Consumer Confidential: Credit cards, banks and trains

Here's your tardy-Tuesday roundup of consumer news from around the Web:

--Sign o' the times: MasterCard Inc. says its quarterly profit rose as consumers put more stuff on plastic, which is yet another indication that the economy is on the upswing. Robert Selander, MasterCard's chief exec, said it looks like the worst of the downturn is now in our rear-view mirror. But he also said that things won't be entirely hunky-dory until next year. So go easy with your credit card. We're not through the rough stuff yet.

--These little town blues: Bank of America says it wants to attract a higher caliber of exec for its next CEO, so the company reportedly may move its executive suite from North Carolina to New York. Probably doesn't matter much in the grand scheme of things. But it shows that many of our too-big-to-fail companies are beholden to no particular community -- except, perhaps, Wall Street.

--Warren Buffett is buying a railroad -- the Burlington Northern Santa Fe Corp., to be precise. Clearly the guy known how to play Monopoly. The railroads always pay off over the long run.

-- David Lazarus

Consumer Confidential: Credit cards, muscle carts and car seats

Here's your woe-it's-Wednesday roundup of consumer news from around the Web:

• Fedmeister Ben Bernanke says the Federal Reserve may speed up new credit card regulations -- or maybe not. Amid efforts by lawmakers to get tough new laws on the books, Bernanke said it's possible that the Fed's own efforts could arrive sooner than their current arrival date of Feb. 22. But he's concerned that banks need sufficient time "to allow for an orderly transition and to avoid unintended consequences, compliance difficulties and potential liabilities." I say: Get some darned safeguards in place and worry about consequences and difficulties later.

• The Consumer Product Safety Commission says it'll take a closer look at so-called ROVs, or off-road recreational vehicles. The four-wheel contraptions, which look like golf carts on steroids, have been responsible for more than 100 deaths since 2003, the agency says. ROV-makers have proposed voluntary safety regulations, but officials say those rules don't go far enough. So the commission will now explore its own crackdown. How hard can this be? Write some rules that keep people from dying. Is this something that really needs to be negotiated?

• Car seats are great ... in cars. On the dining room table? Not so much. That's the conclusion of a new study which found that more than 43,000 kids ended up in the emergency room between 2003 and 2007 after falling in car seats placed atop tables and other high surfaces. The problem, of course, is that kids wriggle and jiggle, and can send unsecured car seats tumbling. Note to parents: Keep the car seat in the car. Keep the kid in a crib or down on the floor.

-- David Lazarus

Consumer Confidential: Credit, jobs and beer

Here's your finally-it's-Friday roundup of consumer news from around the Web:

-- Banks weren't doing us any favors in August. Consumer credit dropped by nearly $12 billion, according to the Federal Reserve. In other words, there were a lot fewer loans being made, particularly in light of many credit card accounts being shut down by banks ahead of stricter rules coming from Washington. Of course, it's not necessarily a bad thing that many would-be borrowers are being shown the door. One reason we got into our current mess is because banks were handing out cash willy-nilly. But after billions of dollars in taxpayer-funded bailouts, some might see this big drop in credit as a fine how-do-you-do.

-- This has been an equal-opportunity recession. Experts say it's not just working stiffs who have been struggling to find jobs. Nearly half of long-term job seekers come from the ranks of white-collar workers, according to a report from outplacement firm Challenger, Gray & Christmas. And since these folk tend to make more dough, and thus spend more, this could slow any economic recovery until the ranks of the white-collar crew are replenished. I'm sure we can all agree that what the workplace needs is more managers.

-- Don't mess with Coors drinkers. An Illinois man is suing MillerCoors for allegedly denying him the chance to win football-themed goodies in a promotional sweepstakes. Mario Aliano says in the lawsuit that consumers were told by the company to submit a code on Coors Light cartons to see if they'd won a prize. But when he tried to do this online and by text message, he says all he got was an error message. Aliano alleges that the code was in fact invalid and that he never had a chance to win anything. Would he settle for some free brew?

-- David Lazarus

Bankruptcy the 'best option' for more debtors

More debtors are running out of alternatives, leaving many with no choice but to file for bankruptcy, according to a Florida-based consultancy.

The number of people whose best option is determined to be bankruptcy protection jumped 42% in the first four months of this year compared with the year-ago period, according to InCharge Debt Solutions.

The organization, which conducts nearly 100,000 free credit counseling sessions annually, now reports seeing more than 700 clients daily who have filed for bankruptcy. In the fall, the average was 100 filers.

-- Tiffany Hsu

Debt settlement companies investigated for 'unscrupulous' practices

In this time of debt troubles, there are plenty of companies willing to take your money with the promise of making your debts disappear. But New York Atty. Gen. Andrew Cuomo said today that many so-called debt settlement companies -- one of which charged money for advice such as mowing lawns to make extra income -- are part of "a rogue industry."

He said the companies have been "offering consumers false hope, charging tremendous fees, and leaving them in a worse financial situation." His office issued subpoenas today to 14 companies, including five based in California, as part of a nationwide investigation.

Cuomo accused companies of making unfounded advertising claims, including that they could reduce credit card debt as much as 75% by negotiating with creditors. A settlement plan, if reached, would still require unrealistic payments for people who were broke, he said, yet the companies would urge clients to raise extra funds by selling blood plasma, cutting down on car insurance and mowing lawns. 

Our dads gave out that last bit of advice -- for free.

Consumers who suspect they have been defrauded by a debt settlement company can report it to the attorney general's office at (800) 771-7755 or through the office's website.

-- David Colker

Photo: Mowing the grass old-school. Credit: Roger Foley from the book, "A Man's Turf," by Warren Schultz.

A consumer guide to the Chrysler bankruptcy

The Chrysler bankruptcy is huge financial news with international repercussions, but if you own one of the beleaguered company’s cars, it gets personal. Here’s a look at what the bankruptcy means for consumers:

-- Will my warranty still be honored?
“All vehicle warranties will be honored without interruption,” Chief Executive Robert Nardelli said. (His personal warranty is used up, however -- he’s leaving the company.)

-- Will extended service contracts stay in force?
 In-house contracts will be honored. “People should continue to send in their payments, because it’s a valid contract,” Chrysler spokeswoman Kathy Graham said.

-- If my car loan is with Chrysler, will it be affected?
No. Chrysler Financial will continue to oversee current contracts. New in-house loans will be made by GMAC.

-- What if I’ve purchased a new Chrysler car but it hasn’t been delivered?
The bankruptcy won’t affect the deal. But if the car hasn’t come off the manufacturing line, there could be a long wait. The company is shutting down its plants for at least a month.

-- Will Chrysler’s new-car prices go down because of the bankruptcy?
Probably, according to Edmunds.com senior analyst Jesse Toprak. “I think there is a huge psychological impact to the bankruptcy announcement,” he said. “Chrysler will probably have to compensate.”

-- Will it affect resale prices on Chrysler cars?
“Unfortunately, yes,” Toprak said. “The only good news is that Chrysler resale values are some of the lowest in the industry, so they don’t have a lot more room to go down.”

-- How about parts?
“If the bankruptcy has a negative effect on suppliers who happen to be exclusive makers of certain parts, that could have an impact,” Toprak said.

-- Will my local Chrysler dealer go out of business?
Maybe. Some of Chrysler’s more than 3,000 dealers will be closing, but the company wouldn’t say how many.

-- What if my dealer does go out of business?
Then for warranty work, you'll have to find another. “The customer can go to any of our dealers for service,” Graham said.

Here’s hoping it’s within the towing distance allowed by your insurance.

-- David Colker

Photo: A Chrysler sign at a Manhattan dealership. Credit: Getty Images

From the same folks who make debt-collection calls...

Get out the party hats, it's National Credit Education Week!

To celebrate, the ACA International Education Foundation (which invented the week), has launched "Ask Doctor Debt," an online service the nonprofit group touts as "Dear Abby for consumers with credit and debt questions."

Sample questions on the site — which features smiling, hugging people who don't look miserable enough to have debt problems — concern credit cards, mortgages, student loans and the like. Doctor Debt's answers frequently involve having a nice discussion with creditors to see what can be worked out. And if a collection agency calls, "talk to your collector and arrange a time and place to discuss your debt."

No big surprise the site urges you to make nice with debt collectors — the foundation was created by the Assn. of Credit and Collection Professionals. Yes, the people who make debt-collection calls.

One topic that's not much explored on the site is bankruptcy, which gets only two sample questions (credit cards get 10). Could it be because a bankruptcy filing immediately halts collection calls by law?

And that makes the agencies frown. When bankruptcy is filed, they no longer can play doctor.

—David Colker

Lazarus: Credit card issuers should listen to the anger

Los Angeles Times consumer columnist David Lazarus dissects the credit card kerfuffle on video and in print today.

The nation's consumer-in-chief, President Obama, called executives to the White House for an unusual scolding about the powerful industry's practices -- such as hiking interest rates for any reason or slapping on fees. But Obama must realize that card issuers aren't going to soften their practices without a fight.

If the industry wants to win back people's trust, it needs to treat them fairly. If they don't do anything about it, Congress will.

General Growth Properties files for bankruptcy protection

It's a familiar story: A shopping spree during good times leaves lots of debt that can't be refinanced in bad times, sending the borrower skidding into Bankruptcy Court.

This time the bankruptcy filer is General Growth Properties, which owns a bunch of prominent malls. The company was hit by months of shopper stinginess, loss of tenants and tons of debt.

In Southern California, General Growth's stable includes Glendale Galleria, Burbank Town Center, Fallbrook Center in West Hills, Northridge Fashion Center and SouthBay Pavilion in Carson. Some of its trophy shopping centers are Tysons Galleria in McLean, Va., Faneuil Hall in Boston, Water Tower Place in Chicago and South Street Seaport in Manhattan.

For now, it's business as usual, the Chicago company says. But real estate experts say the company could be forced to close some malls and unload others on the cheap.

UPDATE: The Glendale Galleria and Burbank Town Center are among the approximately 50 (out of more than 200) properties that weren't included in the bankruptcy filing because General Growth just manages the property or owns it with others.

-- Nancy Rivera Brooks

Photo: Shoppers at the Glendale Galleria on last November's Black Friday. Credit: Brian Vander Brug / Los Angeles Times

Credit card borrowing drops in February, Federal Reserve reports

Borrowing on credit cards and other use of revolving credit plunged at an annual rate of 9.7% -- or $7.8 billion -- in February, according to the Federal Reserve. The slide represents the steepest percentage decrease since 1978.

More consumers are going into default or starting to skimp as credit card issuers boost interest rates and lower available credit limits.

The full report is here.

-- Tiffany Hsu