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    Feds Weigh In Against Thermalean Promoters

    The Federal Trade Commission has charged three related dietary supplement companies located in Norcross, Georgia, and a physician with deceiving consumers through deceptive advertising for their weight-loss and erectile dysfunction products.

    The Commissions complaint alleges that the defendants made deceptive claims about the effectiveness and safety of Thermalean and Lipodrene, purported weight-loss products with ephedra, and Spontane-ES, a purported erectile dysfunction product with yohimbine.

    The FTC filed charges against National Urological Group, Inc.; National Institute for Clinical Weight Loss, Inc.; Hi-Tech Pharmaceuticals, Inc.; Jared Wheat; Thomasz Holda; Stephen Smith; Michael Howell; and Dr. Terrill Mark Wright.

    The case is part of the agencys ongoing effort to combat deceptive claims for dietary supplements that purport to enable obese or overweight consumers to lose substantial amounts of weight safely.

    Weight Loss Claims

    According to the FTCs complaint, the defendants direct mail and Internet advertisements contained false and unsubstantiated efficacy and safety claims for the weight-loss products Thermalean and Lipodrene.

    The central theme of the Thermalean advertising campaign was that the product was an effective treatment for obesity, and that it combined the weight-loss benefits of three different prescription drugs. Consumers paid $80 for a two-month supply of Thermalean. The defendants promoted Lipodrene as a dietary supplement that had undergone substantial clinical testing proving that it enabled consumers to lose large amounts of weight safely. Consumers paid about $30 for a one-month supply of Lipodrene. The active ingredient in Thermalean and Lipodrene was ephedra.

    The FTC has alleged that, contrary to the defendants claims, dietary supplements with ephedra do not cause substantial, long-term weight loss, and create safety risks because they increase blood pressure and stress the circulatory system.

    In April 2004, the U.S. Food and Drug Administration (FDA) banned sales of dietary supplements with ephedra because they pose an unreasonable risk of illness or injury. The defendants have not advertised or sold Thermalean or Lipodrene containing ephedra since the FDA prohibited the sale of dietary supplements containing ephedra.

    Erectile Dysfunction Claims

    The FTCs complaint also alleges that the defendants represented that Spontane-ES, a dietary supplement with yohimbine, was effective in treating erectile dysfunction in 90 percent of users and Spontane-ES was safe. Consumers paid about $100 for a 60-count bottle of Spontane-ES.

    The Commission challenged the defendants specific 90 percent efficacy claims as unsubstantiated. The FTC also alleged that their safety claim for Spontane-ES was unsubstantiated, because yohimbine creates safety risks by significantly raising blood pressure and interacting adversely with certain medications, such as beta-blockers that are used to treat heart disease.

    The defendants, according to the FTC, made further deceptive claims to reinforce the efficacy and safety claims they were making for their products. The FTC also alleged that ads for Thermalean contained several deceptive claims made by Dr. Wright, who is named in the complaint.

    In addition, the defendants allegedly made the false claim in ads that Warner Laboratories and the National Institute for Clinical Weight Loss were legitimate research or medical facilities engaged in the scientific or medical research and testing of their products.

    The FTC complaint seeks injunctive and other equitable relief including, but not limited to, consumer redress, restitution, and disgorgement of ill-gotten gains.

    FTC charged 3 related dietary supplement companies, and a physician with deceiving consumers through deceptive advertising for their weight-loss and erecti...

    FDA Opens Baycol Probe

    Agency Feeling the Heat after Vioxx Withdrawal

    The Food and Drug Administration (FDA) has launched a review of Bayer's August 2001 withdrawal of Baycol from the market, following reports that the drug company knew of serious risks associated with the drug but failed to inform the FDA promptly.

    The FDA has been under growing scrutiny since a series of articles in last week's Journal of the American Medical Association (JAMA), including a report of a new study which found that Baycol's risks were far worse than had been believed at the time Bayer withdrew the statin drug, taken to lower cholesterol.

    The JAMA articles linked Baycol to at least 31 deaths involving a fatal muscle disorder called rhabdomyolysis. One article, written by University of Washington medical professor Bruce Psaty alleged that Bayer was aware of the risks of Baycol within months of its launch in February 1998, more than three years before it was withdrawn.

    By the time Baycol was removed from the market, the estimated number of cases of rhabdomyolysis had reached the tens of thousands, one of the JAMA articles said. As of this fall, Bayer has settled 2,861 lawsuits involving Baycol.

    The company says it has paid $1.1 billion so far, without admitting liability, in out-of-court settlements of cases related to Baycol side effects. Some 7,169 cases are still pending.

    An FDA official said last week that if Psaty's charges are true, the FDA would take it "extremely seriously." Steven Galson, acting director of FDA's Center for Drug Evaluation and Research, said the agency would have its criminal investigators look into the allegations.

    "Right now, we don't really know whether that's true or not. We read about it in this level of detail for the first time" in the JAMA article, Galson said in a C-SPAN appearance last week.

    "Bayer kept FDA fully informed about all pertinent safety information, including adverse event reports," a company statement said. "Indeed, an FDA audit of Bayer's post-marketing practices during the time Baycol was on the market demonstrated no deficiencies."

    The articles follow concern about FDA's role in the recent voluntary market withdrawal of Vioxx, a COX-2 inhibitor manufactured by Merck that has been linked to increased cardiac risks.

    With increasing pressure on Congress to beef up drug safety enforcement, it's increasingly likely a separate agency will be created to police drugs after they have been approved.

    Sen. Edward Kennedy (D-Mass.), who is drafting drug safety legislation, predicted that reform bills would receive "bipartisan support," noting that "the FDA gold standard has been tarnished," The New York Times reported.

    FDA Opens Baycol Probe; Agency Feeling the Heat after Vioxx Withdrawal...

    Missouri Sues Water "Purification" Company

    Missouri Attorney General Jay Nixon is suing the owners of Hague Quality Water of the Ozarks

    Missouri Attorney General Jay Nixon is suing the owners of Hague Quality Water of the Ozarks for repeatedly violating Missouris consumer protection laws in the sale of its water systems.

    Nixon is seeking at least $55,000 in restitution for consumers who say representatives of Hague falsely promised them the water treatment system would improve their familys health, save water and give them other benefits. Nixons lawsuit says the misrepresentations violate Missouri law.

    "This company pours out promises it knows it will not deliver," Nixon says. "We want an immediate end to this deception, and repayment for all of the families taken by the companys well-rehearsed lines."

    Eleven consumers from throughout Missouri have complained to the Attorney General about problems with the defendants. Hague Quality Water has offices in Republic and Joplin, and previously had an office in Columbia.

    The suit states that since at least August 2002, Hague Quality Water of the Ozarks has advertised, offered and sold water treatment systems to Missouri consumers. Hague sales representatives go to consumers homes and give presentations that usually last more than two hours.

    During the presentation, they "test" the consumers tap water for various conditions including "hardness" and the presence of chlorine. Hagues sales representatives then tell the consumers their tap water is hard and contains chemicals and substances that have been proven hazardous to their health.

    The consumers are told the Hague water treatment system, which costs several thousand dollars, will alleviate these problems.

    According to the lawsuit, Hague sales representatives gave at least one consumer articles on how the water treatment system would improve the asthma and eczema of the consumers son. The consumer bought the water treatment system based on this information. To date, the consumers son has not experienced any improvement. Nixon says this misrepresentation violates the law.

    Another of Hagues deceptive practices involves financing. Hague sales representatives routinely tell consumers they will help them obtain financing to pay for the water treatment system, and if the consumers make payments of $99 a month the system will be paid for in four or five years. The lawsuit says that some customers end up getting financing at an interest rate which does not allow them to pay off the system in four or five years, as they were promised. They do not learn this until they receive their first bill.

    According to the lawsuit, Hague also fails to comply with Missouris law that gives buyers a three-day right of rescission. This law states that consumers must be told they have three days to terminate their contract after an in-home sales presentation. Many Hague customers are not told about this. Others are told they have until installation to terminate the transaction. One consumer was told Hague offered a 60-day trial period.

    Consumers who tried to cancel the contract based on the time frame specified by Hague employees have been denied cancellation. They were told they were only entitled to a three-day right of rescission, regardless of what was said during the sales presentation.

    Nixon is seeking a permanent injunction that bars Hague Quality Water of the Ozarks and its employees from further unlawful, unfair and deceptive acts. The Attorney General is seeking full restitution for all consumers who have been taken by the deceptive practices named in the lawsuit. Nixon also is seeking a civil penalty of $1,000 per violation and payment of court and investigative costs.

    Missouri Attorney General is suing the owners of Hague Quality Water of the Ozarks for repeatedly violating Missouris consumer protection laws in the sale ...

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      FDA Clears New MS Treatment

      The Food and Drug Administration has licensed a new biologic approach to treat patients with relapsing forms of multiple sclerosis

      The Food and Drug Administration has licensed a new biologic approach to treat patients with relapsing forms of multiple sclerosis (MS) to reduce the frequency of symptom flare-ups or exacerbations of the disease. MS is a chronic, often disabling disease of the brain and spinal cord.

      Natalizumab, the new product, is a monoclonal antibody bioengineered from part of a mouse antibody to closely resemble a human antibody. It is being marketed under the tradename Tysabri. The product is given intravenously once a month in a physician's office.

      According to the Multiple Sclerosis Association of America, approximately 350,000 individuals have been diagnosed with MS in the U.S., with an estimated 10,000 new cases diagnosed each year. The most common form of MS at the time of initial diagnosis is a relapsing-remitting form, in which acute symptoms or worsening of neurologic function, referred to as "relapses," "attacks," or "exacerbations," occur intermittently. The symptoms can diminish or disappear for months or years between relapses.

      Although the cause of MS is unknown, it is widely considered to be an autoimmune disease in which the person's immune system attacks the brain and/or spinal cord. Tysabri appears to work by binding to these immune system cells, thus preventing them from traveling to the brain where they can cause damage.

      Antibodies are proteins produced by a person's immune system to fight foreign substances, such as infections. Monoclonal antibodies, such as natalizumab, can be produced in large quantities in cell culture in a laboratory setting. They can be designed to bind to proteins on the body's normal cells. By recognizing and attaching to these proteins, monoclonal antibodies can interfere with (or alter) normal or abnormal cellular responses. In this way, monoclonal antibodies may be useful in the treatment of certain diseases such as MS.

      "This innovative treatment for multiple sclerosis represents a new approach to treating MS -- exciting news for patients with this serious disease," said Dr. Lester M. Crawford, Acting FDA Commissioner. "While we eagerly await long-term results from ongoing clinical trials, we have reason to believe that Tysabri will significantly reduce relapses in MS."

      The FDA said approval of Tysabri is based on positive results seen in patients after one year of treatment. The agency said the product received accelerated approval because it appears to provide substantial benefit for patients with a serious disease. As part of that approval, the manufacturer has committed to continuing its trials of this product for another year.

      Tysabri was evaluated for safety and efficacy in two ongoing randomized, double-blind, placebo-controlled trials in patients with relapsing forms of MS. In the first clinical trial of the product's safety and efficacy, the drug reduced the frequency of relapses by 66 percent relative to placebo.

      In a second trial, patients who had been treated with Avonex (interferon beta-1a), an approved treatment for MS, but who had experienced one or more relapses while on Avonex, were randomized to receive Tysabri or placebo. Avonex was continued throughout the study for both groups. In this trial, natalizumab reduced the frequency of relapses by 54 percent relative to placebo.

      The most frequently reported serious adverse reactions were infections, including pneumonia, temporary hypersensitivity reactions (such as rash, fever, low blood pressure, and chest pain), depression, and gallstones. These serious adverse reactions were uncommon.

      Common adverse reactions were generally mild and included non-serious infections such as urinary tract, lower respiratory tract, GI system, and vaginal infections, headache, depression, joint pains, and menstrual disorders.

      Tysabri is marketed by Biogen Idec, Inc., of Cambridge, Massachusetts, and Elan Pharmaceuticals, Inc., of Dublin, Ireland.

      FDA Clears New MS Treatment...

      Study: Nursing Home Residents Dying Of Hunger, Thirst

      Residents of America's nursing homes die every day, but health officials are wondering how many of those deaths could be prevented with improvements in simple, basic care. Some suggest many deaths occur because caregivers don't have the time or experience to properly look after residents.

      According to an investigation by the Detroit News, many of the deaths occur because residents either don't eat enough food or drink enough liquids.

      Nationwide, malnutrition and dehydration killed at least 13,890 nursing home residents between 1999 and 2002, the most recent year for which numbers are available, federal health records show. Those conditions contributed to the deaths of about 68,000 others.

      While some of those deaths probably would not have been prevented even with the best of care, analysis of medical records and government inspection reports suggest many could have been, and it's leading to calls for Congressional action. Sen. Ron Wyden, D-OR, a long-term care advocate who sits on the Senate committee on aging, says there's no reason any nursing home resident should die because of diet.

      "America is at ground zero in its fight against [nursing home] malnutrition," he said. "Today, we begin an effort that can improve the health and lives of hundreds of thousands of older Americans."

      Wyden said it was "morally repugnant" that nursing home residents are malnourished, particularly in a country with abundant wealth and resources.

      Nursing home Industry executives maintain that malnutrition and dehydration - and the deaths they cause - are almost always natural progressions of the chronic diseases that put patients in nursing homes in the first place.

      "This is an active stage of dying and not necessarily something people should be alarmed with," said Reginald Carter, president and chief executive of the Health Care Association of Michigan, which represents more than 400 long-term care facilities.

      But a study by the Commonwealth Fund suggests there's more to it than that. The study says at least a third of the 1.6 million nursing home residents in the United States may suffer from malnutrition or dehydration, conditions that can aggravate or cause more severe medical problems and hasten death. That suggests a more systemic problem. More importantly, the study says the problem can be corrected.

      "Much of this problem could be alleviated by increasing the number of overall staff and trained professional nurses at nursing homes so they can make sure residents are getting enough to eat and drink," said Sarah Greene Burger, executive director of the National Citizens' Coalition for Nursing Home Reform and lead author of the study.

      Chronic conditions such as depression and cognitive impairment, and the side effects of treatments for these conditions, are also a major factor. Residents suffering from depression, for example, are more likely to experience weight loss, the study says. Another obstacle to good nutrition is that nursing home residents commonly have a limited choice in what they eat, with their cultural and ethnic food preferences frequently ignored. Poor dental health also contributes to inadequate nutritional intake.

      "Malnutrition, dehydration, and weight loss in nursing homes constitute one of the largest silent epidemics in this country," said Karen Davis, president of The Commonwealth Fund. "As this report suggests, we can address this problem by promoting changes in public policy, seeking creative solutions from providers and professionals, undertaking further research on key issues, and enforcing existing standards."

      Study: Nursing Home Residents Dying Of Hunger, Thirst...

      Feds Raid Ephedra Warehouse

      Apparently not all marketers have gotten the word that the government has banned ephedra in dietary supplements. The Food and Drug Administration says its taking action against a Texas firm that it says sells dietary supplements with ephedrine alkaloids, marketed as a treatment for serious diseases and conditions.

      "We are once again sending a message that HHS and the FDA will not tolerate the marketing of dietary supplements that are more likely to harm health than help it," said HHS Secretary Tommy G. Thompson.

      The complaint, filed by the United States Attorney for the Southern District of Texas in U.S. District Court in Houston, charges that VITERA-XT, an ephedra-containing dietary supplement marketed by Houston-based Asia MedLabs, Inc., is an adulterated food as well as an unapproved and misbranded drug, which present an unreasonable risk of illness or injury.

      At FDA's request, Asia MedLabs' supply of VITERA-XT was embargoed by the Texas Department of State Health Services prior to the filing of the enforcement action.

      U.S. Marshalls armed with a warrant seized more than 2.1 million VITERA-XT capsules in the possession of Asia MedLabs, Inc. located on the 9100 block of Winkler Drive in Houston, Texas. Of the total, one million were as-yet unpackaged capsules; the remainder were contained in more than 14,000 labeled bottles.

      "We've issued a rule banning ephedra-containing products and we're sparing no effort to stop their manufacture and distribution. If any of these dietary supplements are still on the store shelves, I urge the retailers to stop selling them immediately," said Acting Commissioner of the Food and Drug Administration, Dr. Lester M. Crawford.

      In December 2003, the FDA informed manufacturers of dietary supplements containing ephedra, including MaxLabs, Inc., located at the same address and under the same ownership as Asia MedLabs, that products would be considered adulterated under a forthcoming rule banning ephedra-containing dietary supplements. FDA's ephedra ban was published in February and took effect in April of this year.

      Although the product, VITERA-XT, is labeled as a "traditional Asian herbal formulation," the government says the product is still considered a dietary supplement, based on FDA regulations, because its label included a panel with "Supplement Facts" and the dietary supplement disclaimer.

      In addition, the civil complaint alleges, that VITERA-XT, contains ephedrine alkaloids, thereby making it an adulterated food. Moreover, Asia MedLabs's Internet website has made medical claims, including "treat[s]... persistent flu, fevers, and [may be used] for poison release ..., treat[s] allergies, especially, allergic rhinitis ..., treat[s] heart muscle ailments ..., [and] expands cardiac vessels to prevent the ischemic injury of myocardium and relieves the symptoms of angina pectoris." In making these medical claims the civil complaint alleges VITERA-XT is considered an unapproved new and misbranded drug.

      Ephedra, also called Ma Huang, is a source of ephedrine alkaloids that, when chemically synthesized, are regulated as drugs. FDA has warned consumers against the use of dietary supplements containing ephedra since June, 1997, and banned these products after research confirmed that ephedrine alkaloids raise blood pressure and otherwise stress the circulatory system.

      FDA's enforcement efforts have focused on manufacturers and major distributors of ephedra-containing dietary supplements. As a result, two firms have voluntarily destroyed more than a quarter of a million dollars worth of these dietary supplements and several others have removed ephedra products from the market.

      Feds Raid Ephedra Warehouse...

      Travel Promoters Scammed Seniors, Illinois Charges

      Made false claims about free trips, state charges

      Illinois Attorney General Lisa Madigan has filed suit in Cook County Circuit Court against an Indiana man and his Illinois cohort for allegedly luring consumers to flashy travel club sales presentations and then misleading them with false claims about free trips and features of a travel membership club that was anything but a bargain.

      The two defendants made their way across the Midwest, renting hotel conference rooms or ballrooms to lure would-be travelers to their promotional performances. At least half of the consumers who complained were seniors who likely were planning to travel during their retirement years. All of the 23 complaints were made by couples who purchased the packages together.

      Madigans consumer fraud lawsuit alleges American Travel and Management, LLC, of Dyer, Indiana, company manager Kevin B. Raines of Crown Point, Indiana, and Francine M. Bauer of McHenry, an agent of the firm, traveled from town to town setting up one-day travel club sales presentations and leaving local consumers with little more than a packet of deception and misrepresentations.

      Madigans office alleges that after the defendants had left town, consumers found the free trips they had signed up for would actually cost them hundreds or thousands of dollars.

      Raines and Bauer allegedly took these consumers on a trip, but it certainly was no vacation, Madigan said. Many of these couples no doubt worked hard for years to enjoy travel in their retirement, but they were deceived.

      Madigans suit alleges Raines and Bauer engaged in unfair and deceptive acts in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. Among the many misrepresentations alleged in Madigans lawsuit, the defendants allegedly told prospective members that by joining the travel club, they would enjoy substantial discounts on airline tickets; receive vouchers for free condominium stays anywhere in the world; be eligible for trips to Mexico and other vacation spots; and receive a money-back guarantee if they were dissatisfied with their membership.

      Madigan said that Raines and Bauer allegedly misled and deceived consumers about the free trip and travel membership club by omitting facts and making misleading statements.

      For example, during the sales presentation, they allegedly failed to mention that consumers were responsible for paying certain costs for the promotional travel voucher, including, but not limited to, port fees of $99 a night, activation charges and services charges. The duo also led consumers to believe the expiration date of the promotional vouchers was five to seven years when in fact the expiration date of cruise certificates was 18 months while airfare and all-inclusive certificates expired in 36 months.

      Additionally, Raines and Bauer allegedly misrepresented to consumers that a benefit of the travel club membership included time shares available anywhere in the world when in fact they were available only in Tennessee and Arkansas. They also orally misrepresented the value of the travel club as being worth nearly $3,000 when in fact it was worth $275.

      Madigans lawsuit alleges that Bauer, at one point, operated as an independent sales agent, selling memberships to the Grand Getaways Vacation Club through an arrangement with a Florida corporation, Mini-Vacations, Inc. However, after Mini-Vacations severed its ties with Raines and Bauer last March, the pair began selling travel club memberships in June for Michigan-based Vacation Travel Incentives, Inc. Raines company, which is registered in Indiana, is not licensed to conduct business in Illinois.

      Madigans lawsuit seeks to permanently bar the defendants from advertising or offering vacation packages to Illinois consumers. In addition, Madigans suit asks the court to impose civil penalties of $50,000 for each violation of the Consumer Fraud Act and $10,000 for each violation committed against a person aged 65 or older, and order the defendants to pay full restitution to consumers.

      Travel Promoters Scammed Seniors, Illinois Charges...

      A Round Plate Deserves A Round Towel

      Chicago inventor John Esparza calls his creation "microbuddies"

      At last there's a solution to the agonizing problem of fitting a square paper towel onto a round microwave plate. Chicago inventor John Esparza calls his creation "microbuddies." They're round paper towels.

      Esparza, 60, says the idea came to him in his kitchen, where he daily encountered the problem of square paper towels slipping off the revolving round plate in his microwave.

      "I kept having to tear the corners off the paper towels myself," said Esparza, a retired railroad worker in a Chicago Sun-Times interview. "I thought, 'Why don't they make round paper towels?' "

      Paper towels are a staple of microwaving. They are commonly placed on top of food to help keep in moisture and to absorb splatters and grease.

      The U.S. Patent and Trademark office accepted Esparza's application this month. According to his patent application, the paper towels would be available in multiple sizes -- 11 inches for dinner plates and 8 inches for smaller plates.

      They wouldn't come packaged in a roll like conventional paper towels but instead would come packed individually in a box.

      Esparza doesn't yet have a deal to mass-produce and market his microbuddies, but he's optimistic something will come along soon.

      Esparza, 60, has created a solution for microwaving food with square paper towels. "Microbuddies" are rounded paper towels made to perfectly fit your plate...

      John Deere Riding Mowers Recall

      November 24, 2004
      John Deere & Co. is recalling about 4,400 GX85 and SX85 riding lawn mowers. The fuel tanks can crack and leak fuel presenting a potential for fire or burn injuries.

      John Deere is aware of 37 instances of replacement of the fuel tank under warranty. There have been no reports of fires, injuries or property damage.

      The recalled lawn mowers are green with yellow trim and have either GX85 or SX 85 on the side of the riding mower and a John Deere symbol on the front end and involve the following machines:

      ModelSerial Numbers
      GX85MOGX85X145887 through 149328
      SX85MOSX85X125374 through 126508

      The mowers were sold by authorized John Deere dealers in the United States and Canada from November 2003 through July 2003 for between $2,000 and $2,400.

      The company is directly notifying those consumers who purchased affected mowers. . Consumers should stop using their tractors immediately and contact a John Deere dealer for a free repair.

      Consumer Contact: For more information, contact John Deeres Customer Communications Center at (800) 537-8233 between 8:00 a.m. and 6:00 p.m. ET, Monday through Friday and 9:00 a.m. and 3:00 p.m. ET Saturday or at the John Deere web site at www.johndeere.com.

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

      John Deere Riding Mowers Recall...

      Texas Charges Mortgage Company with Fraud

      City Mortgage Services defrauded more than 150 Hispanic homeowners, state charges

      Texas Attorney General Greg Abbott has filed a lawsuit and is seeking a restraining order and asset freeze alleging that City Mortgage Services defrauded more than 150 Hispanic homeowners in Texas.

      The company and its principals, Gustavo Duarte and Alfredo Mendez, allegedly pocketed thousands of dollars that should have been forwarded to the mortgage companies financing the consumers' homes.

      The company, which had offices in Dallas, Houston and Austin, shut down abruptly earlier this year, leaving consumers owing their mortgage companies substantial amounts of money in missed payments and late fees.

      "Brazen schemes like these will not be tolerated in Texas," said Abbott. "City Mortgage systematically victimized these Hispanic families by exploiting their dreams of home ownership. I am committed to ensuring this scam doesn't hurt any more Texas consumers."

      According to the lawsuit, City Mortgage dispatched teams of door-to-door salespersons throughout Hispanic neighborhoods, touting the company's "debt-reduction service."

      Sales pitches and promotional materials promised consumers City Mortgage would save them thousands of dollars by withdrawing and forwarding to their mortgage company a larger monthly amount than their regular mortgage payment, thus reducing the number of years it took to pay off the loan. City Mortgage charged families between $700 and $1,000 for the service.

      Many consumers indicated that City Mortgage was often late in forwarding payments to the mortgage companies, resulting in delinquency notices and late fees. In its last few months of operation, City Mortgage failed to make payments altogether, and simply shut down and kept the consumers' money, the state charged.

      Many consumers did not learn about City Mortgage's failure to pay until they received notices from their mortgage companies, informing them that they had accrued considerable debts.

      Consumers can reduce their mortgage debt by dealing directly with their mortgage companies. Typically, consumers can make arrangements to pay extra amounts each month that can be applied toward paying down the principal of the loan. No middlemen are necessary, and consumers do not have to pay enrollment fees like those charged by City Mortgage.

      City Mortgage has no affiliation with the CitiBank or CitiMortgage units of CitiGroup.

      Texas Charges Mortgage Company with Fraud...

      A Future Without Nursing Homes

      There is a future without nursing homes says Dr. William Thomas, a physician who has established new small group homes for elders called Green Houses.

      At a congressional briefing on Capitol Hill, research findings presented by an independent team from the University of Minnesota led by Dr. Rosalie Kane reported statistically significant improvements in how the elderly responded in Green Houses compared to a control group of two other traditional institutional-type nursing homes.

      In a time of growing concern about the cost of caring for the elderly, the Green House model delivers this high-quality at the same or lower cost, Thomas said.

      America has a choice. With the nation's nursing homes deteriorating from age and the baby boom generation moving into the later chapter of their lives, should we build many new traditional institutions or replace them with an alternative that deinstitutionalizes the frail elderly and truly celebrates elderhood? Thomas asked.

      America's obsession with youth harms young and old alike, says Thomas, who argues in his new book What Are Old People For? that the 77 million aging baby boomers will change society one more time.

      Creating a new old age will be the baby boomers last act on the public stage, says Thomas.

      The focus of the Green House model is the quality of life experience in a living space for eight to ten elders. The preliminary findings from the ongoing study found that the seniors, the people who take care of them, and even the friends and family that come to visit were extremely satisfied with the quality of life offered by Green Houses.

      The Green Houses, which look and feel like a house, respect what Dr. Thomas calls the rhythm of life and the well-being of the people who live there. This rhythm is created by, and evolves through, household decisions made jointly by the seniors and the staff trained to care for them.

      At the Green House, there is no bureaucracy. Says Dr. Thomas, Bosses upon bosses upon bosses have been removed. The research indicates that this may be a solution to the critical problem of high staff turnover in traditional nursing homes.

      In research at the worlds first Green Houses in Tupelo, Mississippi, which opened in May 2003, answers to open-ended questions show that elderly people thrive far more than in regular nursing homes.

      Seniors who were in wheel chairs are walking, seniors who were not talking are talking, seniors who were not eating are eating, states Tupelo director Steve McAlilly. Through something as simple as enabling Green House residents to smell the bacon cooking, the small pleasures of life are restored.

      Additional Green House projects are in development nationwide in Michigan, Nebraska, Georgia, Florida, and North Carolina.

      More detailed findings of the research sponsored by The Commonwealth Fund are available on the projects web site at www.thegreenhouseproject.com.

      There is a future without nursing homes says Dr. William Thomas, a physician who has established new small group homes for elders called Green Houses....

      Ford Will Fix Explorer Transmissions

      November 22, 2004
      Ford will notify about 740,000 owners of 2004 Explorers and Mercury Mountaineers of a potential transmission problem in the popular sport-utility vehicles.

      Ford said it decided to check the transmissions because of consumer complaints about jerky shifting from park to reverse. Ford will send letters to owners asking that they take the SUVs to a dealership for free repairs.

      It's not an official recall but the repair action could put a dent in Ford's claims of improved quality in the Explorer, America's best-selling SUV.

      Ford Will Fix Explorer Transmissions...

      Cashback Payday Loans Banned In New York

      Company has agreed to forgive loans that carried exorbitant rates and provide refunds to New Yorkers

      Cashback Payday Loans has been barred from doing business in New York and has agreed to forgive loans that carried exorbitant rates and provide refunds to New Yorkers.

      Attorney General Eliot Spitzer said the Nevada company had been making payday loans at annual interest rates of up to 400 percent. The action against Las Vegas-based Cashback Payday Loans, Inc. marks the third time this year Spitzer's office has acted to halt payday loan schemes.

      "Payday lending can be the modern equivalent of loan sharking and is illegal in New York," Spitzer said. "My office will continue to take aggressive action to stop payday lenders from victimizing New York consumers."

      Spitzer began an investigation of Cashback's operations after receiving a complaint from a consumer who, in order to avoid default on a $500 payday loan from Cashback, became stuck in a cycle of refinancing at annual interest rates of nearly 400 percent. Within three months of receiving the $500 loan, the consumer owed Cashback more than $900 in interest.

      The probe revealed that Cashback -- which advertised "payday advances" over the Internet -- extended such loans to dozens of New York consumers in violation of state usury laws.

      Under the settlement agreement, the company must contact all New Yorkers with open accounts and notify them that their loans will be discharged. Further, the company must pay refunds to past customers who were charged exorbitant interest rates. It must cease issuing illegal payday loans in New York immediately, and discontinue any other lending operations.

      In the past year, Spitzer's office has taken action against two other payday lending schemes: New York Catalog Sales in Watertown; and County Bank of Rehobeth Beach, Del., along with its partners, Cashnet, Inc., and Telecash Co.

      The goal of each of these actions is to halt illegal lending in New York, obtain court orders discharging the debts associated with such lending, and obtain restitution for injured consumers.

      Payday loans are small, short term loans that are repayable on the borrower's next payday, usually by a post-dated check or by electronically withdrawing the money from the borrower's checking account. Annual interest on such loans often exceeds the maximum rate allowed in New York, which is currently 16 percent.

      Cashback Payday Loans Banned In New York...

      Studies Allege Bayer Was Too Slow Withdrawing Baycol

      November 22, 2004
      New studies indicate Bayer AG was too slow to pull Baycol from the market in 2001, when some patients taking the drug developed a severe and sometimes fatal muscle disorder. In a related development, a prestigious medical journal is calling for a new independent agency to monitor drug safety.

      A report in the December 1 issue of the Journal of the American Medical Association (JAMA) quotes a new study which found that Baycol's risks were far worse than had been believed at the time Bayer withdrew the drug.

      Merck has been under fire recently for allegedly moving too slowly to withdraw the arthritis drug Vioxx, which has been found to raise the risk of heart attack and stroke in some patients.

      In an editorial accompanying the article, JAMA's editors said it is time to recognize that the Food and Drug Administration (FDA) is unable to protect the public from dangerous drugs and to establish a new agency to fill that role.

      "It is unreasonable to expect that the same agency that was responsible for approval of drug licensing and labeling would also be committed to actively seek evidence to prove itself wrong," the editors wrote.

      Last week, David Graham, a senior FDA safety officer told a Senate panel that at least five dangerous drugs are on the market today because of the FDA's inability to effectively monitor drugs once they have been approved.

      The study cited in the JAMA article said that today's cholesterol-lowering statin drugs are very safe but can pose risks when taken with fibrates, drugs often taken by older patients with diabetes to lower triglycerides.

      Studies Allege Bayer Was Too Slow Withdrawing Baycol...

      Sprint Named in Fat Fingers Suit

      Defendants set up numerous toll-free numbers that differ by only one digit from their competitors' numbers

      A New York class action charges that Sprint and ASC Telecom victimized consumers through a "fat fingers" scheme. The companies allegedly set up numerous toll-free numbers that differ by only one digit from their competitors' numbers.

      Thus, customers trying to call AT&T at 1-800-CALL-ATT would get Sprint if they accidentally dialed 1-800-CELL-ATT.

      Sprint and ASC Telecom charge their accidental callers rates vastly greater than what the callers' intended providers would have charged them, the suit argues.

      The suit alleges the practice amounts to fraud and violates New York's prohibitions on deceptive actions.

      An appeals court upheld the suit's class action certification but agreed with a lower court that it should not be a nationwide class action.

      New York's General Business Law "requires the deceptive transaction to have occurred in New York, leaving potential class members from outside the state, who were victimized by defendants' practices, with no viable claim under the statute," the appeals court ruled.

      Sprint Named in Fat Fingers Suit...

      Feds Toughen Warning for Depo-Provero

      The injectable drug is used to prevent pregnancy

      The Food and Drug Administration is adding a "black box" warning to Depo-Provera labels, warning that prolonged use may result in the loss of bone density. The injectable drug is used to prevent pregnancy.

      The black box warning for Depo-Provera highlights that prolonged use of the Pfizer drug may result in significant loss of bone density, and that the loss is greater the longer the drug is administered. This bone density loss may not be completely reversible after discontinuation of the drug.

      Thus the warning states that a woman should only use Depo-Provera Contraceptive Injection as a long-term birth control method (for example, longer than two years) if other birth control methods are inadequate for her.

      Black box warnings are designed to highlight special problems, particularly those that are serious, and to give health care professionals a clear understanding of a potential medical complication associated with a drug. Black box warnings are supposed to provide physicians with important insights as to how to prescribe a drug that may be associated with serious side effects in a way that maximizes its benefits and minimizes its risks.

      The addition of the black box warning came as a result of the drug manufacturer's and FDA's analysis of data that clarified the drug's long-term effects on bone density.

      In addition to the black box warning on the labeling, the drug's manufacturer will issue a "Dear Health Care Practitioner" letter regarding the effect of long-term treatment on bone mineral density to health care professionals likely to prescribe the drug, and will incorporate the new information in the patient information sheet distributed with the drug.

      The FDA is adding a "black box" warning to Depo-Provera labels, warning that prolonged use may result in the loss of bone density. The injectable drug is u...

      Unum Provident Agrees to Review Denied Disability Claims

      Company Estimates Cost of Settlement With New York at $100 Million

      A landmark, multi-state settlement with UnumProvident will impose sweeping reforms that will protect disabled workers nationwide, New York State Attorney General Eliot Spitzer said today.

      The settlement resolves issues relating to investigations into UnumProvident's claims handling practices. The investigations focused on assertions that UnumProvident had inappropriately denied claims for benefits under individual and group long-term disability insurance policies.

      The settlement requires UnumProvident and its subsidiaries: (1) to reassess approximately 200,000 claims that previously had been denied; (2) to completely restructure their claim handling procedures to ensure objectivity and fairness; and (3) to pay a $15 million fine.

      "This settlement sends a strong message to disability insurance companies that improper denials of disability claims will not be tolerated," said Attorney General Spitzer.

      "These claim denials involved vulnerable workers those whose illnesses and injuries prevented them from continuing their employment. I am very pleased that these individuals will have their claims reviewed, and that UnumProvident will now implement the structural reforms necessary to ensure that future claims are handled appropriately."

      The investigation is unrelated to the separate probes into the payment of contingent commissions, steering and bid-rigging in the insurance industry.

      Numerous other actions are still pending against UnumProvident, including a class-action lawsuit which charges that the company operates "disability denial factories" and at least 2,500 individual suits filed by policyholders. A California jury returned a $31 million verdict against the company in 2003 and the state of Georgia fined it $1 million after an 18-month investigation.

      The reassessment process covers the vast majority of persons whose claims for group or individual long-term disability benefits were terminated or denied after January 1, 2000. UnumProvident and its subsidiaries are required to provide notice to those individuals of their rights under the agreement.

      In addition, individuals whose disability claims were denied between 1997 and 2000 can also apply to participate in the claim reassessment process. Spitzer and Serio urged these individuals to contact UnumProvident at 1-866-278-4641 and ask that their claims be reassessed.

      UnumProvident officials estimate that the settlement will result in expenditures of over $100 million in restitution to policyholders and in structural reforms to improve compliance and monitoring. Some of the structural reforms must remain in place for at least two years, while others are permanent.

      The review process and restitution payments will provide claimants with a more expedient method of obtaining recoveries, and simultaneously will reduce the companies' exposure to litigation judgments and other costs.

      If UnumProvident fails to implement the required changes in a timely manner as stipulated by the agreement, it will be subject to penalties of $100,000 per day until compliance is achieved. In addition, failure to meet acceptable levels of accuracy in making disability claim determinations will result in a penalty of $145 million.

      The investigation was conducted by the New York State Attorney General's Office, the New York State Insurance Department, state insurance regulators conducting a multi-state examination led by Massachusetts, Maine and Tennessee on behalf of all the other states, and the United States Department of Labor.

      The settlement covers Unum Provident and five of its subsidiaries -- Unum Life Insurance Company of America, The Paul Revere Life Insurance Company, Provident Life and Casualty Insurance Company, Provident Life and Accident Insurance Company and First Unum Life Insurance Company.

      Unum Provident Agrees to Review Denied Disability Claims...

      Dynacraft Fined $1.4 Million for Failing to Report Mountain Bike Hazard

      Forks can break, causing the rider to fall

      Dynacraft Inc. faces a $1.4 million fine for failing to promptly report a safety defect in its mountain bicycles to the U.S. Consumer Product Safety Commission (CPSC).

      Between July 1999 and March 2001, Dynacraft imported nearly 250,000 mountain bicycles that were manufactured with two types of defective forks, the CPSC said.

      The forks, which are part of the steering column, can break apart and separate from the front wheel, causing the rider to lose control and suffer serious injuries. Over 50,000 of these bicycles also were made with a defect that caused the pedals to come loose and fall off, resulting in a loss of control by the rider.

      In January 2000, Dynacraft reported to CPSC that a limited number of Vertical XL2 bicycles were involved in incidents where the fork broke and riders suffered chipped teeth, a sprained back, or bumps and bruises to the head.

      Based on this information, CPSC and the firm recalled only 19,000 bicycles in February 2000. Yet, the firm knew of additional consumers who experienced the same problem with the bicycles, but these incidents were not reported to CPSC until July 2000.

      As a result, the February 2000 recall was expanded in September 2000 to include another 24,800 Vertical XL2 and Magna Electroshock model bicyles. Dynacraft reported problems with the Magna Electroshock model in August 2000, including 35 incidents and injuries (concussions, fractures, and lost teeth).

      In March 2001, Dynacraft informed CPSC that about 31 riders using the Next Shockzone model mountain bikes who were injured between March 2000 and March 2001. In addition to broken bones, cuts and bruises, one rider suffered a blood clot in the brain. The recall of 38,000 Next Shockzone bicycles in April 2001 also involved defective suspension forks.

      An additional 54,000 units were recalled in May 2001 after the company reported incidents and serious injuries involving the Magna Equator models, due to defects with the pedals. The largest and last recall took place in June 2002, when 132,000 Next Ultra Shock mountain bicycles were recalled due to defective Ballistic 105 forks. Dynacraft reported 21 injuries involving the Next Ultra Shock, including concussions, abrasions, chipped teeth, and chest trauma.

      Federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information which reasonably supports the conclusion that a product contains a defect which could create a substantial risk of injury to the public, presents an unreasonable risk of serious injury or death, or violates a federal safety standard.

      In agreeing to settle the matter, Dynacraft BSC Inc. denies that it violated the reporting requirements of the Consumer Product Safety Act.

      Dynacraft Fined $1.4 Million for Failing to Report Mountain Bike Hazard...

      California Insurance Corruption Probe Advances

      Universal Life Settles, Agrees to Cooperate With Prosecutors

      California probe of insurance industry corruption advanced today when Universal Life Resources, a large California-based employee benefits brokerage firm, entered into a consent decree and agreed to cooperate with prosecutors, the lead attorney for the state Insurance Commissioner said.

      "Now that Universal Life Resources has agreed to cooperate, the state can focus more specifically on the illegal practices of the insurance firms, with full assistance from the insiders at ULR," said John Stoia. "This is a huge breakthrough."

      Stoia was hired by California Insurance Commissioner John Garamendi to assist in breaking up a longstanding pattern of hidden deals and commissions paid by the companies to companies like ULR and Marsh & McLennan, who advanced the companies' products while pretending to perform objective brokerage services for employers who hired them to assemble employee benefits.

      Stoia is filing suit on behalf of the state of California and Garamendi against ULR and its chairman along with MetLife, Cigna, Prudential and UnumProvident to enjoin them from violating California insurance laws and regulations.

      The consent agreement and permanent injunction excludes ULR from further prosecution or fines but requires them in writing to "fully and timely cooperate" in the state's investigation.

      The agreement also requires ULR to no longer "put their own financial interests ahead of their clients' financial interests," to disclose fully their income and commission arrangements and to stop paying or receiving kickbacks and other hidden fees. ULR did not admit to guilt or liability as part of the agreement.

      In the lawsuit filed in state Superior Court in San Diego, where ULR is headquartered, the Insurance Commissioner charged that the brokerage and the insurance companies participated in a scheme to steer clients to buy insurance products from the insurors and others who provided undisclosed compensation to ULR.

      "Defendants use a number of euphemisms for these improper steering agreements," the complaint noted, such as "special compensation service agreements," "direct vendor marketing agreements" and "preferred broker compensation plans."

      This revenue came to ULR in addition to standard fees or commissions from the companies and amounted to profit-sharing between the insurance firms and the broker at the expense of the broker's clients, the suit charges.

      The suit also singles out a practice known as "low-hanging fruit," in which the insurance companies push their clients with whom they have direct contracts to ULR, in exchange for ULR steering their clients to the insurers. The result was millions of dollars in undisclosed fees for ULR and hundreds of millions of dollars in premiums to the insurance companies, even as ULR positioned itself as providing "independent and unbiased advice to their clients," the lawsuit charged.

      The suit seeks to permanently stop these practices.

      Stoia's firm filed the first of the now numerous cases uncovering insurance industry kickback practices, suing Marsh and McLennan, the world's largest insurance brokerage, in federal district court in New York City last August. In October, New York Atty. Gen. Eliot Spitzer initiated a major investigation into the same practices.

      Stoia also filed a separate class action civil RICO case in federal court in San Diego last month against Universal Life Resources, MetLife Inc., Prudential Financial Inc., Cigna Corporation and UnumProvident.

      The New York suit, also a class action civil RICO case, names Aon and its related companies and The Willis Group of companies, in addition to Marsh and McLennan.

      Stoia is a partner in Lerach Coughlin Stoia Geller Rudman & Robbins LLP, a San diego firm.

      California insurance corruption probe advances today when Universal Life Resources entered into a consent decree and agreed to cooperate with prosecutors....