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New Consumer Protections for Contact Lens Wearers

A new federal law will make it easier -- though far from effortless -- for consumers to get a copy of their contact lens prescription

New Consumer Protections for Contact Lens Wearers...

A new federal law will make it easier -- though far from effortless -- for consumers to get a copy of their contact lens prescription, enabling them to shop around for the best deal on their contacts, rather than being compelled to buy them from their optometrist. But it will keep consumers traipsing back to their optometrist for a $100 yearly exam, whether they need it or not.

The "Fairness to Contact Lens Consumers Act," passed by Congress last year, requires that optometrists and ophthalmologists give patients a copy of their prescriptions after a fitting and verify those prescriptions to any third party designated by the patient, such as an online lens seller.

Many optometrists have previously refused to make the prescriptions available, hoping to prevent their customers from going to discount lens outlets.

Congress was heavily lobbied by optometrists during its consideration of the measure, and those able to read the fine print will discover that in 42 states, optometrists can refuse to pass along a prescription if it is more than a year old. The limit is two years in the other eight states.

Thus, while optometrists may have lost their grip on the sale of contact lenses, they have gained an annuity that will keep patients coming back once a year to renew their prescriptions. There are 36 million contact lens wearers in the U.S. At about $100 per exam, that's $3.6 billion in guaranteed revenue for the optometrists.

Most lens discounters say the one-year limit is unnecessary. Optometrists disagree but have a hard time saying why. Dr. Victor Connors, president of the American Optometric Association, said a yearly exam simply reflects the "standard of care."

Asked if he knew of any studies that mandated such exams, he told The New York Times: "I haven't seen any health care studies on that, but I'm sure they've done them."

Optometrists' stalling tactics to date have not only caused consumers to pay artificially high prices for their contacts, they have also kept the discount lens business from taking off at the rapid pace that investors and consumer advocates had hoped for.

1-800-Contacts says it lost a huge amount of business in five states that, before the federal law was passed, required verification of prescriptions.

Details

Here are the details of the Federal Trade Commission's "final rule" sets out the ground rules under which the law will be implemented. It:

• Requires prescribers (such as optometrists and ophthalmologists) to provide patients with a copy of their contact lens prescription immediately upon completion of a contact lens fitting;
• Requires prescribers to provide or verify contact lens prescriptions to any third party designated by a patient;
• Prohibits prescribers from placing certain conditions on the release or verification of a contact lens prescription;
• Requires contact lens sellers either to obtain a copy of a patients prescription or verify the prescription before selling contact lenses, and deems a prescription verified if, among other things, a prescriber fails to respond to a sellers verification request within eight business hours; and
• Establishes minimum expiration dates for contact lens prescriptions.

The final Rule also allows third-party sellers flexibility in communicating with prescribers and requires sellers to keep records of all direct communications with prescribers.

 

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Do-Not-Call Scam Shut Down

Service supposedly safeguarded consumers from telemarketers

Do-Not-Call Scam Shut Down...

A court order has shut down a scheme in which Vector Direct Marketing, LLC, an Arizona-based company, defrauded consumers nationwide by offering a $399 service to safeguard their personal financial information from telemarketers.

The defendants allegedly told consumers that their information including their social security and bank account numbers was for sale on a large number of telemarketing lists. The defendants allegedly told consumers that a $399 call screening device could help them avoid becoming victims of identity theft. Most consumers received little more than a $34.95 call-screening device that they could have bought themselves at many retail locations.

The stipulated court order prohibits the defendants from making similar false representations to consumers about their financial information, and from billing them or debiting their accounts without their prior authorization.

Finally, the order bars the defendants from violating the FTCs Telemarketing Sales Rule, based on their past abusive phone-collection practices, and subjects them to a monetary judgment of nearly $811,000, which has been suspended due to their inability to pay.

The Federal Trade Commission action settles all charges against Vector, which also did business under the names National Solicitation Guard and Anti-Solicitation Guard.

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Make a Call, Get a Ticket

D.C., New Jersey Join New York in Banning Cell Phones While Driving

D.C., New Jersey Join New York in Banning Cell Phones While Driving...

Attention motor-mouths: effective July 1, you can be fined $100 or more for holding a cell phone while driving in Washington, D.C. and New Jersey. New York has had a similar law since 2001.

The New Jersey fine can climb as high as $250 if there are aggravating circumstances, but Garden State police say they won't actually pull motorists over for driving and gabbing unless there's another infraction -- like expired plates or reckless driving.

New York and Washington, D.C., police can stop motorists simply for driving and chatting and D.C. police say they'll do so, at least for the first few weeks the new law's in effect.

Critics say the new laws won't have much effect.

The critics include the Governors Highway Safety Association (GHSA), the organization that represents state highway safety agencies. It is discouraging other states from passing hand- held cell phone legislation.

The association says hand-held cell phone bans send the wrong message to drivers -- giving them a false sense of safety by implying that it's safe to use hands-free cell phones while driving. The association says any distraction is a safety hazard.

Research conducted for AAA by the University of North Carolina last year indicated that reading and writing, eating, adjusting the radio, interacting with others in the car and grooming, as well as cell phone use, were major distractions.

Employing in-car video cameras to observe how drivers behave, the study concluded that all drivers in the study had been distracted to some degree, 90 percent by something outside the car and 100 percent by something inside the car.

"The AAA research reaffirms that cell phones are the distraction that drivers love to hate, but in fact they are just one of many that drivers encounter on a daily basis. Anything that takes a driver's attention away from the task at hand can be potentially fatal, said Kathryn Swanson, Chair of GHSA.

The Yankee Group, a Boston-based communications and networking research and consulting company, estimates that about 44 percent of all adult cell phone usage in 2003 was done in a vehicle.



 

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Biotape Pain Relief Claims Disputed

FTC says a piece of tape can't cure pain

FTC charged that Smart Inventions, Inc., a CA-based direct response TV company, made false and unsubstantiated claims that a product called Biotape can tre...

The Federal Trade Commission has charged that Smart Inventions, Inc., a California-based direct response TV company, made false and unsubstantiated claims that a product called Biotape can treat or cure severe pain.

The FTC complaint, filed in the Central District of California, also alleges that the defendants falsely claimed Biotape is superior to commonly available over-the-counter analgesics and topical creams and ointments in treating pain.

The defendants advertised Biotape, which resembles electrical tape, primarily through a 30-minute infomercial that aired nationally on various cable stations, including Womens Entertainment, The Discovery Channel, and the Inspirational Network.

Darrell Stoddard who developed Biotape and is featured in the infomercial along with the infomercial host Kevin Trudeau and the company's chief operating officerr, Jon D. Nokes also are named as defendants.

The infomercial sold Biotape in conjunction with Stoddards book, Pain Free for Life. A sheet of 10 adhesive Biotape strips costs approximately $10. The infomercial directed consumers to apply Biotape to the parts of their bodies where they experience pain. Biotape was purported to contain a space age conductive mylar that connects the broken circuits that cause the pain.

The FTC complaint alleges that the defendants have falsely and without substantiation claimed that Biotape: (1) significantly and permanently relieves severe pain caused by surgical procedures, arthritis, migraines, and other serious conditions; and (2) is superior to other products and treatments, such as over-the-counter analgesics and topical creams and ointments, in eliminating or relieving severe pain.

In a separate action filed by the Commission in June 2003, the FTC previously sued Trudeau for his role in making false or unsubstantiated pain-relief claims in the Biotape infomercial, charging that such claims violated a 1998 federal district court order. This contempt action against Trudeau is pending in the U.S. District Court for the Northern District of Illinois.

 

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Pennsylvania Sues Cross Country Bank

Pre-approved credit cards were deceptively marketed, state charges

Cross Country Bank and its Pennsylvania-based collection company allegedly targeted hundreds of consumers with impaired credit for pre-approved credit card...

Pennsylvania Attorney General Jerry Pappert has filed a civil lawsuit against Cross Country Bank and its Pennsylvania-based collection company, following claims that hundreds of consumers with impaired credit were targeted for pre-approved credit cards that were deceptively marketed.

The defendants are also accused of improperly disclosing charges and fees, and engaging in abusive and illegal debt collection tactics when cardholders defaulted on their accounts. The state's investigation involved complaints from more than 400 consumers throughout Pennsylvania.

Texas sued Cross Country Bank earlier this month.

"This case represents one of the more egregious examples of predatory lending because specific consumers were targeted and further harmed by the defendants' alleged deceptive and illegal business practices," Pappert said at a news conference in Philadelphia.

"Instead of helping consumers as promised, the defendants actually pushed cardholders further into debt when they used the credit cards. Those who failed to make the payments, were subjected to a barrage of abusive, harassing collection practices that included the use of profanity and multiple calls to consumers' homes or offices."

Cross Country, based in Delaware, and Applied Card Systems Inc., Glen Mills, Pennsylvania, are accused of violating Pennsylvania's Consumer Protection Law and Fair Credit Extension Uniformity Act.

According to the suit, the defendants since 1999 have used direct mail solicitations and the website www.crosscountrybank.com to promote and market credit cards and services for consumers with impaired credit or lack of credit history. The defendants claim to have more than three million customers nationwide.

The ads promoting the pre-approved credit cards and services include claims that the cards carry a line of credit in the thousands of dollars to help consumers obtain the "positive credit history they deserve." In reality, the credit limits are much lower than advertised and the cards include inadequately disclosed initial and monthly fees as well as other charges that have already been deducted from the minimal credit available, the suit states.

Many consumers who received the pre-approved credit cards thought their credit limit would be as high as $2,500. Once the final paperwork arrived, they learned that their credit limit was far lower than the amount advertised. They also learned that the balance was further reduced once the fees and other charges were deducted. In many cases, consumers available credit was just $250 to $350.

The Commonwealth claims that some of the alleged improperly disclosed fees include a $100 application fee or $10 monthly maintenance fee, a $50 annual membership fee, a $30 late or over-the-limit fee, and other fees for customer assistance, payment processing over the telephone or Internet and debt collection services.

Other allegedly deceptive fees include an optional $10 express handling charge to approve consumers' credit card application within 10 days even though the process is typically completed within that time frame.

Investigators said similarly deceptive fees exist in the defendants' "Credit Account Protection" or CAP benefits program. Each month cardholders are charged $1 per $100 balance on their credit card accounts toward disability, job loss or death benefits. Under the program, CAP pays a monthly benefit equal to five percent of the consumers' credit card balance up to $10,000. In reality, few consumers ever had balances high enough to derive a benefit from the coverage.

Pappert said the lawsuit also accuses the defendants of abusing, harassing, misleading and deceiving consumers through a variety of illegal debt collection practices including:

• Making multiple or frequent telephone calls to consumers at home and at work over an extended period of time.
• Continuing to contact consumers even if they requested not to be contacted at home or at work.
• Using obscene, profane, derogatory, rude and hostile language in communicating with debtors or their family members.
• Contacting consumers before 8 a.m. and after 9 p.m., which is prohibited by law.
• Failure to close consumers' accounts when requested to do so and/or falsely stating that they are prohibited from closing the accounts forcing consumers to continue to pay the fees.
• Misled consumers about their identity when calling on the telephone. They also implied that they were lawyers in their written correspondence or collection letters to consumers.
• Making improper legal and physical threats to coerce payments from consumers.
• Making improper contact with third parties including close family members and children.

Pappert said, "One Philadelphia consumer was contacted as much as ten times a day. Another consumer received 12 harassing voice messages at work, still another was subjected to profanity and physical threats. All of these tactics are outrageous and illegal."

The lawsuit asks the court to require the defendants to:

•Pay restitution to consumers who suffered monetary losses as a result of the defendants' alleged illegal business practices.
•Pay civil penalties of $1,000 per violation and $3,000 for each violation involving a consumer age 60 or older.
•Forfeit their right to conduct business in the Commonwealth until all restitution and fines are paid.
•Forfeit all profits that were derived as a result of the alleged illegal business practices.

Pappert urged Pennsylvania consumers who suspect that they were victimized in this case to obtain a complaint form by calling 1-800-441-2555.

 

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Airbag Problems Plague New Hyundais

Hyundai is wrestling with an airbag problem in its 2004 Elantra sedan

Airbag Problems Plague New Hyundais...

Hyundai is wrestling with an airbag problem in its 2004 Elantra sedan. The airbag's sensor system is designed to keep the airbag from deploying when there is a child in the front passenger seat.

The problem is it's also preventing airbag deployment when adults who weigh less than 150 pounds sit in the seat, unless they position themselves perfectly in the center.

In many cases, the problem manifests from Day 1.

"On the way home from the dealership the air bag light was intermittently going on and off, stating the passenger air bag is off," Rodney of Narrowburg, NY, said in a complaint to ConsumerAffairs.com.

Like many other purchasers, Rodney complained to his dealer.

"I was handed a technical service bulletin number 4-90-003 stating you must sit perfectly straight, upright, legs extended all the way forward in order for the air bag to be on. Well, with an adult in the seat over the specified weight you can not move at all. Lift a leg, move your butt, recline your seat at all and the air bag "off" light comes on.

A Hyundai spokesman said the only thing passengers not heavy enough to activate the airbag can do now is sit somewhere else. Other than that, Hyundai said all it can advise is that consumers take a long test drive -- with regular passengers sitting where they normally would -- before deciding to buy the car.

That response may not be quite enough.

The National Highway Traffic Safety Administration says it has opened an investigation into Hyundai's problem and response. The investigation could lead to a recall.

 

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COSCO Rock N Roller Baby Strollers Recalled

COSCO Rock N Roller Baby Strollers Recalled...

June 23, 2004
Dorel Juvenile Group is recalling about 300,000 COSCO Rock 'N Roller Baby Strollers. If the stop pins are bent or missing or the seat is not fully attached, the seat can partially detach from the frame during use and the infant occupant can be injured in a fall.

There have been 77 reports of problems related to the stroller seats. Injuries included one child that fell and had a slight concussion and another child that cut his forehead and required stitches. Additionally, there were 46 reports of bumps and bruises.

The COSCO Rock N Roller strollers involved have seats that can be removed from the stroller frame. The detached seat can function as a bassinet, or be repositioned on the stroller frame facing front or back. The stroller has a dark blue or green metal frame with four wheels on the front and two wheels on the back. The side folding area of the frame has a white plastic cover that is labeled Rock N Roller by Geoby COSCO.

There is a label on the back of the frame containing one of the following model numbers: 01-654, 01-622, 01-624, 01-646 or 01-656. The seat cover is usually a dark blue or green printed fabric with COSCO A Dorel Company printed on the footrest.

The strollers were sold at Wal-Mart, Kmart, Sears, Toys R Us, Target, JC Penneys, Service Merchandise and other toy and childrens furniture stores nationwide from April 1996 through August 2002 for between $79 and $179.

Consumers should stop using the recalled Rock N Roller strollers with detachable seats immediately and call the firm to determine how to inspect the stroller for possible replacement.

Consumer Contact: Dorel Juvenile Group at (800) 711-0402 between 8 a.m. and 4:30 p.m. ET Monday through Friday, visit the firms web site at www.djgusa.com or email rnr@djgusa.com

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

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Cablevision Rolls Out Internet/Cable/Phone Package

Long-Distance Carriers Raising Rates, Fees As Quickly As They Can

Cablevision Rolls Out Internet/Cable/Phone Package...

Competition for local telephone service is at last heating up, as cable companies begin their first serious push into local and long-distance service, routing calls over the Internet to avoid the call completion charges that artificially inflate the price of long-distance calls.

Cablevision today rolled out its first Internet telephone package -- combining local and long-distance telephone service with high-speed Internet access and digital cable television, all for $90 per month. Cox Communications started marketing a similar plan a few weeks ago.

Cablevision said the pricing makes the Internet phone service practically free, since many consumers are already paying $90 a month for cable and high-speed Internet access. The $90 price will be good for one year.

Cox offers a $99.99 plan that gives customers either unlimited phone calling or digital cable, plus a premium service for $124.99 that offers all that plus additional services.

Local telephone companies aren't likely to welcome the news. They're already losing business to cell phones and to competitors like AT&T and MCI, who lease space at discounted rates on the local companies' circuits.

Cablevision already has about 100,000 telephone customers in its New York service area. It charges about $35 per month for standalone phone service. It charges $45 for high-speed Internet access and $40 for digital cable if purchased separately.

The Bell companies have been responding to the competition by offering their own packages, usually consisting of local, long distance and DSL Internet service. Though still losing basic business, the Bells are taking long-distance business away from AT&T and MCI are a rapid pace.

SBC Communications has been the most aggressive Bell company in pricing bundled service. It charges $105 a month for unlimited local and long-distance calling, high-speed Internet and television, delivered by EchoStar Communications Corp. For an extra $25, it will throw in 250 cell phone minutes per month.

Verizon, which competes with Cablevision in the New York area, has a package comparable to Cablevision's, selling for $123.85 per month.

AT&T, MCI Raise Rates

The trend is reversed among the long-distance carriers. As their business deteriorates, they're raising prices as fast as they can.

AT&T is adding an "in-state connection fee" in six more states starting next month. The company says its fee covers extra costs of doing business in various states. Less than a year ago, AT&T; assessed such a fee in only 12 states. Now the total will be 25 -- half of the states in our country. What's more, MCI and Sprint have followed AT&T; with similar fees in the past.

MCI will increase phone rates and fees effective July 1st. Monthly fees on 17 domestic service plans will rise $1. Five different international calling plans' fees increase $1 as well. International calls from the U.S., which connect to mobile phones overseas, will be charged at higher rates.

MCI is said to be making plans to quit offering consumer phone service, including local and long-distance. The next day, MCI's TelecomUSA division increased rates and fees for its 10-10-987 service.

"Those hikes are relatively early in the life of this service, which launched nationally with a big ad campaign last April," said Rich Sayers, editor of consumer help sites 10-10PhoneRates.com and Phone-Bill-Alert.com. "This appears to accelerate MCI's burn-and-churn* marketing strategy in the dial-around segment."

Sprint and AT&T; may increase some rates on national long- distance plans in July, but it is more likely those increases will come in August, Sayers said.

Sprint recently increased some fees related to its local phone service in several states. Fees increased 20 to 25 percent in most cases. For example, a charge to not be listed in the phone book going from $2.50 to $3; a Toll Restriction charge for blocking outgoing long-distance calls rising from $2 to $2.50.

"These charges for not getting something really irritate consumers and me too," said Sayers.

 

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California Sues Tuna Canners

Companies don't warn consumers that albacore and light tuna contain mercury

California Sues Tuna Canners...

California is suing the nation's three largest canned tuna companies for failing to warn consumers that albacore and light tuna contain mercury, known to cause reproductive harm and cancer.

"This is a crucial public health issue," said California Attorney General Bill Lockyer. "Prenatal exposure to mercury can cause serious disabilities in infants and children. We're not trying to eliminate tuna from people's diets. We're trying to enforce the law and protect the health and safety of California women and children."

The defendants in the lawsuit include: Tri-Union Seafoods, maker of Chicken of the Sea; Del Monte, maker of Starkist; and Bumble Bee Seafoods, maker of Bumble Bee. Filed in San Francisco Superior Court, Lockyer's complaint alleges the companies have violated Proposition 65, a landmark ballot initiative enacted by voters in 1986. The law requires businesses to provide "clear and reasonable" warnings before exposing people to known carcinogens or reproductive toxins.

Methylmercury compounds have been listed under Proposition 65 as a chemical known to cause cancer since 1996, and methylmercury has been listed as a known reproductive toxin since 1987. Mercury and mercury compounds have been listed as known reproductive toxins since 1990. By failing to warn consumers about the mercury in their products, the defendants have violated Proposition 65, Lockyer's complaint alleges.

Testing conducted by Lockyer's office showed the mercury levels in both canned albacore and light tuna exceed the exposure threshold that triggers the Proposition 65 warning requirement. The same testing showed canned albacore contains significantly higher amounts of mercury than canned light.

The lawsuit asks the court to prohibit the companies from selling their tuna in California without providing a warning as required by Proposition 65. Potential alternatives for adequate warnings include signs posted in grocery aisles or labels placed on cans. Additionally, the complaint seeks civil penalties for violations of Proposition 65 and the state's Unfair Competition Law.

Under both laws, each defendant is liable for civil penalties of up to $2,500 per day for each violation. The complaint covers the defendants' alleged Proposition 65 violations dating back to 2000.

Excessive exposure to mercury poses serious health risks to all people, but particularly pregnant women and children. Prenatal and infant exposure can cause mental retardation, cerebral palsy, deafness, blindness, and developmental and learning disabilities.

A 2000 study by the National Research Council estimated 60,000 children born annually in the United States could suffer neurological problems caused by prenatal mercury exposure. A 2004 report presented to the U.S. Environmental Protection Agency (EPA) found that, every year, as many as 600,000 newborns may be at increased risk of health damage caused by mercury exposure.

Fish and seafood are important sources of nutrients and can be key components of a balanced diet. However, public concern increasingly has focused on fish, including canned tuna, as a source of mercury exposure.

In March 2004, after conducting testing, the EPA and U.S. Food and Drug Administration (FDA) issued a joint notice that advised pregnant and nursing women, women who may become pregnant and young children to limit their consumption of canned albacore tuna to six ounces per week. That amount is equal to one average meal. The EPA-FDA advisory said the same groups should eat no more than 12 ounces (two average meals) of canned light tuna and other fish that are lower in mercury.

Lockyer last year filed Proposition 65 lawsuits against major grocery and restaurant chains for failing to post warnings about mercury in fresh or frozen shark, swordfish and tuna. Those cases remain pending, and have been coordinated in San Francisco Superior Court.

While that litigation is pending, some of the defendant grocers and restaurants have posted an interim warning that advises pregnant and nursing women, women who may become pregnant and young children to not eat swordfish or shark, and to limit their consumption of fresh or frozen tuna.

The interim warning developed by Lockyer's office also mentions canned tuna, saying in part that canned light contains less mercury than albacore. Lockyer believes Proposition 65 requires more explicit advice to consumers about canned tuna. Additionally, grocers post the interim warning at fresh fish counters, where canned tuna consumers will not see it.

A private party, the Public Media Center, previously filed a Proposition 65 lawsuit against canned tuna companies. That case also is pending in San Francisco Superior Court. Lockyer will ask the court to consolidate his action with the private lawsuit, so they can be tried jointly.

 

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Simplicity, Massey Ferguson, AGCO Lawn Tractors Recalled

Simplicity, Massey Ferguson, AGCO Lawn Tractors Recalled...

June 20, 2004
About 6,000 riding mowers sold under the Massey Ferguson, Simplicity and AGCO brand names are being recalled because of a problem with the automatic shut-off.

A safety switch under the seat of these lawn tractors and riding mowers is designed to stop the mower blade within 5 seconds of the operator leaving the tractor seat.

The recalled mowers blades can continue to turn longer than 5 seconds after the operator leaves the seat, posing a laceration and amputation hazard.

No injuries have been reported.

The recalled lawn tractors and riding mowers, designed for non- commercial use, include Regent/500/2500 Series lawn tractors, Coronet/2400 Series riding mowers, and Lancer/4400 Series riding mowers with the following model and serial numbers:

Regent/500/2500 Series:

Product SeriesModel NumberSerial Number
Regent, 15-hp169391109000-09439
Regent, 15-hp169432109000-10015
Regent, 15-hp169431400166-00334
Regent, 16-hp169391509000-11368
Regent, 16-hp169420009000-09120, 10000-10411
Regent, 16-hp169431309000-09060, 10000-10001
Regent, 17-hp169391809000-09050
515H, 15-hp169432309000-09027
516H, 16-hp169393509000-09034
2515H, 15-hp169432509000-09011
2526H, 16-hp169434309000-09025

Coronet/2400/RT Series:

Product SeriesModel NumberSerial Number
Coronet, 13-hp169446200001-00599
Coronet, 16-hp169446300001-00346
Coronet, 13-hp169451000001-00098
2413H, 13-hp169446400001-00028

Lancer/4400 Series:

Product SeriesModel NumberSerial Number
Lancer, 17-hp169429202000-02016
4417, 17-hp169429402000-02160

 

The mowers were sold at independent lawn mower dealers nationwide from June 2003 through May 2004 for between $2,000 and $3,750.

Consumers should contact the dealership where the lawn tractor or riding mower was purchased to have a free replacement seat safety switch installed.

Consumer Contact: Call Simplicity at (800) 357-8244 between 9 a.m. and 5 p.m. ET Monday through Friday visit the firms Web site at www.simplicitymfg.com, or write to Simplicity Manufacturing, 500 N. Spring Street, Port Washington, WI 53074.

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

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California Sues Safeway for Selling Cigarettes to Minors

Chain hasn't done enough to shut down sales to minors, state charges

California Sues Safeway for Selling Cigarettes to Minors...

California Attorney General Bill Lockyer has sued Safeway for selling tobacco products to minors and failing to take adequate steps to prevent such sales at its Safeway, Vons, Pavilions and Pak N' Save stores.

"While we have made progress, youth smoking remains a serious public health problem in California and nationwide," said Lockyer. "Every day in this country, more than 650 kids start a habit that ultimately will cause their death. This case is about protecting the health of our children and ensuring responsible corporate behavior."

Lockyer filed the complaint jointly with Los Angeles City Attorney Rocky Delgadillo. "Anyone who sells tobacco to minors is committing a crime and jeopardizes the health and safety of our children," said Delgadillo. "This lawsuit sends a strong message that retailers must take responsibility for keeping tobacco away from children or face serious consequences."

Filed in Los Angeles Superior Court, the complaint seeks civil penalties which could total in the hundreds of thousands of dollars. More importantly, the complaint asks the court to issue an injunction that effectively would require the Safeway, Inc. stores to take certain actions to curb tobacco-product sales to minors.

Undercover inspections by state health officials showed that, through March 2004, the Safeway, Inc. stores sold tobacco products to minors in 29.8 percent of the cases. In 2003, the violation rate was even higher, at 42.1 percent. Safeway Inc.'s sales-to-minors rate is the highest of four major grocery chains including Ralphs, Albertsons and Raley's that underwent the inspections conducted by the state Department of Health Services.

The complaint alleges the defendant stores violated the California Penal Code's prohibition against selling cigarettes to people under 18 years old. The stores also violated state law by failing to check the IDs of tobacco purchasers who reasonably appeared to be underage, and failing to display at each point of purchase signs warning against underage sales, according to the complaint. Finally, the complaint alleges the defendants' Los Angeles stores failed to prominently display tobacco retail permits, as required under a city ordinance.

Despite being notified of the illegal sales, Safeway Inc. has done little to correct the problem, the complaint alleges.

"The People have documented that Safeway has sold cigarettes to children in California in violation of state law on numerous occasions," the complaint states. "Notwithstanding the fact that Safeway has been repeatedly notified of said sales to minors, defendant has not taken adequate precautions to ensure that children cannot purchase cigarettes from its stores."

Along with other Attorneys General, Lockyer has worked aggressively to curb tobacco sales to minors. An enforcement effort launched by 30 state Attorneys General in 2000 has produced settlements with major national retailers under which they have voluntarily agreed to take specific actions to reduce such sales.

The agreements cover Wal-Mart and Walgreens stores across the nation, and all gas stations and convenience stores operating under the Exxon, Mobil, BP, ARCO and Amoco brand names in the signing states. Combined, the agreements cover more than 37,000 retail outlets. They provide measures to reduce sales of tobacco products to minors by the nation's top retail chain (Wal-Mart), number one drug store chain (Walgreens) and largest oil company (ExxonMobil).

The voluntary agreements include provisions to strengthen ID checks, prohibit self-service displays and sale of paraphernalia, train employees and conduct compliance checks.

The Attorneys General have long recognized that youth access to tobacco products ranks among the most serious public health problems. Studies show that more than 80 percent of adult smokers began smoking before the age of 18. Research indicates that every day in the United States, more than 2,000 people under the age of 18 begin smoking and that one-third of those persons ultimately will die from a tobacco-related disease. Young people are particularly susceptible to the hazards of tobacco, often showing signs of addiction after smoking only a few cigarettes.

In 1999, Lockyer established a full-time Tobacco Litigation and Enforcement Section to enforce California laws regarding the sale and marketing of tobacco products. The section also enforces the national Master Settlement Agreement (MSA), reached with tobacco companies in November 1998.

Californians who suspect violations of state tobacco laws or the MSA can file complaints by calling 916-565-6486 at any time, or by writing to the Tobacco Litigation and Enforcement Section at P.O. Box 944255, Sacramento, CA 94244-2550. Additional information is available on the Attorney General's web site at http://www.ag.ca.gov/tobacco/ .

 

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Hearing Aids Becoming Easier & Cheaper to Buy

Have you heard?

Hearing loss is as common as dandruff, maybe more so, with nearly 30 million Americans suffering from some form of diminished hearing. Yet, 80% or more avo...

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Court Snuffs "Kool MIXX"

Brown & Williams Must Close Website

New York Attorney General Eliot Spitzer is applauding the court decision severely limiting Brown & Williamson's "Kool MIXX" advertising campaign targeting ...

New York Attorney General Eliot Spitzer is applauding the court decision severely limiting Brown & Williamson's "Kool MIXX" advertising campaign targeting children.

"Today's decision makes clear that the court will take appropriate steps to prevent tobacco companies targeting youth in their marketing campaigns," Spitzer said. "Although this is a preliminary order, the evidence presented in our lawsuit amply demonstrates that B&W has committed hundreds of violations of the Master Settlement Agreement signed by the company in 1998."

At the request of Spitzer's office, New York State Supreme Court Justice Charles E. Ramos issued a restraining order that:

• Prohibits the distribution of Kool MIXX brand name merchandise such as CD-ROMs, bags, radios and lighters;
• Requires B&W to shut down its "House of Menthol" website and toll-free telephone number;
• Prohibits the live webcast of a DJ competition to be held in Chicago in July;
• Severely limit advertising for planned DJ competitions to be held in New York City during the next four weeks; and
• Requires Brown and Williamson to recall all special edition Kool MIXX cigarette packs in New York. More than 79,000 cartons of the special edition thematic packs of cigarettes have been distributed nationwide, with nearly 25% of the cartons sent to numerous New York locations such as convenience stores, drug stores, gas stations and other retail stores

Spitzer filed a motion earlier in the week, seeking to stop B&W's "Kool MIXX" campaign, which is focused on hip-hop music and culture, including DJ competitions, interactive CD-ROMs, and special collectible bags, radios, lighters and cigarette packs. Copies of the CDs were distributed free in Spin, Vibe, and Rolling Stone all of which have high youth readership, and B&W has set up a special "House of Menthol" internet website.

Justice Ramos is allowing B&W to hold its planned DJ competitions, because they take place in "adult-only" facilities. However, B&W's advertising for those events will be limited to the type of advertising that it has used in prior years, rather than using the hip hop images that have been appearing in magazines and newspapers this year.

B&W; is running a national "Kool MIXX 2004" promotion focused on hip-hop music and culture, including DJ competitions, interactive CD-ROMs, and special collectible bags, radios, lighters and cigarette packs. Kool MIXX 2004 promotions have appeared in Spin, Vibe, Rolling Stone and Entertianment Weekly, magazines that have high youth readership, and B&W; has set up a special "House of Menthol" internet website and toll-free telephone number. They have also distributed in excess of 1.7 million CD-ROMs nationwide.

Spitzers court motion asserted that the promotional campaign violates several provisions of the MSA, including the prohibition against: (a) cigarette marketing that targets youth; (b) use of brand name merchandise; (c) payments to place tobacco products in media; and (d) limitations on brand name sponsorships.

"Brown & Williamsons campaign is a shameless attempt to market Kool cigarettes to children and teenagers, particularly African American youth," Spitzer said. "Hip-hop music is youth-driven. By targeting this music genre and culture through CDs, advertising and other promotions Brown and Williamson clearly violates the terms of the MSA for their own profit."

New Yorks action is the most recent step in a coordinated multi-state effort to stop B&W; from marketing its cigarettes to youth. During the past three months, Attorney General Spitzer, Maine Attorney General G. Steven Rowe and Maryland Attorney General Joseph Curran, acting on behalf of 35 other states and jurisdictions, have written to B&W; asking the company to terminate the "Kool MIXX" promotion. While B&W; has agreed to stop distributing the special packs and merchandise, they are moving forward with the national DJ and MC competitions, culminating in a final competition to be held on July 24th in Chicago, which will be broadcast live on the "House of Menthol" website.

"It is absolutely offensive that Brown & Williamson is targeting African American youth in these promotional efforts, and I am very pleased that Attorney General Spitzer is moving to stop them," said Councilman Bill Perkins. "Tobacco use and tobacco-related illnesses already are disproportionately high in communities of color, and this attempt to get more of our children and teenagers hooked on smoking is unconscionable."

"The world understands Harlem as the center of African American culture. Unfortunately, we also have the highest smoking rates in the nation. If the Harlem community allows campaigns like Kool Mixx to exist, we are sending the message that negative corporate elements can exploit not just Black culture, but youth and hip hop culture as well. Brown and Williamson's Kool Mixx hip hop campaign is irresponsible, and is not welcome in Harlem," said Chair of the Harlem Tobacco Community Action Board Courtney A. Bennett.

"B&W; agreed not to engage in this type of marketing when they signed the MSA, and that agreement was made part of a court order. Every teenager who becomes a smoker because they are attracted by the Kool MIXX advertising campaign is likely to be faced with a lifetime of addiction and disease, and it is essential that we move aggressively and severely punish these egregious actions, Spitzer said."

 

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Huffy Recalls Cranbrook Bicycles Sold at Wal-Mart

Huffy Recalls Cranbrook Bicycles Sold at Wal-Mart...

June 16, 2004
About 12,000 Huffy Cranbrook bicycles are being recalled. The handlebar could unexpectedly loosen causing the rider to lose control.

The recall involves single-speed Cranbrook bicycles with 26-inch wheels. The bicycles were sold in both mens (model 56462) and ladies (model 56472) style frames. The name Cranbrook is printed on the frame of the bicycle. Serial numbers included in the recall range from SNHHE04C52556 to SNHHE04C64557. Serial numbers and model numbers are located on the bottom bracket of the frame, where the crank is attached to the bicycle.

The bikes were sold at Wal-Mart stores nationwide from April 2004 through May 2004 for about $80.

Consumers should stop using the bicycles and contact Huffy Bicycle to determine if the product is a part of the recall. Consumers will receive a free replacement handlebar and stem.

Consumer Contact: Call Huffy Bicycle toll-free at (888) 366-3828 between 8 a.m. and 4:30 p.m. ET Monday through Friday, or visit the firms Web site www.huffybikes.com.

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

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Arizona Sues Kirby Vacuum Distributors

Salesmen used deceptive methods, suit charges

Attorney General Goddard has filed suit against two independent field distributors who make in-home sales of Kirby vacuums for allegedly violating the Ariz...

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Ford Credit Owes Refund to 150,000 Lease Customers

More than 150,000 Ford customers may qualify for a $100 restitution check from Ford Credit

Ford Credit Owes Refund to 150,000 Lease Customers...

More than 150,000 Ford customers may qualify for a $100 restitution check from Ford Credit, following a settlement between Ford and 38 state Attorneys General, led by Illinois' Lisa Madigan and Florida Attorney General Charlie Crist.

In 1997, Ford Credit came under the scrutiny of investigators from the Illinois and Florida Attorneys General offices for its leasing practices, in connection with its Red Carpet lease plan. In this scheme, the dealerships allegedly packed extra fees into the early termination of vehicle leases when the lessee also was purchasing the vehicle at the time of the lease termination.

Investigators discovered that in some cases when the lessee bought a vehicle upon early termination, consumers were charged more than the actual balance owed on the lease.

The consumers caught in this scheme often werent aware that any fraud was being perpetrated against them, even after it had occurred, Madigan said. This settlement addresses fraudulent practices, eliminates future confusion and provides the appropriate redress for affected consumers, Madigan said.

The investigation revealed that at times dealers would discharge the lease obligation to Ford Credit, but keep the extra amount charged to consumers. Consumers were usually unaware of this scheme because the dealers not Ford Credit provide the payoff figure to the consumer.

As a result of this investigation, Ford has changed its Red Carpet lease contract language to clearly explain consumers rights when terminating a vehicle lease early and to include a toll-free number in the lease so that consumers can easily learn the correct payoff amount.

Consumers in the 38 states who participated in the Red Carpet lease plan, terminated the lease early and purchased the vehicle between 1991 and present may be eligible to receive a $100 restitution check from Ford Credit.

Customers of Ford Credit between 1991 and 1994 will receive direct notice of the settlement. Other consumers who also may be eligible to participate in the settlement should call 1-800-221-3312 or go online to www.gilardi.com.

 

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Experian, ConsumerInfo.Com Named in Class Action Suit

"Free" credit reports wound up costing $79

Experian, ConsumerInfo.Com Named in Class Action Suit...

A consumer class action lawsuit charges Experian and ConsumerInfo.com with misleading consumers into signing up for "free" credit reports that in fact cost $79 per year or more.

Kimberly Taylore of Tucson charges in the suit that in early 2003, she visited www.ConsumerInfo.com to obtain a "free" credit report for herself and her husband. She entered her debit card number as instructed but saw no notification that she would be charged for the report.

On June 25, 2003, Taylore said she found two charges of $79.95 each on her debit card statement, each labeled "CIC Credit Monitor Svc." She canceled her debit card and dispute the two $79.95 fees. She received a credit for one of the fees but not for the other.

Experian, the parent company of ConsumerInfo.com, is one of the "Big Three" national credit reporting agencies. ConsumerInfo.com, founded in 1995, advertises its services through more than 100 co-branded Web sites and more than 65,000 affiliates, according to the San Francisco Superior Court lawsuit.

Major sites promoting ConsumerInfo.com include Yahoo!, MSN, AOL, E-LOAN, Earthlink and Quicken.

"Defendants heavily advertise to consumers on the Internet that they offer 'Free!' credit reports," the suit charges. To obtain the "free" credit report, consumers must enter their credit or debit card number and agree to a "free" 30-day trial membership in the CreditCheck Monitoring Service.

"The overall impresson of the www.ConsumerInfo.com website offer ... is that accepting the 'Free' credit report creates no duty or obligation on behalf of the consumer," the suit charges, noting that the credit reports are advertised as "Free! Free! Free! and claim repeatedly that there is "no obligation or commitment."

In fact, Taylore's attorneys allege, consumers who accept the "free" service incur financial obligations of at least $79.95 through the use of the "negative option" marketing strategy, which requires that consumers cancel their "trial" membership before the 30-day trial period expires.

If the consumer does not contact Experian to cancel the CreditCheck service, the company automatically charges the consumer's credit or debit card for $79.95 and continues to do so annually if the consumer does not cancel the service.

The defendants' advertising and promotional materials fail to adequately disclose the charges, obligations and other terms of the "free" credit report, the complaint charges, in violation of California laws prohibiting unfair and fraudulent business practices and false advertising.

The suit asks the court to issue an injunction barring Experian and its affiliates from continuing the allegedly illegal practices and requiring that consumers be refunded all fees paid as a result of the unfair and misleading practices.

The suit was filed on behalf of Ms. Taylore by attorneys Eric Gibbs of San Francisco and Richard J. Doherty of Chicago. Similar class actions have been filed in other jurisdictions.



 

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Water Purification Company Faces Fraud Charges

False advertising, telemarketing violations among the allegations

PA's Bureau of Consumer Protection has filed a lawsuit against H20 Tech Inc., accusing them of false advertising, telemarketing violations and other illega...

Pennsylvia's Bureau of Consumer Protection has filed a lawsuit against a water purification company and its president, accusing them of false advertising, telemarketing violations and other illegal business practices. The suit follows an investigation into complaints from 23 consumers located in Pennsylvania and Ohio.

Pennsylvania Attorney General Jerry Pappert identified the defendants as H20 Tech Inc., doing business as Hague Quality Water of Pittsburgh and its president, Richard E. Boysen. They are accused of violating Pennsylvania's Unfair Trade Practices and Consumer Protection Law, and the Telemarketer Registration Act. The defendants filed for Chapter 7 Bankruptcy in September 2003.

According to investigators, the defendants through March 2003 engaged in telemarketing activities to sell their water purification systems. Consumers interested in the products agreed to an in-home presentation designed to explain the benefits of the products. The water systems consumers purchased ranged in price from $2,988 to $5,848.

During the sales presentations, consumers' tap water was tested for various conditions including "hardness" and the presence of chlorine. In each case, consumers were told by company representatives that their water had a high level of "hardness" and contained chemicals and substances that have been proven to be hazardous to their health.

"Consumers claimed that the defendants misrepresented the health benefits of their products to encourage sales," Pappert said. "For example, without scientific evidence, homeowners were told that the defendants' water treatment systems would help those who have Alzheimer's disease, acid reflux and dry skin. In reality, no test or research was done to substantiate those claims."

Pappert said other alleged misrepresentations included the defendants' claims that their water treatment systems were used by "every Children's Hospital, Red Lobster, McDonalds and Pizza Hut."

Consumers were also falsely told that the company designed its water filtration system for NASA. Still others said the defendants' claimed that Pepsi-Cola (Aquafina) and Coca-Cola (Dasani) use the defendants' water treatment systems in every plant worldwide to produce their bottled water products.

The defendants' sales presentation also included several years supply of free soap. Several consumers claimed that they failed to receive the soap products.

In addition to the alleged deceptive product claims, the suit accuses the defendants of:

• Failing to provide consumers with a "Buyers Right to Cancel" and notice of cancellation as required under state law for the sale of goods or services at a consumer's residence.
• Failing to honor its promise to issue refunds and remove the water filtration units if consumers canceled their contracts during the trial period.
• Violating the state's "Do Not Call" law by contacting consumers who names, addresses and telephone numbers were on the statewide "no call" registry.

Pending the outcome of the defendants' bankruptcy proceedings, the Commonwealth will attempt to seek restitution for consumers. The suit also asks the court to permanently bar the defendants from operating a water filtration company in the Commonwealth or any other business in violation of the Unfair Trade Practices and Consumer Protection Law.

 

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Low Staffing, High Turnover Blamed for Poor Nursing Home Care

Low Staffing, High Turnover Blamed for Poor Nursing Home Care...


A recent survey finds that more than one-third of California's freestanding nursing homes do not meet the state's minimum nurse staffing standards (3.2 hours or more per resident. The finding is one of several in a "snapshot" report prepared by the California HealthCare Foundation (CHCF).

The low staffing levels contributed to more than two-thirds of the staff in California's nursing homes leaving their jobs in 2002. Low staffing and high turnover rates were important contributing factors to poor quality care and a 38 percent increase in complaints between 2000 and 2002.

The CHCF report found that the most common clinical measures of poor quality -- weight loss, time spent in bed, and use of physical restraints -- continued to be serious problems in 2002.

"Low staffing led to 78 percent of nursing homes not complying with federal care and safety regulations during mandatory inspections," said the report's author, Charlene Harrington, Ph.D., School of Nursing, University of California, San Francisco. "An additional 11 percent of the nursing facilities were cited for very serious quality of care problems."

State monitoring by the Department of Health Services resulted in 43 percent of nursing homes receiving deficiencies (warnings for minor problems) and 26 percent receiving citations, which include fines and are indications of more serious violations.

Other findings in the report include:

• The number of facilities with inadequate staffing (according to state requirements) decreased from 46 to 37 percent between 2001 and 2002;
• 93 percent of nursing homes did not meet staffing ratio guidelines of 4.1 hours per resident, per day, recommended in a report to the Centers for Medicare and Medicaid Services; Annual nursing staff turnover rates ranged from 5 to 304 percent. The majority are nursing assistants who earn an average of $10.35 per hour;
• In 2002, 10 percent of nursing home residents experienced substantial weight loss; 9 percent were in bed all or most of the time, and 17 percent were placed in physical restraints;
• Nearly half of the state's nursing homes reported either no profit or a net loss in 2002, and 160 were in bankruptcy between 1999 and 2002;
•Among freestanding nursing homes that receive Medi-Cal reimbursement, the proportion of those that broke even or lost money grew by an average of 26 percent.

Non-profit nursing homes, representing just 18 percent of the state's total, faired better than for-profit facilities, which had:

• An average of 3.3 nursing hours per resident per day compared with 4.1 for nonprofits;
• Staff turnover rates of 70 percent, compared to 49 percent for nonprofits;
• 37 percent more violations than nonprofits.

The report found that in spite of an aging population (the number of residents aged 85 and over is expected to double by 2030) there is ample capacity in the state's 1,400 nursing homes. Occupancy has declined from 85.9 percent in 1991 to 80.9 percent in 2001.

"Nursing homes must do a better job of caring for the 110,000 Californians currently in their facilities, not to mention preparing for a rising tide of elderly citizens who deserve more," said Mark Smith, M.D., CHCF president and CEO.

"Nursing homes face difficult challenges -- low-paid staff, high turnover rates, low margins, and declining reimbursement from government agencies-but seniors deserve quality care and their families must have confidence that loved ones are in a safe environment."

Detailed information on every nursing home in the state-including quality ratings, staffing levels, and results of complaint and inspection visits-can be found at www.calnhs.org. The data is current as of May 2004.

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Wal-Mart to Pay $14.5 Million for California Gun Law Violations

Wal-Mart to Pay $14.5 Million for California Gun Law Violations...


Wal-Mart will pay more than $14 million to settle charges that it committed thousands of violations of California state gun safety laws between 2000 and 2003, including selling ammunition to minors and selling firearms to convicted felons.

California Attorney General Bill Lockyer said that under the settlement, Wal-Mart will pay $5 million in fines, submit to court-enforced compliance with all gun laws, and provide more than $4 million to fund state compliance checks, prevent the sale of ammunition to minors and educate the public on gun laws.

Wal-Marts failure to comply with gun safety laws put the lives of all Californians at risk by placing guns in the hands of criminals and other prohibited persons, Lockyer said.

Although Wal-Mart has suspended gun sales in California, this settlement will ensure that it follows state law if it renews sales and will also provide valuable public education about the importance of gun safety. I will continue to vigorously regulate all gun dealers in California to ensure compliance with the law - the health and safety of all Californians depends on it.

Lockyers lawsuit alleged that Wal-Mart engaged in unfair competition by committing thousands of violations at five separate stores. Among the laws Wal-Mart allegedly violated are:

• Selling and delivering firearms to 23 individuals the Attorney Generals Office had informed the store were prohibited from possessing firearms,
• Delivering firearms to 36 persons prohibited from possessing a firearm by means of a straw purchase to a relative or friend,
• Delivering firearms to persons prior to the completion of a criminal background check,
• Failing to verify the identity of purchasers through thumbprints and by scanning drivers licenses, and
• Failing to document that a firearm safety device, such as a trigger lock, was delivered with each firearm.

Lockyers lawsuit stems from a series of inspections, investigations and audits conducted between 1999 and 2004 that uncovered thousands of firearms law violations at numerous Wal-Mart stores.

Routine inspections by Firearms Division agents of Wal-Mart stores in 1999 and 2000 revealed numerous technical violations of state gun laws. In response, a special training program was provided by the Attorney General to Wal-Mart officials to ensure knowledge and compliance with state laws.

In September 2001, state agents inspected the Wal-Mart store in Pleasanton and again discovered numerous violations - including allowing buyers to claim firearms before background checks were completed and failing to conduct background checks on employees allowed to sell guns. Special training on gun law compliance was provided to Bay Area Wal-Mart stores.

Subsequent inspections in 2002 and 2003 revealed continued violations of law. As a result, the Firearms Division conducted an investigation of six Wal-Mart stores and identified hundreds of state gun law violations. The stores were located in Turlock, Merced, Los Banos, Madera and two in Sacramento.

After notifying Wal-Mart of the findings, in April 2003 the company voluntarily agreed to shut down firearms sales at all of its 114 store locations that sold guns in California.

Later in 2003, the Firearms Division completed a comprehensive audit of five randomly selected Wal-Mart stores in Folsom, Turlock, Fresno, Ukiah and Simi Valley. The audit uncovered 2,891 violations that occurred between 2000 and 2003; these violations served as part of the basis of the Attorney Generals lawsuit.

Among the most serious of the violations discovered by the Attorney General were 23 confirmed cases where Wal-Mart released a firearm to a prohibited person and 36 straw purchases (where an individual purchases a gun on behalf of a prohibited person).

Follow-up investigations by Firearms Division agents led to the successful recovery of 20 weapons sold to prohibited persons. With respect to the straw purchases, criminal charges have been filed against 20 different individuals and most of the firearms have either been recovered or confirmed to have been transferred to a non-prohibited person. Investigations regarding the outstanding prohibited person and straw-purchase cases remain ongoing.



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Free Annual Credit Reports Required by Next Year

FTC finalizes free annual credit report rule

The FTC has finalized the rule under which the three consumer credit agencies will provide consumers with a free yearly copy of their credit report upon re...

The Federal Trade Commission has finalized the rule under which the three consumer credit agencies will provide consumers with a free yearly copy of their credit report upon request.

Equifax, Experian, and Trans Union will be required to establish a centralized source for accepting consumer requests for free credit reports. This centralized source must include a dedicated Internet Web site, a toll-free telephone number, and a postal address.

The rule provides for a gradual, structured roll-out of the centralized source. The centralized source will become available in cumulative stages, over a period of nine months, rolling-out from west to east beginning December 1, 2004. The entire transition will be complete by September 1, 2005.

Consumers will become eligible on the following schedule:

  • Western states (Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming) will become eligible on December 1, 2004;
  • Midwestern states (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin) will become eligible on March 1, 2005;
  • Southern states (Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, and Texas ) will become eligible on June 1, 2005; and
  • Eastern states (Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia), Puerto Rico, and all U.S. territories will become eligible on September 1, 2005.

The rule also requires that the centralized source:

• Must have adequate capacity to accept requests from the reasonably anticipated volume of consumers making requests;
• May collect only as much personally identifiable information as necessary to process requests;
• Must provide clear and easily understandable information and instructions on how to make requests; and
• May not include any advertising or marketing that interferes with, detracts from, or undermines the purpose of the centralized source.

In addition, the final rule provides the credit reporting agencies with relief from the capacity requirements during times of unusually heavy request volume. In those circumstances, the agencies are permitted to place consumer requests in a queue for processing, or request that consumers return to the centralized source at a reasonable later time.

The rule also limits the use and disclosure of personally identifiable information collected through the centralized source. It provides that personally identifiable information can only be used to process the consumers request.

In addition, the final rule requires nationwide specialty credit agencies - those that maintain specific types of files on consumers, such as employment history, tenant history, medical records, and insurance claims - to maintain a toll-free telephone number through which consumers may request a free copy of their credit report once every 12 months.

The new procedure was mandated by Congress when it passed the Fair and Accurate Credit Transactions Act (FACTA) and by amendments to the Fair Credit Reporting Act (FCRA).

 

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Supreme Greens, Coral Calcium Daily Give FTC Indigestion

Falsely claimed products can cure cancer and other diseases, feds charge

Supreme Greens, Coral Calcium Daily Give FTC Indigestion...

The Federal Trade Commission has charged marketers of Supreme Greens with MSM and Coral Calcium Daily with falsely claiming that their products can prevent and cure cancer and other diseases. The supplements have been sold through two widely-aired infomercials.

The Supreme Greens infomercial promotes the supplement as a means to treat, cure, and prevent cancer and other diseases, and to cause significant weight loss, as well as being a safe for consumption by all, including pregnant women and persons on medication, the FTC charged. The Coral Calcium Daily infomercial touts the supplement as a means to treat and cure cancer and other diseases and as a superior form of calcium based on its purported bioavailability.

In its complaint, the FTC also charges that the infomercial presents itself as an independent television program rather than a paid program-length commercial. Also, the promoters are accused of charging consumers credit cards for automatic product shipments without authorization.

The FTC is seeking a temporary restraining order against the marketers of Supreme Greens, and is seeking permanent injunctive relief, including redress to consumers who purchased the products, against the marketers of both products.

Supreme Greens

According to the FTC, the promoters began marketing Supreme Greens in August 2003 through a nationally disseminated infomercial featuring Donald Barrett and Alejandro Guerrero. The infomercial promoted Supreme Greens as an effective treatment to cure or prevent cancer, heart disease, diabetes, and arthritis.

The FTC also alleges that the defendants claimed Supreme Greens will cause significant weight loss of up to four pounds a week and up to 80 pounds in eight months, and that the product is safe for everyone, including pregnant women, children, and persons on medication.

The FTC has asked the court to enter a temporary restraining order against the Supreme Greens defendants to prohibit them from making the challenged claims. The Commission also has asked the court to freeze the assets of the promoters and to appoint a temporary receiver.

Coral Calcium Daily

The FTCs complaint also alleges that the promoters marketed Coral Calcium Daily to consumers throughout the United States beginning in 2002. Coral Calcium Daily is a dietary supplement that purportedly contains a form of calcium derived from marine coral.

According to the FTC, the defendants promoted the product through a nationally televised infomercial featuring Kevin Trudeau and Robert Barefoot, whom the FTC sued in June 2003 in connection with an infomercial promoting another coral calcium product.

The Coral Calcium Daily infomercial aired on national cable networks such as PAX Television, Womens Entertainment, and the Food Network. The defendants also advertised in free-standing newspaper inserts, and sold the product through retail outlets such as CVS, Rite Aid, and Walgreens.

According to the FTC, the defendants promoted Coral Calcium Daily as an effective means to prevent, treat, and cure cancer, heart disease, and various degenerative and autoimmune diseases including multiple sclerosis, lupus, and Parkinsons disease.

In addition, the FTC alleges that the defendants had no basis for their claims that Coral Calcium Daily was superior to other calcium supplements in terms of the amount of calcium absorbed by the body and the speed of that absorption, and that the defendants had no basis for claiming that scientific research published in the Journal of the American Medical Association and the New England Journal of Medicine proves that calcium supplements are able to prevent, reverse, or cure cancer in humans.

The FTC alleges that the defendants health benefit and superior bioavailability claims for Coral Calcium Daily are false and/or unsubstantiated.

In a related action, on April 19, 2004, the Food and Drug Administration (FDA) sent a warning letter to the promoters, stating that labeling for the firms dietary supplement product Supreme Greens with MSM, including a brochure and customer letter included when the product was ordered caused the product to be out of compliance with the provisions of the Federal Food, Drug, and Cosmetic Act.

The brochure and letter contained unsubstantiated claims about the products benefits such as [n]atural weight loss, balance the bodys pH, and neutralize acidity...heartburn, acid-reflux.

In addition, disease claims were made on the firms website. For example, the product claimed it helped thousands of people with cancer, diabetes, arthritis, lupus, fibromyalgia, chronic fatigue syndrome.... The claims cause the product to be an unapproved new drug. Subsequently, a response from the firms attorneys stated that they intend to remove all the violative claims.

Defendants include Boston-area marketers Direct Marketing Concepts, Inc., ITV Direct, Inc. and Donald Barrett, along with their business partners, California corporations Healthy Solutions, LLC and Health Solutions, Inc., and their principals Alejandro Guerrero (a.k.a. Alex Guerrero), Michael Howell, and Greg Geremesz; and Wayne, Pennsylvania-based Triad ML Marketing, Inc., King Media, Inc., and Allen Stern.

 

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KFC's Low-Fat Claims Don't Fly

The Commission also charged the company with making false claims that its fried chicken is compatible with certain popular weight-loss programs. ...

June 3, 2004
Fried chicken a low-fat food? The Federal Trade Commission thinks not. It charged KFC Corporation, owner of the Kentucky Fried Chicken chain, with making false claims about the nutritional value and healthiness of its chicken in a national television ad campaign.

The Commission also charged the company with making false claims that its fried chicken is compatible with certain popular weight-loss programs.

In a proposed settlement, which does not include a fine, the company will stop making these or similar claims about the nutritional value, weight-loss benefits, or other health benefits of its chicken products and meals unless it substantiate the claims.

Todays action signals food advertisers that the FTC will not tolerate misleading advertisements to consumers who are trying to eat healthier and watch their weight, warned FTC Chairman Timothy J. Muris. More than ever before, todays consumers need truthful information about diet and health in food marketing. Consumers want healthier menu options, and many of the national fast food chains are responding. For consumers to obtain healthier choices, we must make sure that companies promote their products honestly, added Chairman Muris.

The FTCs complaint charged KFC with making false claims that eating KFC fried chicken, specifically two Original Recipe fried chicken breasts, is better for a consumers health than eating a Burger King Whopper.

One ad featured a woman putting a bucket of KFC fried chicken down in front of her husband and announcing, Remember how we talked about eating better? Well, it starts today! The ad then states that Two KFC breasts have less fat than a BK Whopper.

Although it is true that the two fried chicken breasts have slightly less total fat and saturated fat than a Whopper, they have more than three times the trans fat and cholesterol, more than twice the sodium, and more calories.

A second ad, the complaint charges, falsely claims that eating KFC fried chicken is compatible with low carbohydrate weight-loss programs. The ad depicts a man surprised when he recognizes a friend who is sitting on the tailgate of a truck eating KFC fried chicken.

Jack? the first asks, Is that you? Man, you look fantastic! What the heck you been doing!? Eatin chicken, Jack replies.

The announcer states, One Original Recipe chicken breast has just 11 grams of carbohydrates and packs 40 grams of protein. So if youre watching carbs and going high-protein, go KFC. The claim is false, the FTC says, because low carbohydrate weight-loss programs such as the Atkins Diet and the South Beach Diet specifically advise against eating breaded, fried foods.

The FTC is not endorsing any particular diet program. Consumers should choose an approach to managing their weight that works for them. But they cannot succeed if they make choices based on bad information, said Muris.

The settlement prohibits KFC from claiming that eating its fried chicken is better for a consumers health than eating a Burger King Whopper, or that its fried chicken is compatible with low-carbohydrate weight-loss programs, unless it substantiates the claim with competent and reliable evidence, including scientific evidence when appropriate.

The settlement also prohibits KFC from making any other claim about the amount of fat or other nutrients in its chicken products; the compatibility of its chicken products with any weight-loss program; or any other health benefit, unless the company substantiates the claim with competent and reliable evidence, including scientific evidence when appropriate.

The FTC has been engaged on several fronts to improve access to information about the calorie content and other health consequences of the foods consumers eat. For example, the FTC has provided its support to FDAs food labeling initiative on qualified health claims, which affords food companies more flexibility to discuss emerging areas of nutrition research.

And, as part of a government-wide effort to combat the nations rising obesity rates, the FTC also has joined forces with the Food and Drug Administration to create regulatory policies that will ensure that food labels offer accurate and more complete information about the calorie content of foods.

As food companies create lower-calorie, healthier options for consumers, they should be able to communicate these improvements to the consumer. At the same time, we will police the marketplace to ensure the information is truthful, accurate, and not misleading, Muris said.

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Jury Awards Ford Explorer Rollover Victim $369 Million

Jury Awards Ford Explorer Rollover Victim $369 Million...

June 3, 2004
A San Diego jury has awarded a woman paralyzed in a Ford Explorer rollover $246 million in punitive damages, in addition to $122 million in compensatory damages. It is the first of about a dozen Explorer rollover cases that Ford has lost.

Plaintiff Benetta Buell-Wilson, 49, had asked for up to $27 million in compensatory damages. Instead the jury awarded her a total of $369 million. She has offered to waive $100 million of the punitive damages if Ford agrees to recall Explorers made between 1990 and 2001 to fix roof defects in those models.

Ford is likely to file motions to have the jury awards set aside. It could also try to negotiate a lower settlement with the plaintiff.

Buell-Wilson's lawyers argued that Ford had ignored the advice of its own engineers and designed the Explorer with safety flaws that made it prone to roll over.

Jurors hugged Buell-Wilson as they left the courtroom after the trial, press reports said. One juror said the evidence proved that Ford went out of its way to deceive the public on the safety of the Explorer.

Buell-Wilson was injured in January 2002. She was driving her 1997 Explorer on Interstate 8 when she swerved to avoid an object in the roadway. The Explorer tipped up on two wheels and rolled over. The roof caved in, breaking her back and leaving her paralyzed from the waist down. Her attorney said she is in constant pain.

Explorers made between 1990 and 2001 have a high center of gravity and a narrow wheel base, making them susceptible to rollovers during sharp maneuvers, said her attorney, Lou Arnell.

Buell-Wilson said that when she bought her Explorer she told the dealer that safety was her No. 1 concern.

"They said it was a very safe car," she testified.

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New Scam Uses Counterfeit Checks

Watch out for cashiers checks greater than the purchase price

Consumers beware of online scammers buying items with counterfeit cashier's checks greater than the purchase price and asking sellers to return the differe...

Consumers should watch out for a scam in which swindlers buy items on the Internet with counterfeit cashier's checks greater than the purchase price and then ask sellers to return the difference. The bogus check bounces, leaving the seller owing the bank the entire amount.

The scam artists, usually from overseas, typically target online sellers of expensive items, such as cars. In a variation of the scam, consumers receive calls telling them they have won a large prize and telling them to remit part of a cashier's check to pay expenses.

"Consumers selling items on line should immediately reject offers to pay with cashier's checks greater than the agreed-upon price," said Connecticut Attorney General Richard Blumenthal, whose office uncovered the scam.

"These seemingly simple transactions are scams intended to relieve sellers of their cash. A buyer or business has no legal or legitimate reason to send a check larger than the sale price," Blumenthal said. "Alarm bells should go off the moment someone from overseas offers to pay with a cashier's check. Wiring cash from a cashier's check will line the scam artist's pocket while picking yours."

Phony buyers sometimes offer explanations for the cashier's check being greater than the purchase price. The purchaser may claim the check was mistakenly made out for a greater amount, is a refund from an unrelated transaction, or includes transportation or import/export fees that need to be refunded. The scam artists typically ask the seller to wire money to a foreign country via Western Union.

In another scenario, the swindler claims that he has to pull out of the deal because of a tragic accident or other unforeseen circumstance and asks for a refund of the cashier's check. He may even offer to let the consumer keep a small amount of the payment as compensation for the inconvenience.

Steps consumers can take to avoid such scams include:

• Read all alerts related to Internet sales.
• Be wary of prospective buyers who send e-mails from overseas, want to pay more than the purchase price and ask pay by cashier's check but then cancel the transaction and ask for a refund.
• Do not assume that the cashier's check has cleared and is not counterfeit even if your bank says that funds are avialable.
• Do not withdraw cash or write checks on any cashier's check until the check has cleared, and there is no risk that you will have to reimburse the bank.
• Check with the bank which issued the cashier's check. Aask if it has had problems with counterfeit cashier's checks.

If you are the victim of a counterfeit check cashing scam, submit your complaint to FDIC's Special Activities Section, 550 17th St., NW, Room F-4040, Washington, D.C. 20429, or send your information electronically to alert@fdic.gov.



 

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Glaxo Misled Doctors About Safety of Paxil, NY Charges

Company concealed important information about the safety and efficacy of an anti-depressant drug, state charges

Glaxo Misled Doctors About Safety of Paxil, NY Charges...

New York State Attorney General Eliot Spitzer has filed a lawsuit against one of the world's leading pharmaceutical companies for concealing important information about the safety and efficacy of an anti-depressant drug.

The lawsuit, filed today in New York State Supreme Court in Manhattan, alleges that GlaxoSmithKline (GSK) engaged in repeated and persistent fraud by concealing and failing to disclose to physicians information about Paxil, a drug used to treat depression. Paxil has been approved by the FDA for the treatment of depression in adults, but not in children.

Prozac is the only antidepressant that has been approved to treat depression in children. Physicians, however, have professional discretion to prescribe Paxil for treatment in children, a so-called "off-label" use.

"Doctors should have access to all scientifically sound information so that they can prescribe appropriate medication for their patients," Spitzer said. "By concealing critically important scientific studies on Paxil, GSK impaired doctors' ability to make the appropriate prescribing decision for their patients and may have jeopardized their health and safety."

The lawsuit alleges that, starting in 1998, GSK engaged in a concerted effort to withhold negative information concerning Paxil and misrepresented data concerning Paxil's safety and efficacy when prescribed for depression in children and adolescents.

Specifically, GSK conducted at least five studies on the use of Paxil in children and adolescents. However, GSK only published and disseminated one of these studies, which showed mixed results on efficacy. The lawsuit alleges that the company suppressed the negative results of the other studies, which failed to demonstrate that Paxil is effective and which suggested a possible increased risk of suicidal thinking and acts. GSK is also alleged to have failed to disclose this information in "Medical Information Letters" that it sent to physicians.

An internal GSK document from 1998 shows that GSK intended to "manage the dissemination of (the) data in order to minimize any potential negative commercial impact."

The lawsuit also alleges that GSK misrepresented the results of its research on Paxil as a treatment for children and adolescents to its sales representatives who promote Paxil to physicians. The company portrayed the drug as having "remarkable efficacy and safety in the treatment of adolescent depression."

In fact, GSK's studies did not demonstrate that Paxil is effective in treating children and adolescents with major depressive disorder and showed the possibility of increased risk of suicidal thoughts and acts in adolescents. In documents submitted to the FDA and similar agencies in the United Kingdom and Europe, GSK admitted that its studies "all failed to separate [Paxil] from placebo overall and so do not provide strong evidence of efficacy in this indication."

Through these and other acts, GSK deprived physicians of the information they needed to evaluate the risks and benefits of prescribing Paxil for children and adolescents and deprived these youngsters of the benefit of their physicians' professional judgment.

The lawsuit seeks disgorgement of all profits obtained by GSK as a result of the conduct alleged in the suit.

Barry Perlman, M.D., President of the New York State Psychiatric Association, said: "The relationship between a doctor and a patient must be based on a sense of trust. In order to hold true to that principle, physicians must have access to all relevant medical information regarding treatment. Any obstacle placed in the way of full and complete communication with our patients undermines the trust upon which the doctor-patient relationship is based and prevents us from providing the best care we can to our patients."

Arthur Levin, Executive Director, Center for Medical Consumers, said: "The fact is that published drug studies are hugely biased towards good news - the drug works and is safe - and that studies reaching the opposite conclusion are likely never to see the light of day. The ability of drug companies to pick and choose the research they provide doctors in support of their product is an outrageous conflict of interest and puts us all in harm's way."

More than two million prescriptions for Paxil were written for children and adolescents in the United States in 2002. Nearly 900,000 of these prescriptions were for youngsters whose primary diagnosis was a mood disorder, the most common of which is depression. Prescriptions for Paxil to treat mood disorders in children and adolescents translated into US sales for GSK of approximately $55 million in 2002 alone.

In the last year, the use of Paxil for children and adolescents for the treatment of major depressive disorder has come under scrutiny by the FDA and regulatory agencies in the UK, Ireland, Europe and Canada. The FDA has advised caution in prescribing Paxil in children and adolescents for the treatment of major depressive disorder and is currently conducting an analysis of the data related to the use of Paxil and the possibility of increased suicidal thoughts. Regulatory agencies in the UK, Europe, Ireland and Canada have recommended that Paxil not be prescribed for adolescents and children with depression.

GSK is based in the United Kingdom with subsidiaries in the United States and several other nations.

 

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