What happens when you “misrepresent the health benefits and nutritional content” of your product? You get sued. And then you settle.

That’s exactly what happened to All Market Inc, maker of Vita Coca Coconut Water. They recently settled a class action lawsuit (Fishbein v. All Market Inc. d/b/a Vita Coco) in which they were accused of misrepresentation, so anyone who purchased one of their products between August 10th, 2007 and when the settlement is approved, is entitled to a payment from the settlement. How much you get depends on how much proof you have:

• Cash Payment With Proof of Purchase: If you have Proof of Purchase, you may receive a check in the amount of the purchase(s) up to a maximum of $25.00 per Settlement Class Member.
• Cash Payment Without Proof of Purchase: If you do not have Proof of Purchase, you may receive a check in the amount of $6.00 per Settlement Class Member.
• Product Voucher With Proof of Purchase: If you have Proof of Purchase, you may receive a product voucher with a retail value in the amount of the purchase(s) up to a maximum of $36.00 per Settlement Class Member.
• Product Voucher Without Proof of Purchase: If you do not have Proof of Purchase, you may receive a product voucher with a retail value of $8.00 per Settlement Class Member.

You can find the claim forms here and you have until July 23rd, 2012 to fill it out.

(Photo: bitchcakes)

In a vote of 52 to 45, the Senate failed to pass a motion to begin debate on a Democratic bill that would have frozen student loan interest rates before they are set to increase on July 1st. The Senate needs 60 votes to begin debate on a bill and Republicans planned to filibuster the bill over how the bill would be funded. The cost to freeze interest rates would be about $6 billion and Democrats planned to offset that with increased Social Security and Medicare payroll taxes on high earners.

Who is affected by this increase? Any students taking out subsidized Stafford loans after July 1st. The current rate, set by a law in 2007, is a mere 3.4%. Holders of existing subsidized Stafford loans are not affected.

Personally, I’m of the mindset that subsidized funding for education is important but we’re in a very troubling time. The cost of one year at my alma mater is nearly $60,000 a year – which is nearly double what I paid. Well, technically I got Stafford loans and some grants, but the top line number was “only” $30,000. There’s no doubt that college is expensive but higher education is like any profit – it’s price is in part dictated by supply and demand. As more cheap money is available to student borrowers, colleges can pay more because the student offsets higher prices with cheap funding.

This is especially true when you look at the for profit education space, where for profit universities are happy to charge less exorbitant sums knowing full well that their students aren’t going to be getting a positive ROI out of the investment. I’ve heard plenty of “non profit” (I think all universities are for profit) horror stories of people with six figure debts for low paying entry level liberal arts degrees too, so it’s not a “profit vs. not-for-profit” issue.

That said, I don’t know what the solution is but I don’t think increasing interest rates will help us as a whole.

Ever hear a company say that their funds have beaten the five year Lipper Average? Or the ten year Lipper Average? If you’ve ever heard a T. Rowe Price commercial, where they talk about how they understand the connections of a complex, global economy; you’ve heard someone make the claim that some percentage of their funds beat their 10-year Lipper average (in their case, it’s over 75%). If you’re like me, you just ignored it because you have no idea what the Lipper Average is and companies make claims all the time.

Well today we will find out what the heck a Lipper Average is and why those claims matter.

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One of the downsides of listening to Sirius XM radio is that you start to hear the same commercials over and over and over again. It’s one of the reasons why I thought to do more research into stock loss companies. After listening to numerous ads from companies like 9 Year Mortgage (pay off your mortgage in 9 years!), I thought I’d do an analysis of all the various mortgage prepayment strategies.

There is only one way to pay off your mortgage faster – pay more money and pay more often. Outside of paying more and paying more often, there isn’t much else you can do besides refinance so your interest rate is lower. The only services that are legitimate are the ones that help you manage the payments and keep you on track, but those usually are more expensive than they are worth.

For our examples, we’ll use Bankrate’s mortgage calculator and it’s default values to help calculate the savings of these different strategies. The default values are:

• Mortgage – $165,000 for 30 years fixed at 7% interest
• Payoff Date – April 23, 2042
• Monthly Payment – $1097.75
• Total Interest – $230,189.68

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After talking about how half of Americans don’t pay any income tax, CNN took a quick look at the reasons why. They don’t go into greater detail but basically they pointed to all the various tax benefits available. The Tax Policy Center said that for 2011, 46% of households ended up owing nothing in federal taxes, up from 40% before the recession. When you think about it, the standard deduction is $5,950 for individuals and $11,900 for married filing jointly. Additionally, you get a $3,700 exemption for each person in your household. A family of four would get $14,800 in exemptions plus a $11,900 deduction for $26,700 in income exempt from tax. The poverty threshold for a family of four is $22,350.

That said, the reality is that $23,700 is not a lot for a family of four to survive on. That’s less than $2,000 a month for four people. While I understand the need for fairness, I don’t think our society benefits from taxing folks who may be barely scraping buy. That said, our world isn’t fair but I’d like it to be stable, so as someone who makes more than $26,700, I’m happy paying taxes. I’m happy paying more than the average amount in taxes even if I believe the government is using it inefficiently.

What do you think about all this?

Ever wonder how they come up with your car’s VIN? VIN stands for vehicle identification number and it’s a code that tells you a lot about the vehicle you’re driving. For the longest time, I thought a VIN on a car was a unique serial number that incremented with each manufactured car. As you can tell, I didn’t put much thought into it because it’s clear that a unique number, incremented each time, is not the best way to handle identifying cars!

As it turns out, part of the code is a unique number assigned to a single car of a single model at a single manufacturer, but much of the information contained in a VIN is not unique. Now, knowing about how the VIN works won’t save you any money on gas but now you’ll know something few people do!

(I realize my title is a case of RAS syndrome, but everyone I know says VIN number)

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Getting a free credit score without jumping through the hoops of trials is nice, but nearly impossible. Services like Credit Sesame and Credit Karma are great for getting a credit score, even if it’s not the celebrated FICO credit score. The one knock against those scores is that, while free, they aren’t “FICO” so they aren’t useful. I have to disagree.

Personally, I think that closely monitoring your FICO score for no reason is a waste of time. If you plan on buying a car or home in the near future, knowing your score is very important. If you aren’t, getting your Experian score (Credit Sesame) or your TransUnion score (Credit Karma) is going to be good enough.

That said, I wondered how close those scores were to FICO and it turns out they’re pretty close, according to an informal survey done by the members of CreditBoards.com. Credit Sesame offers Experian’s National Equivalency Score, which is the same score they sell to lenders, and everyone was asked to self-report their FICO scores compared to their Experian NES.

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In William Baldwin’s column in an old issue of Forbes, he writes a “fictitious” investment advice letter to his widow, he suggests two important rules for her. The first rule is to use fee only advisors, it’ll cost more up front but be cheaper in the long term and yield more independent advice. The second is a rule I thought was important, he called it the “Yahoo principle.” The Yahoo principle is simple “Buy things that trade in large volumes at prices you can see.”

The idea is that when you buy a stock or bond or ETF or mutual fund, you’re buying something that is liquid and whose price is well known. If you need to sell it, you can sell it without great difficulty. High volume stocks are easy to sell because there are plenty of buyers in the marketplace at any one time (low volume stocks are trickier). Plus, you can buy and sell stocks for just a few dollars.

With mutual funds, you may not trade as often (once a day) but you are guaranteed to be able to at the end of the day. You don’t have to worry about taking a haircut because you happen to find the very last buyer in the world at that very moment. Finally, you can buy and sell shares of a mutual fund for free (Vanguard funds in a Vanguard account, Fidelity funds in a Fidelity account). I have a Vanguard account because I know I can buy and sell shares of Vanguard funds for zero commission.

More to the point, the Yahoo principle warns against tricky financial products. Baldwin points to products with names like Guaranteed Lifetime Enhanced Income Portfolio IV, where there is no ticket, no way to buy and sell it unless it’s to the person who issues it, and “it would take a finance Ph.D. two weeks to find all the buried costs.” Obfuscation is the friend of the person selling that investment, not the one buying it.

I’m a fan of this rule, you?