CFPB’s proposed overdraft fee disclosure: What do you think?

As part of a brand-new investigation into bank overdraft-fee practices, Consumer Financial Protection Bureau Director Richard Cordray today unveiled a prototype “penalty fee box” for bank statements, so consumers can see how much overdraft fees are costing them.

The CFPB would like to know what you think of the proposed penalty fee box, and also what you know about overdraft fees and your ability to avoid them. Do you know whether you’ve “opted in” to get such “protection” (at an average cost of $30 to $35 per overdraft)? And did you know, as we’ve reported, that banks have added numerous other consumer fees in recent months to snag more revenues?

Today, the CFPB released a consumer advisory with all the basic information consumers need to know about overdraft fees. Consumers who want to report on their experiences with overdraft fees, and discuss the new fee penalty box can communicate in several different ways with the bureau (see page two of the linked document).

Consumers Union, the advocacy arm of Consumer Reports, advocates cheaper alternatives for consumers to cover overdrafts triggered by debit cards or checks. Most banks allow customers to link checking accounts to a savings account, credit card, or a line of credit. When an overdraft occurs, the bank will automatically transfer money to cover the transaction from the linked account. The FDIC has concluded that the fees assessed for these other types of programs are significantly lower than for automatic overdraft loan programs.

“Consumers should not sign up for high cost overdraft protection at their bank,” said Lauren Bowne, a Consumers Union staff attorney.  “Banks should be required to inform customers of all of their options for avoiding overdrafts so consumers can make the best choice for them.”

In its investigation announced today, the CFPB said it would study a banking practice that it says can increase consumer costs: reordering a consumer’s transactions in a way that maximizes overdraft fees. The investigation also will focus on bank marketing and disclosure language on overdraft protection programs for missing or confusing information. The bureau says it has received reports of misleading marketing materials and will examine how different ways of explaining overdraft protection affect the number of customers opting in.

The CFPB also will study why most overdraft fees are incurred by young and lower-income consumers. A 2008 study by the FDIC showed that these consumers—ostensibly a more vulnerable population—were much more likely to incur such fees than others. In the study, nine percent of checking-account customers incurred about 84 percent of overdraft fees. Nearly half of all young adult cardholders—46.4 percent—incurred overdraft fees; 15 of those racked up 10 or more in a single year.

The average bank overdraft fee in 2011 ranged from $30 to $35, the CFPB reported. For a comparison of bank and credit-union fees, check this recent post on BankTracker.com.

FTC ends exaggerated energy claims by window makers

Replacement window manufacturers have long made energy savings part of their pitch to consumers, implying that the new units will pay for themselves in no time. But the science hasn’t supported their claims. In fact, Consumer Reports has found that it could take consumers as long as 20 years to recoup the investment. Today, the Federal Trade Commission wielded its own stick by ordering five companies that sell replacement windows to stop making exaggerated and unsupported promises about their products.

“Energy efficiency and cost savings are major factors for many consumers buying replacement windows,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection, in the news release. “The FTC is committed to making sure that the information consumers get is accurate and that marketers can back up the claims they make.”

The companies named in the settlements are: Gorell Enterprises, Inc.; Long Fence & Home, LLLP; Serious Energy, Inc.; THV Holdings LLC; and Winchester Industries. They claimed that consumers could cut their energy bills by 40 to 50 percent by using replacement windows alone. In order to continue making such claims, the companies will need to substantiate them with competent and reliable scientific evidence. Given that the Energy Star program notes that replacement windows can only lower household energy by 7 to 15 percent, it’s doubtful that the companies will push back on the FTC order.

While windows are not a magic bullet for energy efficiency, replacing the units in your home is smart if they’re badly deteriorated. Not only will you reap some energy savings, you will also benefit from the improved comfort, quiet, and aesthetics. Consumer Reports’ Ratings of clad-wood, vinyl, and fiberglass windows assesses them by wind and rain resistance, overall durability, and convenience. We also have extensive buying information on features that can enhance energy efficiency a bit further, such as double glazing and low-emissivity coatings.

New phishing email disguised as BBB and the American Institute of CPAs

A new phishing email using the Better Business Bureau name and email address has been reported by people across the country. The phishing attempt is the latest iteration in a recent outbreak of scams using the BBB name.

In addition to the BBB.org email address, the phishing email also uses the American Institute of CPAs logo and name. Although the email primarily targets accountants, the BBB has received reports of other professionals receiving the emails as well.

The email says that the recipients CPA license is being terminated due to tax fraud allegations and encourages them to click on a link and reply to the charges. The link leads to a third party website that downloads a virus on to the recipient’s computer.

If this email (pictured below) lands in your inbox:

• Do not reply or click on the link in the email

• Forward fake BBB emails to phishing@council.bbb.org
• Delete the email

For ID theft prevention tips, see Consumer Reports Guide to online security. This time of year, you also want to beware of tax scams, for more details read Top tax scams and how to avoid them. Plus it doesn’t hurt to know what latest tricks fraudsters are trying to pull, for more information see our coverage of the top 10 scams of 2011.

New Scam Uses BBB.org Email Address [BBB]

LG announces the Optimus 3D Max, its second 3D smart phone

LG has announced its latest Android smart phone with 3D capability. The Optimus 3D Max, which will debut at the 2012 Mobile World Congress (MWC) in Barcelona later this week, has the same 3D technology found in the high-scoring LG Thrill (available from AT&T) in our Ratings.

The Optimus 3D Max has a larger, 4.3-inch WVGA display and a faster, dual-core processor, and it adds support for NFC (near-field communication) technology, which enables the phone to act as a payment device at a small but slowly growing number of store registers.

The phone will launch in Korea in March, then roll out in Europe and “other markets.” No U.S. carrier was mentioned in the release. It will run Android 2.3 out of the box, but LG says an upgrade to Android 4.0 will be available later on.

As with the Thrill, the Optimus 3D Max’s 3D effects come via two side-by-side 5-megapixel cameras that, like two eyes, capture stills and videos from slightly different perspectives. These images are shown simultaneously on the phone’s display, but a filter in the screen called a Parallax barrier makes sure your right eye sees only what was recorded with the right-side camera, and your left eye sees what was recorded with the left-side camera.

In our tests of the Thrill (available to subscribers), we found the camera produced fair 2D pictures when photos were taken under well-lighted conditions. But the 3D effect required us to hold the screen at a specific distance and angle, and only one person at a time could view it properly. When we moved the screen an inch or so, the cool 3D image looked like blurry 2D. Eyestrain was also an issue.

Other Optimus 3D Max features include 8GB of internal storage and 1GB of memory, support for HSPA+ 21Mbps data networks, an HDMI connection, a 2D/3D TV/monitor up to 1080p via MHL, and wireless streaming to TVs and PCs via DLNA.

Don’t be tempted by tax refund anticipation loans or checks

Tax refund anticipation loans or checks may sound like a good deal, but you’ll pay a high price if you take either offer from a tax-prep company.

A refund anticipation loan, or RAL, is when a tax-prep company gives you your refund in advance, for what seems like a small fee, but those fees are actually extremely costly. Refund anticipation checks, or RACs, provide short-term loans to clients who don’t have the money up front to pay for tax preparation.

Because of pressure from regulators and consumer activists, this will be the last tax season RALs are available, in their place, tax-prep companies are offering RACs, although RALs may still be available through non-bank entities such as payday lenders.

The RAL fees represent interest you’re paying on a very short-term loan from a bank in partnership with the tax-prep company. When calculated as an annual percentage rate, the interest can be high. For example, a customer of tax-prep chain Jackson Hewitt requesting an RAL of $1,500 through Republic Bank, would be charged $61.22, according to a report by the National Consumer Law Center and Consumer Federation of America. That translates to an annual percentage rate of 149 percent.

With an RAC, you’re given a temporary bank account and once the IRS deposits the refund into that account, you’re charged a service fee plus the cost of tax preparation. The bank then issues you a check or prepaid card and closes the account. This year, the RAC service fee is about $30 to $32, according to the NCLC, and that’s on top of what it costs to prepare the return.

Instead of an RAL:
File your federal tax return electronically and choose direct deposit, you may only wait a few days for your refund. The IRS says it can process a return and refund in as little as 10 days if you file this way. You can also have your tax preparer file your return electronically for you.

Instead of an RAC:
If paying for tax preparation is your concern, check the IRS’s information on free help preparing and filing. Or check for locations of the AARP’s TaxAide program (geared toward taxpayers over age 60). Free online tax prep is available to all taxpayers through IRS Free File. You may have to pay to file state returns depending on your state.

For more on refund anticipation loans and checks see the full article, at our Consumer Reports’ Money section, which has additional tax-time information, such as how to avoid tax season headaches. Plus, we recently reported on top tax scams and how you can avoid them.

One Last Bite: Final Year For Bank Tax Refund Anticipation Loans (pdf) [National Consumer Law Center and Consumer Federation of America]

Sony PlayStation Vita review

The PlayStation Vita, Sony’s new hand-held gaming device, hit the market today. The question on at least some of our minds, though, is whether we really need a standalone gaming device anymore; the way people think about portable gaming has changed a lot in recent years, with the advent of games on sophisticated smart phones and tablets. But this descendant of the PlayStation Portable, with its advanced controls and expansive games, just may just be able to carve out a niche in the market.

The PS Vita ($249 for the Wi-Fi-only version, $299 for 3G plus Wi-Fi) has a 5-inch OLED touch screen, which is perfect for hand-held gaming. The graphics are easily better than those of the Nintendo 3DS, but (despite what you might have heard) they’re not quite at the level of the PlayStation 3 console’s graphics. The Vita’s touch screen is very responsive, and the interface is intuitive and easy to use.

The Vita has both a front- and a rear-facing camera, for taking photos and (more important) for augmented-reality gaming. Its sophisticated controls include dual analog thumb sticks (the first time these have been built onto a hand-held gaming system), a touch panel on the back of the device, and a six-axis motion sensing system, which provides some real versatility in the way you can control the games.

Innovative controls. The two analog sticks came in very handy for games such as Uncharted: Golden Abyss, in which you can use the right analog stick to control the in-game camera. But the game also gives you additional control options: For example, when you’re climbing ledges, you can use the left analog stick and Face buttons to jump; or you can use the touch screen to “paint” the ledges, and the game’s hero, Drake, will follow the path that you lay out for him. You can also tilt the Vita in the direction you want Drake to lean, rather using the analog sticks. And with the rear touch panel, you can slide your fingers in alternating directions to simulate a climbing motion when you want Drake to move up or down a rope.

In another Vita game, ModNation Racers: Road Trip, you can build your own tracks using the Vita’s controls. If you want to add hills, you simply push up on the rear touch panel, and to create a pit, you push down on the front touch screen. The Vita provides enough flexibility to allow intuitive uses of the controls.

Augmented-reality gaming. Similar to the 3DS, the Vita has augmented-reality games, which can be played with or without the provided AR cards. Without the cards, you can play games that simply make it look as though characters are appearing in your room.

The more impressive use of AR gaming is with the cards. The game Cliff Diving lets you use the cards to create your own diving pool: You place one card on a surface, which when viewed through the camera, becomes a pool of water. After unlocking the custom cliff mode, you can then use a second card and place it on top of a raised object, such as drinking glass, to represent the diving board. You then have Diver Dan jump off of the “diving board” into the “pool of water” while executing tricks. The simple but fun game lets you interact with a video game in a new and compelling way. Just be sure to stay within range of the cards.

Cross-play capability. One feature that really sets the Vita apart from other mobile-gaming devices is cross play, which gives it the ability to communicate with the PlayStation 3. With Cross Platform Game Play, you can play both the PS3 and Vita on the same network—so you can play on the Vita against gamers playing on the PS3. And when you’re playing Ultimate Marvel vs. Capcom 3, you can use the Vita as a controller for the PlayStation 3, complete with touch screen and panel controls.

You can also pause a game on the PS3 and resume it on the Vita using the Cross Platform Game Save feature. This feature does require you to have the game on both devices, but some of the extra content needs to be only purchased once for both. This is a huge step in the right direction; you really shouldn’t have to buy your content twice. But whether it will continue or is just a promotional tool remains to be seen.

Beyond gaming. The Vita also has at least some of the capabilities of smart phones or tablets. You can’t make a call on it, but you can keep up with friends on Facebook, Twitter, and Skype. You can also download movies from the PlayStation store and access your Netflix account for streaming videos, and you can listen to music and view photos on the Vita. The Vita also lets you chat with your PlayStation Network friends and features the Near app, which shows you other players nearby along with what games they are playing.

Unfortunately, the Vita is not quite as portable as a smart phone. Though it won’t fit easily into a pocket, it can be carried in a bag or backpack with no problem. I recommend that you pick up a case and screen protector if you plan to carry it around.

The price. The Vita is available as a Wi-Fi only model for $250 or a Wi-Fi-plus-3G model for $300. 3G connectivity is provided by AT&T and costs $15 for 25MB of data or $25 for 2GB of data. (Some launch deals are available; shop around.)

Over 20 games available already. Games can be purchased at a retail store or downloaded from the PlayStation store and kept on a proprietary Vita Memory Card. The games cost anywhere from $25 to $50; the digital versions are slightly cheaper than game cards. Many of the games require the use of the Vita Memory Card, which costs $25 to $100. All these costs can add up quickly, making the Vita an expensive entertainment.

Bottom line. All things considered, the Vita should attract a pretty wide spectrum of players: The terrific graphics, classic controls, and innovative games will appeal to hardcore gamers, and those features along with the responsive touch screen and touch panel offer a lot of appeal to casual and younger gamers—even those who are attached to smart-phone and tablet games and the Nintendo 3DS.

Want to see the device in action? Check out our hands-on video of the PlayStation Vita.

V2V and me: Driving the smart cars of the future

The future of vehicle safety depends on talking cars. That is, cars that can communicate wirelessly, sharing data on their speed and positing, giving them the ability to alert drivers of potential dangers.

Through vehicle-to-vehicle (V2V) technology, warnings could be triggered by a car slamming on their brakes in front of you, running a red light, or moving into your lane. Instead of dealing with the after effects of an accident, this technology would alert you to prevent a crash from occurring in the first place.

I recently had the opportunity to get behind the wheel of various connected vehicles at the National Highway Traffic Safety Administration’s (NHTSA) pilot test at a former naval air station in Alameda, California, and experience this promising new technology first hand.

I drove eight specially built vehicles with this new wireless technology which make them able to communicate with other vehicles at the test site. The vehicles I drove included a Acura TL, Cadillac DTS, Hyundai Sonata, Infiniti M37, Ford Taurus SHO, Mercedes-Benz C300, Toyota Venza, and Volkswagen GTI. Each vehicle was driven through a variety of traffic scenarios to see how the various alerts and warnings worked. They include:

Emergency electronic brake lights. This alerts a driver when a vehicle two or three cars ahead slams on their brakes unexpectedly, a help when you can’t see its brake lights. While driving behind two vehicles, I was notified immediately when the first car slammed on their brakes, enabling me to avoid a potential rear-end crash.

Forward-collision warning. This warning is sounded if there is an imminent forward crash. In one experiment, I drove up quickly to a slow-moving vehicle and had to brake immediately to avoid a rear-end collision. In the second scenario, I followed behind another car when it suddenly swerved out of the lane to expose a stopped vehicle in my path.

Blind-spot/Lane-change warning. When driving along on a highway stretch, the blind-spot warning light illuminated when a vehicle was traveling in my vehicle’s blind spot. Once I put on my directional signal to change lanes, a beep sounded to alert me it was unsafe. I also was instructed to drive past another car as I would on a highway and no alert sounded, showing that this technology doesn’t go off randomly unless there is an immediate danger. A vehicle-to-vehicle system is more accurate than current blind-spot monitoring systems that use cameras or radar and can even warn you of a car that’s accelerating into your blind zone, which conventional systems can’t do.

Left-turn assist. I was stopped at a traffic light trying to make a left turn, while another vehicle was waiting across the intersection to turn in the opposite direction. This application helped to determine if there was enough time to make the turn across oncoming traffic, a welcomed aid when my vision was obstructed by a stopped car across from me.

Intersection movement assist. This test was a bit more harrowing than the others. I had to travel toward a green light at 30 mph, while another vehicle was speeding towards their red light. Once the alert sounded, I needed to immediately react to avoid a dangerous T-bone accident. While I knew the risk was there, the warning would have helped a driver whose view was blocked or who was being inattentive.

Do-not-pass warning. While driving on a simulated rural two-lane road, this alert warned me that a vehicle was approaching and it was not safe to move into the left lane to pass a slower-moving vehicle.

Each vehicle I drove received the same information about the hazard. The difference is how the driver is alerted to the situation. Ford and Mercedes-Benz models used a series of lights on top of the dashboard. The yellow lights informed the driver of a potential hazard and the red lights warned that action (such as braking) needs to be taken. This was coupled with a tone as well.

Other manufacturers sampled used audible alerts and a graphic or message of the hazard description, or an illustration. General Motors and Toyota displayed the visual information above the center stack. Hyundai illustrated the warning in the center navigational display. Honda, Nissan and Volkswagen showed their visual warning in the instrument cluster, which is easier to miss.

Ford and GM were the only manufacturers that alerted the driver to which side of the vehicle that is in danger. This information is transmitted through a vibrating steering wheel, thereby avoiding alerting passengers. Other systems can vibrate the seat.

I found the Ford and Mercedes lights most useful, as their placement made it easy to see while looking out the windshield. No matter how the visual alert was displayed, the sound gets your attention to react immediately. Experiencing it behind the wheel, I was struck with how this useful this technology could be in every day driving situations, providing an additional safety net. Of course, this technology is still dependent on attentive drivers to take action, although a future step could have the vehicle braking autonomously.

For more on this new car safety technology, see our full report: “Stopping crashes
with smarter cars.”

Malware on mobile devices jumps 155 percent since last year

Spyware that captures and transfers data such as your GPS coordinates, text records, and browsing history is the biggest malware threat by far on mobile Android devices, according to networking firm Juniper Networks’ 2011 Mobile Threats Report.

Spyware made up nearly 64 percent of the malware the company identified in a study of over 790,000 apps. In addition, there was a 155 percent increase in malware across all mobile platforms compared to last year, the report said.

You should also beware of SMS Trojans, which accounted for about 36 percent of the malware uncovered. These send text messages to premium-rate numbers owned by the attackers without your knowledge.

Fake installers are another illegal money-making scheme, Juniper noted. These trick users into sending costly text messages and were found in third-party app stores. One example was a pirated version of a popular, legitimate app called PowerAMP. When users attempted to buy “PowerAMP” from a third-party market, they were prompted to pay for it by agreeing to have costly text messages sent from their device to the cyber-thief, who was pretending to be the developer.

Another finding is not surprising: Insecure Wi-Fi networks provide easy access to user accounts. But the trend is troubling, because gaining access that way is getting easier. The latest hacking tools simplify the process of finding users on a Wi-Fi network, grabbing their credentials, and impersonating them.

In addition to apps that were purposely malicious, Juniper discovered programs that engaged in behavior that was overreaching or not ethical, such as getting a user’s location, sending text messages, and possibly even initiating phone calls, all without the user’s consent.

There are ways to protect yourself on mobile devices. We recommend that you:

• Avoid third-party markets
• Understand the permissions an app requests
• Download only popular apps with mostly positive user reviews
• Lock your device with a pass-code
• Use tools like remote data wiping, often available from your service provider.

For more tips on staying safe, see our story, Online Exposure.

Honda recalls 2008-09 Odyssey minivans for power liftgate issues

American Honda Motors has issued a recall for 45,747 of its 2008 and 2009 model year Odyssey minivans equipped with the power rear liftgate option. The gas-filled struts used to open and close the rear hatch are flawed and may fail to support the lifted door, said the U.S. National Highway Traffic Safety Administration.

According to NHTSA, the flawed struts leak pressurized gas which is needed to keep the large liftgate in the upright position. The defect can lead to unexpected closures of the rear gate, increasing the risk of injury to drivers and passengers who may be under the vehicle’s open hatch.

Honda, which has identified this recall as S22, will begin next month to notify its minivan owners affected by this safety recall. Mechanics at local dealerships will inspect and replace both liftgate gas struts in the affected Honda Odyssey vehicles free of charge.

For more information, consumers can contact Honda’s toll-free customer service line (800-999-1009) or visit the NHTSA website: www.SaferCar.gov.

Recall: 2008-2009 Honda Odyssey – Liftgate hinge and attachments; Campaign ID #: 12V062000 [NHTSA]

Honda recalls 2008-09 Odyssey minivans for power liftgate issues

American Honda Motors has issued a recall for 45,747 of its 2008 and 2009 model year Odyssey minivans equipped with the power rear liftgate option. The gas-filled struts used to open and close the rear hatch are flawed and may fail to support the lifted door, said the U.S. National Highway Traffic Safety Administration.

According to NHTSA, the flawed struts leak pressurized gas which is needed to keep the large liftgate in the upright position. The defect can lead to unexpected closures of the rear gate, increasing the risk of injury to drivers and passengers who may be under the vehicle’s open hatch.

Honda, which has identified this recall as S22, will begin next month to notify its minivan owners affected by this safety recall. Mechanics at local dealerships will inspect and replace both liftgate gas struts in the affected Honda Odyssey vehicles free of charge.

For more information, consumers can contact Honda’s toll-free customer service line (800-999-1009) or visit the NHTSA website: www.SaferCar.gov.

Recall: 2008-2009 Honda Odyssey – Liftgate hinge and attachments; Campaign ID #: 12V062000 [NHTSA]