Tom Price, the physician-turned-congressman who recently became Donald Trump’s first Health and Human Services Secretary, has officially resigned in the middle of a scandal involving Price’s apparent overuse of private jets for government — and possibly personal — travel.
In his official resignation letter [PDF], Secretary Price tells President Trump that he is resigning to allow the administration to focus on something other than claims that Price abused his authority at the expense of taxpayers.
“I regret that the recent events have created a distraction,” writes Price.
Politico was first to report that Price had chartered private planes on at least 26 occasions for official government business, even though there were significantly less expensive commercial options available for these non-emergency trips. The timing of some trips left open the question of whether Price was using taxpayer money to fund personal visits.
Following these revelations, Price apologized to the President and pledged to reimburse the government for the unnecessary travel expenses.
However, the nail in Price’s coffin may have come in a Thursday Politico report which claimed that the Secretary had used military aircraft for travel to Africa, Europe, and Asia, at a reported expense of $500,000 to the American public.
Interior Secretary Ryan Zinke has also taken heat in recent days over reports that he too has used private and military jets when they were not necessary.
As a member of Congress from Georgia, Price was responsible for the one piece of Obamcare repeal legislation that passed both chambers of Congress, only to be vetoed (as predicted) by President Obama in early 2016. Price’s bill was the original basis of the legislation that squeaked through the House in the spring before failing in a late-night vote in the Senate in July.
Price’s sudden departure leaves an empty seat in a critical cabinet position that has authority over a vast array of agencies, including the Food and Drug Administration, the Centers for Medicare and Medicaid Services, the Centers for Disease Control and Prevention, the National Institutes of Health, and many others.
A year after thousands of Wells Fargo employees were accused of opening unauthorized accounts in customers’ name in order to make sales goals, one bank teller has pleaded guilty to also opening an account without authorization, this time, in order to steal more than $185,000 from one customer.
The 29-year-old former Wells Fargo bank teller pleaded guilty [PDF] this week to a federal felony count of transporting stolen property.
According to court documents [PDF], over three years, the man — who worked at a Wells Fargo branch in D.C.’s Georgetown neighborhood — stole thousands of dollars from a customer identified as a homeless street vendor and used the funds to buy a home, go on vacation, and pay off other debts.
The scheme began in Oct. 2014 when a customer entered the Wells Fargo branch wanting to deposit “thousands of dollars of cash” that he was carrying in garbage bags. It’s unclear how or why the customer had so much money on hand.
Surprised by the amount of cash the customer had on him and the amount already in his account, the teller proceeded to open a new account in the customer’s name by forging his signature.
The teller then set up an ATM card, PIN, email address, and online login information for the new account. To begin with, the teller transferred $3,000 to the new account.
However, the customer never had access to this account, and the teller used it for his own gain.
Over the next two years, the teller transferred $177,400 between the customer’s accounts, withdrawing $185,440. Because the funds were transported over state lines to the man’s home in Maryland he was charged with the federal felony.
The customer did not receive mailed statements, use email, or have access to a computer; as such, he did not know the fraud was occurring.
Under the man’s plea deal, he will pay back the stolen money. He could also face between 18 to 30 months in prison.
The U.S. Chamber of Commerce may sound like a government agency or a quaint organization of helpful business leaders, but it is, in fact, the single largest lobbying organization in the country, spending nearly $104 billion last year alone on lobbying, about $40 billion more than any other group. The Chamber also thinks the U.S. Constitution is mistaken, that the Sixth and Seventh Amendments don’t apply to consumers; that the mere fact you are a customer should strip you of your constitutional right to sue banks like Wells Fargo or credit bureaus like Equifax when they open millions of bogus accounts in customers’ names or fail to protect sensitive information for more than 100 million people.
And how does the Chamber of Commerce plan to stop the American people from being able to bring lawsuits? By doing the one thing it doesn’t want you to be able to do.
The Chamber of Commerce — along with dozens of others including the American Bankers Association, and the Financial Services Roundtable — have filed suit against the Consumer Financial Protection Bureau (an actual government agency, though there are some on Capitol Hill who would rather that weren’t so), trying to stop a Bureau rule that would limit banks’ and other financial services’ ability to strip wronged consumers of their right to a day in court.
In July, the CFPB finalized a new rule — the result of several years of research — that would restrict certain companies’ use of “forced arbitration.”
Forced arbitration is when a company inserts a paragraph or two into its customer agreement saying that all legal disputes must be handled outside the legal system. Instead, you must go through private, binding arbitration — a process that most Americans don’t even know exists, let alone understand the finer points of.
So if your bank screws up some paperwork and forecloses on your house by mistake, you don’t get a judge in an open courtroom with a docket and evidence that becomes part of the public record. Instead, you get an arbitrator — who may be very familiar with the bank and its attorneys — presiding over a closed-door process where the results are often confidential, the arbitrator’s decision can’t be appealed through the court system, and no precedent is set.
The second, and more insidious, aspect of most arbitration clauses is that they almost always also prohibit customers who have been wronged in the same way from joining their disputes together into one complaint — even through arbitration.
So, imagine you find out that the bank has been making this same foreclosure error all over the country. You and all the other victims can’t pool your resources and sue, or even arbitrate, as a class. Instead, you must each go through arbitration on your own. That means 1,000 victims could go into 1,000 different arbitration hearings and each come out with a different ruling despite having the same evidence and being wronged in the same way.
The CFPB rule doesn’t forbid the use of arbitration for individual disputes. Rather, it bars affected companies — the various financial institutions and services regulated by the CFPB — from using arbitration clauses to halt class actions.
Within days of the rule being published, a group of bank-backed House members, led by Rep. Jeb Hensarling — a top recipient of campaign cash from the savings & loan, commercial bank, finance, and payday loan sectors — introduced a Congressional Review Act (CRA) resolution seeking to overturn the rule.
The CRA gives Congress a 60-day window to effectively roll back any new federal regulations. If a majority in each chamber of Congress, and the President, all approve the CRA resolution of disapproval within that window, it’s like the rule never happened.
The actual “60 day” thing is a little complicated, as it’s neither 60 working days nor 60 calendar days. It does count weekend, but only when either chamber of Congress is not out for at least three days. Because D.C. effectively shuts down for the month of August — meaning that entire month doesn’t count — the best estimate for the 60-day window on the CFPB rule is around Nov. 4.
The resolution glided through the House on a nearly party-line vote in late June, with only one Republican — Walter Jones of North Carolina — voting against it.
However, the CRA resolution has stalled in the Senate, where Republicans only hold a slim 52-48 majority. There were reports earlier this week that Senate Majority Leader Mitch McConnell would try to quietly force a vote on the CRA this week while media attention would be focused on the Graham-Cassidy healthcare bill. However, between the last-minute failure of that bill and reports that the GOP was having trouble getting the 50 votes it would need, it remains unconsidered by the Senate.
Which is why, some critics suspect, the Chamber of Commerce has filed its lawsuit now, more than two months after the CFPB rule went on the books.
“What a brazen act of hypocrisy that the financial services lobby is bringing a lawsuit to block consumers from having their day in court,” says Amanda Werner, of Americans for Financial Reform and Public Citizen. “The protection they want to take away is the result of five years of diligent work by CFPB, including the most extensive study ever done on forced arbitration. This baseless legal challenge is a desperate move after their Senate repeal effort ran into massive resistance this week due to public outrage over Equifax and Wells Fargo.”
The actual arguments in the Chamber of Commerce complaint [PDF] have little to do with the regulation that the bank-backed groups are trying to overturn.
First, they make the well-worn claim that the CFPB’s structure is unconstitutional, even though neither the Constitution nor any of its amendments say anything about the proper structure of an independent federal agency. The CFPB’s structure is also an issue that is currently being considered by the full D.C. Circuit Court of Appeals.
The lawsuit also makes the claim that the multi-year study by the CFPB was “deeply flawed” and “improperly limited public participation.” Perhaps the most astonishingly stupid allegation in the lawsuit is the assertion that the CFPB is violating the very law that created the CFPB by “fail[ing] to advance either the public interest or consumer welfare.”
This is where the Chamber brings up its favorite talking point: That class-action lawsuits take a long time, consumers get small payouts, and the big money goes to the lawyers.
But as we’ve covered before, this all glosses over one of the main purposes of class actions: To hold companies accountable for their bad actions.
Say you found out your credit card company has been illegally charging you $1/month for the last six months for a credit-monitoring service you didn’t sign up for. You’re only out $6 and the bank will probably give it back to you.
But what if the bank has been doing this to 5 million other customers for the same period of time, and only reimbursing people when they noticed the charges? That’s $30 million collected illegally, and the bank should be held accountable for it. Yet, because you’re bound by an arbitration agreement, you can only dispute your $6; you can’t represent all the bank’s customers in a class action that could seek full redress and possibly additional damages. Yes, in the end each customer might only get a few bucks back, but those dollars add up to a huge financial lesson for the bank — and a warning for other banks to shape up.
Karl Frisch, of Allied Progress, is astounded by the idea that the banking industry is using the legal system to block consumers’ access to the legal system.
“Even Alanis Morissette couldn’t handle this much irony,” says Frisch. “The idea that the Chamber and big banking interests would take the CFPB to court to stop consumers from going to court when they’re screwed over by big banks, reeks of desperate hypocrisy. The fact is that the Chamber is fighting to deny consumers the right to take financial institutions – like Equifax and Wells Fargo – to court for wrongdoing. They are dead wrong and they deserve to be called out.”
Walmart already has a slew of house brands that it sells in stores and on Walmart.com, but rather than try to sell brands like Great Value or Sam’s Choice through its recently acquired Jet.com, the company is coming up with new house brands specifically for Jet that it hopes will appeal to a younger buyer.
Walmart’s Jet.com will soon launch a house brand, dubbed “Uniquely J,” in the next few months with the aim of attracting more millennial customers.
House brands — like Walmart’s own Great Value or Whole Foods’ 365 — typically offer customers similar products to name-brand items at a lower price.
A rep for the company tells Consumerist that the brand, which will debut in the “coming months,” is designed for “metro millennials.”
While it’s unclear how the company is targeting millennials with products like soap, olive oil, paper towels, and household items, the rep says that Uniquely J will focus on quality and design of products.
For instance, the products will come in custom “bold” packaging with illustrations by artists and witty labels.
The brand’s coffee — Badass Espresso — comes in a bag decorated in a black and grey design featuring a skull. The bag also comes with Jet’s “J” logo along with the product’s name. Uniquely J’s version of Ziploc bags — called double seal snack bags — come in a box featuring cartoons and words like “emergency snack kit,” “nom nom,” and “on the go-go.”
The items seem to focus on customers’ desire to know where their goods come from. The coffee, for example, includes the notation that it is fair trade and organic.
“Instead of focusing in on any one aspect of product development, we’ve created a uniquely valuable brand experience that will speak to the metro millennial lifestyle,” the rep said.
Jet’s new house brand will join a number of other similar products on the sites.
Walmart already sells its Great Value, Equate, and Sam’s Choice products on the e-commerce site.
However, retail experts tell the New York Post that these store brands have yet to catch on with younger customers, hence Jet.com’s decision to jump into the house brand gang.
When Apple introduced the iPhone X’s new “Face ID” feature — which scans a user’s face to unlock the phone — the company said it had considered the “Evil Twin” scenario. And now, it’s admitting that if you have a twin — or an alternate reality doppelgänger– he or she could totally break into your phone.
In its Face ID Security Guide [PDF], Apple notes that the probability of a random person successfully unlocking your phone is about 1 in 1,000,000 — compared to versus 1 in 50,000 for Touch ID.
However, the likelihood of a false match is different for twins, as well as siblings who may look like you.
And in case there are any kids out there running around with the $1,000 phones, you should be warned that False ID may provide false matches for children under the age of 13, “because their distinct facial features may not have fully developed,” Apple explains.
There are two solutions. First, don’t use Face ID and just lock your overpriced iPhone X with a passcode. Or… buy a different phone that doesn’t use such a problematic unlocking mechanism.
Despite announcing the product in January, toy giant Mattel has still not released the always-on, always-listening Aristotle kid monitor that has already raised red flags among privacy advocates. Now, a bipartisan pair of U.S. legislators are asking Mattel to address what they see as serious concerns about this connected-home device that is intended to track info about your kid from birth through adolescence.
In a letter [PDF] sent this week by Sen. Ed Markey (MA), and Rep. Joe Barton (TX) to Mattel CEO Margaret Giorgiadis, the lawmakers say they have “serious privacy concerns” about Aristotle’s ability to build an “in-depth profile of children and their family.”
Aristotle isn’t just a web-connected video camera or audio monitor. According to marketing materials for the device, it will be able to track things like kids’ feeding and sleeping patterns. As they get older, it would be able to answer users’ questions, much like other digital assistants such as Apple’s Siri, Amazon’s Alexa, and Google Home.
“It appears that never before has a device had the capability to so intimately look into the life of a child,” reads the letter, which goes on to pose a series of questions about Aristotle, including:
• Does it shoot and collect any photo or video, or use facial-recognition tech?
• Does it record audio of children speaking within listening distance of Aristotle? If so, how and where (and how securely) are these file stored?
• Is it truly an “always-on” device, meaning it collects data regardless of whether it’s actively being used?
• What data will be transmitted to, and stored on, Mattel servers?
• What information will be shared with third parties?
• What measures have been taken to make sure Aristotle gets parental permissions when needed, and that it complies with federal laws regarding online products targeted at children?
Barton and Markey have given Mattel until Oct. 18 to reply.
We’ve reached out to Mattel for comment about the letter, but have not yet received a reply.
Aristotle is technically a product of nabi, a kid-focused tech company. Mattel purchased nabi’s parent company Fuhu shortly before announcing the Aristotle, so now the brand is under the Mattel umbrella.
Interestingly, while the original Aristotle press release is still available on the Mattel corporate website, the page once dedicated to Aristotle on the nabi site has been removed (though you can still see it via the Internet Archive), and a search of the nabi site turns up no results for Aristotle.
Mattel is no stranger to privacy concerns. Its “Hello Barbie” talking doll was slammed by privacy and family advocates for recording kids’ conversations and transmitting those recordings to third parties, and was eventually named worst toy of the year by Campaign for a Commercial-Free Childhood.
Last year, Mattel agreed to pay $200,000 to settle allegations brought by the New York state Attorney General’s office that several of its kid-targeted websites were in violation of the federal Children’s Online Privacy Protection Act (COPPA) by allegedly collecting information on kid users without parental authorization and sharing this data with third parties that tracked the youngsters as they continued to browse the web.
Earlier this week, Google pulled YouTube from Amazon’s Echo Show, claiming that the device provides a “broken user experience.” Perhaps it’s no coincidence that there are now rumors swirling that Google is working on its own smart screen device.
TechCrunch cites multiple sources who say Google is developing a tabletop smart screen that could make video calls, and would have a similar sized screen to the 7-inch Echo Show.
Along with video calls, the devices would also offer YouTube, Google Assistant, and Google Photos, and could act as a smart hub for other home devices like the Nest.
These insiders tell TechCrunch that the original released date has been moved up from mid-2018 to earlier in the year or even late 2017, partly amid pressure to compete with Amazon.
As for what it will cost, there’s no word. We’ve reached out to Google for comment on TechCrunch’s story and will update this post if we receive a response.
Even though CarMax, the nation’s largest seller of used cars, has been called out publicly by safety advocates and federal regulators, a new report claims that more than 1-in-4 vehicles being sold by CarMax is currently under an open safety recall.
The Center for Auto Safety, along with Consumers for Auto Reliability and Safety (CARS) Foundation and the MASSPIRG Education Fund, recently released a report [PDF] finding that 27% of vehicles for sale at eight CarMax locations contained unrepaired safety defects.
The report — based on a survey of 1,699 vehicles that CarMax advertised for sale at eight locations in Northern and Southern California, Massachusetts, and Connecticut — found that more than one-in-four — or 461 — vehicles had open safety recalls.
The figure represents a 15% increase since the groups performed their last survey in 2015. At that time, the report looked at five CarMax dealerships, finding that 12% of the vehicles had open recalls.
Despite finding a number of unrepaired recalled vehicles at the original five dealerships in 2015, CarMax allegedly hasn’t changed its practices.
For instance, in 2015, 10% of vehicles sold a dealership in Hartford, CT, had open recalls. Fast forward to 2017 and the report found that 28% of the vehicles at the same dealership had unrepaired safety recalls.
Likewise, in 2015, a North Attleboro, MA, dealership had 17% of vehicles with open safety recalls. In 2017, that figure increased to 31% of vehicles.
The recalls ranged from seat belt defects, non-deployment of airbags, engine fire risks, loss of power steering while driving, faulty parking breaks, and shrapnel-shooting airbags.
At least 45 of the 1,699 vehicles surveyed contained recalled Takata airbags that have been linked to 11 deaths and hundreds of injuries in the U.S.
Of the vehicles found to have open safety recalls, 86 had more than one unrepaired safety issue. Among those vehicles, 19 had three or more open safety issues.
One GMC Sierra Light-Duty Pickup Truck for sale in Westborough was found to have six unrepaired safety recalls.
While CarMax advises customers to have recalls repaired immediately by the manufacturer, many of the vehicles for sale with recalls can’t be fixed.
Of the vehicles surveyed, 41 (or 9%) have an unrepaired safety recall for which no remedy is yet available.
Consumers who purchase such a vehicle may have to wait months or years before their unsafe recalled vehicle can be repaired, the groups contend.
These vehicles included a 2014 Ford Escape that was recalled over a seatbelt anchor that could break, preventing the passenger from being restrained in the event of a sudden stop. Another 2016 Mercedes GLE Class vehicle was recalled over an unintentional engine shutdown problem that could increase the risk of crash in certain traffic situations.
“It is dangerous and irresponsible for CarMax or other dealers to assume that car buyers will have time to get unsafe, defective vehicles repaired before disaster strikes,” the report states.
The group points to a June 2016 incident in which a woman purchased a 2013 Chrysler Town & Country for a different dealer. The company had not disclosed that the van had two unrepaired safety recalls. Six months later, the driver’s door caught fire without warning.
“CarMax is selling huge numbers of unsafe, defective recalled cars that are ticking automotive time bombs. They pose a serious threat to the safety of all American motorists and their families,” Rosemary Shahan, President of the Consumers for Auto Reliability and Safety (CARS) Foundation, said in a statement.
As with the 2015 report, the coalition notes CarMax continues to sell vehicles using the claim that it provides disclosures of safety recalls.
However, the group claims that the information CarMax provides verbally and in writing is often false, contradictory, deceptive, or misleading, or presented too late to be an effective form of disclosure.
Additionally, the new report found that sometimes the AutoCheck vehicle history reports provided by CarMax to prospective car buyers falsely indicates that there is no safety recall. This, despite the fact that the National Highway Traffic Safety Administration showed there were multiple unrepaired safety recalls.
In some cases, the groups found that CarMax didn’t inform customers of the recalls until after they had already purchased the car.
One advocate says this happened to him in 2015. While he told the associate it was important that the vehicle didn’t have a recall, he didn’t receive the disclosure form until after he had signed the purchase contract.
The CarMax disclosure noted that according to NHTSA there was an open recall, but the AutoCheck said there was no safety recall. In reality, the Jeep had three unprepared safer recalls, including catching fire, faulty breaks, and stalling issues.
The answer to whether or not CarMax’s practices are illegal is complicated.
The groups contend that CarMax may be in violation of some state laws. For example, in Massachusetts it is illegal for a car dealer to sell a used vehicle to a consumer that is not fit to be driven on roads.
However, there is no specific federal law that gives NHTSA the authority to force dealers to fix recalled used cars before they are sold or rented.
That’s because, while it’s illegal for consumers to sell recalled microwaves, blenders, or other products, the folks at NHTSA lack the authority to actually force people to fix recalled vehicles before they are sold or rented.
Additionally, while the groups contend that CarMax is engaging in deceptive advertising by claiming that vehicles are safe when they have recalls, this practice isn’t illegal.
In fact, the Federal Trade Commission recently finalized a consent order that allows used car dealers to continue marketing their vehicles as safe even while they may have unrepaired defects.
The groups have asked a court to overturn this decision. The case is currently pending.
Although they say there’s no such thing as a free lunch, patrons of one Pennsylvania Applebee’s would beg to differ, thanks to the generosity of a mystery couple that’s been paying the tab for strangers at least a few times a month.
According to KDKA, these unnamed benefactors — a husband and wife — sit at the bar of the Pittsburgh-area restaurant three or four times a week, and have picked up the bill for several people over the last few months.
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One restaurant patron said the anonymous patrons paid for her entire party of 16 people, bringing tears to everyone’s eyes.
“I was almost in tears,” the server who worked at that table told KDKA. “It touches me, too.”
She says she knows who paid the bill, but that he wants to remain anonymous.
Another woman said the tab for her group of six people was taken care of a few months ago, inspiring her to start paying it forward as well.
RELATED: Stranger Pays For Family’s Dinner At Pizza Hut Because Parenting Ain’t Easy
The manager of Applebee’s knows who the generous couple are — they own an area business and pay for strangers two or three times a month. She’s keeping her lips zipped on their identities.
“He always says, ‘I grew up poor and now I’m not’ and that is all he says,” she said.
In the wake of the still-lingering Dieselgate scandal, which has cost Volkswagen billions of dollars and left a smog-colored stain on its reputation, the carmarker is hoping to turn schadenfreude into fahrvergnügen* by having a warranty on many of its new vehicles that lasts twice as long as the standard warranty you’d find on most cars in the U.S.
VW had previously announced that the upcoming 2018 Atlas and Tiquan vehicles would get the 6-year/72,000-mile bumper-to-bumper warranty, but today the company said that several additional 2018 VW models will also come with this extended coverage.
According to the company, the following will now all be covered by the longer warranty: Beetle, Beetle Convertible, Golf, Golf Alltrack, Golf GTI, Golf R, Golf SportWagen, Jetta, and Passat.
Because not everyone owns a car for six years before reselling it, Volkswagen is making this warranty transferrable. So if you sell your 2018 Beetle in 2022, the new owner still has about two years (or whatever remains of the 72,000 mile cap) of warranty coverage left.
The apparent hope behind the 6-year warranty is that the additional years and miles of coverage will give car-buyers the sense that VW is willing to stand behind the quality of its vehicles. That’s a turnaround in image the company needs following the Dieselgate scandal, in which the car company was alleged to have deliberately modified its “clean diesel” line of vehicles so that they would pass emissions tests in a garage but emit potentially dangerous levels of toxins while driving on the road.
But even before Dieselgate, VW’s U.S. business was on a downward trend. In 2016, VW sales were down nearly 8% from the year before, and down more than 25% from their all-time high in 2014. The company’s U.S. marketshare has also dropped to three-quarters of what it once was. Things have turned around more recently, with the latest year-to-date U.S. sales up about 6% over where they were a year ago.
Given Volkswagen’s rather small marketshare in the U.S., many Americans may not realize that VW is the second-largest (or largest; it depends on how one counts these things) car company in the world, moving more than 10 million vehicles in 2016.
VW has previously expressed its aim of chiseling away at the U.S. market, where it not only lags behind fellow mega-manufacturers like General Motors, Ford, and Toyota, but also has less of a presence stateside than smaller competitors like Subaru, Kia, and Hyundai.
Speaking of Hyundai, it has long touting itself as having the best standard warranty in the U.S. at 5 years or 60,000 miles, which looks like it will soon be surpassed by the VW warranty. However, Hyundai has scheduled a press event for Oct. 10, where some expect that the carmaker will announce improvements to make its warranty more attractive to American customers.
*(Yes, we know that doesn’t really make sense, but it sounds like it should.)
In certain markets, Uber will charge a “surge” rate during busy times that is in excess of what a passenger normally pays for a ride. But one Chicago Uber customer says she had no idea she’d be charged $925, nearly eight times the standard rate, for her lengthy trip.
The customer tells Chicago’s ABC-7 that she is relatively new to using Uber, and didn’t realize that the 100-mile ride she took to get home after a concert was being charged at a sky-high surge rate.
“I think it’s absolutely crazy and ridiculous,” she told ABC-7. “That’s like a house payment.”
While it was a long ride — with an added stop at O’Hare airport — that journey would’ve normally cost just $117 without surge prices in place.
She says she contacted Uber through the app, but the situation wasn’t resolved until the news station contacted Uber.
Uber called the situation a “perfect storm” that was partly the result of the woman changing her destination and added the airport stop after her car arrived.
“We have refunded the rider for the charges related to her ride including the additional 93 miles she added to the trip,” a spokesperson told ABC-7, adding that the company encourages riders to “input all desired stops into the app upfront to receive a correct fare estimate.”
In the last month a number of cruise lines have either canceled or rerouted trips after a string of hurricanes raged through the Caribbean. While the storms have passed and many companies have once again set sail, Royal Caribbean canceled yet another trip this week. This time, however, the change of plans was intended to help bring much-needed relief to the millions of Americans in Puerto Rico whose lives have been turned upside-down by Hurricane Maria.
Royal Caribbean announced this week that it had canceled a Sept. 30 Adventure of the Seas trip in order to use the ship for evacuation and humanitarian efforts.
The ship was scheduled to arrive Wednesday in San Juan, Puerto Rico to evacuate residents and drop off supplies. It then headed to St. Thomas and St. Croix with the same mission.
Royal Caribbean says it will bring the evacuees to Fort Lauderdale before making a return trip to San Juan on Oct. 6.
“We are very sorry for the impact this storm has had on your vacation,” the company said in a statement to passengers booked on the cruise.
Customers scheduled for the canceled cruise will receive a 100% refund and a 25% credit for a future cruise if a new trip is booked in the next 30 days.
Pre-booked shore excursions will also be refunded to your original form of payment.
Royal Caribbean has already mobilized its ships to assist in relief efforts in the Caribbean following Hurricane Irma and Maria.
To date, the company says it has helped to evacuate 1,700 people, dropped off nearly 30,000 gallons of water, and more than 25 pallets of medical supplies.
The company says it plans to continue to provide recovery assistance in coming weeks.
In words that will most surely never come back to haunt him, American Airlines CEO Doug Parker boldly declared this week that the U.S. airline industry is in such a solid place right now that he doesn’t see how it could ever end up in the red.
“I don’t think we’re ever going to lose money again,” Parker told investors at a media and investor day in Texas on Thursday. “I’ve said this for a long time; I believe it. We have an industry that’s gonna be profitable in good and bad times. We have an airline that’s going to be profitable in good and bad times.”
There are four remaining major airlines — American, United, Delta, and Southwest — that account for the vast majority of air travel in the U.S. Yet, all of these carriers, except for Southwest, have gone bankrupt at some point in the last 15 years, with American’s 2011 bankruptcy filing being the most recent.
Even these carriers’ biggest merger partners — U.S. Airways, Continental, Northwest — had all had to file for Chapter 11 protection at least once since 2002. U.S. Airways, which effectively took over American when the two carriers merged, went bankrupt in 2002 and then again in 2004.
And after the Sept. 11, 2001 attacks, which grounded all planes in the country and cast a pall over the entire industry, Congress approved a $15 billion bailout of the transportation industry, with around $10 billion going to keep these carriers from collapsing.
Beyond that, the airline industry is at the whims of weather, fuel prices, consumer demand, government regulation, and other factors. Just look at the network and software issues that have resulted in massive, system-wide outages for United, Delta, and Southwest, costing them hundreds of millions of dollars.
So why does Parker seem so convinced that it’s all smooth sailing from now on for his industry?
He points out that, combined, American and U.S. Airways netted a total of $1 billion in profit from 1978 through 2013, never cracking more than $3 billion a year in pre-tax revenue, and compares that to the last three years, during which the airline has averaged nearly $5 billion a year in pre-tax revenue.
According to Parker, the industry is in a “profoundly different” place than it was only a few years back, and all those concerns about hoping to just break even while vacillating between profitable years and money-losing years are “arguably irrelevant… that is not who we are anymore.”
The CEO did admit that his is a “cyclical business. There will be good and bad years.” But in his mind, he believes that having a “lesser” year would mean around $3 billion in profit, while “great” years would amount to around $7 billion in profit.
Whether or not the U.S. airline industry is truly locked into a profitable future remains to be seen, but the way carriers make money has certainly changed in recent years, with much of an airline’s revenue coming not from ticket sales but from ancillary fees and deals with credit card companies.
A recent report from the Government Accountability Office calculated that U.S. carriers are now making $7.1 billion per year on fees for checked bags and ticket changes.
With regarding to American Airlines, the Bureau of Transportation Statistics says the carrier brought in more than $1.1 billion in baggages fees in 2016, more than $200 million above any other airline’s bag fee revenue. AA has already earned nearly $600 million from these fees in the first half of 2017; again, more than any other airline.
American also leads the industry in change fee revenue, with nearly $900 million in 2016, and on track to improve on that mark in 2017.
So between just those two fees — and not counting any other add-ons a passenger might pay for — American is looking at north of $2 billion per year; about 40% of its average annual revenue since the U.S. Airways merger.
Then there are the deals that airlines make with banks and credit card companies for rewards miles. The carriers don’t just give those miles away for free; rather, they charge a few cents each, and those pennies add up with bigger banks buying billions of miles each month, to the point where some airlines may now be making more money from selling miles than they are from selling tickets. And while unused miles are technically an accounting liability for an airline, the money made from selling these miles in bulk is far more than the actual value of the mile when it’s ultimately cashed in.
Right now, the quickest way to get from, say, New York to Siberia involves at least a few plane tickets and a lot of layovers. But if Elon Musk has his way, travelers won’t have to rely on airlines to get them to the other side of the world — they can just hop on a rocket ship and be there in the same time it takes to get a pizza delivered.
Speaking at the 68th International Astronautical Congress in Adelaide, Australia, Musk revealed his plan for a rocket ship dubbed “BFR” that he says could fly travelers anywhere in the world in under an hour. By all appearances, at 30 feet in diameter, this would be a big frickin’ rocket, indeed — check out that tiny person standing underneath it:
The way Musk sees it, if SpaceX — the aerospace company he founded — is going to colonize Mars, and make us a “multiplanet species,” they might as well improve life on this planet, too.
“If we are going to places like Mars, why not Earth?” Musk asked while onstage, saying that if BFR is a success, travelers could get from New York to Shanghai in 30 minutes.
The BFR would have a maximum speed of 27,000 km/h, and accommodate 40 cabins that could carry about 100 people at one time, Musk said. After his on-stage appearance, he added in an Instagram post that fares would cost about the same as an economy airfare.
“Fly to most places on Earth in under 30 mins and anywhere in under 60,” he wrote. “Cost per seat should be about the same as full fare economy in an aircraft. Forgot to mention that.”
The BFR would also be able to make trips to the Moon and Mars, carry satellites into orbit, and ferry cargo and crew members to the International Space Station.
Although Musk originally to use a rocket called Red Dragon for unmanned missions to Mars, the new plan is land the first unmanned BFR on the planet in 2022 and then send crewed rocket ships out there in 2024.
You can watch Musk’s appearance at the conference in its entirety below:
Many toymakers say they won’t let Toys ‘R’ Us die after filing for bankruptcy, noting that doing so would be bad for their own businesses. After all, the chain is typically their biggest client. However, it appears there’s more at stake, namely, the millions of dollars the manufacturers are owed.
Now, instead of relying on Toys ‘R’ Us to make sales and pad their bottom lines, many toymakers are bracing to take a hit as a result of the debt-strapped retailer’s bankruptcy.
The Washington Post reports that there is a “widespread panic” making its way through the toy companies that supply products to Toys ‘R’ Us, as many believe they won’t be able to recoup the millions of dollars they’re owed by the chain.
When Toys ‘R’ Us filed for bankruptcy [PDF] earlier this month, the company noted that it owed more than $7.5 million in debt to more than 100,000 creditors.
Many of those creditors happen to be toymakers, both large and small ventures.
For instance, the second largest creditor is Mattel, which is owed $136 million; Hasbro comes in next with $59 million; and Spin Master is owed $32 million.
But smaller toymakers are likely to feel the biggest pinch: Baby supplier Munchkin Inc is owed about $3.1 million, while Playmobile is owed $2.5 million.
Earlier this week, some small vendors cut ties with Toys ‘R’ Us citing concern that they would never be paid their debts.
Product Launchers — which connects small toymakers with retailers — said it had “taken down all connections” with the chain, noting that it would “rather focus on retailers that have strong financials.”
The company had recently delivered an order of $500,000 worth of fidget spinners with licensed DC Comics characters on them to the chains.
Product Launchers estimates that it’s owed around $1 million, which sounds like a lot of money to mere humans, but doesn’t even put it in the top five creditors of Toys ‘R’ Us.
“We’re bottom of the barrel when it comes to getting paid back,” Linda Parry Murphy, chief executive of Product Launchers, told The Post. “They’ll get to us last, even though we’re the ones who will get impacted the most.”
Jakks Pacific, a California-based toy supplier, is owed about $14 million from Toys ‘R’ Us. That debt will likely cause the company to post a loss for the year, executives warned last week.
The year “continues to present a challenging retail environment, which has now been further disrupted by the Toys ‘R’ Us Chapter 11 filing,” CEO Stephen Berman said in a statement.
However, unlike some of the smaller toymakers cutting ties, Jakks believes its relationship can be salvaged as Toys ‘R’ Us has recently received financing to pay some of its debts.
To that end Berman says he is “optimistic that we can resume our relationship with Toys ‘R’ Us as one of its significant suppliers.”
With larger toymakers likely to be paid by Toys ‘R’ Us, bankruptcy experts tell The Post that there could be hope for the chain, yet.
As long as the company can continue to keep suppliers on board, shipping their products to stores, then the brand could continue. If suppliers don’t continue working with the company, the upcoming holiday season could be Toys ‘R’ Us’ last. That’s apparently something the chain is aware of.
One smaller toymaker, who asked not to be identified, told The Post that Toys ‘R’ Us has been insistent that products continue to ship despite the financial woes.
The executive says that “without product for the holidays, they don’t survive.” But the toymaker’s survival is also in question now.
“This has ruined our year,” the executive said. “Right now everybody is basically working out their own side deals, getting what they can. We’re not a Mattel, Hasbro or Spin Master. We’re not a multibillion-dollar company. We’re a small company that is going to end up getting pennies on the dollar.”
Have you eaten at or enjoyed an adult beverage at Whole Foods this year? If you paid with a credit card, your information might have been leaked. Whole Foods is investigating a possible credit card breach at some of its stores.
Whole Foods revealed Thursday that it had recently “received information regarding unauthorized access of payment card information.”
The company says that the possible breach is centered on its taprooms and full table-service restaurants located inside some stores.
While Whole Foods did not specify how many customers were affected by the breach or how long the hack lasted, Consumerist has reached out to the company for additional information. We’ll update this post if we hear back.
Whole Foods notes that customers who purchased groceries from the company are not at risk, as its primary store checkout systems use a different point of sale system.
“When Whole Foods Market learned of this, the company launched an investigation, obtained the help of a leading cyber security forensics firm, contacted law enforcement, and is taking appropriate measures to address the issue,” the company said in a statement.
For now, the investigation is ongoing, and Whole Foods will provide updates as it learns more.
Whole Foods, which was purchased by Amazon for $13.7 billion earlier this year, notes that Amazon.com systems do not connect to its own. To that end, transactions on Amazon.com are not impacted.
When it comes to catching sight of a national landmark, it can get pretty crowded on the ground. But starting next week, you won’t be able to use a drone to get a better view of 10 famous spots in the U.S.
The Federal Aviation Administration says it’s agreed to restrict drone flights up to 400 feet within the lateral boundaries of 10 Department of the Interior sites, starting Oct. 5.
Sites on the no-fly-over list:
• Statue of Liberty National Monument, New York, NY
• Boston National Historical Park (U.S.S. Constitution), Boston, MA
• Independence National Historical Park, Philadelphia, PA
• Folsom Dam; Folsom, CA
• Glen Canyon Dam; Lake Powell, AZ
• Grand Coulee Dam; Grand Coulee, WA
• Hoover Dam; Boulder City, NV
• Jefferson National Expansion Memorial; St. Louis, MO
• Mount Rushmore National Memorial; Keystone, SD
• Shasta Dam; Shasta Lake, CA
Other sites could be added to the list, as the FAA says it’s considering additional request from other federal agencies.
There are a few exceptions where drones are allowed to fly over those sites, but that has to be coordinated with either the individual landmark or the FAA.
While the FAA has put similar airspace restrictions in place for military bases, this is the first time it’s restricted drones from flying over any DOI landmark.
