Business » Consumer Report http://abcnews.go.com/blogs/business The latest Business news and blog posts from ABC News contributors and bloggers. Sat, 28 Feb 2015 23:07:51 +0000 en hourly 1 http://wordpress.org/?v=3.2.1 Survey Finds Many Americans ‘on the Edge of Financial Disaster’ http://abcnews.go.com/blogs/business/2015/02/survey-finds-many-americans-on-the-edge-of-financial-disaster/ http://abcnews.go.com/blogs/business/2015/02/survey-finds-many-americans-on-the-edge-of-financial-disaster/#comments Mon, 23 Feb 2015 13:53:15 +0000 Richard Davies http://abcnews.go.com/blogs/business/?p=121942 Morning Money Memo …

As the economy improves, more Americans are borrowing money to pay for purchases.

Thirty-seven percent have credit card debt that equals or is greater than their emergency savings, says a survey released today by Bankrate.com.

“These numbers mean that three out of every eight Americans are teetering on the edge of financial disaster,” says Bankrate’s Greg McBride.

The average credit card debt for U.S. households is more than $15,000, according to the Federal Reserve.

“From a purely financial standpoint, it makes more sense to pay down that high interest rate” before you start to save, says Kelley Long, member of the American Institute of CPAs.

Borrowing money with a credit card is usually very expensive.

“If you are over your head in debt, you might want to consider a balanced transfer card, but you need to have pretty good credit to qualify for the best offers,” says credit card writer Beverly Harzog, author of “The Debt Escape Plan.” A balanced transfer card “would give you an opportunity to pay off your debt while paying zero interest on that.”

New Greece Agreement Buoys Stocks

International stock markets extended gains today after Greece and its European creditors reached an agreement that put off the immediate threat of bankruptcy and exit from the euro. Stock futures fell slightly this morning on Wall Street after Friday’s rally to another record high. Benchmark U.S. crude oil slipped below $50.50 a barrel. The dollar gained against the yen and the euro.

Honda President to Step Aside

Honda – the Japanese automaker at the center of an air-bag defect scandal – says its president, Takanobu Ito, will step aside and be replaced by another Honda executive. The surprise move follows major recalls by Honda of vehicles equipped with air bags made by Japan’s Takata Corp. The air bags have inflators that can explode, expelling shards of metal and plastic. At least five deaths and dozens of injuries have been linked to the problem worldwide.

HSBC Earnings Disappoint

Another big bank has reported a decline in earnings. HSBC, Europe’s biggest bank, says full-year profits fell 16 percent. CEO Stuart Gulliver acknowledged today that 2014 profits disappointed, but said a tough fourth quarter “masked some of the progress made over the preceding three quarters.” The disappointing results came as HSBC was being pummeled by allegations that its Swiss private bank helped the wealthy evade taxes.

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Rite Aid Expands Into Pharmacy Benefits Business http://abcnews.go.com/blogs/business/2015/02/rite-aid-expands-into-pharmacy-benefits-business/ http://abcnews.go.com/blogs/business/2015/02/rite-aid-expands-into-pharmacy-benefits-business/#comments Wed, 11 Feb 2015 14:55:47 +0000 Richard Davies http://abcnews.go.com/blogs/business/?p=121891 Drug store chains are changing their business models, adapting to big changes in health care. Rite Aid is expanding from running drugstores into managing pharmacy benefits with its $2 billion purchase of EnvisionRx. The company, which runs prescription drug plans for employers and insurers, also processes mail-order and retail pharmacy prescriptionss. EnvisionRx offers services in a growing area for prescription drug spending, specialty pharmacy, and a national Medicare prescription drug plan. Drug store rivals CVS and Walgreen are making similar moves, offering prescription and other health care services to consumers.  With the rollout of Obamacare and Medicaid expansion in many states there is a growing market for health care at large drug stores.

The cable TV industry and broadcasters will be watching the reception to the newly launched Sling TV.  The Dish Network online service costs $20 a month for ESPN, TNT, TBS, BBC America and some other cable channels.  Dish has also added AMC to its lineup just in time for the new season of the network’s most popular show, “The Walking Dead.” “I think a lot of people in the industry are going to pay a lot of attention to this service,” said Paul Sweeney, media analyst for Bloomberg Intelligence. “Let’s see how the demand is: are there a lot of consumers out there that will sign up for this?” Sweeney says if Sling is a hit, “then I think everybody is going to take a step back– the cable networks the cable distributors– and really re-think the relationships.”

Oil and gas drilling company Halliburton says it will lay off as much as 8 percent of its workforce  because of falling oil prices. That’s about 6,000 employees.  Crude prices have plunged nearly 60 percent since last June. In recent weeks they’ve been up slightly.

Target has agreed to pay nearly $4 million to settle a lawsuit filed by Northern California prosecutors saying that it charged higher prices than advertised. The retailer is said to have misrepresented the weights of products and failed to ensure that price scanners at checkout stands were accurate. 

Apple has set a record on Wall Street. It’s the first U.S. company to be worth more than $700 billion based on the value of its stock. That’s almost twice the value of the next biggest company, oil giant ExxonMobil.

Finance ministers from euro nations are holding an emergency meeting in Brussels on Greece later today, the group’s first opportunity to hear directly from the new left-wing anti-austerity Greek government. Greece wants to renegotiate the terms of its international bailout that has imposed years of punishing austerity on the country. The current agreement expires later this month.  Speculation that Greece could be granted extra time to hold new negotiations gave a lift to the US stock market yesterday, with the S&P 500 rising more than 1 percent.

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3 Red Flags to Remember When Picking Tax Preparer http://abcnews.go.com/blogs/business/2015/01/3-red-flags-to-remember-when-picking-tax-preparer/ http://abcnews.go.com/blogs/business/2015/01/3-red-flags-to-remember-when-picking-tax-preparer/#comments Wed, 28 Jan 2015 23:24:27 +0000 Rebecca Jarvis http://abcnews.go.com/blogs/business/?p=121811

When Oscar Lomeli asked his friends for a recommendation on a tax preparer, he didn’t think he’d end up getting stuck paying back his bogus refund.

Need more help with your tax returns? See more information below.

“They [friends] told me she was good,” said the engineer from Costa Mesa, California. ”She [the preparer] totally lied and now it’s my fault that she wrote the wrong information and now I have to pay the consequences for that.”

With nearly 60 percent of Americans using tax professionals to prepare their returns, the Internal Revenue Service is issuing a warning today to be on the lookout for con artists making the rounds.

Early warnings about IRS scams this tax season

Beware IRS impersonators’ intimidation scams

Watch: Phone scam caught on tape

Lomeli said during tax time, the tax preparer came to his house and then left with all of his papers. Two weeks, later, he learned he’d receive a $3,000 refund. Lomeli said the woman came to his house to pay him.

“She paid me my refund in $20 bills,” he said.

Lomeli said he later learned that the tax preparer had made up thousands of dollars in deductions. His refund totaled $4,500. Lomeli said she kept $1,500.

“It [the filing] stated that I had a business, which I do not, and it said I lost money in my business, therefore my refund was bigger,” he said.

The IRS said Lomeli’s situation was an all too common problem.

“Legitimate preparers should be charging you a fee tied to the amount of work it’s going to take to prepare your return and file it,” said John Koskinen, an IRS commissioner. “That fee should be independent to any refund to which you’re entitled.”

abc taxes lb 150128 16x9 608 3 Red Flags to Remember When Picking Tax Preparer

ABC News

Koskinen shared these Top 3 tax preparer red flags:

1. A preparer who bases fees on the size of the refund.

2. A preparer who asks you to sign blank or incomplete tax returns.

3. A preparer who can’t provide a PTIN (preparer tax identification number)

There’s also these additional tips:

The Volunteer Income Tax Assistance Program offers free tax help to people who generally make $53,000 or less, persons with disabilities, the elderly and limited English speaking taxpayers who need assistance in preparing their own tax returns.

Make less than $60,000? You can file your federal tax returns for free through IRS Free FileTurboTax is also letting those taxpayers file state returns for free and H&R Block is charging $9.99 through Feb. 15.

 

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Early Warnings About IRS Scams This Tax Season http://abcnews.go.com/blogs/business/2015/01/early-warnings-about-irs-scams-this-tax-season/ http://abcnews.go.com/blogs/business/2015/01/early-warnings-about-irs-scams-this-tax-season/#comments Thu, 22 Jan 2015 23:41:24 +0000 Enjoli Francis http://abcnews.go.com/blogs/business/?p=121781

The government is issuing a warning today for Americans to be on high alert for tax-season scams that feature fake IRS agents.

Lois Dilibero said a fake IRS agent left a voicemail on her phone recently.

“They said, ‘You need to call us right away. You’re being sued for $5,000 by the IRS,’” Lois Dilibero told ABC affiliate WPLG-TV in Miami. “I thought, ‘Yeah, really?’ … I knew I didn’t owe any money to anybody.”

In Dilibero’s case, she said she knew immediately that it was a scam.

Beware IRS impersonators’ intimidation scams.

Watch: Phone scam caught on tape.

‘Pay your taxes now or be arrested’: the dirty dozen tax scams to avoid.

Tim Camus, a top investigator with the U.S. Treasury Department, said even he got a call demanding that he pay $750 or get arrested.

Nearly 3,000 people have already fallen victim, scammed out of more than $14 million, according to the US Treasury Inspector General for Tax Administration.

And half of that money has come from these five states: California, New York, New Jersey, Florida and Pennsylvania.

The scammers, often overseas, disguise their phone numbers to make people think they’re calling from the IRS and then make serious threats of jail time and even deportation.

The IRS says it would never call demanding immediate payment and would never make a person pay with prepaid cash cards or ask for credit card information.

The agency said it also would not threaten to arrest you.

ABC News’ Clayton Sandell contributed to this story.

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Ikea Recalls 169,000 Crib Mattresses Over Entrapment Risk http://abcnews.go.com/blogs/business/2015/01/ikea-recalls-169000-crib-mattresses-over-entrapment-risk/ http://abcnews.go.com/blogs/business/2015/01/ikea-recalls-169000-crib-mattresses-over-entrapment-risk/#comments Thu, 15 Jan 2015 21:16:53 +0000 Jeanette Torres http://abcnews.go.com/blogs/business/?p=121753 ht ikea crib recall jc 150115 16x9 608 Ikea Recalls 169,000 Crib Mattresses Over Entrapment Risk

Ikea is recalling about 169,000 crib mattresses in the U.S. over an entrapment hazard.

According to the U.S. Consumer Product Safety Commission (CPSC), the recall involves Ikea’s Vyssa-style crib mattresses with the model names Vackert, Vinka, Spelevink, Sloa and Slummer. The mattresses were sold at Ikea stores nationwide and online between August 2010 and May 2014.

The CPSC says the mattresses could create a gap between the mattress and crib larger than the width of two fingers, making it possible for infants to become entrapped.

So far, Ikea has received two reports of entrapment. None of the children involved were injured.

Customers with affected mattresses are advised to stop using them immediately and return them to any of the furniture retailer’s stores for an exchange or full refund.

 

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Gas Prices Fall Again, With No Floor in Sight http://abcnews.go.com/blogs/business/2015/01/gas-prices-fall-again-with-no-floor-in-sight/ http://abcnews.go.com/blogs/business/2015/01/gas-prices-fall-again-with-no-floor-in-sight/#comments Tue, 13 Jan 2015 01:28:12 +0000 Zunaira Zaki http://abcnews.go.com/blogs/business/?p=121718 The average price of a gallon of regular fell to $2.14, down 8 cents from a week ago and $1.19 less compared with a year ago, according to the Department of Energy.

This is the lowest weekly average gas price since May 2009 — the recession at the time depressed prices dramatically.

GasBuddy predicts that the national average will fall to $1.95 by the next month.

As of now 43 states have at least one gas station selling gas for less than $2 a gallon, according to GasBuddy.

 

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2014: It’s Been a Brilliant Year for Investors http://abcnews.go.com/blogs/business/2014/12/2014-its-been-a-brilliant-year-for-investors/ http://abcnews.go.com/blogs/business/2014/12/2014-its-been-a-brilliant-year-for-investors/#comments Wed, 31 Dec 2014 14:04:16 +0000 Richard Davies http://abcnews.go.com/blogs/business/?p=121683 Morning Money Memo….

Take a look at your 401(k) fund statement: 2014 has been a very good year for most investors and businesses. The S&P 500 big stock index is up more than 12.5 percent. Stock returns are usually far stronger than keeping your money in a bank account or money market mutual fund. The 2014 rise for stocks came despite gloomy predictions of a plunge or correction by many stock pickers. This was not a good year for many experts, especially the managers at hedge funds, which charge wealthy investors large fees to stay ahead of the market. In most cases they didn’t–lagging behind the rise for the S&P and other stock averages. The biggest shock of the year was the plunge in the price of oil, which helped bond investors with falling interest rates and higher prices for bonds. The value of the dollar has been strong this year on global currency markets – gaining in value. Stock market futures rose this morning on the final day of the year.

The view from most oil-rich nations is not so good. Venezuela’s government confirms today the economy is still struggling. Its socialist president is blaming the severe slump on his government’s opponents. Nicolas Maduro’s comments came hours after the central bank said GDP shrank at an annual rate of 4.8 percent in the third quarter.  The report came as no surprise to economists, who blame the Venezuelan government’s tight control of prices and foreign exchange for scaring away investment and widespread shortages of even essential items such as soap and sugar.

The real estate firm RealtyTrac says the median sales price of U.S. single family homes and condos in November was $190,000, flat with the previous month but up 15 percent from the year before. “As the price of distressed properties reaches a new high the pool of investor activity that has been fueling the housing recovery may dry up,” says Daren Blomquist, vice president at RealtyTrac. Most economists expect fewer distressed sales next year as the housing market returns to normal with more first-time buyers.

China’s two biggest manufacturers of bullet trains have merged in hopes of creating a globally competitive producer. CNR and CSR, both state-owned, will merge into a company called CRRC Corp., according to a statement released through the Shanghai stock exchange. It said they want to create a “globally leading” supplier of high-end equipment. China has the world’s biggest bullet train network but its trains are based on French, German and Japanese technology. Beijing is trying to develop its own bullet trains to secure a foothold in a growing global market.

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Christmas Parcel Delivery Improves Over 2013 http://abcnews.go.com/blogs/business/2014/12/christmas-parcel-delivery-improves-over-2013/ http://abcnews.go.com/blogs/business/2014/12/christmas-parcel-delivery-improves-over-2013/#comments Mon, 29 Dec 2014 23:28:46 +0000 Richard Davies http://abcnews.go.com/blogs/business/?p=121669 Morning Money Memo…

The Christmas parcel rush went much better than last year, when bad weather contributed to major shipping snafus. But how did retailers do with their late promises to customers? The online commerce research firm StellaService did a performance test on 40 large retailer, placing orders on the advertised Christmas cutoff date. “Retailers did a nice job this year on fulfillment,” said Kevon Hills, StellaService vice president of research. “You saw many of these packages leave the warehouse the same day the order was placed, which is the best effort the retailer can make. Everyone seemed to learn from last year’s woes and make the proper improvements.” For orders placed on December 23, Apple, Nordstrom, Dell and Amazon delivered all packages on time–before Christmas Day. Overall, 7 percent of the gifts ordered on the Christmas cutoff deadline didn’t make it. Staples and Toys ‘R’ Us, missed their promised delivery deadline more than once in this test. Online stores used UPS more than any other parcel delivery firm.

Sony says its PlayStation Network is back online after three days of disruptions that began on Christmas. But the company says heavy traffic might continue to cause problems for customers seeking to play their favorite games. A group of hackers called Lizard Squad — or someone claiming to speak for it — took credit for the disruptions. Sony vice president Catherine Jensen added that “PlayStation Network and some other gaming services were attacked over the holidays with artificially high levels of traffic to disrupt connectivity and online gameplay.”

The biggest threat to U.S. economic growth in 2015 may come from overseas. The ruble extended its losses on today after a report showed the Russian economy has started shrinking in annual terms for the first time since 2009 as the country is buffeted by falling oil prices and Western sanctions. The Russian government, which has been scrambling to support the ruble and the economy, announced fresh steps to keep the banks afloat.

An early election in Greece is the latest worry for global financial markets. The January 25 vote was called after the Greek Parliament failed to elect a new president in a third and final round of voting. The move could endanger the international financial bailout for Greece The Euro is down this morning against the dollar. The main Greek stock index fell nearly 10 percent. Asian stocks were mostly higher today after a report China will change banking rules in an apparent effort to boost lending and economic growth as oil prices rebounded.

Richard Davies Twitter: daviesnow

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Jobs, Economy and Stocks Gain as Year Closes http://abcnews.go.com/blogs/business/2014/12/jobs-economy-and-stocks-gain-as-year-closes/ http://abcnews.go.com/blogs/business/2014/12/jobs-economy-and-stocks-gain-as-year-closes/#comments Thu, 25 Dec 2014 12:48:37 +0000 John Kapetaneas http://abcnews.go.com/blogs/business/?p=121658 Morning Money Memo…

Major markets in the U.S. and Europe are closed today for Christmas. The Dow finished up just 6 points yesterday, enough to set yet another new record for the index at 18,030. Markets will end the week with good news in hand, with new Labor Department data showing jobless claims falling to a seven-week low. Factoring estimates of December’s job data, total employment growth this year could approach nearly 3 million new jobs, outpacing the estimated 2.3 million jobs added in each of 2012 and 2013.

Takata is facing a shakeup in its executive ranks, following a tumultuous year marked by the massive recalls linked to the company’s airbags. Yesterday the company’s president and COO announced he was stepping down from his post, while other key executives would be taking substantial pay cuts. Shegehisa Takada, the current CEO and grandson of the company’s founder, will be absorbing the president’s role.

Wal-Mart is preparing to raise wages.  The world’s largest retailer will adjust base salaries at 1,434 stores, or a third of its U.S. locations, according to an internal memo reviewed by Reuters. Stores in 21 states make will make adjustments to coincide with minimum wage increases.

Uber can add another check to the column of challenges the up-and-coming company faces. The ride-booking service, which has faced a litany of lawsuits, in addition to having its Nevada operation suspended and its CEO indicted by the South Korean government in the last 30 days, is now facing a federal lawsuit by 45 Philadelphia taxi companies, accusing Uber of racketeering.  Uber said on Wednesday it will “vigorously defend the rights of riders to enjoy competition and choice, and for drivers to build their own small businesses.”

 

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Stock Market Enjoys Santa Claus Rally http://abcnews.go.com/blogs/business/2014/12/stock-market-enjoys-santa-claus-rally/ http://abcnews.go.com/blogs/business/2014/12/stock-market-enjoys-santa-claus-rally/#comments Wed, 24 Dec 2014 15:35:59 +0000 Richard Davies http://abcnews.go.com/blogs/business/?p=121654 Morning Money Memo…

The stock market is having more than a Santa Claus rally. The U.S. economy is getting stronger with new optimism about growth heading into the new year. The stock market closed yesterday at record highs after the Commerce Department said growth expanded at an annual rate of 5 percent during the third quarter. That’s the strongest rate of growth in more than a decade.  Gains in spending by consumers and businesses are part of this trend. Consumer confidence is at the highest level since before the recession. The Dow Jones Industrials gained 65 points yesterday, closing above 18,000 for the first time. Futures rose again this morning after five straight days of gains.

The latest sign of a growing economy comes from today’s jobs report by the Labor Department. Weekly unemployment applications fell to 280,000 – the lowest level in seven weeks. The four-week average of people making first-time benefits claims is down 16 percent since this time last year.

This year’s worst-performing currency is not the Russian ruble – it’s bitcoin. The digital currency peaked at a value of $1,130 just over a year ago, reports Bloomberg News. Bitcoin plunged 56 percent in value this year, making it dead last in 175 foreign-exchange values.

Standard & Poor’s has put Russia on a watch list.  The credit rating firm is threatening to give a junk rating to its corporate debt. Russia’s central bank has made another move to shore up the battered ruble, offering hard currency loans to companies and banks to help them service their debts. The bank says borrowers can put their debt obligations as collateral against the loans. 

Uber is facing more legal problems. South Korea has indicted the head of local subsidiary of the ride-sharing service. The executive is accused a violating the local law that prohibits firms or people  without licenses from providing public transport services. 

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