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Current Events in November 2000

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    Spam Artists Settle FTC Charges

    WASHINGTON, Nov. 28, 2000 -- Defendants in a pyramid scheme that disguised itself as a legitimate work-at-home operation have agreed to settle Federal Trade Commission charges that the scheme violated federal laws. The settlement bans the defendants from engaging in pyramid schemes in the future, bars misrepresentations about the availability and profitability of jobs and requires that the defendants pay $72,000 in consumer redress.

    On July 7, 1999, the FTC alleged that DP Marketing and its principals, David Martinelli, Jr. and Deana Plourde, sent consumers unsolicited commercial e-mail -- "spam" -- with messages such as:

    "National Marketing Company seeks individuals to handle office duties from home. This is a full or part-time position with a salary of $13.50/hr. The position consists of processing applications for credit, loans or employment, as well as online consumer service."
    Consumers responded by visiting DP Marketing's web site or by calling them. Whichever route they took, they were informed that the $13.50 per hour jobs were for processing orders for DP Marketing from the comfort of their own homes. They were told that no experience was necessary, and that for a "registration fee" ranging from $9.95 to $28.72 they would be sent everything they would need to get started, including telephone scripts, product sheets, time sheets and an ID number.

    What the consumers actually got was a kit instructing them first to place advertisements identical to the ones they had responded to, and then to read the same script to people who responded to their ads. Instead of $13.50 per hour, the money consumers could earn was based on the number of new victims they could recruit.

    The FTC charged that the defendants violated federal law by misrepresenting to consumers that DP Marketing offers jobs at a specified salary; by failing to disclose that they are offering a pyramid work-at-home scheme; and by providing the "means and instrumentalities" to others to commit deceptive acts that violate federal law.

    The FTC order imposes a judgment of $72,312 for consumer redress, based on financial declarations provided by the defendants. Should the court find that the defendants misrepresented their financial situations, $430,140, the total amount paid by consumers to DP Marketing, becomes due.

    Spam Artists Settle FTC Charges...

    Cosco High Chairs Recalled

    Cosco Inc. is voluntarily recalling about one million Options 5 High Chairs. The high chairs are adjustable and have both recline and upright positions. In the recline position, the seats can separate from the frame and fall to the ground. In the upright position, the seats can slip from their set height position to the lowest position or can fall to the ground.

    Additionally, some seats were sold with a metal restraint anchor that can slip through the back of the seat allowing the child to fall to the ground. Infants and toddlers can suffer head, face and bodily injuries.

    The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

    Cosco and CPSC have received 168 reports of incidents involving the high chairs' seats or restraints, including 57 injury reports, primarily to the head and face. Two children reportedly suffered slight concussions; twelve children were monitored for head injuries; and others suffered swollen eyes, bloody noses and lips, bumps and bruises.

    The Cosco Options 5 High Chairs being recalled have five options for use: high chair, infant feeding, youth chair, play chair and booster seat. The chair's seat can be used in a reclined infant position or adjusted into seven upright height positions for toddlers. It has four tray positions, a vinyl seat pad and a removable footrest. "Cosco" is on the chair's leg support bar, tray and on a sticker on the bottom of the seat. The restraint system consists of a waist/crotch belt and a plastic T-bar attached to the tray. The recalled chairs can be identified by model number 03-286 and manufacture date, which are located on the bottom of the seat.

    The Options 5 High Chairs subject to this recall were manufactured from December 1, 1997 through August 11, 2000. Mass merchandise, juvenile products and major discount department stores nationwide sold the high chairs for about $40 to $50.

    Cosco is offering consumers two types of repair kits, depending on the date their high chair was manufactured. To prevent seat separation, all kits will contain a redesigned handle that stays out and fits over the frame each time the seat is used in the recline position. In many incidents in the recline position, the handle was not over the frame of the high chair.

    Consumers should stop using these high chairs immediately, and order a free repair kit from Cosco by calling (800) 221-6736 between 8 a.m. and 4:30 p.m. ET Monday through Friday. Consumers also may visit the company's web site to order a free repair kit and to obtain instructions for proper assembly and use. When contacting Cosco, consumers should have the chair in front of them to provide the model number and four-digit manufacture date, which are located on the bottom of the seat. The manufacture date will determine which repair kit is needed.

    Cosco High Chairs Recalled...

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      Bridgestone/Firestone Agrees to Extend Recall

      Bridgestone/Firestone has agreed to replace an additional 1.4 million tires beyond the 6.5 million AT, ATX II and specific Wilderness tires covered in a recall ordered by the National Highway Traffic Safety Administration (NHTSA).

      The action resulted from an agreement with the Attorneys General of 48 states, Puerto Rico and the District of Columbia.

      The additional tires have been identified as having high tread separation rates. Included are 24 tire models, including additional sizes of the ATX and specific tires from the Firehawk, ATX 23 Degree, Widetrack Radial Baja, Wilderness AT and Wilderness HT lines.

      Consumers should go to an authorized Bridgestone/Firestone dealer to obtain reimbursement forms. Consumers will receive up to $140 per tire for any competitor's tire they purchase to replace one of the tires listed under the recall. Bridgestone/Firestone has also agreed to transfer any road hazard warranty or insurance to the new tire, free of charge. It will take four to six weeks for the reimbursement check to arrive.

      Additionally, the Attorneys General requested -- and Bridgestone/Firestone agreed -- that consumers will no longer have to sign a release waiving their legal rights as a condition of participating in the recall program. Any such waivers that were signed prior to the agreement will not be enforced.

      Bridgestone/Firestone Agrees to Extend Recall...

      Goodyear Faces NHTSA Probe

      WASHINGTON, Nov. 21, 2000 -- The National Highway Traffic Safety Administration (NHTSA) may be taking aim at Goodyear. The agency is reported to be about to open an investigation into defects in Goodyear Wrangler Load Range E tires used on commercial-size pickup trucks and vans.

      The Washington Post reported that the agency has received 37 complaints about the Wrangler tires and said there have been 25 lawsuits filed against Goodyear alleging tread separation and other premature failures.

      The tires are provided as original equipment on heavy-duty Dodge and Ford pickups and vans. About 27.5 million of the tires have been manufactured under Goodyear and other brand names.

      Goodyear said it has replaced the tires for some customers who have had problems but denied that the model has a safety defect. The company maintains the problelms are due to overloading and vehicle modifications.

      Goodyear has been making the tires for a decade. It modified the design in the mid-1990s after receiving complaints about tire failures. That could open the company to charges that it knew about a defect but failed to notify NHTSA as required by law.

      Some 6.5 million Bridgestone/Firestone tires used on Ford Explorers and other vehicles have been recalled. Ford has claimed that problems disappeared when the Firestone tires were replaced with Goodyears. A NHTSA probe of Goodyear would potentially call those claims into doubt.

      Goodyear Faces NHTSA Probe...

      FDA Warns Against Using TRIAC

      WASHINGTON, Nov. 21, 2000 -- The Food and Drug Administration (FDA) is again warning consumers of products marketed as dietary supplements that contain tiratricol, also known as TRIAC, a potent thyroid hormone that may cause serious health consequences including heart attacks and strokes. Despite four recalls over the past seven months, various products that contain tiratricol may still have reached consumers. FDA urges all consumers to stop using such products immediately.

      On November 11, 1999, FDA warned the public against consuming Triax Metabolic Accelerator, a dietary supplement for weight loss by Syntrax Innovations, Inc., Cape Giradeau, Mo. Since this action, several other firms have recalled similar products containing tiratricol. Distribution of these products has been primarily through retail sales to health food stores, fitness centers, and gymnasiums. There have been four additional such recalls:

      • J.N.G. Sports Supplement Distributors, Bloomsburg, Pa., recalled a product called Tricana Metabolic Hormone Analogue, 1 mg. capsules, which were labeled as an "extremely effective fat burner, working especially well for conditions of obesity and reducing problematic areas of fat (cellulite)". This recall letter was issued on April 6, 2000.
      • Thermo-Life International, San Carlos, Ca., also recalled Tricana Metabolic Hormone Analogue from nine direct wholesale accounts on April 6, 2000, and requested sub-recalls by the wholesalers. The wholesalers reportedly sold this product through the Internet.
      • Gentech LLC., Edison, N.J. recalled a product containing tiratricol on April 11, 2000. This firm called its product "Tria-Cutz, Thyroid Stimulator, Dietary Supplement Capsules," and sold it in 90-capsule bottles containing 1000 mcg (1 mg) per capsule. The instructions directed users to take 1 capsule 2-3 times a day. The product bore labeling claims similar to those of Tricana Metabolic Hormone Analogue. Tria-Cutz was distributed to 45 retail units (stores/gyms) and to 30 individuals totaling about 1570 bottles.

      On September 12, 2000, ATF Fitness Products Inc., Oakmont, Pa. recalled a similar product called "Sci-Fi-Tri-Cuts Dietary Supplement Capsules." Although the product contains 1000 mcg (1mg) of tiratricol, the labeling does not include indications for use and does not make any claims kind. The product was sold to 135 accounts, most of which were gyms and health food stores.

      FDA urges all individuals who may have purchased these products, or any product containing tiratricol, to stop using them immediately and, in addition, to consult their health care professional if they are experiencing any adverse effects, which may include insomnia, nervousness, sweating, and diarrhea.

      Despite 4 recalls over the past 7 months, various products that contain tiratricol may still have reached consumers. FDA urge all consumers to stop using s...