Yes, your work around works, what I also did first was go back to 3DXchange 6.54 and use the characterization there because it still seems to work.  I am looking forward to a fix for 3DXchange 7.1 so it works right the first time.. 
thanks for your suggestion

3DXchange 7.2 the new patch that came out today has fixed this issue. Although it has introduced a new issue in the Expression editor where it adds unwanted custom face puppet animation to all the custom groups, which makes the characters not work with talk data from Crazy talk character ..