Avis, Budget Lower Car Rental Age Amidst Rate Hike
Almost lost in the news of a coming rate hike for Cendant Corp's Avis and Budget vehicle rental companies was word that the minimum age for a renter had dropped from 25 years old to 21. Corporate travel arrangers were already grumbling on the web and in industry press about the rate change, and news that drivers previously considered to be higher risk would now be part of the company's marketing strategy was not lost on them.
Meanwhile, an August 4 article by Bill Brubaker of The Washington Post points out that city's closest airport, Ronald Reagan National Airport, is not covered by the new policy because it has a Washington, D.C. address despite being located in Virginia. Various state laws increase a rental company's liability and the new lower-age policy will not be rolled out in those states. The Post identified Iowa, Idaho, Connecticut and parts of New Jersey as areas in which the minimum age for a renter would remain 25 unless that renter is part of a separate corporate agreement.
Wednesday, August 31, 2005
Tuesday, August 30, 2005
180,000 "Tower" Heating Fans Recalled, Can Overheat
The United States Consumer Product Safety Commission, along with The Holmes Group, a heating fan manufacturer like the one pictured here, has recalled 180,000 of the units. According to the government agency, there have been 98 reports of minor property damage after the fans overheated. No injuries have been reported.
The recall involves Holmes® models HFH6498-U, HFH6500-U and HFH6500TG-U and Bionaire® model BFH3530-U. The recalled heaters also have date codes beginning with 2604 through 3804 for all units, except for Holmes® model 6500TG-U, which has date codes ranging from 2604 through 4704. The model and date code can be found on the silver label on the back of the unit. The heater fans are 26 inches tall; come in all gray, two-tone gray, or black and gray; and have either the word Holmes® or Bionaire® printed on the front of the base.
The fans were sold at retailers such as Wal-Mart, Target, Linens N Things and Bed Bath & Beyond for between $40 and $90 during the period from July 2004 through June 2005.
Consumers who own one of the affected units can call The Holmes Group toll-free at (800) 593-4269 anytime to obtain a replacement.
The United States Consumer Product Safety Commission, along with The Holmes Group, a heating fan manufacturer like the one pictured here, has recalled 180,000 of the units. According to the government agency, there have been 98 reports of minor property damage after the fans overheated. No injuries have been reported.
The recall involves Holmes® models HFH6498-U, HFH6500-U and HFH6500TG-U and Bionaire® model BFH3530-U. The recalled heaters also have date codes beginning with 2604 through 3804 for all units, except for Holmes® model 6500TG-U, which has date codes ranging from 2604 through 4704. The model and date code can be found on the silver label on the back of the unit. The heater fans are 26 inches tall; come in all gray, two-tone gray, or black and gray; and have either the word Holmes® or Bionaire® printed on the front of the base.
The fans were sold at retailers such as Wal-Mart, Target, Linens N Things and Bed Bath & Beyond for between $40 and $90 during the period from July 2004 through June 2005.
Consumers who own one of the affected units can call The Holmes Group toll-free at (800) 593-4269 anytime to obtain a replacement.
Thursday, August 25, 2005
Trade Group Says Drug Industry Will Self-Police, Advocates Skeptical
The head of one of the nation's most powerful pharmaceutical associations announced tighter internal controls, highlighted by a program called "Guiding Principles" regarding consumer advertising would avoid the need for government intervention in this increasingly contentious area.
Pharmaceutical Research Manufacturers of America (PhRMA) President and CEO Billy Tauzin announced the program in an August 2 speech in Washington, D.C. Among its requirements are:
Companies should submit all new direct-to-consumer television advertisements to the FDA before releasing them for broadcast.
The head of one of the nation's most powerful pharmaceutical associations announced tighter internal controls, highlighted by a program called "Guiding Principles" regarding consumer advertising would avoid the need for government intervention in this increasingly contentious area.
Pharmaceutical Research Manufacturers of America (PhRMA) President and CEO Billy Tauzin announced the program in an August 2 speech in Washington, D.C. Among its requirements are:
Companies should submit all new direct-to-consumer television advertisements to the FDA before releasing them for broadcast.
- Television advertising that identifies a product by name should clearly state the health conditions for which the medicine is approved and the major risks associated with the medicine being advertised.
- DTC television and print advertising should be designed to achieve a balanced presentation of the benefits and risks associated with the advertised prescription medicine. Specifically, risks and safety information in DTC television advertising should be presented in clear, understandable language, without distraction from the content, and in a manner that supports the responsible dialogue between patients and health care professionals.
Other provisions, such as educating healthcare workers, were also included in the guidelines,which were enthusiastically endorsed by major pharmaceutical companies.
“By formally adopting these guidelines, we are committing to the American people and the medical community that we will use advertising not only to promote new medicines, but also to educate consumers about health and disease. We are saying that we will place a balanced emphasis on the risks as well as the benefits of medicines,” said William C. Weldon, Chairman and CEO of Johnson & Johnson and PhRMA’s board chairman.
His comments were echoed by other leaders such as Karen Katen, Pfizer vice chairman and president of Pfizer Human Health, who said, "“Through the principles, we can improve communications about pharmaceutical risks and benefits, educate the public about prescription medicines and treatment options, enhance health awareness and motivate patients to talk with their health care providers about their health.”
The plan Tauzin announced also calls for an "Office of Accountability" that will issue reports to the public and make annual recommendations.
Some consumer advocates have singled out Tauzin's rhetoric on this issue. Within days, advocates such as Gary Ruskin of Commercial Alert had criticized the lobbyist, calling his comments on the topic "ironic".
Politicians are taking notice. The Washington Post announced that Senate Majority Leader Bill Frist (R-Tenn.) has called for a government study of the issue by the U.S. Government Accountabiity Office while the United States Food and Drug Administration reaffirmed that consumer advertising was one of its key initiatives. The government agency went far beyond the industry's own pledge of self-policing by stating that it would:
- Develop draft guidance on a scientific evidence-based rating system for qualified health claims for conventional foods and supplements.
- Expand efforts, in conjunction with the Federal Trade Commission (FTC), to take action against unsubstantiated claims on dietary supplements through warning letters, seizures, and/or injunctions against misbranded products.
- Develop guidance for industry on the content of the "brief summary" for direct-to-consumer advertising.
Tuesday, August 23, 2005
Northwest Flies On Despite Strike, Union Cites Differing Statistics
Avoiding mass disruption that has marred previous work stoppages at its company, Northwest Airlines enters the fourth day of a strike by the airline's mechanic's union still flying and still seemingly without widespread system problems.
A statement issued by the Aircraft Mechanics Fraternal Association, the union striking Northwest, claimed that the airline's on-timer performance this year has been 78%, but that the number of on-time flights has dipped to 50% during the strike. Still, a tour of the carrier's Memphis hub on Monday and media reports from its other two hubs in Detroit and Minneapolis seem to contradict the number.
"There could be a sampling issue," said Consumer Help Web President Joan Bounacos. "Although the study reported that 99 flights were surveyed at random, a system-wide number was generated. Just a few outliers could skew that number." Bounacos also noted that whether the number was 50% or 78% that the airline seemed to be maintaining operations despite the worker action.
"It's always a good idea to check your flight's status before leaving for the airport," Bounacos said. "This action just makes it critical for Northwest travelers.
Although the airline has refused to comment on flight delays or statistics, the company has urged travelers to check on their flights by visiting the airline's web site at nwa.com or by calling the airline's toll-free flight information line at (800) 441-1818.
Avoiding mass disruption that has marred previous work stoppages at its company, Northwest Airlines enters the fourth day of a strike by the airline's mechanic's union still flying and still seemingly without widespread system problems.
A statement issued by the Aircraft Mechanics Fraternal Association, the union striking Northwest, claimed that the airline's on-timer performance this year has been 78%, but that the number of on-time flights has dipped to 50% during the strike. Still, a tour of the carrier's Memphis hub on Monday and media reports from its other two hubs in Detroit and Minneapolis seem to contradict the number.
"There could be a sampling issue," said Consumer Help Web President Joan Bounacos. "Although the study reported that 99 flights were surveyed at random, a system-wide number was generated. Just a few outliers could skew that number." Bounacos also noted that whether the number was 50% or 78% that the airline seemed to be maintaining operations despite the worker action.
"It's always a good idea to check your flight's status before leaving for the airport," Bounacos said. "This action just makes it critical for Northwest travelers.
Although the airline has refused to comment on flight delays or statistics, the company has urged travelers to check on their flights by visiting the airline's web site at nwa.com or by calling the airline's toll-free flight information line at (800) 441-1818.
Monday, August 22, 2005
SunTrust Leads J.D. Power Mortgage Study
SunTrust Mortgage ranks highest in customer satisfaction among home mortgage servicing companies, according to the J.D. Power and Associates 2005 Primary Mortgage Servicer Study released this month.
The inaugural study measures customer satisfaction with the nation’s largest mortgage services based on performance in four primary areas: billing, payment, annual account review/administration, and customer-initiated interaction.
SunTrust Mortgage performs particularly well in the areas of billing, payment and account review/administration. SunTrust is followed in the rankings by World Savings Bank, Bank of America and Countrywide Home Loans, respectively.
"With climbing interest rates suppressing refinance activity, customer recommendations to others has become even more vital to mortgage lending companies," said Jeremy Bowler, senior director of the finance and insurance practice at J.D. Power and Associates. "Throughout our research, we find that customers who are satisfied with their lender are considerably more likely to offer a personal referral to a friend, co-worker or relative, illustrating the strong relationship between customer satisfaction and long-term customer value."
The billing and payment factors are the two most important and highest-rated aspects of the customer experience with the company that services the mortgage. In these areas, customers place the strongest importance in the accuracy of posting payments as well as the variety of payment options.
The study finds that while only 20 percent of customers pay their mortgage online, those who pay online or through automatic deductions rate their lenders significantly higher overall than customers paying by mail or phone. Furthermore, customers who currently receive an online bill notification are among the most satisfied overall, yet only 6 percent indicate they take advantage of this option.
"In our increasingly electronic world, consumers are always looking for ways to save time in paying their monthly bills," said Bowler. "However, more customers say they would like to pay or receive their mortgage bill online than actually do so, despite existing options available to most borrowers. Given the high impact that the perception of payment options has on overall brand impression, increasing customer awareness of payment options is an area of opportunity for servicers to distinguish themselves in the marketplace."
For the industry as a whole, more than one borrower out of every 10 who contact their lender indicate the service representative they dealt with did not speak clearly.
"By far the most common cause of this complaint is poor articulation of words," said Bowler.
"Customers who had difficulty hearing what the service representative was saying rated their experience very poorly—more than 300 index points lower than those customers who indicate they had no difficulties comprehending the representative they spoke with."
The 2005 Primary Mortgage Servicer Study is based on responses from 9,214 home mortgage customers. J.D. Power and Associates now conducts three studies related to the mortgage lending experience.
SunTrust Mortgage ranks highest in customer satisfaction among home mortgage servicing companies, according to the J.D. Power and Associates 2005 Primary Mortgage Servicer Study released this month.
The inaugural study measures customer satisfaction with the nation’s largest mortgage services based on performance in four primary areas: billing, payment, annual account review/administration, and customer-initiated interaction.
SunTrust Mortgage performs particularly well in the areas of billing, payment and account review/administration. SunTrust is followed in the rankings by World Savings Bank, Bank of America and Countrywide Home Loans, respectively.
"With climbing interest rates suppressing refinance activity, customer recommendations to others has become even more vital to mortgage lending companies," said Jeremy Bowler, senior director of the finance and insurance practice at J.D. Power and Associates. "Throughout our research, we find that customers who are satisfied with their lender are considerably more likely to offer a personal referral to a friend, co-worker or relative, illustrating the strong relationship between customer satisfaction and long-term customer value."
The billing and payment factors are the two most important and highest-rated aspects of the customer experience with the company that services the mortgage. In these areas, customers place the strongest importance in the accuracy of posting payments as well as the variety of payment options.
The study finds that while only 20 percent of customers pay their mortgage online, those who pay online or through automatic deductions rate their lenders significantly higher overall than customers paying by mail or phone. Furthermore, customers who currently receive an online bill notification are among the most satisfied overall, yet only 6 percent indicate they take advantage of this option.
"In our increasingly electronic world, consumers are always looking for ways to save time in paying their monthly bills," said Bowler. "However, more customers say they would like to pay or receive their mortgage bill online than actually do so, despite existing options available to most borrowers. Given the high impact that the perception of payment options has on overall brand impression, increasing customer awareness of payment options is an area of opportunity for servicers to distinguish themselves in the marketplace."
For the industry as a whole, more than one borrower out of every 10 who contact their lender indicate the service representative they dealt with did not speak clearly.
"By far the most common cause of this complaint is poor articulation of words," said Bowler.
"Customers who had difficulty hearing what the service representative was saying rated their experience very poorly—more than 300 index points lower than those customers who indicate they had no difficulties comprehending the representative they spoke with."
The 2005 Primary Mortgage Servicer Study is based on responses from 9,214 home mortgage customers. J.D. Power and Associates now conducts three studies related to the mortgage lending experience.
US Postal Service Offers 'Premium' Mail Forwarding
Business travel, temporary work assignments, college, personal emergencies, "snow birds," relocation, even military duty are taking people away from home for longer periods of time.
This is the customer the United States Postal Service had in mind in developing a new service available to all consumers - Premium Forwarding Service (PFS).
PFS is a personalized service for sending all mail from a primary residential address to a temporary address using Priority Mail. Express Mail, First-Class Mail or Priority Mail packages too large to fit inside the Premium Forwarding Service package are rerouted separately at no additional charge. PFS is available only for domestic mail.
It is designed for residential customers who want to receive all of their mail at a temporary address, including a Post Office Box, regardless of the distance.
With PFS, the Postal Service boxes and reships mail to a temporary address for customers who are away from their primary address for at least two weeks and up to one year. The nationwide service begins today, providing all residential customers with a range of quality mail-forwarding options to meet individual needs.
Premium Forwarding is designed to make life on the road or separation from friends and family a little easier.
"Customers won't have to wait for correspondence and favorite magazines until they return home," said Nick Barranca, Vice President of Product Development. "Premium Forwarding gives customers one more way to enjoy their mail in a timely manner."
Interested customers simply complete an application at the Post Office serving their primary address. Necessary information including name, address of primary residence, temporary address, contact numbers and start and end dates is required. Premium Forwarding Service is temporary, but it does not replace the temporary or permanent Change-of-Address option or Hold Mail services. These services still are available at no charge.
"Convenience to the customer is key," Barranca said. "Whatever your situation may be, the Postal Service has several convenient service options for handling your mail. You may be away from home, but your mail doesn't have to be."
There is a one-time enrollment charge of $10. Customers are charged $10 for each weekly shipment during the period they are enrolled in the Premium Forwarding Service.
Business travel, temporary work assignments, college, personal emergencies, "snow birds," relocation, even military duty are taking people away from home for longer periods of time.
This is the customer the United States Postal Service had in mind in developing a new service available to all consumers - Premium Forwarding Service (PFS).
PFS is a personalized service for sending all mail from a primary residential address to a temporary address using Priority Mail. Express Mail, First-Class Mail or Priority Mail packages too large to fit inside the Premium Forwarding Service package are rerouted separately at no additional charge. PFS is available only for domestic mail.
It is designed for residential customers who want to receive all of their mail at a temporary address, including a Post Office Box, regardless of the distance.
With PFS, the Postal Service boxes and reships mail to a temporary address for customers who are away from their primary address for at least two weeks and up to one year. The nationwide service begins today, providing all residential customers with a range of quality mail-forwarding options to meet individual needs.
Premium Forwarding is designed to make life on the road or separation from friends and family a little easier.
"Customers won't have to wait for correspondence and favorite magazines until they return home," said Nick Barranca, Vice President of Product Development. "Premium Forwarding gives customers one more way to enjoy their mail in a timely manner."
Interested customers simply complete an application at the Post Office serving their primary address. Necessary information including name, address of primary residence, temporary address, contact numbers and start and end dates is required. Premium Forwarding Service is temporary, but it does not replace the temporary or permanent Change-of-Address option or Hold Mail services. These services still are available at no charge.
"Convenience to the customer is key," Barranca said. "Whatever your situation may be, the Postal Service has several convenient service options for handling your mail. You may be away from home, but your mail doesn't have to be."
There is a one-time enrollment charge of $10. Customers are charged $10 for each weekly shipment during the period they are enrolled in the Premium Forwarding Service.
Friday, August 19, 2005
KB Pays $2 Million Penalty For Allegedly Violating 25 Year Old Consent Order
Under the terms of a stipulation and modified consent decree approved by the Federal Trade Commission and submitted in federal court by the U.S. Department of Justice (DOJ), KB Home, a California-based homebuilder formerly known as Kaufman and Broad, Inc., will pay a $2 million civil penalty to settle charges that it violated the terms of a 1979 consent order with the Commission. The modified consent decree also bars KB Home from violating the terms of the original order in the future, and requires the company to modify existing home repair warranties to comply with the consent order and extend for one year certain homeowners’ two-year warranty coverage for major home components. The FTC also has issued a new publication for consumers to help them understand the issue of home warranties.
Under the terms of a stipulation and modified consent decree approved by the Federal Trade Commission and submitted in federal court by the U.S. Department of Justice (DOJ), KB Home, a California-based homebuilder formerly known as Kaufman and Broad, Inc., will pay a $2 million civil penalty to settle charges that it violated the terms of a 1979 consent order with the Commission. The modified consent decree also bars KB Home from violating the terms of the original order in the future, and requires the company to modify existing home repair warranties to comply with the consent order and extend for one year certain homeowners’ two-year warranty coverage for major home components. The FTC also has issued a new publication for consumers to help them understand the issue of home warranties.
Case Background
This case concerns a 1979 FTC consent order against KB Home that, among other things, required it to make timely warranty repairs and to furnish home purchasers with a warranty that is “substantially identical” to the Home Owners Warranty Corporation warranty. Under the consent order, warranties must provide for mandatory arbitration of warranty repair disputes that is binding upon KB Home, but is not binding on homeowners. In addition, the warranties must provide for arbitration for which no fee or deposit is required of homeowners. In 1991, the DOJ filed a complaint in U.S. District Court alleging that KB Home had violated several provisions of the 1979 order related in part to the timing and quality of warranty repairs. Ultimately, the court entered a consent decree under which KB Home paid a civil penalty of $595,000 and stipulated to a permanent injunction requiring it to comply with the 1979 order. The action approved by the Commission alleges that KB Home violated specific terms of the original order, as detailed below.
The Alleged Violations
The stipulation and decree submitted today resolve allegations that KB Home violated Part III.B of the FTC’s order by furnishing new home buyers with a warranty: 1) providing for arbitration of warranty disputes that is binding on homeowners; and 2) requiring homeowners to pay fees and costs to initiate and conduct such dispute arbitration. KB Home also allegedly violated Part III.B by furnishing new home purchasers with purchase agreements that required binding arbitration of warranty disputes.
According to the Commission’s amicus brief filed earlier in private litigation involving KB Home, the company knowingly violated the consent order’s provisions. Despite having sought and received a staff advisory opinion in 1995 that explained to do so would violate the 1979 order, KB Home nonetheless provided homeowners with warranties that provided for mandatory binding arbitration of warranty disputes. In addition, the amicus brief contended that KB Home violated commitments to the FTC staff that it would not seek to enforce its binding warranty arbitration provisions while the staff was investigating its conduct. The amicus brief and the press release announcing its filing are available from the FTC’s Web site at http://www.ftc.gov/opa/2003/08/fyi0350.htm.
The Modified Decree
The modified consent decree, which replaces the consent decree entered in 1991, resolves the Commission’s allegations that KB Home violated the prior order. It enjoins KB Home from violating the 1979 consent order and requires KB Home to: 1) modify the dispute resolution provisions of existing warranties to comply with the 1979 order; 2) comply with the warranties as so modified; 3) extend for one year the two-year warranty coverage for major home components for homeowners whose homes were delivered during 2002 through 2004; and 4) reimburse homeowners for fees they had to pay to arbitrate warranty disputes in alleged violation of Part III.B of the order. In addition, the decree will require KB Home to pay a civil penalty of $2 million to settle the Commission’s charges that it violated the order.
Finally, the modified decree contains terms requiring KB Home to distribute the order to certain company personnel, as well as to keep relevant records and provide them to the Commission to ensure its compliance with the order’s terms.
The Commission vote approving the stipulation and modified consent decree and authorizing transmission to the DOJ for filing was 5-0. DOJ submitted the modified consent decree in the U.S. District Court for the Southern District of California on August 3, 2005.
Thursday, August 18, 2005
155,000 Kawasaki ATVs Recalled, 3 Injuries Reported
The United States Consumer Product Safety Commission and Kawasaki have announced a joint recall of 155,000 Prairie and Brute Force All-Terrain Vehicles (ATVs).
Acccording to the government agency, "A significant impact to the front wheel of the ATV while the steering is fully turned to either side can result in suspension damage, wear, and an eventual loss of steering control that could result in injury or death."
The recall includes 2001 through 2005 Prairie and Brute Force Kawasaki ATVs. The following Kawasaki ATV models are included in this recall: Prairie 300, Prairie 300 4x4, Prairie 360, Prairie 360 4x4, Prairie 400, Prairie 400 4x4, Prairie 650 4x4, Prairie 700 4x4, and Brute Force 650 4x4. The model numbers can be found on the identification label located on the frame of the ATV. “Prairie” or “Brute Force” is printed on each side of the vehicle’s gas tank.
Consumers should stop using the recalled ATVs immediately and contact an authorized Kawasaki ATV dealer to arrange for a free repair. Registered owners of the vehicles will be notified directly by Kawasaki about the recall. Consumers can also call toll-free at (866) 802-9381 between 8:30 a.m. and 4:30 p.m. PT Monday through Friday.
The United States Consumer Product Safety Commission and Kawasaki have announced a joint recall of 155,000 Prairie and Brute Force All-Terrain Vehicles (ATVs).
Acccording to the government agency, "A significant impact to the front wheel of the ATV while the steering is fully turned to either side can result in suspension damage, wear, and an eventual loss of steering control that could result in injury or death."
The recall includes 2001 through 2005 Prairie and Brute Force Kawasaki ATVs. The following Kawasaki ATV models are included in this recall: Prairie 300, Prairie 300 4x4, Prairie 360, Prairie 360 4x4, Prairie 400, Prairie 400 4x4, Prairie 650 4x4, Prairie 700 4x4, and Brute Force 650 4x4. The model numbers can be found on the identification label located on the frame of the ATV. “Prairie” or “Brute Force” is printed on each side of the vehicle’s gas tank.
Consumers should stop using the recalled ATVs immediately and contact an authorized Kawasaki ATV dealer to arrange for a free repair. Registered owners of the vehicles will be notified directly by Kawasaki about the recall. Consumers can also call toll-free at (866) 802-9381 between 8:30 a.m. and 4:30 p.m. PT Monday through Friday.
Wednesday, August 17, 2005
89% of Online Merchants Allow Consumers To Opt Out Of Email
In a survey to test whether top e-tailers are allowing consumers to opt out of receiving promotional or marketing messages, the FTC has determined that 89 percent of the online merchants it tested are honoring requests to halt future mailings.
The CAN-SPAM Act, which became effective January 1, 2004, requires that senders of commercial e-mail provide recipients with a clear and conspicuous notice that they have the right to opt out of receiving future marketing messages, provide a mechanism to allow them to exercise that right, and honor requests to be removed from future mailings.
To assess whether e-tailers were complying with the opt-out provisions of the CAN-SPAM Act, FTC staff developed a list of 100 top e-tailers – those who make significant use of the Internet to market their goods or services – and visited their sites. Most of the sites solicited consumers to sign up for special offers, promotions, updates and newsletters via e-mail. FTC staff created three new e-mail accounts and opted in to receive the offers and promotions once for each of the three e-mail accounts and monitored the accounts for six weeks. Then staff notified the e-tailers they wished to stop receiving commercial e-mail messages.
The study showed a high rate of compliance with the CAN-SPAM opt-out provisions. All of the e-tailers who sent e-mail to the FTC accounts provided clear notice of recipients’ right to opt out of receiving future mail and provided recipients with an opt-out mechanism. Eighty nine percent of the e-tailers honored all three of the opt-out requests made by FTC staff and 93 percent complied with opt-out requests for at least some accounts.
Tuesday, August 16, 2005
Toyota Highlander Granted Tax Credit Status
The Internal Revenue Service has certified the model year 2006 Toyota Highlander Hybrid as being eligible for the clean-burning fuel deduction. This certification means that taxpayers who purchase one of these hybrid vehicles new during calendar year 2005 may claim a tax deduction of up to $2000 on Form 1040.
Under Working Families Relief Act of 2004 which was signed into law in October of 2004, the clean-burning fuel deduction is limited to up to $2,000 for certified vehicles first put into service in 2005 and $500 for vehicles placed in service in 2006. No deduction will be allowed after 2006.
Federal Law allows individuals to claim a deduction for the incremental cost of buying a motor vehicle that is propelled by a clean-burning fuel. By combining an electric motor with a gasoline-powered engine, these hybrid vehicles obtain greater fuel efficiency and produce fewer emissions than similar vehicles powered solely by conventional gasoline-powered engines.
This one-time deduction must be taken in the year the vehicle is originally used. The taxpayer must be the original owner. Individuals do not have to itemize deductions on their tax return to claim this deduction. This benefit can be taken as an adjustment to income on the Form 1040.
The amount of the deduction for the Toyota Highlander Hybrid was set after the manufacturer, Toyota Motor Sales, U.S.A., Inc. documented for the IRS the incremental cost related to the vehicle’s electric motor and related equipment.
The Internal Revenue Service has certified the model year 2006 Toyota Highlander Hybrid as being eligible for the clean-burning fuel deduction. This certification means that taxpayers who purchase one of these hybrid vehicles new during calendar year 2005 may claim a tax deduction of up to $2000 on Form 1040.
Under Working Families Relief Act of 2004 which was signed into law in October of 2004, the clean-burning fuel deduction is limited to up to $2,000 for certified vehicles first put into service in 2005 and $500 for vehicles placed in service in 2006. No deduction will be allowed after 2006.
Federal Law allows individuals to claim a deduction for the incremental cost of buying a motor vehicle that is propelled by a clean-burning fuel. By combining an electric motor with a gasoline-powered engine, these hybrid vehicles obtain greater fuel efficiency and produce fewer emissions than similar vehicles powered solely by conventional gasoline-powered engines.
This one-time deduction must be taken in the year the vehicle is originally used. The taxpayer must be the original owner. Individuals do not have to itemize deductions on their tax return to claim this deduction. This benefit can be taken as an adjustment to income on the Form 1040.
The amount of the deduction for the Toyota Highlander Hybrid was set after the manufacturer, Toyota Motor Sales, U.S.A., Inc. documented for the IRS the incremental cost related to the vehicle’s electric motor and related equipment.
Monday, August 15, 2005
California Governor Schwarzenegger Signs Car Buyer's Bill of Rights
Again leading the nation in consumer protection and legislation of automobiles, California Governor Arnold Schwarzenegger signed AB68, the California Car Buyer's Bill of Rights, into law on July 26.
The new law:
Again leading the nation in consumer protection and legislation of automobiles, California Governor Arnold Schwarzenegger signed AB68, the California Car Buyer's Bill of Rights, into law on July 26.The new law:
- Requires car dealers to offer a two-day cancellation option for used cars selling for less than $40,000. The maximum a dealer can charge for the option is $250.
- Defines specified standards under which a "certified" or similar term for used or pre-owned motor vehicles can be sold.
- Requires car dealers to tell consumers the lowest finance rate they qualify for, and if the seller of a vehicle arranges a loan for the buyer, the seller must disclose the buyer's credit score as reported by an identified credit reporting agency.
- Requires that dealers cap their finance rate markups at 2.5 percent for loans up to 60 months, and 2 percent for loans over 60 months.
- Requires that dealers must notify buyers of the cash price and the financing cost of any extra items, such as fabric protection or extended service contracts.
- Gets rid of hidden charges in auto loans by prohibiting a dealer from adding charges to the contract after negotiating the terms of a vehicle sale or lease.
Friday, August 12, 2005
Counterfeit "Lipitor" From UK May Find Its Way To US, Sold in UK Pharmacies Too Through Online Sales
he Food and Drug Administration (FDA) is alerting U.S. residents to the recent recall of a batch of counterfeit "Lipitor" (atorvastatin) sold in the United Kingdom (U.K.). The medicine is used to treat high cholesterol. The counterfeit Lipitor 20mg tablets were recalled in the U.K. on July 28, 2005. Health authorities in the U.K. stated that initial results of tests performed on the counterfeit drugs do not indicate that this product poses an immediate risk to patients, however, they are advising that patients stop taking the drug and return it to the pharmacy where they obtained it. U.K. pharmacies are being advised to return all remaining stock of this batch to Pfizer Ltd., the manufacturer of Lipitor.
he Food and Drug Administration (FDA) is alerting U.S. residents to the recent recall of a batch of counterfeit "Lipitor" (atorvastatin) sold in the United Kingdom (U.K.). The medicine is used to treat high cholesterol. The counterfeit Lipitor 20mg tablets were recalled in the U.K. on July 28, 2005. Health authorities in the U.K. stated that initial results of tests performed on the counterfeit drugs do not indicate that this product poses an immediate risk to patients, however, they are advising that patients stop taking the drug and return it to the pharmacy where they obtained it. U.K. pharmacies are being advised to return all remaining stock of this batch to Pfizer Ltd., the manufacturer of Lipitor.
Consumers who purchased FDA-approved Lipitor products through legitimate U.S. pharmacies should not have received any of these counterfeit tablets and are not subject to this recall. But some U.S. residents may have obtained prescription drugs from the U.K. through on-line or storefront operations that do not supply legitimate, FDA-approved products, or through state-run drug importation programs that facilitate the purchase of unapproved foreign drugs. Consumers who purchase drugs through these arrangements may have received these counterfeit products.
"Americans need to be very careful when buying drugs outside of the U.S. drug distribution system," said FDA Commissioner Lester M. Crawford. "The American drug supply system is in fact a very safe one that consumers can count on."
The affected product is 20 mg. "Lipitor" and is sold in packages of 28 tablets. The drug packages are marked with batch number 004405K1 and an expiration date of "11 2007." The batch number can be found on the end of the box next to the expiration date and on the foil backing of the drug's blister pack. Legitimate U.K. Lipitor also has this same batch number.
Because the recalled Lipitor is fake, there is no guarantee of its quality or effectiveness. U.S. patients who have the identified U.K. drugs should stop using them and should consult their physician or pharmacist if they have any questions or concerns. Patients should resume treatment as soon as they can obtain from their doctors or pharmacists a legitimate supply of Lipitor or an equivalent medicine. When patients resume taking the drug, they should take only the daily dose prescribed and not try to make up for missed doses.
Lipitor belongs to a class of drugs known as "statins". In addition to Lipitor, a number of low-cost FDA-approved generic versions of these drugs are available to consumers. Consumers interested in these options should discuss them with their physicians.
Thursday, August 11, 2005
2.6 Million "Slow Cooker" Rival Crockpots Recalled, Consumers Face Possible Burn Injuries
The United States Consumer Product Safety Commission and The Holmes Group (maker of Rival "slow cooker" crockpots) announced an extended recall of the firm's applicances after the CPSC reported receiving dozens of reports of handles breaking and more than 30 consumer injuries.
The recall includes Rival® Crock-Pot® slow cookers with model numbers 3040, 3735, 5025, 5070 and 5445. The model number is printed on the UL label located on the bottom of the base. The recalled Rival® slow cooker has a removable ceramic bowl that sits inside of a metal base. The Rival® logo is printed on the front of the unit above the control knob. The bases are round or oval shaped and were sold in various colors and designs. A date code is stamped on the side of one prong of the power plug. The first two digits represent the week of manufacture and the last two digits represent the year of manufacture. Any plug with a date code from 0199 (1st week of 1999) to 3504 (35th week of 2004) is included in this recall or the previous recall.
Consumers should contact The Holmes Group at (800) 299-1284 anytime to receive a replacement base.
The United States Consumer Product Safety Commission and The Holmes Group (maker of Rival "slow cooker" crockpots) announced an extended recall of the firm's applicances after the CPSC reported receiving dozens of reports of handles breaking and more than 30 consumer injuries.
The recall includes Rival® Crock-Pot® slow cookers with model numbers 3040, 3735, 5025, 5070 and 5445. The model number is printed on the UL label located on the bottom of the base. The recalled Rival® slow cooker has a removable ceramic bowl that sits inside of a metal base. The Rival® logo is printed on the front of the unit above the control knob. The bases are round or oval shaped and were sold in various colors and designs. A date code is stamped on the side of one prong of the power plug. The first two digits represent the week of manufacture and the last two digits represent the year of manufacture. Any plug with a date code from 0199 (1st week of 1999) to 3504 (35th week of 2004) is included in this recall or the previous recall.
Consumers should contact The Holmes Group at (800) 299-1284 anytime to receive a replacement base.
Wednesday, August 10, 2005
United Stays In Bankruptcy Protection, Delta and Northwest Threats Loom
UAL, the parent company of United Airlines, has elected to keep the company in Chapter 11 bankruptcy protection. The company cited a colaboration with is Creditor's Committee, in which the two parties agreed that remaining in bankruptcy would "...provide an additional opportunity to continue collaborating on and reviewing the complex, extensive documents as part of the overall confirmation process" as well as provide "a smoother exit process."
Airline industry observers remain concerned that Delta Airlines and Northwest Airlines may soon also seek bankruptcy protection. Delta has lost billions of dollars since the September 11, 2001 terrorist attacks despite massive cost cutting, including employee concessions. Northwest has fared little beter and faces a looming strike date next week when mechanics may walk off their jobs. The airline says it has contingency plans that will allow it to continue operating even if its mechanics strike, but the last major US aviation work stoppage was also a Northwest action that cost the company millions.
"This isn't a 'strand travelers with tickets' bankruptcy issue," said Joan Bounacos, President of Consumer Help Web. "Even if Delta or Northwest were to seek protection from the bankruptcy courts, there is every indication that they will continue flying their normal schedules and honoring all tickets. We urge consumers to more carefully watch the possible Northwest strike action for next week as that may disrupt air travel more than any financial restructurings the airlines do."
UAL, the parent company of United Airlines, has elected to keep the company in Chapter 11 bankruptcy protection. The company cited a colaboration with is Creditor's Committee, in which the two parties agreed that remaining in bankruptcy would "...provide an additional opportunity to continue collaborating on and reviewing the complex, extensive documents as part of the overall confirmation process" as well as provide "a smoother exit process."
Airline industry observers remain concerned that Delta Airlines and Northwest Airlines may soon also seek bankruptcy protection. Delta has lost billions of dollars since the September 11, 2001 terrorist attacks despite massive cost cutting, including employee concessions. Northwest has fared little beter and faces a looming strike date next week when mechanics may walk off their jobs. The airline says it has contingency plans that will allow it to continue operating even if its mechanics strike, but the last major US aviation work stoppage was also a Northwest action that cost the company millions.
"This isn't a 'strand travelers with tickets' bankruptcy issue," said Joan Bounacos, President of Consumer Help Web. "Even if Delta or Northwest were to seek protection from the bankruptcy courts, there is every indication that they will continue flying their normal schedules and honoring all tickets. We urge consumers to more carefully watch the possible Northwest strike action for next week as that may disrupt air travel more than any financial restructurings the airlines do."
Tuesday, August 09, 2005
CARFAX Adds More Data, Now Reports Frame Damage
Carfax has expanded the damage information available in its Vehicle History Reports. Frame damage data now reported to Carfax alerts used car buyers and sellers that a vehicle's frame may have been previously damaged. This information, when combined with an inspection by a certified mechanic, can be used to identify potentially unsafe vehicles.
Carfax has expanded the damage information available in its Vehicle History Reports. Frame damage data now reported to Carfax alerts used car buyers and sellers that a vehicle's frame may have been previously damaged. This information, when combined with an inspection by a certified mechanic, can be used to identify potentially unsafe vehicles.
"We're constantly on the lookout for new information that can help our customers find the car that's right for them," said Larry Gamache, communications director at Carfax. "It's important to us that used car buyers know as much about a vehicle's history as possible so they can take the appropriate measures to protect themselves."
An improperly repaired frame can diminish the structural integrity of a vehicle and increase the risk of serious injury in an accident. It also may negatively affect the vehicle's other safety features, such as seat belts and airbag deployment.
In addition to a vehicle history report, Carfax recommends having every vehicle inspected by a certified mechanic prior to purchase.
Monday, August 08, 2005
Guidant Receives Permission To Start Shipping Heart Devices Again
Guidant Corporation, which participated in a voluntary recall of some of its heart implant devices last month, reported August 1 that it received U.S. Food and Drug Administration (FDA) approval to re-launch its CONTAK RENEWAL 3 family of cardiac resynchronization therapy (CRT) defibrillators in the United States. The company expects to resume worldwide distribution and implants of its CRT defibrillators by mid-week. Guidant expects full product supply within this month.
Guidant Corporation, which participated in a voluntary recall of some of its heart implant devices last month, reported August 1 that it received U.S. Food and Drug Administration (FDA) approval to re-launch its CONTAK RENEWAL 3 family of cardiac resynchronization therapy (CRT) defibrillators in the United States. The company expects to resume worldwide distribution and implants of its CRT defibrillators by mid-week. Guidant expects full product supply within this month.
“Our top priority is to provide safe, reliable cardiac rhythm management products and therapies to physicians and patients,” said Fred McCoy, president, Cardiac Rhythm Management, Guidant Corporation. “Guidant's return to the CRT defibrillator market is exceptionally important for patients with heart disease. It is the result of sound engineering, unwavering dedication to highest product quality, and FDA’s timely response to validated technical information and analysis.”
The company also said that it had received Conformité Européenne (CE) Mark approval to re-launch CONTAK RENEWAL 4 cardiac resynchronization therapy defibrillators for use outside the United States. The combination of these regulatory approvals clears the way for Guidant to once again fully participate in the fastest growth area within cardiac rhythm management – cardiac resynchronization therapy defibrillators.
Guidant had voluntarily removed these devices from implant and distribution on June 24, 2005, after identifying device performance and potential safety concerns related to a magnetic switch component. No additional reports of this component failure have been received since that time. After further testing and evaluation of the CONTAK RENEWAL 3 and 4 cardiac resynchronization therapy defibrillators, the company has identified, and the FDA has approved, a new component solution that resolves these concerns. Guidant previously provided physicians with a programming recommendation for CONTAK RENEWAL 3 and 4 cardiac resynchronization therapy defibrillators already in service. In addition, Guidant has received approval for United States distribution of new software designed to help physicians better manage existing RENEWAL 3 patients. The new software will be available outside the United States later this year.
A cardiac resynchronization therapy defibrillator delivers small electrical impulses to both ventricles that may improve the heart’s pumping ability. The device also monitors the heart for potentially fatal heart rhythms that can cause sudden cardiac death and, if such a rhythm is detected, delivers a lifesaving shock to restore normal heart rhythm.
Friday, August 05, 2005
1.1 Million Children's Folding Chairs Recalled
The United States Consumer Product Safety Commission and Idea Nuova have announced the voluntary recall of more than one million children's folding chairs.
According to the government agency, the chair's safety lock can fail, allowing the chair to collapse or fold unexpectedly. Children’s fingers can become caught or entrapped in the hinge and slot areas of the chair, posing a pinch or cut hazard. This can cause severe lacerations and finger tip amputations to children’s fingers.
The CPSC said it was aware of five incidents involving children. In one incident, there was a finger tip amputation, the second incident involved a finger tip amputation and a laceration, and the third incident involved a finger fracture and a laceration. There were no injuries reported in the other two incidents.
The chairs were sold between September 2004 and June 2005 for $15-$25 per set. Consumers should call Idea Nuova toll-free at 866-772-1666 between 9 a.m. and 4 p.m. ET Monday through Friday for instructions on how to receive a free repair kit.
The United States Consumer Product Safety Commission and Idea Nuova have announced the voluntary recall of more than one million children's folding chairs.
According to the government agency, the chair's safety lock can fail, allowing the chair to collapse or fold unexpectedly. Children’s fingers can become caught or entrapped in the hinge and slot areas of the chair, posing a pinch or cut hazard. This can cause severe lacerations and finger tip amputations to children’s fingers.
The CPSC said it was aware of five incidents involving children. In one incident, there was a finger tip amputation, the second incident involved a finger tip amputation and a laceration, and the third incident involved a finger fracture and a laceration. There were no injuries reported in the other two incidents.
The chairs were sold between September 2004 and June 2005 for $15-$25 per set. Consumers should call Idea Nuova toll-free at 866-772-1666 between 9 a.m. and 4 p.m. ET Monday through Friday for instructions on how to receive a free repair kit.
Thursday, August 04, 2005
Credit, Insurance "Pre-Screened" Rules Tightened
Since August 1, 2005, companies that send “prescreened” solicitations of credit or insurance to consumers will be required to provide simple and easy-to-understand notices that explain consumers’ right to opt out of receiving future offers. The Fair and Accurate Credit Transactions Act of 2003 (FACTA) required the FTC, in consultation with the federal banking and credit union agencies, to prescribe the format, type size, and manner for these opt-out notices. The FTC also is issuing a new consumer education brochure to help consumers understand the prescreening process and what they should consider in deciding whether to opt out.
Prescreened offers of credit or insurance – sometimes called “preapproved” offers - are sent to consumers unsolicited, usually by mail. They are based on information in consumers’ credit reports that indicates that the individuals receiving the offer meet the criteria set by the company making the offer. The Fair Credit Reporting Act (FCRA) limits the circumstances in which consumer reports can be used to make prescreened offers, and all such offers must include a notice of consumers’ right to stop receiving future prescreened offers. The FTC Rule is intended to make these notices simple and easy to understand.
The Rule adopts a “layered” notice approach that requires a short, simple, and easy-to- understand statement of consumers’ opt-out rights on the first page of the offer, along with a longer statement containing additional details elsewhere in the offer. Specifically, the short statement informs consumers about the right to choose not to receive future prescreened solicitations and specifies a toll-free number for consumers to call to exercise that right (1-888-5-OPTOUT). Consumers may choose to opt out for five years or permanently, and may opt back in at any time by calling the same number. The longer part of the notice provides consumers additional information about prescreening that is required by the FCRA. The Rule includes model short and long notices.
FACTA also requires the FTC to educate consumers about prescreened offers of credit or insurance and their opt-out rights. The FTC has created a new consumer brochure, “Prescreened Offers of Credit and Insurance,” which explains how the prescreening process works and provides some of the benefits and consequences of receiving these offers and of opting out.
Copies of the Rule and the FTC’s brochure, “Prescreened Offers of Credit and Insurance,” are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580
Since August 1, 2005, companies that send “prescreened” solicitations of credit or insurance to consumers will be required to provide simple and easy-to-understand notices that explain consumers’ right to opt out of receiving future offers. The Fair and Accurate Credit Transactions Act of 2003 (FACTA) required the FTC, in consultation with the federal banking and credit union agencies, to prescribe the format, type size, and manner for these opt-out notices. The FTC also is issuing a new consumer education brochure to help consumers understand the prescreening process and what they should consider in deciding whether to opt out.
Prescreened offers of credit or insurance – sometimes called “preapproved” offers - are sent to consumers unsolicited, usually by mail. They are based on information in consumers’ credit reports that indicates that the individuals receiving the offer meet the criteria set by the company making the offer. The Fair Credit Reporting Act (FCRA) limits the circumstances in which consumer reports can be used to make prescreened offers, and all such offers must include a notice of consumers’ right to stop receiving future prescreened offers. The FTC Rule is intended to make these notices simple and easy to understand.
The Rule adopts a “layered” notice approach that requires a short, simple, and easy-to- understand statement of consumers’ opt-out rights on the first page of the offer, along with a longer statement containing additional details elsewhere in the offer. Specifically, the short statement informs consumers about the right to choose not to receive future prescreened solicitations and specifies a toll-free number for consumers to call to exercise that right (1-888-5-OPTOUT). Consumers may choose to opt out for five years or permanently, and may opt back in at any time by calling the same number. The longer part of the notice provides consumers additional information about prescreening that is required by the FCRA. The Rule includes model short and long notices.
FACTA also requires the FTC to educate consumers about prescreened offers of credit or insurance and their opt-out rights. The FTC has created a new consumer brochure, “Prescreened Offers of Credit and Insurance,” which explains how the prescreening process works and provides some of the benefits and consequences of receiving these offers and of opting out.
Copies of the Rule and the FTC’s brochure, “Prescreened Offers of Credit and Insurance,” are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580
Wednesday, August 03, 2005
Marriott, Alaska Air Lead 9 Travel Cos. In Above Average Ratings
The Customer Respect Group, an international research and consulting firm that focuses on how corporations treat their customers online, today released the results of its Third Quarter 2005 Online Customer Respect Study of the largest Airline and Travel firms.
The study is the only one to bring objective measure to the analysis of corporate performance from an online customer's perspective. It assigns a Customer Respect Index (CRI(TM)) rating to each company. The Customer Respect Index is a qualitative and quantitative in-depth analysis and independent measure of a customer's online experience when interacting with companies via the Internet. Scores of 8.0 and above are considered excellent and show an admirable level of Customer Respect. Scores 4.0 and below are considered poor and are badly lacking in Customer Respect.
By interviewing a representative sample of the adult Internet population, and by analyzing and categorizing more than 2000 corporate Web sites across a spectrum of industries in detail, The Customer Respect Group has determined the attributes that combine to create the entire online customer experience. These attributes have been grouped together and measured as indicators of Simplicity (ease of navigation), Responsiveness (quick and helpful responses to inquiries), Privacy (respect for the privacy of the customer), Attitude (customer-focus of site), Transparency (open and honest policies) and Principles (values and respects customer data). Combined they measure a company's overall Customer Respect.
Summary Results/Comparisons
Although a direct comparison is difficult because of the inclusion of industry-specific questions, the average CRI based on 660 surveys of corporate Web sites in various industries throughout 2004 was 5.9. Meanwhile, travel firms in this study scored 7.2 (versus 6.8 in the Q1 2005 report). By segment, car rental companies on average scored highest at 7.6, Web-based resellers and passenger transportation firms scored 7.3, hotels rated 7.1, airlines came in at 7.0 and cruise lines scored 6.7.
Nine Travel related Web sites received "excellent" CRI scores (8.0 and above), including Marriott International, Alaska Air Group, Enterprise, InterContinental Hotels Group, Northwest Airlines, Travelocity, US Airways Group, Avis and Orbitz.
Looking at the sectors in more detail, car rental companies overall were very good at responding to online inquiries but most likely to share personal data. Web-based resellers and passenger transportation firms were generally the least likely to share data. Airlines and cruise line were generally poor at responding to online questions while hotels scored lowest in Principles.
In terms of the speed and quality of the email responses, the companies in this report also compare very favorably. Only nine percent of inquiries were not answered. In addition, 69 percent of replies arrived within a day and 68 percent were very helpful.
However, the industry needs to improve in some key areas. In particular, the area of data sharing needs to be addressed. More companies in this report share data with business partners and third parties than the global average. In fact, some 38 percent either share information with outside parties or are unclear about their policies. This percentage remains consistent with the Q1 2005 report.
"We see the improvement in the travel industry as a direct result of competition. Hotels, airline and car rental companies are working very hard to attract direct bookings and circumvent the Web-based resellers," said Terry Golesworthy, president of The Customer Respect Group. "In order to compete, the standard for customer respect simply had to be raised to gain trust from customers that were being asked to supply substantial amounts of personal information. The impact of privacy concerns is now one of the hot buttons in the travel industry."
"While there have been improvements in many areas, such as Transparency of policies, Responsiveness and even Attitude, there is still a major unseen factor which is troubling," said Anthony Naylor, director of research for The Customer Respect Group. "The sharing of personal information outside the organization is still too big a temptation for many travel companies. There really is an impact for those companies that continue this practice."
The report conveys in great detail improvement opportunities for each company.
Web Sites that achieved an "Excellent" Customer Respect rating include the following:
Marriott International 8.4
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Alaska Air Group, Inc. 8.3
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Enterprise Car Rental 8.2
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InterContinental Hotels Group 8.2
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Northwest Airlines Corporation 8.2
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Travelocity 8.1
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US Airways Group 8.1
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Avis 8.0
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Orbitz 8.0
A sample of other findings for all surveyed firms include the following:
The Customer Respect Group, an international research and consulting firm that focuses on how corporations treat their customers online, today released the results of its Third Quarter 2005 Online Customer Respect Study of the largest Airline and Travel firms.
The study is the only one to bring objective measure to the analysis of corporate performance from an online customer's perspective. It assigns a Customer Respect Index (CRI(TM)) rating to each company. The Customer Respect Index is a qualitative and quantitative in-depth analysis and independent measure of a customer's online experience when interacting with companies via the Internet. Scores of 8.0 and above are considered excellent and show an admirable level of Customer Respect. Scores 4.0 and below are considered poor and are badly lacking in Customer Respect.
By interviewing a representative sample of the adult Internet population, and by analyzing and categorizing more than 2000 corporate Web sites across a spectrum of industries in detail, The Customer Respect Group has determined the attributes that combine to create the entire online customer experience. These attributes have been grouped together and measured as indicators of Simplicity (ease of navigation), Responsiveness (quick and helpful responses to inquiries), Privacy (respect for the privacy of the customer), Attitude (customer-focus of site), Transparency (open and honest policies) and Principles (values and respects customer data). Combined they measure a company's overall Customer Respect.
Summary Results/Comparisons
Although a direct comparison is difficult because of the inclusion of industry-specific questions, the average CRI based on 660 surveys of corporate Web sites in various industries throughout 2004 was 5.9. Meanwhile, travel firms in this study scored 7.2 (versus 6.8 in the Q1 2005 report). By segment, car rental companies on average scored highest at 7.6, Web-based resellers and passenger transportation firms scored 7.3, hotels rated 7.1, airlines came in at 7.0 and cruise lines scored 6.7.
Nine Travel related Web sites received "excellent" CRI scores (8.0 and above), including Marriott International, Alaska Air Group, Enterprise, InterContinental Hotels Group, Northwest Airlines, Travelocity, US Airways Group, Avis and Orbitz.
Looking at the sectors in more detail, car rental companies overall were very good at responding to online inquiries but most likely to share personal data. Web-based resellers and passenger transportation firms were generally the least likely to share data. Airlines and cruise line were generally poor at responding to online questions while hotels scored lowest in Principles.
In terms of the speed and quality of the email responses, the companies in this report also compare very favorably. Only nine percent of inquiries were not answered. In addition, 69 percent of replies arrived within a day and 68 percent were very helpful.
However, the industry needs to improve in some key areas. In particular, the area of data sharing needs to be addressed. More companies in this report share data with business partners and third parties than the global average. In fact, some 38 percent either share information with outside parties or are unclear about their policies. This percentage remains consistent with the Q1 2005 report.
"We see the improvement in the travel industry as a direct result of competition. Hotels, airline and car rental companies are working very hard to attract direct bookings and circumvent the Web-based resellers," said Terry Golesworthy, president of The Customer Respect Group. "In order to compete, the standard for customer respect simply had to be raised to gain trust from customers that were being asked to supply substantial amounts of personal information. The impact of privacy concerns is now one of the hot buttons in the travel industry."
"While there have been improvements in many areas, such as Transparency of policies, Responsiveness and even Attitude, there is still a major unseen factor which is troubling," said Anthony Naylor, director of research for The Customer Respect Group. "The sharing of personal information outside the organization is still too big a temptation for many travel companies. There really is an impact for those companies that continue this practice."
The report conveys in great detail improvement opportunities for each company.
Web Sites that achieved an "Excellent" Customer Respect rating include the following:
Marriott International 8.4
---------------------------------------------
Alaska Air Group, Inc. 8.3
---------------------------------------------
Enterprise Car Rental 8.2
---------------------------------------------
InterContinental Hotels Group 8.2
---------------------------------------------
Northwest Airlines Corporation 8.2
---------------------------------------------
Travelocity 8.1
---------------------------------------------
US Airways Group 8.1
---------------------------------------------
Avis 8.0
---------------------------------------------
Orbitz 8.0
A sample of other findings for all surveyed firms include the following:
- Companies received the best average rating (8.0) for Transparency and Attitude and the worst (5.8) for Responsiveness.
- Some 26 percent of firms did not respond consistently or did not respond at all to online inquiries resulting in nine percent of all online inquiries being ignored.
- Looking at all inquiries made, including those ignored, 69 percent were answered within a day of being sent, considered to be the time limit that consumers will accept. Taken one level further and looking at the nature of the response, 39 percent were responded within the day and were considered helpful.
- Some 38 percent of firms are either unclear or share data with outside third parties or business partners.
- After personal data is collected, seven percent of sites provide no means to "opt out" of future marketing campaigns.
- Only 37 percent of firms always use SSL or Https forms consistently to provide security when collecting personal data.
- Only 20 percent of the firms provide an FAQ, site search and a site map to assist the customer self serve.
Tuesday, August 02, 2005
Average Charity Only Keeps 41 Cents Of Each Dollar Says Calif AG
California Attorney General Bill Lockyer released a report July 21 that shows the average charity in 2003 received just over 40 percent of the revenue raised in donation campaigns run by commercial fundraisers, with roughly one-quarter of the campaigns netting nonprofits 15 percent or less.
“Charities need to carefully assess whether employing commercial fundraisers is the wisest, best way to raise money for valuable programs that serve our communities,” said Lockyer. “The average nonprofit’s receipts from these campaigns improved slightly in 2003. Unfortunately, the numbers show that too many charities receive too few dollars from too many commercial fundraising efforts.”
The Attorney General’s “Summary of Results of Charitable Solicitation by Commercial Fundraisers,” and a supplemental solicitation report on thrift store and vehicle donation programs, are available online at www.ag.ca.gov/charities . The Attorney General’s Office today also published a new booklet on charitable solicitation that provides donors tips on how to make informed contribution decisions. The guide is available online at www.ag.ca.gov/charities . In addition, Lockyer on July 27 will post at the same web site address an updated “Guide for Charities.” This document provides information on how to form and operate nonprofits, and about state and federal laws that govern nonprofits and solicitation.
Both the number of commercial fundraising campaigns and total revenue they produced increased in 2003 compared to 2002, according to the annual solicitation summary. In 2003, 605 campaigns grossed $233.17 million, up from the $211.30 million raised by 573 campaigns in 2002. The total net proceeds to charities, however, declined as a percentage of gross revenue. In 2003, charities received $100.02 million of the $233.17 million, or 42.9 percent. In 2002, by comparison, charities netted 46.7 percent, or $98.79 million of the $211.30 million raised.
The average commercial fundraising campaign in 2003 provided the charity 41.02 percent of total revenue, according to the summary. This 2003 number represented a fairly significant improvement over the 2002 figure of 38.14 percent.
To avoid distortion by a few campaigns, the average percent to charity is calculated by taking the percentage of contributions returned to the charity for each campaign, adding the individual percentages together, then dividing that figure by the total number of campaigns.
While the 2003 summary of results shows the average commercial fundraising campaign raised more for charities, the report also contains less heartening numbers. In 2003, charities received 15 percent or less of the total revenue from 146 of the 605 campaigns, or 24.1 percent. The percentage of low-yielding campaigns remained virtually unchanged from 2002, when 24.4 percent (140) of the 573 campaigns netted the charity 15 percent or less.
Further, only 223 of the 2003 campaigns, or 36.8 percent, provided more than 50 percent of the revenue to the charity. That’s less than a one percentage point increase from 2002, when 206 of the 573 campaigns, or 35.9 percent, netted the charity more than half the revenue. Lockyer said he had hoped for more improvement in this number, noting that the 35.9 percent figure in 2002 represented an 11.6 percentage-point jump over 2001.
The Better Business Bureau's Wise Giving Alliance recommends that charities net 65 percent of the revenue raised from commercial fundraising campaigns. Of the 605 campaigns in California in 2003, only 148 (less than a quarter) met that standard.
Lockyer also issued the 2003 “Supplemental Report: Donations of Personal Property,” which details how much charities received from thrift stores that sell donated goods, and from vehicle donation campaigns run by commercial fundraisers.
Vehicle donation campaigns produced $45.54 million in gross revenue in 2003, according to the supplemental report, compared to $45.69 million in 2002. The average vehicle donation campaign in 2003 netted the charity 45.19 percent. That continued a promising trend that saw the average net to charity from vehicle donation campaigns rise almost nine percentage points from 2001 to 2003, from 36.76 percent to 45.19 percent.
For-profit thrift stores that resell goods they purchase from charities at negotiated prices reported total revenue of $74.26 million in 2003, an increase of 184.12 percent from the 2002 figure of $26.14 million. Unfortunately, the average amount paid to charities by these stores declined from 15.69 percent to 13.92 percent of the stores’ total revenue.
Lockyer noted the fundraising reports use information from unedited financial statements filed by charities and fundraisers. The financial statements contain more detailed information about the filers, and can be viewed at the Attorney General’s web site, www.ag.ca.gov/charities . The 2003 statements filed by commercial fundraisers will be available on the web site within weeks. Most of the 91,000 charities registered with the Attorney General’s Office solicit donations directly, and do not use commercial fundraisers.
A comprehensive reform law sponsored by Lockyer, which took effect January 1, 2005, includes provisions to protect charities that deal with for-profit solicitors. The Nonprofit Integrity Act requires commercial fundraisers, within five days of receiving donations, to deposit the funds in a bank account controlled by the charity, or give the money directly to the charity. The Act also requires written contracts between charities and commercial fundraisers for each solicitation campaign, and mandates that the contracts include specific protections and rights for nonprofits.
California Attorney General Bill Lockyer released a report July 21 that shows the average charity in 2003 received just over 40 percent of the revenue raised in donation campaigns run by commercial fundraisers, with roughly one-quarter of the campaigns netting nonprofits 15 percent or less.
“Charities need to carefully assess whether employing commercial fundraisers is the wisest, best way to raise money for valuable programs that serve our communities,” said Lockyer. “The average nonprofit’s receipts from these campaigns improved slightly in 2003. Unfortunately, the numbers show that too many charities receive too few dollars from too many commercial fundraising efforts.”
The Attorney General’s “Summary of Results of Charitable Solicitation by Commercial Fundraisers,” and a supplemental solicitation report on thrift store and vehicle donation programs, are available online at www.ag.ca.gov/charities . The Attorney General’s Office today also published a new booklet on charitable solicitation that provides donors tips on how to make informed contribution decisions. The guide is available online at www.ag.ca.gov/charities . In addition, Lockyer on July 27 will post at the same web site address an updated “Guide for Charities.” This document provides information on how to form and operate nonprofits, and about state and federal laws that govern nonprofits and solicitation.
Both the number of commercial fundraising campaigns and total revenue they produced increased in 2003 compared to 2002, according to the annual solicitation summary. In 2003, 605 campaigns grossed $233.17 million, up from the $211.30 million raised by 573 campaigns in 2002. The total net proceeds to charities, however, declined as a percentage of gross revenue. In 2003, charities received $100.02 million of the $233.17 million, or 42.9 percent. In 2002, by comparison, charities netted 46.7 percent, or $98.79 million of the $211.30 million raised.
The average commercial fundraising campaign in 2003 provided the charity 41.02 percent of total revenue, according to the summary. This 2003 number represented a fairly significant improvement over the 2002 figure of 38.14 percent.
To avoid distortion by a few campaigns, the average percent to charity is calculated by taking the percentage of contributions returned to the charity for each campaign, adding the individual percentages together, then dividing that figure by the total number of campaigns.
While the 2003 summary of results shows the average commercial fundraising campaign raised more for charities, the report also contains less heartening numbers. In 2003, charities received 15 percent or less of the total revenue from 146 of the 605 campaigns, or 24.1 percent. The percentage of low-yielding campaigns remained virtually unchanged from 2002, when 24.4 percent (140) of the 573 campaigns netted the charity 15 percent or less.
Further, only 223 of the 2003 campaigns, or 36.8 percent, provided more than 50 percent of the revenue to the charity. That’s less than a one percentage point increase from 2002, when 206 of the 573 campaigns, or 35.9 percent, netted the charity more than half the revenue. Lockyer said he had hoped for more improvement in this number, noting that the 35.9 percent figure in 2002 represented an 11.6 percentage-point jump over 2001.
The Better Business Bureau's Wise Giving Alliance recommends that charities net 65 percent of the revenue raised from commercial fundraising campaigns. Of the 605 campaigns in California in 2003, only 148 (less than a quarter) met that standard.
Lockyer also issued the 2003 “Supplemental Report: Donations of Personal Property,” which details how much charities received from thrift stores that sell donated goods, and from vehicle donation campaigns run by commercial fundraisers.
Vehicle donation campaigns produced $45.54 million in gross revenue in 2003, according to the supplemental report, compared to $45.69 million in 2002. The average vehicle donation campaign in 2003 netted the charity 45.19 percent. That continued a promising trend that saw the average net to charity from vehicle donation campaigns rise almost nine percentage points from 2001 to 2003, from 36.76 percent to 45.19 percent.
For-profit thrift stores that resell goods they purchase from charities at negotiated prices reported total revenue of $74.26 million in 2003, an increase of 184.12 percent from the 2002 figure of $26.14 million. Unfortunately, the average amount paid to charities by these stores declined from 15.69 percent to 13.92 percent of the stores’ total revenue.
Lockyer noted the fundraising reports use information from unedited financial statements filed by charities and fundraisers. The financial statements contain more detailed information about the filers, and can be viewed at the Attorney General’s web site, www.ag.ca.gov/charities . The 2003 statements filed by commercial fundraisers will be available on the web site within weeks. Most of the 91,000 charities registered with the Attorney General’s Office solicit donations directly, and do not use commercial fundraisers.
A comprehensive reform law sponsored by Lockyer, which took effect January 1, 2005, includes provisions to protect charities that deal with for-profit solicitors. The Nonprofit Integrity Act requires commercial fundraisers, within five days of receiving donations, to deposit the funds in a bank account controlled by the charity, or give the money directly to the charity. The Act also requires written contracts between charities and commercial fundraisers for each solicitation campaign, and mandates that the contracts include specific protections and rights for nonprofits.
Monday, August 01, 2005
Lincoln Repair Service Tops: JD Power Study
With a CSI score of 915 (on a 1,000-point scale), Lincoln ranks highest in customer satisfaction with dealer service, receiving a record-setting high CSI score for the second consecutive year, according to the J.D. Power and Associates 2005 Customer Service Index (CSI) StudySM released July 21.
The study, now in its 25th year, measures customer satisfaction of vehicle owners who visited the dealer service department for maintenance or repair work during the first three years of ownership, which typically represents the majority of the vehicle warranty period. Overall customer satisfaction is based on six measures: service initiation, service advisor, in-dealership experience, service delivery, service quality and user-friendly service.
Lincoln outperforms other brands in the areas of service initiation and user-friendly service. Lincoln customers are particularly pleased with the dealership’s ability to get them in for an appointment within a reasonable amount of time and the fairness of charges. Lincoln is the first domestic make to rank highest in CSI for two consecutive years.
Lincoln is followed in the rankings by Cadillac, Saturn and Lexus, respectively.
The study finds that 51 percent of repair work involved a recall—up from 39 percent in 2004—reflecting, in part, a change in government regulations on mandatory reporting of vehicle safety defects. CSI scores are, on average, considerably higher for repairs that involve recalls, particularly in the area of service quality. Recall work often tends to garner higher satisfaction than typical repairs because dealers plan for and communicate the work to customers better. As recall repairs become routine, technicians become more efficient and consistent in fixing the problem.
"As negative as recalls are for manufacturers, they provide dealerships with opportunities to excel in service and make a positive impact on their customers," said Steve Witten, executive director of automotive retail research at J.D. Power and Associates. "When a vehicle is fixed quickly and correctly in one visit, customers tend to walk away with higher satisfaction. This typically occurs with recall work since the dealers are prepared to work on the specific problem. Manufacturers may consider applying lessons learned from recall campaigns to regular repair service."
The study also finds that brands receiving high ratings from customers for service satisfaction benefit as well in terms of loyalty, both in the likelihood of customers returning to the dealer for in-warranty and post-warranty work and in intentions to repurchase from the servicing dealer. This is particularly important when the warranty period ends. Creating strong relationships with customers during the first few years of ownership significantly influences customer retention during the post-warranty period, according to the J.D. Power and Associates 2005 Service Usage and Retention StudySM (SURS), which measures the same elements as CSI but at four to five years of ownership, when most warranties have expired.
"After one year of ownership, nearly one-third of customers turn to non-dealer facilities to service their vehicle," said Witten. "This percentage increases to more than one-half by the time the vehicle is five years old. What we find in SURS is that many independent service providers maintain a competitive advantage over dealers primarily through the strong relationship and trust they have developed with their customers. While most independents have the advantage of being small operations that offer more personal service, manufacturers and dealers can develop programs that foster personal relationships between service advisors and customers."
According to SURS, independent service providers typically outperform dealers in the key drivers of service satisfaction, including getting customers their appointment on the desired day; waiting on customers immediately; telling customers when their vehicle will be ready and consistently delivering on that promise; fixing the vehicle right the first time; and explaining the work performed and associated charges.
Brands that perform particularly well in service satisfaction among owners of four- to five-year-old vehicles include luxury brands Acura, Cadillac, Infiniti and Lexus.
The 2005 CSI Study is based on responses from 99,550 owners and lessees of 2002 to 2004 model-year vehicles. The 2005 SURS is based on responses from 11,016 owners of 2000 to 2001 model-year vehicles.
With a CSI score of 915 (on a 1,000-point scale), Lincoln ranks highest in customer satisfaction with dealer service, receiving a record-setting high CSI score for the second consecutive year, according to the J.D. Power and Associates 2005 Customer Service Index (CSI) StudySM released July 21.
The study, now in its 25th year, measures customer satisfaction of vehicle owners who visited the dealer service department for maintenance or repair work during the first three years of ownership, which typically represents the majority of the vehicle warranty period. Overall customer satisfaction is based on six measures: service initiation, service advisor, in-dealership experience, service delivery, service quality and user-friendly service.
Lincoln outperforms other brands in the areas of service initiation and user-friendly service. Lincoln customers are particularly pleased with the dealership’s ability to get them in for an appointment within a reasonable amount of time and the fairness of charges. Lincoln is the first domestic make to rank highest in CSI for two consecutive years.
Lincoln is followed in the rankings by Cadillac, Saturn and Lexus, respectively.
The study finds that 51 percent of repair work involved a recall—up from 39 percent in 2004—reflecting, in part, a change in government regulations on mandatory reporting of vehicle safety defects. CSI scores are, on average, considerably higher for repairs that involve recalls, particularly in the area of service quality. Recall work often tends to garner higher satisfaction than typical repairs because dealers plan for and communicate the work to customers better. As recall repairs become routine, technicians become more efficient and consistent in fixing the problem.
"As negative as recalls are for manufacturers, they provide dealerships with opportunities to excel in service and make a positive impact on their customers," said Steve Witten, executive director of automotive retail research at J.D. Power and Associates. "When a vehicle is fixed quickly and correctly in one visit, customers tend to walk away with higher satisfaction. This typically occurs with recall work since the dealers are prepared to work on the specific problem. Manufacturers may consider applying lessons learned from recall campaigns to regular repair service."
The study also finds that brands receiving high ratings from customers for service satisfaction benefit as well in terms of loyalty, both in the likelihood of customers returning to the dealer for in-warranty and post-warranty work and in intentions to repurchase from the servicing dealer. This is particularly important when the warranty period ends. Creating strong relationships with customers during the first few years of ownership significantly influences customer retention during the post-warranty period, according to the J.D. Power and Associates 2005 Service Usage and Retention StudySM (SURS), which measures the same elements as CSI but at four to five years of ownership, when most warranties have expired.
"After one year of ownership, nearly one-third of customers turn to non-dealer facilities to service their vehicle," said Witten. "This percentage increases to more than one-half by the time the vehicle is five years old. What we find in SURS is that many independent service providers maintain a competitive advantage over dealers primarily through the strong relationship and trust they have developed with their customers. While most independents have the advantage of being small operations that offer more personal service, manufacturers and dealers can develop programs that foster personal relationships between service advisors and customers."
According to SURS, independent service providers typically outperform dealers in the key drivers of service satisfaction, including getting customers their appointment on the desired day; waiting on customers immediately; telling customers when their vehicle will be ready and consistently delivering on that promise; fixing the vehicle right the first time; and explaining the work performed and associated charges.
Brands that perform particularly well in service satisfaction among owners of four- to five-year-old vehicles include luxury brands Acura, Cadillac, Infiniti and Lexus.
The 2005 CSI Study is based on responses from 99,550 owners and lessees of 2002 to 2004 model-year vehicles. The 2005 SURS is based on responses from 11,016 owners of 2000 to 2001 model-year vehicles.
