December 23, 2009
By Terry Smilijanich:
Before you take a bite of that Christmas turkey, you may want to read on and make sure you’re cooking that holiday bird well!
Last year, Consumer Warning Network reported that the 2008 Farm Bill loosened federal regulation of poultry inspections by allowing state inspection programs take the place of federal inspections. With Thanksgiving behind us and Christmas dinners around the corner, how’s that little bit of federal deregulation working out?
Consumers Union recently tested 382 whole chicken broilers bought at over 100 supermarkets nationwide, and tested them for salmonella and campylobacter, the two leading causes of food poisoning. Two-thirds of the raw chickens tested showed signs of one or both of these dangerous contaminants. A similar test back in 2003 had found such contaminants in half of the chickens examined. On the other hand, another test in 2007 had found a higher rate of contamination.
The cleanest products came from Perdue chickens, but the worst came from Tyson and Foster Farms. Interestingly, all of the store brand “organic chickens” involved in the testing were free of salmonella. Of course, all chickens are presumably “organic,” but organic farmers usually follow more stringent standards in their smaller operations.
So, are we better off with less federal regulation? The jury is still out. Now that your local state inspector doesn’t have a pesky federal inspector looking over his shoulder, it remains to be seen whether the level of safety will suffer. Is it acceptable that only one out of three poultry products can be considered safe?
With every three poultry purchases at your supermarket, two of them will probably have bacterial contamination. This is why it is so important to follow safe cooking rules whenever you roast that turkey stuffed with dressing.
December 21, 2009
If you thought 36% interest on a credit was bad, how about a 79.9% interest rate. It sounds crazy, but it’s true. Thank you South Dakota. As CWN has reported, South Dakota opened the flood gates for banks to charge these outrageous, loan shark, interest rates. Now, First Premier Bank is taking it to a new high or should we say low.
It’s an effort to avoid new fee regulations being posted against credit card companies, starting in February. It sure didn’t take long for First Premier to figure out a way to get around the new government regulatory caps. And rest assured, many of the other sub prime lenders are sure to follow in this direction to skirt the new law.
First Premier Bank charges a variety of annual and first year fees: account set-up fee, program fee, annual fee, and monthly servicing fee. The total cost of first year fees on a new card holder comes to $256.00. The new regulations will cap these fees at 25 percent of a card holder’s credit line and reduce the banks fees to a maximum of $75.00 on a credit line of $300.00.
To offset this loss, First Premier Bank decided to make use of the fact that the new regulations did not cap the interest rate they can charge. They have recently issued cards with fees of $75.00 and an interest rate of 79.9 percent. There will also be a $29.00 late fee and over credit limit fee.
Click here to read more about First Premier’s outrageous new interest rate for its customers.
December 17, 2009
By Terry Smiljanich:
After Consumer Warning Network helped expose how South Dakota politicians are in the banking industry’s back pocket, the bankers and politicians responded. As we reported, South Dakota legislators led the way in giving banks the opening to charge loan shark interest rates. So, are they ashamed for their role in this travesty of justice? Apparently not.
When the Argus Leader, the leading newspaper in Sioux Falls, South Dakota, wrote a story about the CWN article, the reporter asked its state politicians for a comment. Did they argue that rates as high as 36% are fair and equitable? Did they argue that South Dakota was not a prime cause for such high nationwide rates? Not exactly.
December 16, 2009
A “Where’s the Outrage?” column by CWN Managing Editor Terry Smiljanich has raised the ire of some law makers and bankers in South Dakota. Smiljanich called South Dakota the “Loan Shark Capital of the World” and wrote about how that state’s legislators are to blame for opening the flood gates for banks to charge outrageously high interest rates on credit cards in all 50 states. The Sioux Falls Argus Leader did a story about Terry’s column, in which they talked to some state officials who used the old stand-by “it’s best to let the market work it out.” Well, of course, we all know how well trusting corporate America has worked out. Read the Argus Leader story below. Terry will respond in a new column soon.
Consumer group: S.D. interest rate law a sham
State officials say regulation best left to the marketplace
December 15, 2009
South Dakota is called the “loan shark capital of the world” by a Florida-based consumer advocacy group because of the high interest rates banks based here can charge on credit cards.
The nonprofit Consumer Warning Network is urging credit card customers across the country to contact South Dakota lawmakers and complain about banks that charge up to 36 percent interest.
“What I think people ought to do is to ask a simple question: Do you think this is fair? And what are you going to do about it?” said Terry Smiljanich, managing editor at the Consumer Warning Network. “I dare any South Dakota legislator to stand up and say with pride we are happy credit card companies charge 36 percent.”
Consumer Warning Network is a nonprofit established by former federal investigators, prosecutors and investigative journalists to empower consumers.
Banking officials said that credit card statements with high interest rates are hardly being mailed from South Dakota alone.
Delaware, for example, has more large credit card operations than South Dakota.
Nevada also has open lending laws which allow higher interest rates than many other states. After South Dakota’s laws were removed, other states followed suit to compete for business.
“I don’t think it is something unique to South Dakota, it is an epidemic countrywide,” said state Sen. Scott Heidepriem, the minority leader and a gubernatorial candidate.
He added that an idea behind removing the usury limit was to put the rate in the market’s hands.
“When we changed the law, we said we’re going to bet the marketplace sets the limit, not some arbitrary rate,” Heidepriem said. “We benefited greatly from that.”
‘Marketplace is there to sort it out’
Despite the rising interest rates, he said that the governor on the rate should remain the market.
“The marketplace is there to sort it out,” he said. “And, hopefully, it will.”
In May 1980, when South Dakota’s law eliminating all usury laws – which state that interest shall not be charged above a certain percentage – was enacted, it was a move by then Gov. Bill Janklow to entice new businesses with high-paying jobs.
In short order, Citibank announced it would shift its credit card operations to Sioux Falls by summer to evade New York’s interest rate limit of 18 percent on credit card balances of less than $500 and 12 percent on balances above $500.
Other banks followed.
Credit card balances slide again
The average consumer credit card interest rate in the U.S. is 12.75 percent, up from 12.05 percent six months ago. As banks make it more expensive to use cards, consumers have scaled back their credit card debts. Federal Reserve data released last week showed that card balances fell in October for a record 13th consecutive month.
Asked for a reaction to the organization’s appeal, Roger Novotny, the director of banking for South Dakota, said he doesn’t think too much of it – considering it is coming from Florida.
“Florida was one of the centers of the subprime mortgage mess,” Novotny said. “For people in Florida to be pointing to us and saying we’re the problem, at the point we are at economically, is laughable.”
Financial literacy called bigger worry
Novotny contends that high-cost unsecured-debt is not treated that much differently in South Dakota than in other states.
“Our restrictions are at times very similar to theirs. Other states have subprime credit issuers,” he said.
The usury rate, Novotny added, is a smokescreen. Risk drives interest rates, he said.
In that case, is a 36 percent interest rate on a credit card too high?
It depends on the credit worthiness of the user, Novotny said. Of more concern to him is financial literacy and making sure that people know what they are signing on to when they get a credit card.
“I bet you people do more research buying a flat-screen TV more than getting a credit card, and that’s a crime,” he said.
At what point will high credit card rates tarnish South Dakota’s image? Not any time soon, Novotny said.
“I don’t see that our reputation is tarnished as a financial service center. They provide employment for a lot of people and provide access to the credit for a lot of others.”
But for Smiljanich of Florida, who said he has spent time in Sioux Falls and the Black Hills, the state has lost some luster.
“Not as far as your state’s natural beauty goes,” Smiljanich said, “but as far as your politicians go, they should be ashamed.”
December 16, 2009
Just in time for the holiday season The World Against Toys Causing Harm, Inc (WATCH) released its 10 worst toy. WATCH is a Massachusetts, non-profit corporation working to educate the public about life-threatening toys and other children’s products, including children’s furniture, clothing and playground equipment. Beginning in 1973, WATCH has published its annual “Ten Worst Toys.”
Here’s the 2009 list:
1) Disney-Pixar Wall-E Foam Rocket Launcher
2) Moon Board Pogo Board
3) Curious Baby George Counting-My First Book of Numbers
4) The Dark Knight Batman Figure
5) X-Men Origins Slashin’Action Wolverine
6) Lots To Love Babies Mini Nursery
7) Just Kidz Junior Musical Instruments
8) CAT Rugged Mini
9) Pucci Pups Maltese
10) Spy Gear Viper-Blaster
If you want to know what WATCH finds troubling about these toys please click here.
December 11, 2009
House lawmakers have approved the most significant increase in the regulation of U.S. banks and other corporations since the Great Depression. The bill places new restrictions on the nation’s biggest banks, reins in the Federal Reserve and provides more help for troubled homeowners.
Also, lawmakers narrowly defeated a bipartisan effort to destroy a proposed Consumer Financial Protection Agency and replace it with a weaker council. The proposed consumer agency would supervise and regulate mortgage and credit card products including pay-day lenders and other lenders that have so far escaped regulation.
Click here to learn more.
December 11, 2009
When it comes to gas mileage, does it matter if you’re a lead-footed, hybrid driver or slow and steady sports car enthusiast? It’s a curious question. What matters more: the type of car you drive or the type of driver you are? Click here to find out.
December 9, 2009
By Terry Smiljanich:
Why this State is to Blame for your
High Credit Card Interest Rates
Bank of America, among others, charges up to 36% interest on credit card debt. How can financial institutions get away with charging consumers such historically high interest? Isn’t it criminal to do so? Isn’t it “usurious?” If not, who’s responsible for letting banks get away with this? Remember when 18% interest was considered high on consumer debt? Remember finance charges of 6%? How did we get from there to here? Enter South Dakota.
December 9, 2009
Please join us in congratulating Consumer Warning Network Editor Angie Moreschi on winning an Emmy award for her health magazine program, Smart Health , on PBS’s WEDU in Tampa. This is Angie’s 8th Emmy Award. This win is for the July 2008 episode of Smart Health. The show included stories on several important health issues including:
December 8, 2009
Consumer Warning Network received two inquires concerning “pay for view” fees showing up on DirectTV statements for movies that were not ordered. We looked into it and learned what the problem was.
Warning, apparently there is a glitch in DirectTV’s system that downloaded the movie “Angel and Demons” to receivers automatically whether you ordered the movie or not. Here is the catch; if you watch the movie you will be charged for it. Delete it and you will be o.k. There is no warning that you are about to be charged. You look at your play list and, lo and behold, there is the movie “Angels and Demons”. Hey, it’s on my play list so it must be ok to watch. NO! You will be charged.
DirectTV is working on this problem, but until it is fixed – Beware. Thanks to Consumerist for first reporting this.