider from KB Toys, all locations of the bankrupt toy store will stop accepting gift cards starting January 1st, 2009. Run, Consumerists! Your Time is short!
[Thanks, Anonymous!]
Pic:[romulusnr]
Wednesday, December 31, 2008
KB Toys Giftcards Will No Longer Be Taken After Tomorrow [Run For Your Money]
Drug Makers Say Goodbye To Swag In 2009 [Marketing]
Beginning tomorrow morning, drug companies will stop peppering doctors' offices with branded pens, bandages, tongue depressors, stethoscopes, calipers, mugs, prescription pads, soap dispensers, and t-shirts.
What won't stop, according to critics of the industry: free dinners, payment for consultations, or the $16 billion spent annually to hand out free drug samples:
“We have arrived at a point in the history of medicine in America where doctors have deep, deep financial ties with the drug makers and marketers,” said Allan Coukell, the director of policy for the Prescription Project, a nonprofit group in Boston working to promote evidence-based medicine.One side-effect of the voluntary ban is that swag companies—"providers to the world's landfills"—stand to lose around $1 billion, or about 5% of their annual income. (And you know what that is going to do to swag prices!) But hey, at least you won't feel like you're at a NASCAR event the next time you're waiting on the examination table.
For a good look at the wide variety of promo items drug companies hand out, pay a visit to the Drug Rep Toys blog.
"No Mug? Drug Makers Cut Out Goodies for Doctors" [New York Times]
(Photo: Drug Rep Toys)
Viacom Might Pull All Channels (Comedy Central, MTV) Off Time Warner Cable Tomorrow [Viacom]
Viacom wants Time Warner Cable to pay more for its channels, like MTV and Comedy Central. TWC doesn't want to pay. So on Jan. 1, they could all go away for TWC subscribers.
Viacom's argument is that their channels "provide 20 percent of their audience" yet they only "receive about 2.5 percent of the fees Time Warner pays," so they're asking for what amounts to a rate increase of 23 cents per subscriber. Time Warner says that "the root of this is that the advertising market has gone soft and Viacom is desperate" and it's no time to be making people pay more for TV.
Viacom's PR campaign, so far, is decidedly brilliant: They've taken out full page ads in the Times and other papers today with characters like Dora the Explorer crying because children can't watch her starting tomorrow. Time Warner's response is pretty savvy too. Time Warner spokesman Alexander Dudley said that they'll "be telling our customers exactly where they can go to see these programs online...We’ll also be telling them how they can hook up their PCs to a television set.”
That's right—the cable company will be telling people to use Hulu. That's a first. True, they're still doing it over Time Warner's pipes, but it's pretty shocking coming from a cable company/ISP, who, like every other TV/ISP service provider, has traditionally pushed people in various ways to use the internet less and their TV services more. In fact, Time Warner has squawked before that they hate the amount of content—like The Hills and The Daily Show, the very programs at issue here—that broadcasters are putting online for free. Now they're sending people to them.
This is also the same Time Warner that's capping the amount of data people can use a month in certain markets, which, survey says, is a network management practice likely to spread—in large part due to the amount of strain on broadband networks coming from streaming video now.
And this Time Warner's going to tell people to stream more video? Maybe they're just going to bump your broadband bill instead, or this is a bluff. So, don't worry guys, you'll totally be able to watch Comedy Central while you're hungover tomorrow. (Probably.) [NY Times via NewTeeVee]
New Year's Surprise For TWC Customers: No More Comedy Central, MTV, Nickelodeon... [Cable Wars]
Viacom is demanding that Time Warner Cable pay more for the right to broadcast its networks, but TWC has refused. Tonight at midnight, 13.3 million subscribers in New York, Los Angeles, Dallas, and Cleveland will feel the effects of the stalemate first hand when Viacom makes good on its threat to pull all of its networks from TWC. Translation: no more "The Daily Show," "Dora the Explorer," "The Colbert Report," "The Hills," etc. But hey, there's always Hulu and BitTorrent, right?
Rather than doing any actual negotiating, the two companies seem to have been hoping the threat of an angry, alienated customer base would resolve the issue. It hasn't.
Time Warner Cable finally blinked last night, but it didn't help:
Viacom has rejected Time Warner Cable's request for a 15- to 30-day extension on the 12:01 AM January 1st deadline when the cable programmer pulls its 19 channels off the 2nd largest cable system operator. I'm told Viacom and TWC had no contact throughout yesterday until news of the Big Media battle broke. Suddenly, at 8 PM, TWC came to Viacom with an increase offer and the extension request. But Viacom rejected both out of hand. "It was bogus. The low-ball offer was clearly an excuse to ask for an extension and then use that in their press activity today," a Viacom source claimed to me. "After we've been trying to meet with them for several weeks, we won't consider an extension unless they're prepared to really negotiate and come across with a reasonable offer."So who's to blame? Bloggers at the LA Times choose sides, but we were serious about that Hulu/BitTorrent comment—it's possible that in this economy neither side will come out ahead by shutting the doors on its customers. Notice how both bloggers draw the same "maybe I'll just find another way" conclusion:
Time Warner's dangerous gamble [is] that people can learn to live without what it's selling. I already have, to some extent. When Time Warner pulled Turner Classic Movies from its basic cable lineup—in Hollywood, no less!—and substituted the Golf Channel, I didn't bite and upgrade to premium. I've ended up buying a lot of the black and white classic films I love, and can now watch them on my schedule, not Time Warner's.Anti-Viacom
:[Viacom is making] the wrong demand at the wrong time. And the big loser here could be Viacom, which needs Time Warner more than Time Warner needs Nickelodeon, MTV, BET and the host of other Viacom cable networks.You could argue that recessions are good for cable operators—people spend less on entertainment away from home, raising the value of packaged home-entertainment bundles such as cable and satellite. But as the jobless rate climbs, it's hard to imagine Time Warner extracting sizable rate increases from their subscribers in 2009. More important, as Patt notes, Viacom puts its shows online, free of charge. So while it's asking Time Warner for more money for its channels, it's flooding the market with a cheaper version of the same product.
"Blackout looms in Time Warner, Viacom standoff" [Reuters]
"Unhappy New Year!" [Nikki Finke's Deadline Hollywood Daily]
(Photo: Getty)
Best Buy Also Falls Victim To Embezzling Buyers [Best Buy]
Another electronics store was taken for millions by an invoice-fixing scheme: a buyer for Best Buy and a vendor have been charged with overcharging Best Buy $31 million over four years.
Similar to last week's story about a Fry's VP embezzling millions, Best Buy vendor relations manager Robert Bosany and Abby and Russell Cole of Chip Factory allegedly submitted inflated invoices for computer parts to Best Buy, then pocketed the difference. The Coles allegedly used some of their kickbacks to buy a $2.8 million home.
Police say couple paid for $2.8 million new home by bilking Best Buy [Trading Markets]
(Photo: Crawfishpie) Thanks, Derrick!
Tuesday, December 30, 2008
Hot Topic Steals Yet Another Design And Sells It As Its Own [Hot Topic]
Once again, Hot Topic is selling someone else's art as original work. The mallternative retail chain purchased the supposedly original design from Newbreed Girl, which has its own history of ripping off designs.
According to this post, artist Shawn Smith's "Son of Mustachio" character, seen here, has been repurposed on a shirt on Hot Topic's website, seen folder_id=2534374302028485&PRODUCTprd_id=845524442179741&bmUID=1224470965908&AID=10453346&PID=1992680">here. The artist is "not happy" and "dealing with it."
Earlier this year, Newbreed Girl took another artist's image and sold it on Hot Topic. And before that, we wrote about Hot Topic selling another artist's tattoo design as their own.
Cupcake confirmed for T-Mobile G1
We've received word from HTC today that Android's coveted "Cupcake" branch of updates and fixes -- or at least a majority of it -- will definitely be making it to the G1 in the future as an over-the-air push. However, it's not clear exactly when this is going to happen; apparently, HTC's more or less out of the loop on the schedule, and it's up to Google and T-Mobile to figure out how it's going to play out. We'll keep you updated as we find out more!
Filed under: Cellphones, Handhelds
Cupcake confirmed for T-Mobile G1 originally appeared on Engadget on Tue, 30 Dec 2008 20:17:00 EST. Please see our terms for use of feeds.
Monday, December 29, 2008
Always Check the (Sometimes Sketchy) Expiration Dates on Food [Expiration Daze]
This is a friendly Consumerist reminder: always make sure you check the expiration dates on all of your food purchases, especially as alternative expiration 'Codes' confuse the employees checking for spoilage.
Insider E writes about confusion regarding the new (and seemingly overcomplicated) expiration 'codes'.
I work in a retail store with a pretty healthy-sized food section. It isn't a grocery, so that may be the problem. My big issue right now is the codes that a lot of food companies seem to be using instead of just printing an expiration date. Instead of 040510 (April 5, 2010) I see a lot of codes like 29B1348032, where 032 will be the processing plant code, 134 will be the Julian Date (134th day of the year), 8 will stand for 2008 and 29B is supposed to be ignored. Or even the dreaded "Produced On" date, where it gives a code for the date it was made on and then we have to figure the expiration date out of that. We have a huge book full of decoders for these products.
We recently got a new food-department supervisor, so a pretty thorough check of inventory was done and I had the opportunity/misfortune of being one of the team leaders checking dates. Here's what I found:
(1.) Food manufacturers will change these codes frequently and not update the vendors.
(2.) Consumers cannot read these codes and, most importantly
(3.) Employees cannot read these codes.We don't have the training or the resources to determine if many of these products are out of date... therefore many of these products were ridiculously out of date (some by more than 2 years). As a result of the audit, I will not even consider purchasing food with a code instead of an expiration date. Maybe groceries have better lists than we do, but it seems like asking for trouble.
Have you ever encountered these archaic codes? If so, make sure you leave the address where we can all get our matching decoder rings.
Pic: [The Joy Of The Mundane]
Best Buy Turns to Component Cable Deception To Sell HDTV Calibration Service [Best Buy]
We all know that Best Buy isn't above deceiving their customers into purchasing their pricey HDTV calibration service, but it looks like they have changed tactics by using different cables on side-by-side displays.
A Consumerist tipster caught his local Best Buy running a display highlighting the difference between a calibrated and an un-calibrated HDTV. After further examination, the tipster noticed that the un-calibrated TV was hooked up with component cable while the calibrated TV had HDMI. As many of you know, component cable is output at analog, and some devices won't do 1080p without HDMI cables because of copy protection policies. Maybe, in this case, this made a difference in image quality, but generally when you're trying to show side by side benefits of a change, you have to start with the same system in place to avoid causing any doubt to their benefits.
Once again, Best Buy takes advantage of their customers by selling them something they probably didn't even know they needed. My advice is to educate yourself. This guide will teach you how to calibrate your HDTV on your own while this guide will help you buy an HDTV like a pro. [Consumerist]
ExxonMobil Gift Card Results In Higher Prices At Pump [ExxonMobil]
ExxonMobil says their gift cards are "better than cash." They also say, "This cash card is not a credit card." But Rob in NY was hit with a credit card surcharge when he used his.
He writes:
I received several $50 gift cards for Exxon Mobil this Christmas. The cards were paid for with cash (I asked my Aunt, who gave them to me), and the card clearly states on the back "This gift card is not a credit card". When I went to use it at my local Mobil (Astoria Blvd in Queens, NY), they charged me the credit price! I went in to complain, but the clerk mumbled something that I couldn't understand and I was in a hurry. Just wanted to alert your readers... Exxon Mobil gift cards are a bad deal. Cash will go further.
PS. Is is even legal to have a credit price in New York?
Nope, it's not legal in New York, Rob. Check out this from Just Ask Asa:
Nine states in addition to New York prohibit merchants from adding surcharges to credit card transactions: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, Oklahoma and Texas. Credit card issuers, including Visa and MasterCard, generally forbid credit card surcharges too–although they allow cash discounts.A lot of gas stations seem to be ignorant, willfully or accidentally, about the surcharge issue. If you live in a state that forbids them, you should report the station to your attorney general's office. If you live in another state but you think the station is in violation of its credit card merchant agreement, you should contact the credit card company and the parent company of the gas station. And buy your gas elsewhere.
In this case, Rob, you should definitely report the station to the New York Attorney General—their consumer helpline is 1-800-771-7755.
RELATED
"Is This $0.10 Credit/Debit Surcharge On Gasoline Allowed?"
"NY Attorney General: 25% Of Gas Stations 'Engage In Deceptive Practices'"
Cellphones Cause Kidney Stones and Heart Disease Now [Panic]
Just days after preliminary data gathered in the largest cellphone cancer study thoroughly depressed us, a new study claims that exposure causes red blood cells to leak hemoglobin—leading to kidney stones and heart disease.
During the study, scientists exposed samples of blood to varying degrees of microwave radiation (including levels well below those emitted by cellphones) for periods between ten to 60 hours. No matter how you cut it, the result was hemoglobin leakage (which just sounds nasty). Obviously, heart disease is the most serious condition of the two, but I can tell you from experience that you don't want any part of a kidney stone either. Those things could make even Chuck Norris cry like a little girl.
I wouldn't say that this test was the most thorough ever conducted, but I think deep down we all know that when all is said and done, the final verdict about cellphone use is going to be grim. [MINA via textually
Beverly Hills Plastic Surgeon Uses Liposuctioned Fat As Fuel For Car [Gross]
And here's number 16 on our grossest stories of 2008 list: an LA plastic surgeon is in trouble for powering his car with "lipodiesel" from his patients' fat. Ewwww.
According to the article, Dr. Craig Bittner powered his and his girlfriends SUVs with his patients' discarded fat, and was proud of it, even running the now-defunct lipodiesel.com to increase awareness of disgusting ways to power your car. Unfortunately for Dr. Bittner, "state law forbids the use of human medical waste to power vehicles." This is an oddly prescient law.
Dr. Bittner is being sued by several former patients, who say they didn't consent to Dr. Bittner driving around on their spare tires.
(Photos: Getty)
Thanks, Sarah!
Sunday, December 28, 2008
Tampa Bay Handcuffs And Ejects You For Rooting For The Opposing Football Team [Security]
Steve flew down to Tampa to watch his Raiders play the Buccaneers. After cheering for the away team, he was handcuffed, detained, frisked, and ejected with no explanation. He'd like one.
Our tipster sent the following letter to the NFL, Buccaneers, and Tampa Sports Authority:
Good afternoon,I apologize for the number of individuals included on this communication as I was unsure who to contact about this.
I had a very negative experience at Raymond James Stadium while attempting to attend the Buccaneers/Raider NFL football game. My day started poorly as I was forced to go to three different entrance gates because I was "wearing the wrong colors" before I could obtain admittance with my ticket to the game.
The game went without incident up until the first score of the game by the Raiders. I stood in celebration, and before the extra point was even kicked, I was being led away by stadium personnel. Once out of the stands, I was placed in handcuffs, although I was not resisting the stadium personnel's requests, or read my rights and placed under arrest. I was lead to a single person holding cell where my possessions were removed, and I was subjected to a full body frisking. After being detained for roughly 30 minutes, I was released outside of the stadium, and informed that I could not return to the stadium.
As a long time fan and supporter of the NFL, I am greatly disappointed by my treatment at today's game. I feel like I was personally singled out due to my team affiliation, and this was totally unwarranted. I was not intoxicated or found to be in possession of any illegal substances. I was not being verbally or physically abusive to any other fans or players. There were no requests to adjust my behavior prior to this either, which was not causing an issue as multiple witnesses can attest to.
I understand the stadium has the right to remove any attendees as stated on the ticket, but my treatment today was completely unacceptable. I came down to Tampa Bay from New Jersey specifically to see this game, and then was stripped of the ability to enjoy the game. I would like to know if there are any options by which I may file a formal complaint against the personnel at the stadium? I wish I could provide you with more information as to the individuals involved, but they would not provide me with that information prior to my removal.
Any assistance in this matter would be appreciated. Thank you and I hope you all had an enjoyable holiday.
Steve has promised to send along a picture of himself getting along just fine with the Bucs fans near him, and considering he wrote a polite, coherent complaint letter only a couple hours after the game ended, we're inclined to believe him when says he wasn't drunk or abusive. We hope Tampa is able to make it up to him, perhaps by paying for his tickets, and maybe his travel expenses.
(Photo: Getty)
What's The Matter With GameFly? [Ask The Consumerists]
Considering the price of buying or renting video games, GameFly, a Netflix-style program for video games, seems like a useful service. According to our inbox, not so much.
Our eerily pale brothers at Kotaku have noted that GameFly sends way too much email, but our tip line has more problems with the service:
I've had Netflix for almost a year and love the concept so I figured GameFly should be ok. Nothing could be further from the truth. In the two months I have been a member it has taken an average of ten days from the time I put a game in the mailbox for a new one to show up.This entire setup sounds like a gigantic scam on the part of GameFly. I have serious doubts that they ever shipped those games that never arrived, and now they are going to try and bill my credit card for a game that I returned when history has proven that clearly not enough time has passed for them to receive and/or process the game into their system.
5 days of mailbox-watching passed, and nothing had arrived. Another 5 passed, and still nothing, so I contacted their customer service dept. just to get an update on my games' shipping status. Their reply was basically "they got lost - here's a refund. You'll need to buy them again." When I checked their store again, these games were nowhere to be found. So I got my refund, that's fine. But I was puzzled: how could two separate purchases both get lost in the mail? And then coincidentally happen to not be in stock when I go to re-purchase them?
I've started cc'ing the consumerist.com on our correspondence, because you are starting to get weird on me.
I noticed a few months ago that when I returned a game, it would not be reported as received for several weeks. WEEKS!!!! I reported each problem and they responded more or less promptly by shipping out the next game. So I though, okay, they're addressing it, and they should solve this problem soon. What bugged me about the problem report is that they suggested I contact my local USPS myself about the problem.
And so on. We get occasional emails complaining about Netflix, but the consensus around here is that its members love it. What's up with GameFly—are only the disgruntled emailing us, or are they truly a bad service? Let us know in the comments.
These Gap Pants Are On Sale For Ten Dollars More Than The Original Price [Markups]
Reader Ryan caught his local Gap offering a great deal on some snazzy pants: only ten dollars more than the original price!
Like our similar story about Kohl's, we're struck by the half-assed sloppiness of the whole thing. We see only two explanations: the original $59.50 tag was a mistake, and the real price should have been $69.50, or it's a careless attempt to ripoff customers. We tried to guess what pants these were by looking around on gap.com, and we found no dark pants that were originally $69.50.
Use a Prius as an Emergency Generator [Clever Uses]
If you happen to be the owner of a Toyota Prius, or any other battery-packed hybrid car, you can use it as a surprisingly effective emergency generator.
After a storm knocked out power in his neighborhood, John Sweeney did some characteristic things to keep warm in the chilly Massachusetts winter weather. His family bundled up, they burned wood, but for lack of an emergency generator to keep the lights on they took advantage of the battery based design of their Prius. The Harvard Press reports:
Sweeney ran his refrigerator, freezer, TV, woodstove fan, and several lights through his Prius, for three days, on roughly five gallons of gas.“When it looked like we were going to be without power for awhile, I dug out an inverter (which takes 12v DC and creates 120v AC from it) and wired it into our Prius…These inverters are available for about $100 many places online,” he wrote.
The device allowed the engine to run every half hour, automatically charging the car battery and indirectly supplying the required power.
While using a car with an inverter as an emergency source of power is no new thing, the combination of the large battery capacity of the hybrid car and it's modest fuel consumption as a generator is genius. Photo by Beth and Christian.
Ice Storm Tests Mettle of Harvard Residents [via Gadgetopia]
Saturday, December 27, 2008
Sikh Signs For Package, UPS Driver Enters His Name As "TERRORIST" [Racism]
A UPS driver entered a Sikh man's name as TERRORIST on its online package-tracking database. The man's family discovered the epithet when they searched for a package UPS failed to deliver.UPS is looking into the incident, and the package entry has since been changed to the man's last name. We'll take this moment to remind any confused readers that:
We'll also point out that this whole situation could have been avoided if UPS had actually delivered the second package.
- Sikhs, who customarily wear turbans to cover their uncut hair, are not the same as Muslims, and
- Not all Muslims are terrorists
UPS Driver Used "Terrorist" As Name Signed For Package [ABC]
(Photo: ABC)
Friday, December 26, 2008
Psion Orders Websites to Stop Using the Term Netbook [Netbook]
Dear Psion,
Netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook, netbook. Netbook.
Much love,
Gizp.s. Netbook.
[Gearlog]
NASA Offering Reward For Finding its 90 Lost Rubber Duckies [Science]
If you happen to spot a rubber duckie floating in the ocean, NASA would really appreciate it if you give them a call. They're missing about 90 of them and want them back.
The rubber duckies were tossed into a hole in Greenland's ice three months ago as a way to track how the polar icecap is melting. So far, however, they haven't seen signs of any of them. So now they're hoping that sailors, fisherman and cruise passengers will keep their eyes peeled for them. For the first one that's recovered, NASA is offering up a measly $100 reward. But hey, that's $100 more than you had before, you crusty old arctic fisherman. And it's for science. [Guardian via Treehugger
NYT Investigates TV Shrink Ray [Shrink Ray]
Is nothing sacred? The New York Times is reporting that the grocery shrink ray, that scourge of the savvy supermarket shopper, has now been turned to televisions. The Times writes that advertising circulars for Best Buy, Circuit City, and other stores are listing TVs as inch "classes," rather than actual measurements, to allow them to shave half an inch off the actual screen size.
Take this one from Best Buy: Dynex® - 32" Class 720p Flat-Panel LCD HDTV - Matte Black. It then goes on to say 32 inches twice more:
Experience your favorite action movies and sports shows in high-definition on this 32" LCD HDTV that features an ultrafast 6.5 ms response time for fluid visuals and wide 176° viewing angles that help make any seat the best in the house.
What's Included* Dynex® 32" Class 720p Flat-Panel LCD HDTV
* Stationary base
* Remote with batteries
* 5' detachable power cord
* Owner's manualScroll down further, though, and it lists a "31-1/2" screen size measured diagonally from corner to corner, ideal for medium-size rooms." These inch class listings exist for Samsung, Toshiba, and other big manufacturers. The Times reporter contacted the stores and manufacturers and got varying explanations. Best Buy said:
We also started using the word “Class” to describe the size of the television if the screen size was not, in fact, exactly the size at which that television is classified . . . . If a 32″ television is actually 31.5″ we think a customer might want to know that even though it might not seem like a big deal to some people.This is troubling news. At least with the grocery shrink ray, the reduced size wasn't deceptively labeled (imagine a Breyer's "Half-Gallon Class" that only contained 1.5 quarts).
The Mysterious Shrinking TV [NYT]
(Photo: Getty)
Kohl's Marks Up Jewelry, Then Discounts It [Markups]
A Maryland woman bought some jewelry on sale at the Kohl's in Westminster, then discovered cheaper prices under the price tags.
According to the local Fox news station, the woman bought two pair of diamond earrings at 60% off their "original" prices, which were $550 and $320. When she got home, she noticed the price tags covered older tags, so she peeled them off. Surprise! The earrings were originally priced at $425 and $250—they had been marked up 28-30% before being put on sale.
She paid $348 total for the jewelry, but if the discounts had been applied to the original prices, she would have only paid $250.
Fox News says Kohl's says it is looking into the issue. They also contacted the Maryland Attorney General's office and were told that although stores can raise prices at any time, they can't do it solely to make their discounts look better than they are.
At the end of the video clip, the woman gives some good advice for other shoppers, at Kohl's and elsewhere: "Look at the boxes, look at the prices, ask what the original price was, ask what it's marked down from. Just be an informed consumer."
"Price Concerns" (video) [WBFF Fox 45] (Thanks to Wayne!)
Tuesday, December 23, 2008
Retailers Beg Government To Create Tax-Free Shopping Holidays To Save Them [Tax Free Shopping]
The National Retail Federation has asked President-elect Obama to declare three tax-free shopping holidays next year.
The situation is critical," the National Retail Federation (NRF) wrote in a letter to Obama. "In October, consumer confidence was at its lowest level in the 41 years. We urge you to act quickly on legislation to help stimulate consumer spending
An economist told CNNMoney that tax-free holidays don't always have the desired effect, because consumers tend to stop shopping in the month leading up to the event: ""From a policy standpoint, perhaps the most effective way to deal with the sales tax issue is to lower the tax rate rather than eliminate it altogether."
"Retailers want their bailout, too" [CNNMoney]
(Photo: Getty)
T-Mobile Blocks Stolen Cellphone Tracking Despite Victim, Cops' OK [Crime]
T-Mobile is refusing to track stolen cellphones despite having the permission of both Boston police AND the victim whose phone was stolen, citing "privacy restrictions."
According to the Boston Herald, T-Mobile will only help track the stolen phone (a Sidekick, snatched from a 16-year-old by an 18-year-old) if it's a "life or death situation", or if ordered to by a judge. Getting the SK back falls under neither of these two conditions, in this case, so police are hoping a letter from a city council member will sway T-Mobile in helping to track it down.
They'd better act soon, since the theft occured on November 20, and it's unlikely that that Sidekick's battery will hold out much longer for tracking purposes. [Boston Herald - Thanks Patrick!]
Above, two ladies demonstrate how best to hold your Sidekick if you want to get it stolen.
Amtrak Strands Passengers Without Food, Water, Toilets [Amtrak]
About 450 Amtrak passengers were stranded in Chicago's Union Station for almost 24 hours — without food, water or access to reliable functioning restrooms.
The Empire Builder, a train to the Pacific Northwest was scheduled to leave at 2:15 pm Monday — but didn't actually leave the station until 1:22 pm today, says Chicago Breaking News. Similar reports of horrible delays are popping up all over the country.
Here's a train to Michigan that left 8 hours late from Chicago and was spotted sitting on a sidetrack waiting for a new crew. And here's another one too Chicago that stopped mysteriously every hour and forty-five minutes.
The stranded passengers in Chicago say that they had trouble getting a straight answer from Amtrak.
They just keep giving us all of these excuses. Excuse after excuse after excuse," Beth Kelly, 29, of Lima, Ohio, said earlier. She had been en route to Canada by way of Minot, N.D.
The "excuses" have included engine problems and that no conductor was available for the train, Kelly said.
In a morning update with disgruntled and angry passengers on the train, an Amtrak employee said, "If there's a rebellion here, I'm with you."
Passengers say they were allowed to board the train and sleep on hard linoleum floors in the "standing room only" space because the terminals were too cold. In some cars there were no toilets and no one was passing out water.
One passenger said that when she complained about the way they were being treated, the Amtrak employee told her she was being taught a "life lesson."
Kelly said when she asked a customer service employee what to do, she was told: "Sometimes life puts you in a situation, where you need to learn a lesson. I would figure out what that lesson is supposed to be."
It's a good thing for that customer service rep that Kelly had previously learned another important life lesson: Don't punch Amtrak customer service people in the face... no matter what they say to you.
A day late, stranded Amtrak riders depart [Chicago Breaking News]
(Photo: Mac (3) )
Fry's VP Arrested For Embezzling $65 Million [Fry's]
A Fry's VP was arrested last Friday for embezzling $65 million from the electronics retailer to fuel a gargantuan gambling lifestyle and feed his appetite for excess.
Ausaf Umar Siddiqui is accused by the IRS of concocting an incredibly profitable scheme in which he cut side deals with some of Fry's suppliers, buying their goods at higher prices than they would normally get, and buying more of them than he normally would, in exchange for kickbacks of up to 31 percent of the total sales price.An anonymous insider tip we received on Friday, December 19th but weren't able to confirm gives a peek at what the arrest this looked like on-scene:
At Lunch time today, About 30 agents from the FBI and IRS rushed our Home office today. They arrested the Vice President of Fry's, Omar Siddiqui. I believe it has nothing to do with the company, but you can never tell. They also seized his computer, shredders, and boxes of paperwork.IRS: Fry's exec stole $65M to pay gambling debts [AP] (Thanks to Keith!) (Photo: bryce_edwards)
Monday, December 22, 2008
Greyhound Abandons 60 Passengers In Seattle, Locks Up For The Night [Greyhound]
Who rides Greyhound anyways!!!
Unsafe road conditions in Seattle brought Greyhound's fleet to a standstill on Sunday, which apparently is why they abandoned riders outside in 25 degree weather last night.
According to the Seattle PI, the bus dropped off the passengers outside a shelter at the Seattle Center, but the shelter turned them away because it was full. Before they could get back on the bus, it had left. The passengers called the police, who responded to the Greyhound bus station and found it closed for the night.
Luckily for Greyhound's customers, the Seattle Police Department stepped in to find shelter:
The officers then responded to the Seattle Center, and with the assistance from Seattle Police Communications, found available shelters. Three families with young children were transported to the YWCA. The rest of the displaced individuals (about 40), were taken to “DESC” at 517 3rd Avenue.
Metro or Greyhound were not available to assist with the transportation, so all transports were completed by patrol and West Anti Crime Team. They were all in shelters, 1 ½ hours after the original call.
A Greyhound spokeswoman told the Seattle PI that the company has no plans to issue refunds to any of their passengers, although they will allow them to sleep in "heated buses" until they're allowed to depart again. (No buses are leaving today, either.)
"Snow: Update on stuck Greyhound passengers" [Seattle PI] (Thanks to John!)
"SPD Officers Find Shelter For 60 Displaced People" [SPDBlotter]
(Photo: jakesmome)
How to Use Speed Cameras to Bury Your Enemies in Speeding Tickets [Pranks]
I think that speed cameras are the devil's technology that impugn our basic human rights, but Maryland high school students show how they can be used for fun and
profitrevenge.Basically, students from Richard Montgomery High School are copying the license plate numbers of their "enemies" ('cause high schoolers lead such vicious, angsty lives) on glossy photo paper in a font that looks just like the one Maryland uses for its license plates. They tape the crappy fake license over their own, and intentionally zip past a stupid speed trap camera, and a couple days later, their victim receives a ticket in the mail. The really clever little bastards are borrowing cars that are the same model as the one their victim owns.
This should pretty much seal the deal on how speeding cameras are. I mean, the whole program is being effortlessly de-constructed and re-purposed by high school geniuses who call their prank speed camera "pimping" and some glossy photo paper. And this is the future of public safety? Right. [The Sentinel via Slashdot]
Former Treasury Secretary Says He "Forgot" That People Had To "Afford Their House" [Forgetful]
Former Treasury Secretary John W. Snow has told the New York Times that he, along with the entire Bush Administration, simply "forgot" that people had to be able to "afford their house."
One of the main goals of the Bush Administration has always been to increase homeownership among Americans — a fantastic goal — but there was apparently one small flaw in the plan...
From the New York Times:
“The Bush administration took a lot of pride that homeownership had reached historic highs,” Mr. Snow said in an interview. “But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost.”
This seems like an odd thing to forget... especially for someone as accomplished as Mr. Snow. From 2003 - 2006, he served as the 73rd United States Secretary of the Treasury. Previous to that appointment he worked in the Reagan Administration and earned a Ph.D. in Economics from the University of Virginia. He's currently serving as chairman of Cerberus Capital Management, which among other things, owns 80% of Chrysler.
White House Philosophy Stoked Mortgage Bonfire [NYT]
(Photo:Rich Addicks/Atlanta Journal-Constitution)
Sunday, December 21, 2008
60,000-Piece Lego Star Wars Hoth Diorama Features LEDs, Footprints [Lego]
Not only is this Lego Star Wars diorama of the ice world Hoth fun to look at, it's got some gadgetry goodness inside too. Oh, and footprints. Tons of tiny minifig footprints.
As the headline says, the 5′X10′ diorama is comprised of 60,000 Lego bricks. It cost creator Mark Borlase about $3,000 and four years of construction time to complete.
There's also the 50 LED lights that illuminate the Echo Base hangar and bacta tank with a soothing blue. Motorized AT-AT wenches and a fully operational hanger door top off this gorgeous pile of eye candy.
And according to the block heads over at Brothers Brick the diorama also won the recent "Star Wars building challenge" and was featured in the official LEGO Magazine.
Impressive. Most impressive [Flickr Set via Brothers Brick]
Saturday, December 20, 2008
Auto Executives Will Have To Give Up Their Private Jets [Auto Bailout]
One of the conditions of the auto bailout is the elimination of private corporate jets. Guess they probably shouldn't have flown them to Washington to ask for a tax payer bailout. Whoopsie!
The NYT says:
To gain access to the loans, G.M. and Chrysler must agree to a range of concessions, including limits on executive pay and the elimination of private corporate jets.
Ford, which is not seeking government aid at this time, can carry on business as usual.
The various cuts at the troubled companies are likely to be steep and universal— because under the terms of the deal the automakers have until March 31st to become "financially viable" in the opinion of the Obama administration — or the loans will be called in and the government will be paid before any other creditors when the companies go into bankruptcy.
Friday, December 19, 2008
RIAA finds its soul, will stop suing individuals for music piracy
When you retard fair use with pointless DRM and then sue anonymous children for illegally downloading music while ignoring those of the execs at the top of the music industry, well, you're asking for a public relations nightmare. Now, with more than 35,000 lawsuits to its credit, the RIAA says it will finally end the legal assault against consumers that began back in 2003. The Recording Industry Association of America will instead, focus its anti-piracy efforts with ISPs. Under the new plan, the RIAA will contact ISPs when illegal uploading is detected. The ISP will then contact the customer with a notice that would ultimately be followed by a reduction or cessation of service. As you'd expect, the RIAA is not commenting on which ISPs they are in cahoots with. The RIAA also says that it won't require ISPs to reveal the identities of individuals but could, of course, go after individuals who are heavy uploaders or repeat offenders. For the moment though, it appears that single-mothers are in the clear.
RIAA finds its soul, will stop suing individuals for music piracy originally appeared on Engadget on Fri, 19 Dec 2008 06:16:00 EST. Please see our terms for use of feeds.
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Thursday, December 18, 2008
Trek's Majel Roddenberry Dies
Trek's Majel Roddenberry Dies
Majel Barrett Roddenberry, the widow of Star Trek creator Gene Roddenberry and the only actor to have a role in all incarnations of the franchise, has died, the Associated Press reported. She was 76.
Roddenberry died Dec. 18 of leukemia at her home in Bel-Air, Calif., her representative told the AP.
At Roddenberry's side were family friends and her only son, Eugene "Rod" Roddenberry Jr. Gene Roddenberry died in 1991.
Her romance with Roddenberry earned her the title "The First Lady of Star Trek." A fixture in the Trek franchise, her roles included Nurse Christine Chapel in the original series, Lwaxana Troi in Star Trek: The Next Generation and the voice of the USS Enterprise computer in almost every spinoff of the 1966 cult series. She recently reprised the voice role in the upcoming Star Trek reboot film directed by J.J. Abrams.
Majel Barrett Roddenberry as Lwaxana Troi on the set of Star Trek: The Next Generation with her husband, Trek creator Geen Roddenberry. (StarTrek.com)
To Avoid Paying $25 Million, Insurance Co Claims Smoke Killing 3 In Fire Was "Pollution" [Great American Insurance]
Via Chron:
An insurance company with a potential $25 million liability from a 2007 Houston office fire is claiming smoke that killed three people was "pollution" and surviving families shouldn't be compensated for their losses...Great American Insurance Company is arguing in a Houston federal court that the section of the insurance policy that excludes payments for pollution — like discharges or seepage that require cleanup — would also exclude payouts for damages, including deaths, caused by smoke, or pollution, that results from a fire.
When he thought of that loophole, that insurance lawyer must have pumped his fist in the air and ran down the cubicles demanding high-fives from people on both sides of the aisle and then gone and rewarded himself with an extra candybar from the vending machine. As they stood there waiting for the circular arm to wind out and release the chocolate surprise, he bet himself he could find a way to count it as a business expense. Easy there, big guy, he thought to himself, pride comes before a fall.
BONUS FUN FACTCompany says smoke that killed 3 was 'pollution' [Chron] (Thanks to Barbara!) (Photo: princessevilina)
Original Linky
EA Substitutes Wii Graphics For 360 Footage In Tiger Woods Commercial
This post is syndicated with permission from GamerFront.net
I am a Wii owner, and I’m happy with my console. I think the main reason that I’m happy is because I know exactly what the machine is capable of, and I don’t hold any misconceptions that it has the sort of power and graphics of my 360. However, those in Europe that have seen the recent Tiger Woods PGA Tour 09 ads might expect a bit more from their Wii than they should.
Recently EA aired a commercial that shows Tiger Woods swinging a Wiimote while playing his latest game. The entire commercial is centered around the Wii version, and only shows the Wii logo at the end. That’s all good and well except that some eagle-eye viewers noticed that the in-game footage was from the Xbox 360 version, which is obviously better looking than the Wii.
When cornered about the matter, EA stated that there is a disclaimer which states that the game is “available on all formats”. They went on to note that they decided to use Xbox 360 footage because the “Wii footage would not be of broadcast quality”. I love the smell of deception in the morning.
VIA [ GamerFront ]
Tuesday, December 16, 2008
Is your voicemail safe?
In an investigation I’m sure most of us didn’t know was ongoing, T-mobile, along with AT&T have been “been banned” from saying that their voicemail systems are safe and secure.
The investigation out of Los Angeles yielded an ability for undercover phone buyers to “spoof” voicemail systems and access voicemail messages and the information they contain.
“Investigators were able to hack into voicemail accounts using something called a SpoofCard. SpoofCard’s software lets people display any number they want on caller ID and has been used to access voicemail systems that do not require passwords such as those used by Cingular (now part of AT&T) and T-Mobile.”
As part of the settlement both AT&T and T-mobile were fined, $59,300 and $25,000 respectively. All companies involved in the settlement declined comment.
While I for one have always kept my voicemail password protected, my fear of voicemail hacking has never gone beyond that of a crazy ex-girlfriend getting into and listening to my messages. I never lended thought to the notion that this could be a serious practice done for absolutely malicious reasons. So I suppose the lesson here is, password protect your voicemail and stay away from prying eyes ears.
Cop seen on video knocking over bicyclist has been indicted
No wonder police officers sometimes confiscate and destroy the cameras of people who videotape them committing illegal acts -- the officers occasionally end up having to pay for their crimes, just like civilian law breakers do.
Remember the video I posted of a Critical Mass bicyclist who got knocked over by NYPD officer Patrick Pogan? Fox News reports that Pogan's been indicted and must report to the Manhattan prosecutor's office next week.
Police said Long was obstructing traffic and deliberately steered his bicycle into an officer. Charges were dismissed.As Radley Balko says, "If not for the video, the guy on the bicycle would probably still be facing charges."A video of the body-check that knocked Long over was posted on YouTube and has been viewed more than 1.6 million times.
Pogan has been stripped of his badge and gun and been assigned to desk duty.
Monday, December 15, 2008
MPAA to Obama: censor the Internet, kick people off the Internet, break other countries' Internet
This is some fucked up shit!!!!
Tim Jones of the Electronic Frontier Foundation has some good commentary on the news that the MPAA has asked Obama to spy on the entire Internet, and to establish a system where being accused of copyright infringement would result in loss of your Internet connection (and your VoIP line, your access to your university, your lifeline to your parents in the old country, your means of participating in civic life, your means of fighting your parking ticket, etc etc etc). The MPAA also wants Obama to lean on other countries (notably Canada!) and force them to adopt US copyright laws.
Here, the MPAA is advocating for a number of things, the most problematic of which is a "three strikes" internet termination policy. This would require ISPs to terminate customers' internet accounts upon a rights-holder's repeat allegation of copyright infringement. This could be done potentially without any due process or judicial review. A three-strikes policy was recently adopted by legislation in France, where all ISPs are now banned from providing blacklisted citizens with internet access for up to one year.MPAA Asks Obama for More Copyright Surveillance of the InternetBecause three-strikes policies do not guarantee due process or judicial oversight of whether the accusations of copyright infringement are valid, they effectively grant the content industry the ability to exile any individual they want from the internet. Lest we forget, there is a history of innocents getting caught up in these anti-piracy dragnets. (Copyfighter Cory Doctorow has wondered what would happen if the MPAA's erroneous notices were subject to a similar three-strikes law.)
Thankfully, members of the European Parliament vehemently rejected these measures, resolving that "The cut of Internet access is a disproportionate measure regarding the objectives. It is a sanction with powerful effects, which could have profound repercussions in a society where access to the Internet is an imperative right for social inclusion." Let's hope the US government's decisions on this are as wise.
Previously:
Chicago To Lease Parking Meters To A Company That Will Charge $6.50 An Hour? [Privatization]
The Chicago Sun-Times is reporting that Mayor Richard M. Daley of Chicago is trying to get "quickie" approval for a proposal to privatize the city's parking meters. Under the 75 year lease, Chicago's 36,000 parking meters would be controlled by a partnership that includes Morgan Stanley Infrastructure Partners and LAZ Parking. This partnership will, naturally, raise prices. Critics of the proposal say that charging $6.50 an hour by 2013 to park downtown would hurt local businesses.
More troubling is the potential for a conflict of interest:
Ald. William Banks (36th), one of the mayor's staunchest City Council supporters, warned that charging $6.50-an-hour to park at Loop meters and forcing drivers to feed those meters 24/7 would be a "definite deterrent to people visiting the downtown area," hurting retailers and restaurants.
Parking enforcement could get tougher if the contractor exercises its right to "supplement" the city's ticket-writing efforts to "protect its revenue."
Supplement the city's ticket writing to "protect its revenue?" Well, that seems like a conflict of interest, doesn't it? Consumerist expects to receive a lot of email from angry motorists should this deal go through.
Motorists would pay more to park at cashless meter spaces [Sun-Times]
(Photo: mbeldyk )
Dollar Tree To Murdered Black Employee: Drop Dead [Dollar Tree]
Prosecutors say Taneka Talley was killed while working at Dollar Tree because she was black, and now Dollar Tree is denying her 11-year-old her worker's comp because they deem racially-motivated murders on-the-job to be "personal" and not "work-related." Empathy costs more than a dollar, it seems.
Firm denies workers' comp in racial killing [SFGate] (Thanks to Kevin!)
FDIC Critizes Banks' Overdraft Fees [Fees]
It took 18 months for the FDIC to figure out that banks' practice of clearing checks largest to smallest makes banks a lot of money.
Bankers defend it saying that people would rather their cable bill to bounce than their mortgage payment, but it just so happens that if you miscalculate your balance or a deposit didn't clear in time, it maximizes potential fees. Overdraft fees accounted for 74% of service fees banks earned in 2006, to the tune of $1.97 billion. The data was based on banks' responses to survey questions, so you can bet the numbers are actually higher.
FDIC: Bank overdraft fees hit young, low-income customers [USAToday] (Thanks to Snarkysnake!) (Photo: David Reber)
Testing Chuck E. Cheese Restaurants For Bacteria Will Probably Give You Nightmares [Disgusting]
After one of their friends claimed to have gotten ringworm from a Chuck E. Cheese restaurant, mommy blog "momlogic" decided to swab several Chuck E. Cheese locations and have the samples tested for bacteria. The results are pretty gross, and make us thankful to have an immune system.
They found a variety of nasty germs that cause things like UTIs, pneumonia, and infant meningitis — proving once and for all that you should wash your hands before you eat.
Chuck E. Cheese's spokesperson says that the restaurant cleans and disinfects the tables and games every evening.
"We clean and sanitize our games every night with an antibacterial sanitizing solution called Sterbac Blue. We try to inspect and maintain during the day as well. We have a large amount of kids who come through here, and with them, a large amount of bacteria. We try to keep up with it."
Yep, kids are pretty gross. Be sure to wash yours thoroughly.
Teacher Confiscates Linux Discs, Chides Charitable Computer Group, "No Software Is Free" [Linux]
What are teachers teaching our young minds. How good is a teacher that doesn’t know how to Google Linux to find out what it really is. That Linux is a free and open-source operating system. That can be downloaded for free all over the web.
Recently a Texas teacher confiscated Linux OS discs that a kid was passing out in class. She then sent a nasty email to the nonprofit that built and donated the Linux-loaded computer...
"No software is free and spreading that misconception is harmful," Karen wrote in the email that HeliOS, which builds and donates computers for poor kids, posted to their blog. "I will research this as time allows and I want to assure you, if you are doing anything illegal, I will pursue charges as the law allows."
Linux is a free and open-source operating system, it's meant to be passed around without cost. This concept makes people's heads explode, and then they go on to teach our kids.
The blogger posted her letter along with his heated rebuttal, and forwarded the link back to Karen. She ended up calling him, they talked it over, and both agreed they overreacted and have made nice. The kid also got his Linux discs back after class.
Linux - Stop holding our kids back [Blog of Helios]
Character-Assassinations-Ain't-Us [Blog of Helios] (Thanks to Casey!)(Photo: wili_hybrid)
Thursday, December 11, 2008
White House opposes FCC’s plan for free, nationwide wireless broadband
When is the current administration living the White House? I want them to go now!!!!
After the whole controversy over the usage of the White Space spectrum had been given the thumbs up by the FCC, we thought that free, nationwide wireless Internet access was a given. Not so fast says the White House. The FCC was going to vote as early as next week on a plan to auction 25 megahertz of spectrum in the 2155MHz to 2180MHz band. According to the FCC’s plan, those who purchase a license to use this spectrum would be required to offer free wireless broadband service. The White House disagreed with the requirement that licensees had to offer free service and voiced its objection in a letter written by Commerce Secretary Carlos Gutierrez saying:
“The administration believes that the (airwaves) should be auctioned without price or product mandate. The history of FCC spectrum auctions has shown that the potential for problems increases in instances where licensing is overly prescriptive or designed around unproven business models.”
The FCC is reportedly reviewing the letter and has publicly stated that, though it does agree that “market forces should drive competition”, it also believes “providing free basic broadband to consumers is a good thing.” Perhaps the White House is considering how well the free market system is working in every other industry these days when making this assessment…
Monday, December 08, 2008
Kopbusters -- reality show that busts cops for conducting illegal drug raids
Former drug office Barry Cooper has launched an online reality TV show that sets up corrupt cops who conduct illegal drug raids.
KopBusters rented a house in Odessa, Texas and began growing two small Christmas trees under a grow light similar to those used for growing marijuana. When faced with a suspected marijuana grow, the police usually use illegal FLIR cameras and/or lie on the search warrant affidavit claiming they have probable cause to raid the house. Instead of conducting a proper investigation which usually leads to no probable cause, the Kops lie on the affidavit claiming a confidential informant saw the plants and/or the police could smell marijuana coming from the suspected house.On the Agitator blog, Radley Balko says:The trap was set and less than 24 hours later, the Odessa narcotics unit raided the house only to find KopBuster’s attorney waiting under a system of complex gadgetry and spy cameras that streamed online to the KopBuster’s secret mobile office nearby.
To clarify just a bit, according to Cooper, there was nothing illegal going on the bait house, just two evergreen trees and some grow lamps. There was no probable cause. So a couple of questions come up. First, how did the cops get turned on to the house in the first place? Cooper suspects they were using thermal imaging equipment to detect the grow lamps, a practice the Supreme Court has said is illegal. The second question is, what probable cause did the police put on the affidavit to get a judge to sign off on a search warrant? If there was nothing illegal going on in the house, it’s difficult to conceive of a scenario where either the police or one of their informants didn’t lie to get a warrant.Cooper chose to bait the Odessa police department because he believes police there instructed an informant to plant marijuana on a woman named Yolanda Madden. She’s currently serving an eight-year sentence for possession with intent to distribute. According to Cooper, the informant actually admitted in federal court that he planted the marijuana. Madden was convicted anyway.
Friday, December 05, 2008
On Heels of Bailout, Citi Raises Rates on Millions of Cardholders [Op-ed]
We know the credit markets remain seized: late on Black Friday when no one was listening, the Federal Reserve issued a statement that its emergency lending to banks had increased over the prior week. Thus, massive amounts of money continue to flow to large financial institutions in an effort to stimulate economic activity, but by all appearances the money is not flowing into the broader economy. Quite the contrary; as the Fed lowers rates and adds record amounts of loaned cash to bank balance sheets, big banks are actually increasing consumers’ cost of borrowing and reducing their lines of credit. Witness Citibank's recent adverse actions against cardholders.
The most recent beneficiary of a taxpayer-financed lifeline, Citibank is the latest to demonstrate a strange way of saying thanks. First, we were subjected to the made-for-SNL performance on CNBC by the company’s largest shareholder, Saudi Prince Alwaleed. The interview was shot on location at the Prince's stables in Saudi Arabia. Note the beautiful sable horse in the background:
Far less entertaining were the letters that arrived in the mailboxes of millions of Citibank credit card customers last week. The letters informed customers that the APRs on their accounts will be hiked dramatically and immediately. Many will see their APRs raised more than ten points as soon as December 3 - just days after receipt of the letter.
The company claims the rate increases are limited to 20% of their cardholders (if true, that still represents 11 million Americans). In a statement, the company offered few details but acknowledged that it was “repricing a group of customers” in order to “continue lending in this environment.”
Those who pay their balance in full each month have nothing to worry about. And from what we can tell, “promotional balances” - such as that 1.9% balance transfer you might have taken advantage of - are not affected.
Based on admittedly-unscientific online discussions, customers across the risk spectrum have been targeted - including, most oddly, lowest-risk customers with top FICO scores who don’t carry balances. This would seem to indicate that the repricing is more widespread than Citi has indicated.
This deals an embarrassing death blow to the company’s enthusiastic promises last year, when Citi Cards CEO Vikram Atal told the United States Senate that they would abandon the practice of hiking rates on existing balances. Atal said the company was “giving up that practice,” and
“...will not voluntarily increase the rates or fees on the account until the card expires ... the only reason we would consider increasing the rates or fees before the card expires would be if a cardholder pays Citi late, exceeds the credit limit, or pays with a check that bounces. We believe we are the first bank to adopt this policy.”
Setting aside broken promises, Citi is right that we’re in a very difficult environment. But such a precarious environment seems to be the most dangerous time for repricing. Further, the repricing is in direct opposition to the first principle stated by the Federal Reserve when they announced the Citibank bailout last week: “to support a healthy resumption of credit flows to households and businesses.”
It may behoove us to think this forward a quarter or two from the perspective of the bank, the customers, and the broader economy. Beyond the unseemly PR of appearing to burn the taxpayer from both ends when they can least afford it, there are more serious implications.
First, customers who are barely making ends meet under their current arrangements could easily tip into default under the new terms. Many won’t even notice the change until it’s too late. This is the adjustable-rate-mortgage of the credit card business - but in these cases, the customer had no way to see the adjustment coming. This is not just bad for those customers, but it’s bad for Citibank because it will almost certainly generate larger losses down the road.
Second, Citi is allowing customers to “opt out” of the change, but those who do must close their account. This action almost always hurts a customer’s credit score, and the impact can be dramatic. It delivers a nasty one-two punch: it both reduces their reported payment experience and their amount of available credit. More than a third of a FICO score is determined by calculating the person’s percentage of available credit, so closing a credit card account can hurt big. Lower scores, in turn, will cause these customers to be seen as higher risk, and other lenders are likely to reprice them too, setting off a domino effect that could crush those who’ve done nothing other than pay their bills on time.
Third, this makes consumers much less likely to borrow and therefore spend. For many Americans, this is a good thing. But like it or not, spending is the engine of the American economy. The vast majority of consumers borrow - even short term - to finance things like holiday shopping. At a time when consumers are tightening their belts anyway, this presents another very ominous leading indicator for retailers at their most important time of year.
So, why is Citibank doing this? The easy answer is that they need to quickly increase their near-term cash flow in order to survive. This means letting less cash go out the door and charging higher rates on the cash they do.
A more cynical answer might be that the company wants to get ahead of impending legislative and regulatory changes. Both the Cardholders’ Bill of Rights and new lending regulations proposed by the Federal Reserve will expressly prohibit the practice and seem sure to pass by early next year. In light of Citi’s aggressive actions, we wonder if legislators may now consider making these changes retroactive.
So keep your eye out for letters from Citibank - and tell us your story.
Anthony Citrano is a freelance writer with a "great deal of interest in the consumer space, especially with regard to consumer credit and (bad/absurd) customer service experiences. Don't ask me why; I'm just that way." He has also written for Money Magazine.
(Photo: me and the sysop)
Thursday, December 04, 2008
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