Related Resources:
California Attorney General’s Settlement Information
Frequently Asked Questions On Who Qualifies
San Francisco Consumer Credit Counseling Service
HUD Approved Hosing Counseling Agencies

The lenders will have three years to fulfill the terms of the landmark deal that California Attorney General Kamala Harris said could make as much as $18 billion of relief available to thousands of homeowners in the state.

KCBS’ Holly Quan Reports:

Harris and New York Attorney General Eric Schneiderman had been reluctant to sign onto the settlement that did not offer significant help for homeowners.

California walked away from settlement negotiations in September when homeowner relief for California was expected to be $4 billion. Harris said in a written statement the new settlement guarantees as much as $12 billion in principal reductions for California homeowners who are underwater on their loans or behind on payments.

Harris said the additional money allocated for California would help some 28,000 homeowners in the state eligible for refinancing, and another 140,000 eligible for cash restitution because the banks seized their homes.

KCBS Cover Story: Underwater Homeowners Credit Community Activism for Mortgage Relief

“This is not the complete conclusion to the foreclosure crisis. It’s not going to reach everybody, but it’s a meaningful start,” said Bruce Mirken with the San Francisco-based Greenlining Institute.

Mirken applauded Harris’ push for the larger settlement, which could ultimately be worth $40 billion nationwide.

“It’s certainly more than folks feared that this deal was going to have,” he said.

KCBS’ Doug Sovern Reports: Challenges Inherent With Navigating Mortgage Settlement

The settlement also allows Harris to sue banks who are slow in complying with its terms.

The deal ends a separate investigation into Bank of America and Countrywide for inflating appraisals of loans from 2003 through most of 2009. Bank of America will pay $1 billion to settle that federal probe.

Oklahoma is the lone holdout and will receive no money.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

“We want to know that the next time we come into Apple to buy a fancy new tech gadget that it was made not by workers who were suffering from these horrific work place abuses in factories like Foxconn,” said Charlotte Hill with Change.org, the organization behind the petition drive.

KCBS’ Margie Shafer Reports:

Hill and other activists delivered what they said were 250,000 signatures the old fashioned way to the Apple store in Union Square. Manager Larry Verter cordially accepted the stack of signatures and said he would forward them to his corporate office.

The petitions were launched in January after a series of reports in the New York Times documented harsh workplace conditions at several Apple factories in China.

“They’re working with these really cheap chemicals that are causing really severe neurological damage. We say no iPhone is worth that cost,” Hill said.

In a written statement, Apple defended measures taken to ensure the workers in its supply chain were treated fairly. The company said it audited 229 supplier facilities in 2011, and posted the results of those audits on its website.

“We insist that our suppliers provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made,” the statement reads.

It also notes that Apple was the first technology company admitted to the Fair Labor Association, a leading non-profit dedicated to improving conditions for workers around the world. Apple said an independent FLA audit of its suppliers would soon be published online.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Home Depot stores in the Bay Area have launched an in-store checkout system where customers can pay using only their cell phones and a PayPal account, no cash, debit or credit cards necessary.

San Jose Home Depot shopper Angelina Barron said she would love to be able to leave her wallet at home.

”Right now I don’t have my purse, and I think it would just be easier to be able to whip out my phone because everyone always has their phone in their hands,” said Barron. “It would just be quick and easy. I think it would just be a good idea.”

Actually, customers don’t even have to be carrying their phones, they can simply enter their cell number and a security code to buy items. But that made some customers like Margie Taber leery of quick-and-easy payments.

KCBS’ Matt Bigler Reports:

Customers don’t even have to be carrying their phones; they can simply enter their cell number and a security code to buy items. But that made some customers like Margie Taber leery of quick-and-easy payments.

”My only thing is, is it going to be secured, meaning nobody’s going to hack into my phone or my account,” said Taber.

PayPal spokesperson Amanda Pires said that they do not share your financial information with any of their retail partners.

”Just like how consumers trust PayPal online to protect the information, we’re doing that on mobile devices as well, or when you’re in store,” said Pires.

Home Depot plans to roll out the mobile payment system to more than 2,000 stores next month.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Thanh Nguyen and her classmates at the Institute of Medical Education are worried their degrees and their futures are in jeopardy. This week, students in the school’s dental hygiene program were told it is shutting down effective immediately.

“I just go to the class everyday and today they come to the class and tell me there is no school today. Just take a day off, go home,” Nguyen said.

The letter comes as a shock to the students, who have so far invested $35,000 in the 18 month program and are supposed to take their licensing exams this spring. Students are now worried they might not be qualified to take them.

“We’re currently running out of time to make up our clinic hours. We’re uncertain if we’re going to be able to meet them,” said student Erica Hernandez.

On Wednesday, the school’s CEO spoke briefly to CBS 5 ConsumerWatch and did not answer our questions.

Some second year hygiene students told ConsumerWatch they could come to school but their graduation date has been moved up from April to this month. The situation has left them desperate to finish their lab work.

“I think it’s a very dangerous situation,” said Jenny Young, a former instructor at the school. She said there was constant staff turnover. Young also said she didn’t have the necessary supplies to teach.

I don’t have dental impression material, I don’t have books and I don’t have all the supplies,” Young said. “And so, teaching without supplies is very difficult.”

But that was just one sign of trouble. Late last year, a national accrediting body issued a warning that the school’s hygiene program could lose its accreditation.

“We actually sat down as a group and made formal complaints to pretty much every agency that we could contact,” said dental hygiene student Summer Latouf.

But when they complained to state agency that oversees vocational schools, the students said nothing was done. Now they’re wondering what they should do next.

Some second year students said their graduation date has been moved up again to March. The school said their San Jose and Oakland campuses are merging and may move to Fremont. As far as refunds, at least one student said she was told that is not going to happen.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Sean Andrade from Martinez said when he bought a new microwave at Home Depot he figured he’d pay an extra $100 for delivery and installation.

“I’m a cook. I’m not a handy man. So I figured I would be better off to just go ahead and let them do it,” Andrade said.

When the technicians arrived to his house, Andrade said he began to regret that decision.

“When they unbolted the old oven, they dropped it onto the range,” he said.

According to Andrade, the technicians then dropped the microwave on the floor and dented the refrigerator. Andrade added the kitchen cabinets were partially ripped from the wall when the technicians used it to pull themselves up.

When Andrade made a complaint to Home Depot he said he was told it was a third party installer.

Consumer advocate Joe Ridout said it’s not surprising. According to Ridout, most big box retailers often hire out third party installers who may or may not live up to consumers expectations.

“One of the risks of going through big box retailers is that their contractors aren’t necessarily going to be their employees,” he said.

Andrade said Home Depot was a name he could trust.

“My understanding was that Home Depot was coming to do the installation,” he said.

Andrade said he’s now left with thousands of dollars in damages. The third party has since denied Andrade claim. Home Depot tells CBS 5 they are working with the consumer and the third party installer to resolve the claim. In a statement Home Depot told CBS 5:

“We gladly see to it that customers are fairly compensated for legitimate damages during a delivery or installation. This claim has been complicated, so we appreciate GE’s willingness to look further into the facts to ensure Mr. Andrade is treated fairly. We’ll certainly continue to work with him to address his concerns and work towards a reasonable resolution.”

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Starting this October, the legislation will institute a 10-cent fee for each bag provided by any retail establishment to customers. Restaurants will also be required to charge the fee starting in October 2013.

The city’s 2007 ban on supermarkets and chain store pharmacies providing single-use, non-compostable plastic bags will expand to include all retail stores in October, then restaurants the following year.

KCBS’ Barbara Taylor Reports:

The businesses charging the fee will keep the money to use how they see fit, and the plastic bag ban will include certain exemptions, such as “doggy bags” used to take home leftover food from restaurants.

Before supervisors voted on the ordinance, board president David Chiu introduced an amendment to provide additional exemptions that will allow the use of plastic bags for various delicate or heavy items, and another to require further outreach by the city’s Department of the Environment.

“All of us have heard that we still have to do more” to educate residents and merchants about the new law, Chiu said.

Department of the Environment director Melanie Nutter said her department had reached 23 different neighborhood and merchant groups to talk about the legislation and has outreach workers that speak several different languages.

Nutter said the department has also set aside money and is working with corporate partners to provide a reusable bag giveaway in the city.

“We’re poised and ready as a department … for the next seven months” when the law will go into effect, she said.

Supervisor Carmen Chu said she is aware that there are many people who see San Francisco as a city that “nickels and dimes every single thing” and that a lack of outreach could create “a lot of confusion and bad feelings.”

The vote on the proposal had been delayed for two months while more outreach was done.

During that time, the legislation’s author, then-Supervisor Ross Mirkarimi—who also authored the 2007 law—was sworn in as the city’s new sheriff and Christina Olague was appointed as his replacement.

Olague took over as a sponsor of the ordinance and expressed support of it before the vote.

“The only effective way to change the behavior of most customers is to institute a charge,” she said, adding that the law will cut down on both private and public costs of disposing of bags and is “a crucial next step” toward the city’s zero waste goal by 2020.

The board voted 10-0 in favor of the proposal. Supervisor David Campos missed Tuesday’s meeting due to an illness.

The ordinance will return in front of the board next week for final approval and then go to the mayor’s desk for signature.

(Copyright 2012 by CBS San Francisco and Bay City News Service. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

San Francisco already bans plastic shopping bags at supermarkets and drug stores, but this legislation extends that ban to all stores. In addition, for the first time ever, merchants would charge customers 10 cents a bag if they don’t bring their own. Mayor Lee had been on the fence about issue, but isn’t anymore.

KCBS’ Barbara Taylor Reports:

”The intent was never to nickel and dime anybody, but if it takes 10 cents to remind somebody that their habits are within their control, that’s something that we’re willing to consider doing,” said Lee.

As far as those hapless shoppers who forget to bring their own bags and have to pay, Lee said that they’ll eventually learn.

”Some people may make the mistake once or twice, and then they’ll change, because everybody else will serve as a good example,” said Lee.

The supervisors are set to vote on the bag legislation Tuesday afternoon, and with Mayor Lee now expressing support, it’s practically a done deal.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

It all depends on the state’s final answer to a proposed landmark settlement – a multi-billion dollar, multi-state settlement.

As recently as two weeks ago, California Attorney General Kamala Harris rejected the plan, saying banks were asking to be absolved from any further action, something she described as too lenient. Now, California is back at the negotiating table and said to be close to signing off on the settlement, which requires financial institutions like Bank of America, J.P. Morgan Chase and Wells Fargo to overhaul their mortgage servicing and foreclosure practices, as well as come up with a $25 billion pot for mortgage relief.

“People who have been foreclosed upon would get something like $1,800,” explained Guy Cecala, publisher of Inside Mortgage Finance. “Not a huge amount, they’re not going to get their homes back but nobody expected that. Perhaps the biggest hunk of the money would go to borrowers who are in distress now or who have underwater mortgages and that would pave the way for some principal forgiveness and more loan modifications or refinances down the road.”

KCBS’ Holly Quan Reports:

“Because California is the largest state and because most, the largest share of the $25 billion they’re talking about carving up with the states would go to California, it is very important to have California involved,” Cecala continued. “If California’s not involved, the amount of the settlement goes down and it certainly has less impact.”

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

The consumer group has come up with a guide called “Making the Right Call” to help consumers get those cell phone costs in line.

Tips include:

Get a Plan That Fits: The group said most Americans are overpaying for services they don’t need because they don’t choose plans based on their actual talk, text and data usage. You can track your usage on your phone with an app, or by going online to your service provider’s website.

Don’t Overpay for Your Phone: If you know what phone you want, CALPIRG advises buying it online, where the group said you can generally get the lowest price.

Family Plans Aren’t Just for Families: “A group of friends can get together and get a discount on their cell phone plan,” said CALPIRG’s Jon Fox, the author of the report. Fox said the only concern is to make sure participants are vigilant about paying on time, so the person whose name is on the account doesn’t face credit consequences for late payments.

Ask for a Discount: Many cellphone companies offer discounts to students, credit union members, veterans and employees of certain companies. For example, Sprint offers a 24 percent discount to eligible students, while Verizon offers a 15 percent discount to Military vets.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

The Peninsula assemblyman called on the California Public Utilities Commission to reject the proposal and claimed the energy company would be profiting from the deadly disaster.

“They get a guaranteed 11.35 percent rate of return on all their capitol improvements. That is outrageous to have PG&E profiting from what occurred in San Bruno,” he said.

KCBS’ Margie Shafer Reports:

However PG&E spokesman Brian Swanson said the state’s desire to be a leader in energy efficiency and the environment led to the adoption of the business model, so earnings are not based on how much energy is sold.

“We’re only asking to cover in rates those costs that are necessary to meet new gas safety laws and regulations,” Hill said.

An analysis by Hill’s office found the largest component of the cost of PG&E’s plan is shareholder profit.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

The loans, which are currently unregulated, often have interest rates that can top 30%. Jendry Ramos got a “Buy Here, Pay Here” deal last year from Jim Auto Sales in Richmond.

The mother of four, who needed transportation to get to her job in San Francisco, is currently paying 27% interest on her 2003 PT Cruiser, a car she said has been riddled with problems since the day she bought it home from the dealership.

“The car had bald tires,” Ramos told ConsumerWatch. Ramos also said the car jerks when she drives it, and has been leaking fluids all over her driveway.

Under the terms of Buy Here, Pay Here, customers are required to show up at the dealership every month to make their payments – in cash.

“Only cash, to him,” Ramos said.

According to a recent article in the Los Angeles Times, 20% of all used-car purchases in the U.S. are financed with Buy Here, Pay Here deals.

“They are taking advantage of a very vulnerable population,” said State Senator Ted Lieu. Lieu, who is sponsoring a measure to rein in the financing practice, contends dealers are preying on immigrants and people with poor credit ratings who are desperate for transportation. And Lieu said dealers can actually benefit when customers default, because the dealer will keep the down-payment.

“They want you to default so they can take it back and resell it to someone else,” Lieu told ConsumerWatch.

Dealers that offer Buy Here, Pay Here see it differently.

“Buy Here. Pay Here provides transportation to millions of Americans who can’t afford transportation because they can’t get a bank loan,” said Ken Shilson of the National Alliance of Buy Here, Pay Here Dealers.

Senator Lieu’s measure, SB 956, would require Buy Here, Pay Here lenders to be regulated by California’s Department of Corporations as lenders. The bill would also put a cap on the interest rate used-car dealers could charge.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Thanks to the dedication of our experienced helpline volunteers, we’ve quietly solved many consumer problems that never made it to air as news stories on CBS 5.

If you have a consumer question or problem, call our ConsumerWatch hotline at (888) 5-HELPS-U (1-888-543-5778). Our team of experienced volunteers is there to help you Monday through Friday from 11 a.m. to 1 p.m. You can also fill out this form and submit to our ConsumerWatch unit.

ConsumerWatch is also looking for volunteers to staff its consumer hotline. If you’re retired or not working and have life or work experience that could help viewers solve their consumer problems, you might be ideal for our ConsumerWatch volunteer team. We have retired government workers, lawyers, teachers, travel agents and corporate executives who volunteer their time a few hours a week to assist in our problem solving unit. If you’re interested, send us an email at consumerwatch@cbs5.com or call our hotline at (888) 5-HELPS-U (1-888-543-5778).

Four members of the California Public Utilities Commission approved a proposal Wednesday that allows PG&E to charge residential customers an initial fee of $75, and a monthly fee of $10 to opt out of the company’s SmartMeter program.

Low-income customers who want to opt out can be charged an initial fee of $10, plus an extra $5 each month.

KCBS’ Bob Melrose Reports:

Dozens of people and advocacy groups from Fairfax to San Luis Obispo testified at the commission’s meeting saying exposure to radio frequencies and radiation from the wireless electricity and gas meters harms people’s health.

PG&E maintains that the meters are safe and will bring down the utility’s meter reading costs.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Homeowner Jerome Loston said he and his wife have been trying to get a loan modification for eight years. According to the Loston’s, the battle for a loan modification began in 2004 when they took out a mortgage from World Savings bank.

“We told them we needed a 30-year fixed mortgage including our property tax and insurance,” Jerome Loston said.

But when the Loston’s made their first payment mortgage that’s when they noticed something was wrong.

“I saw that there was no principle reduction,” he said.

Within five years, their mortgage monthly payment jumped from $1,800 to $4,200.

“We knew that this was not what we asked for,” he said.

Like thousands of homeowners, the Loston’s were given a “Pick a Pay” loan from World Savings Bank – a loan associated with predatory lending.

According to housing advocate Elizabeth Letcher, banks such as World Savings and Wachovia often took advantage of these loans by offering homeowners the option to pay low monthly payments. But in reality, Letcher said those payments skyrocketed.

“They targeted these loans at elderly people on fixed incomes and people who really didn’t understand what was,” Letcher said.

The Loston’s loan is now owned by Wells Fargo. But even though their good candidates, they say the bank refuses to modify their loan.

“If I’m in the position to pay and you’re in the position to help me stay in my home why can’t we work together?” Jerome Loston asked.

In a statement, Wells Fargo told CBS 5:

We remain committed to helping the Lostons and other Californians avoid foreclosure whenever possible. To that end, we have postponed the scheduled foreclosure sale to review their loan again to ensure we have explored all viable options.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Last week, Google announced new privacy settings. They spell out the fact that the company collects and compiles data about its users based on their activity on its various sites — from its search page to Gmail to YouTube to phones running its Android operating system.

The announcement gave some privacy advocates cause for alarm, even though Mountain View-based Google said the information is assembled to enhance user experience, such as better targeting ads that will be of interest to its customers.

Perhaps most notably, eight members of Congress, both Democrats and Republicans, wrote a letter to Google CEO Larry Page asking for clarification about the changes.

“While Google suggests that the purpose of this shift in policy is to make the consumer experience simpler, we want to make sure it does not make protecting consumer privacy more complicated,” read the letter. The lawmakers also noted that because of Google’s global reach, the change “potentially touches billions of people worldwide.”

It asks Google to share what kind of data it currently collects and explain how information collected under the newly announced system will be used.

In a post on the company’s public policy blog, Google’s Betsy Masiello wrote that there have been misconceptions about the changes.

“A lot has been said about our new privacy policy,” she wrote. “Some have praised us for making our privacy policy easier to understand. Others have asked questions, including members of Congress, and that’s understandable too.”

Among the points that Masiello makes in the post:

_ Users don’t have to be logged in to use many of Google’s products, including search and YouTube. No data is collected when a user is not logged in.

_ When logged in, users can edit or turn off their search histories, switch Gmail chat to “off the record,” use “incognito mode” on the Google Chrome browser or employ other of Google’s privacy tools.

_ Quite simply, Web users don’t have to use all of Google’s products.

She noted that Google won’t be collecting any more data about users than it was before.

“We’re making things simpler and we’re trying to be upfront about it. Period,” she wrote.

Not everyone was convinced.

While noting that there are some advantages to having your information stored in one place, Brent Rose wrote for tech site Gizmodo that there are some scary aspects to it as well.

“There are certainly reasons to be concerned about keeping all of your eggs in one basket. It means there’s a single point of failure, which makes me nervous,” Rose wrote. “The fact that you can’t opt-out of shared search data, and that Google will know more about you than your wife? That’s a little creepy.”

(Copyright 2012 CBS San Francisco and CNN. All rights reserved.)

Stanford education professor Roy Pea and communications professor Clifford Nass surveyed nearly 3,500 girls ages 8 to 12 about how much time they spend texting, chatting online, watching television, listening to music and communicating through Facebook and then asked about the girl’s social and emotional lives.

KCBS’ Rebecca Corral Reports:

“When you look at the amount of video, online communications and media multitasking that they do, it correlated negatively with their social success, their feelings of normalcy and also their sleep,” said Pea.

He does point out that while they did find a correlation between media habits and diminished social and emotional skills, they’re not claiming they’ve proved a cause and effect. But some things are easy to figure out.

“All of us have experienced what happens when you’re having an engaged conversation with a friend or a colleague and they get messaged or called and they end the communication with you,” said Pea. “It kind of sends a signal right?”

That signal being that you’re not as important as the person texting or calling. And if that happens too much, people may start to back away from the friendship.

Pea said face-to-face communications are also lacking.

“If you’re expressing an idea, a suggestion or having a debate with someone, being able to read their face is very important for gauging what you’re going to do next,” he said. “To get to some mutual understanding or to at least understand your differences. Of course, most of those cues are absent in the media we’re describing.”

Dr. Pea said that the bottom line is that parents have to quantify how much time their kids are spending engaged with their electronic devices. One thing that can help a child’s social and emotional development improve is having more face-to-face conversations with friends and family.

The research was published in the journal Developmental Psychology.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Last year, Thelma Goodall bought a $20,000 Colonial Penn life insurance policy for her daughter, Hope, who suffered from brain damage and epilepsy. Goodall said it was TV personality Alex Trebek’s endorsement in the commercials that got her to purchase the policy.

The commercials boast “guaranteed” acceptance and few restrictions for people who apply. According to Goodall, all she had to do was answer four “yes” or “no” questions and have her daughter sign.

Hope died three months after the insurance policy was purchased. Goodall expected a check to come from Colonial Penn to cover insurance costs, but it was only for $42, roughly 500 times less than what the policy was worth.

“I felt like somebody had just slapped me in the face,” Goodall said.

Lawyer Jerry Goldsholle, the chair of the Life Insurance Subcommittee of the State Bar, said insurance applications like those offered by Colonial Penn aren’t so simple after all.

“Each one of those questions has multiple subparts, so you’re really not answering four questions. You’re answering many questions and there are lots of ‘gotchas,’” he explained.

If death occurs within two years of the purchase of the policy, insurers like Colonial Penn will go through the application and medical history meticulously. Colonial Penn claimed that Goodall had incorrectly answered the subsections of one of the four questions. Goodall believes that question wasn’t clearly written to begin with.

Colonial Penn stands by their decision and said the Goodalls’ claim was processed correctly.

With the insurance policy not following through, Hope had to be cremated and not buried like the Goodall household had wanted.

“I just wanted a place to bury my daughter in case anything happened to her,” she said.

Goodsholle recommends that if you do buy life insurance, buy a policy that is underwritten – meaning the provider has checked out your medical records beforehand.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Penney said Wednesday that it is getting rid of the hundreds of sales it offers each year in favor of a simpler approach to pricing. Starting on Feb. 1, the retailer is rolling out an “Every Day” pricing strategy with much fewer sales throughout the year.

The plan, the first major move by Apple executive Ron Johnson since he became Penney’s CEO in November, is different from Wal-Mart’s iconic everyday low pricing. Unlike Wal-Mart, Penney’s goal isn’t to undercut competitors, but rather to offer customers more predictable pricing.

“Pricing is actually a pretty simple and straightforward thing,” Johnson told the Associated Press during an interview ahead of the announcement at the company’s Plano, Tex. headquarters. “Customers will not pay literally a penny more than the true value of the product.”

Penney’s plan comes as stores are struggling to wean Americans off of the profit-busting bargains that they have come to expect in the weak economy. The move is risky, though, because shoppers who love to bargain-hunt may be turned off by the absence of sales.

KCBS’ Susan Leigh Taylor Reports:

“The big question on investors’ minds will be: ‘How customers will react to a single price point versus a perceived discount under the old strategy?”’ says Citi Investment Research analyst Deborah L. Weinswig.

Here’s how Penney’s pricing strategy will work:

• Sale prices become everyday prices. The company will use sales data from last year to slash prices on all merchandise at least 40 percent or lower than the previous year’s prices. So, a woman’s St. John’s Bay blouse regularly priced at $14.99 could have the “Every Day” price of $7.

• Fewer sales. The retailer will pick items to go on sale each month for a “Month-Long Value.” For instance, jewelry and Valentine’s Day gifts would go on sale in February, while Christmas decorations would be discounted in November. Items that don’t sell well would go on clearance during the first and third Friday of every month when many Americans get paid. Those items will be tagged “Best Prices,” signaling to customers that’s the cheapest price.

• New tags. The retailer used to pile stickers on price tags to indicate each time an item was marked down. But now each time an item gets a new price, it gets a new tag too. A red tag indicates an “Every Day” price, a white tag a “Month-Long Value” and a blue tag a “Best Price.”

• Simpler pricing. Penney will use whole figures when pricing items. In other words, you won’t see jeans with a price tag of $19.99, but rather $19 or $20.

• New advertising. Ads began airing Wednesday with a shopper screaming “No” to discounts as they look in their mailboxes, a pile of coupons and big sales signs. The company also has a new spokeswoman (talk show host Ellen DeGeneres) and logo (a red outline of a box that features JCP in the corner.) And a 96-page catalog will be mailed each month to 14 million customers, along with other promotional efforts.

The strategy, unveiled at Penney’s investor meeting on Wednesday, comes as the retailer tries to turn around its business. Heavy discounting has hurt department stores like Penney. The group generates an average of about $200 per square foot, less than half the $550 or $600 stores like Victoria’s Secret and Lululemon make per square foot, according to John Bemis, head of Jones Lang LaSalle Inc.’s retail leasing team.

But Penney has been a laggard even among department stores as its core middle-class customers have been among the hardest hit by the weak economy. It’s also failed to attract younger customers even though its added hip brands like Mary-Kate and Ashley Olsen’s teen clothing collection called Olsenboye. The stores also have been by Johnson himself describes as “tired.”

For the 11 months through December, Penney’s revenue at stores opened at least a year—an indicator of a retailer’s health—rose 0.7 percent, while competitors like Macy’s Inc. rose 5.4 percent, and Kohl’s was up 1.1 percent. Penney posted a loss in the third quarter and cut its fourth-quarter earnings outlook after a disappointing holiday season when it had to heavily discount to attract consumers.

The new pricing caps months of speculation about what Penney’s future might look like under the leadership of Johnson, a former Target Corp executive and the mastermind behind the success at Apple Inc.’s stores.

Johnson, who joined the company’s board in August, already has put his stamp on the retailer. He has tapped former colleagues at Apple and Target to join him at Penney. That includes Target’s top marketing executive Michael Francis to be Penney’s president.

Johnson also is borrowing from the playbook of Apple, which shuns discounting and focuses on selling products and offering services.

In December, Penney said it will have homemaker doyenne Martha Stewart develop mini-shops starting next year. And during Wednesday’s meeting, Penney executives outlined plans to in the next two years add Main Street, a series of 80 to 100 brand shops in stores similar to the Martha Stewart ones. It also plans to open areas in all stores called Town Square, a place that will offer services and expert advice, similar to Apple’s Genius bars.

Perhaps the biggest challenge for Penney is to sell shoppers on its new pricing. For years, Penney, like many other stores, has propped up price. The intent: to make it look like shoppers are getting great discounts when items go on sale.

Penney has been an especially big promoter. Last year, the company, which offered 590 sales events last year, nearly three-quarters of its revenue come from merchandise that was discounted by 50 percent or more.

That’s more than double the retail industry average. According to an estimate by management consultant firm A.T. Kearney, a typical retailer sells between 40 and 45 percent of its inventory at a promotional price, up from 15 to 20 percent a decade ago.

The increased discounting has been a vicious cycle that only feeds into shoppers’ insatiable appetite for bigger and better discounts. In fact, whereas it took 38 percent off to get shoppers to buy 10 years ago, it now takes discounts of 60 percent, Johnson says.

At Penney, the regular price on an item that costs $10 to make rose 43 percent, from $28 in 2002 to $40 in 2011. But because of all of its sales and other promotions, what it actually ended up selling for rose only 15 cents, from $15.80 to $15.95 during that same period.

“I have been struck by the extraordinary amount of promotional activity, which to me, didn’t feel like it was appropriate for a department store,” Johnson says. “Once you start to promote, the only way to beat a promotion was to make it bigger.”

Walter Loeb, a New York-based retail consultant, says Penney’s new pricing is “visionary” and revolutionary.”

But Charles Grom, a retail analyst at Deutsche Bank, says it will be difficult for Johnson to change shoppers’ buying habits. Macy’s, for example, cut back on coupons a few years ago, only to reverse courses after sales fell.

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The downgrade means that the FAA believes the airport is vulnerable to scheduling delays and congestion, with airlines likely to modify their schedules.

KCBS’ Margie Shafer Reports:

The multi-year construction, which is scheduled to get underway at the end of March, will improve runaway safety areas at SFO as airport spokesman Mike McCarron said the current runways don’t meet the length requirement of the FAA.

“This is a requirement that came after an incident in Chicago where a plane overran the runway and landed in a gas station across the street,” he said.

McCarron said that they will have to make adjustments to accommodate the work being done.

“As a result, we’ll have to close parts of the runway at different times during the construction process,” said McCarron. “This could impact us as far as delays. We have peaks and valleys throughout the day so maybe they can look at some of the less profitable flights and move them to a different time of day where it’s not as busy and hopefully flatten that peak and valley out a little bit so that there’s not as many delay issues.”

San Francisco International Airport already has one of the lowest-performing on-time arrival rates of national hubs, mainly due to the ever-changing weather conditions.

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Other Bay Area Walmarts do have grocery aisles inside the stores, but these new stores will have nothing but groceries.

Walmart will move into the former sites of Circuit City in Hayward and Nob Hill Foods in Pleasanton.

Walmart has been on an aggressive expansion effort in California, recently gathering signatures in Milpitas to force the city either to approve an in-store grocery for Walmart’s existing store there or else take it to the voters. The city, lacking money for a special election, was essentially forced to approve Walmart’s plans.

Another grocery-only store is rumored for San Ramon, but there’s been no official confirmation yet.

(Copyright 2012 CBS San Francisco. All rights reserved.)

The latest provisions require airlines and other ticket sellers to disclose all fees associated with ticket prices upfront, meaning even advertised prices need to include fees and taxes.

Flyers will also have the right to hold a reservation without payment or be able to cancel a ticket for a full refund as long as it is within the first 24 hours of purchase and bought at least a week ahead of time.

Along with that, when booking, airlines must now disclose baggage fees within one click of your online fare quote.

Passengers must also be notified promptly if a flight is canceled or delayed more than half an hour and ticket fares cannot be raised after a ticket is bought unless there is written consent from the customer.

While this all sounds great for consumers, some say the changes will do more harm than good.

Perry Flint of the International Air Transport Association said the new ruling will only allow the government to “hide the massive amounts of taxes it puts on airline tickets.”

Flint argued that the DOT did not do enough cost benefit analysis before implementing the rules and will consequently unfairly penalize the airline industry and take away their “commercial free speech.”

At the other end, travel attorney Al Anolik said these types of regulations are long overdue.

“Consumers have been complaining for years, we can’t get a consumer rights bill through the legislator so the DOT said ‘I’m going to give you consumers some rights,’”Anolik said.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Sam Gold used his pre-paid WePay debit card to withdraw $200 from his local Wells Fargo ATM. Gold expected to see a $3 processing fee on his receipt because he wasn’t a Wells Fargo customer. However, when he received his bank statement, a second transaction of $203 was tacked on.

“I thought they ripped me off,” Gold said.

He assumed that since he withdrew his money from a Wells Fargo ATM, Wells Fargo could fix the problem and refund his money. When Gold talked to someone at the branch, however, he was told he had to contact his bank.

Although that may seem strange, Suzanne Martindale of the Consumers Union said that is the law. There are federal regulations that prevent Well Fargo from dealing with Gold because he is not one of their customers.

“Unfortunately with pre-paid debit, you simply don’t get the same legal protections so you don’t have legal guarantees from any of these people,” Martindale explained.

Debit cards are linked to individual bank accounts and are protected under federal regulations, but pre-paid debit cards did not exist when those regulations were created, meaning pre-paid debit card holders don’t have the same protections as traditional debit card users.

“It’s the same thing over and over again. Technology moves faster than the law does,” Martindale said.

The Consumers Union is now calling on the government to update regulations and protections for those with pre-paid debit.

What Gold and others in his situation should do is contact the bank that issued his pre-paid debit card, in this case, the Bancorp Bank. The bank that owns the ATM that malfunctioned and the pre-paid debit card company are not responsible.

After ConsumerWatch’s investigation, Bancorp has promised to reimburse Gold.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Mountain View resident Neil Gorenflo said he began sharing seven years ago. “I just thought sharing was really smart and I wanted to try it,” he said. For instance instead of renting an office to run his online magazine Shareable he shares an office for $195 a month.

When it comes to driving, Gorenflo doesn’t drive. “I just decided to do without a car and last year I calculated that it saved me $4,000 a year,” he said.  But if he needs a car for something, Gorenflo turns to Getaround, a website where he could find a rental from a neighbor for as little as $6 an hour.

“It typically saves you money to rent from a neighbor and it also can be more convenient and fun then going to a rental office,” he said.

Gorenflo has also found a way to share a nanny. For instance rather then paying $16 an hour for a private nanny, he and other parents share a nanny which allows him to lower the hourly pay to $10. At 32 hours a week, that’s a savings of $216. “Child care is really expensive and we wanted to raise our son with other children and so we nanny share and that way it’s less money for us,” he said.

Rather then buying clothing for his son, Gorenflo shares clothes through threadUp. Gorenflo also shares his Wi-Fi service with nearby neighbors as well as tools. According to Gorenflo, sharing has saved him more than $15,000 a year.

Consumers who would like to share could use Neighborgoods, a website where users are willing to share their personal goods to nearby neighbors at no cost. Consumers could also share DVDs, CDs, books and more through Swap.

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Aneesh Chopra said the program called Green Button will allow PG&E customers with smart meters to download their energy use by simply clicking on the green button on the company’s website.

KCBS’ Mike Colgan Reports:

“To the average homeowner, downloading your information gives you some security that you have the data about your performance,” said Chopra. “But it also empowers you to go shopping. Shopping for new apps who compete to tell you how they can support you in saving on your energy bill.”

Karen Austin, Chief Information Technology Officer for PG&E, said that one customer was able to use the data to reduce her energy bill by 70 percent.

“She went through and looked at her hourly usage and compared it to other residential uses to find ways to cut how she was using her energy,” said Austin. “She unplugged appliances, changed the hours of her thermostat and looked for effective ways to manage how she used energy.”

Southern California Edison and San Diego Gas and Electric are also participating in the program.

Austin said that more and more apps are being developed to help consumers save on their energy use.

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Some passengers said they are frustrated about the makeover plans, which include the installation of six more seats and an inch less of seat pitch.

“Seat pitch” is the distance between a point on your seat to the same point on the seat either in front or behind you. The recline of your seat depends on how much seat pitch is provided.

According to travel site SeatGuru.com, some of Southwest’s competitors beat it out in both pitch and recline. Virgin America provides passengers with a 32 inch pitch with a 2-5 inch recline. JetBlue has a 34 inch pitch with a 4 inch recline. Southwest clocks in with a pitch of 31 inches and 2 inches of recline.

While some said Southwest is sacrificing comfort for economy, the airline insists that flyers won’t miss one inch of reclining space.

The new design, Southwest said, will provide more personal space and a new seating angle that makes the passengers not “feel the need to recline.” The airline added that the newly designed seats will have “more shin and leg clearance,” lumbar support, and more under-seat space for carry-on baggage.

Along with the new seats, the new design will come with recyclable carpet, tray tables, and armrests. 600 pounds will be shaved off the plane’s weight with the new design, making it a greener aircraft, according to the airline.

Southwest’s new look will be rolling out in mid-March on the airline’s 737-700 jets, more than 400 planes in total. Long haul planes will still keep the current seat pitch of 32 inches.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)