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    AGs Settle NorVergence Claims With Three Leasing Companies

    Attorneys General from across the country have reached agreements with US Bancorp Business Equipment Finance Group, Wells Fargo Financial Leasing and CIT Technology Financing

    Attorneys General from across the country have reached agreements with US Bancorp Business Equipment Finance Group, Wells Fargo Financial Leasing and CIT Technology Financing Services, Inc., ending the companies' attempts to collect leases on behalf of NorVergence, Inc., an allegedly fraudulent telecommunications company that went bankrupt.

    Affected consumers and businesses may choose or decline to participate in the settlement agreement. If all affected consumers in the participating states and Washington, D.C., accept the deal, the three leasing companies will write off approximately $24.03 million in debt for 1,123 small businesses.

    "Hundreds of Illinois small business entrepreneurs signed telecommunication service agreements with NorVergence because they believed they were making a financially responsible decision for their businesses. But when the service unexpectedly ceased, their collection agency hassles began," said Illinois Attorney General Lisa Madigan "With this agreement, three additional leasing agencies have agreed to work with the states and small businesses to end the nightmares that started when NorVergence deceived its customers."

    Under the settlement agreements, US Bancorp, Wells Fargo and CIT - which entered into direct contracts with NorVergence customers or, through other third-party companies, bought out lease agreements between NorVergence and its customers - have agreed to write off or forgive a combined $24.03 million they claimed to be owed by 1,123 NorVergence customers from the states represented in the agreements.

    While US Bancorp, Wells Fargo and CIT deny any wrongdoing, they have agreed to forgive approximately 85 percent of the debt they claim consumers owe on rental agreements and provide up to two years for customers to pay any remaining balances.

    Signing the US Bancorp agreement, were the Attorneys General of Arizona, Colorado, Connecticut, Delaware, Illinois, Kansas, Louisiana, Maryland, Massachusetts, Michigan, New Hampshire, North Carolina, Ohio, Pennsylvania, Rhode Island, West Virginia and Washington, D.C., and the Georgia Governor's Office of Consumer Affairs.

    The Wells Fargo agreement was signed by the Attorneys General of Arizona, Connecticut, Delaware, Illinois, Kansas, Louisiana, Maryland, Massachusetts, Michigan, New Hampshire, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Washington and Washington, D.C., and the Georgia Governor's Office of Consumer Affairs.

    The CIT agreement involves the Attorneys General from Connecticut, Delaware, Illinois, Maryland, Massachusetts, Michigan, Pennsylvania, Rhode Island and Washington, D.C., and the Georgia Governor's Office of Consumer Affairs.

    The settlement agreements provide that small businesses that have not previously reached independent settlement agreements with the leasing companies will have the opportunity to receive an 85 percent write-off of the money owed from the period beginning on July 15, 2004, the approximate date that NorVergence ceased providing any services. Consumers who have made payments to US Bancorp, Wells Fargo or CIT since July 15, 2004, will receive credit for those payments toward their remaining balance.

    In addition, any customer or business that previously settled with Wells Fargo or CIT for terms that are less favorable than this settlement can receive the more favorable settlement terms if they choose. Customers that settled with US Bancorp for less favorable terms will have a chance to receive an 80 percent write-off of their balance as of July 15, 2004.

    "Deceptive sales pitches lured Connecticut businesses into signing long-term agreements that failed to deliver promised discounts," Connecticut Attorney General Richard Blumenthal said. "When the service ceased, collection agency hassles started. These companies rightly recognized the unfairness of demanding businesses to pay for services promised, but not received. These agreement to forgive the vast majority of the money ends a nightmare for businesses that thought they were getting a useful deal, but ended up with a useless debt."

    On May 18, eight Attorneys General announced a similar agreement with General Electric Capital Corporation (GE Capital). That leasing company agreed to write off or forgive more than $2.8 million it claimed to be owed by 216 NorVergence customers from the states represented in the agreement.

    In November 2004, Madigan filed a lawsuit against NorVergence, a telecommunications company based in Newark, New Jersey, that set up a sales office in Oakbrook Terrace. Madigan's lawsuit alleged the company's sales pitch offered small businesses discounted telecommunications services through the use of a "Matrix" box.

    NorVergence claimed the device was necessary to allow small businesses to reap a 30 percent discount on its current telecommunications costs, including long distance, DSL service, and wireless phone service. The total cost of agreements to lease the matrix boxes ranged from approximately $12,000 to $175,000.

    Under NorVergence's alleged scheme, the company would sell its five-year contracts to leasing companies and walk away with the profit. When NorVergence was forced into bankruptcy in June 2004, its customers were left without service but still responsible for the five-year lease payments to leasing companies.

    In addition, some finance companies charged customers for replacement insurance premiums based on the total rental contract amount, instead of the smaller value of the Matrix box. These leasing companies have agreed to refund most of the premiums and associated fees collected for this insurance.

    Consumers who signed agreements with NorVergence that were bought by US Bancorp, Wells Fargo or CIT, or signed NorVergence agreements directly with one of the three leasing companies, will receive a notice in the mail shortly regarding the opportunity to participate in this settlement. To accept the settlement offer, consumers must follow instructions contained in the notice and execute a Settlement and Mutual Release by the date indicated in the notice.

    AGs Settle NorVergence Claims With Three Leasing Companies...
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    Business Interests Target "Activist" Attorney Generals

    Consumer groups are coming to the defense of state attorneys general

    Consumer groups are coming to the defense of state attorneys general, in response to a U.S. Chamber of Commerce initiative that claims states' chief law enforcement officers are a "serious threat" and that they "operate with little regard for the authority of state and federal legislators."

    The Chamber has set up a front group, the United States Chamber Institute for Legal Reform (ILR), to carry its fight against the consumer protection efforts of state attorneys general. The report claimed to demonstrate "the serious threat posed by activist state attorneys general" and called for "legislative reforms that will restore the publics faith in government."

    "It is time to rein in activist attorneys general," said Lisa Rickard, president of ILR. "They operate with little regard for the authority of state and federal legislators, and their contingency fee deals with private plaintiffs attorneys undermine the publics faith in government."

    In response, consumer groups highlighted some of the accomplishments of state attorneys general across the country, calling them "a critical bulwark of protection against fraud and unfair and deceptive practices."

    The groups which include Consumers Union, Public Citizen, USPIRG, Center for Justice & Democracy, Consumer Federation of America, USAction and Alliance for Justice said they were "troubled by the Chambers suggestion that enforcing the law, holding wrongdoers accountable, fostering consumer confidence in a complex marketplace and protecting consumers will have a negative impact on the business climate in this country."

    "State attorneys general perform a vital role in protecting consumers and businesses from the unfair business practices of those corporations that seek to make a profit and get ahead by breaking the law," the groups said in a statement. "Consumer protection and law enforcement by state attorneys general are essential to a vibrant and fair economy, to the preservation of federalism, to the supervision of entire sectors of the economy and to the safeguarding of one of consumers last avenues for redress."

    Cases highlighted by the consumer groups included:

    Drug Pricing

    In a series of cases, state attorneys general took coordinated enforcement action against multinational pharmaceutical companies that broke antitrust laws to prevent consumers access to cheaper, generic drugs. The companies unlawful conduct cost consumers and taxpayers hundreds of millions of dollars, but the harm extended far beyond mere money. The drug companies rendered patients less able to combat heart disease, cancer, anxiety and Alzheimers. The effort of the state attorneys general produced settlements that provided restitution to consumers and taxpayers, and reformed the companies business practices.

    Predatory Lending

    Household Finance victimized thousands of consumers across the country with predatory lending practices that targeted the most vulnerable among us. Attorneys general launched a multistate enforcement action against Household. The result was a $474 million settlement that provided restitution to victims and substantial, pro-consumer reforms of Households lending practices.


    Energy companies gouged California consumers and businesses to the tune of billions of dollars during the energy crisis of 2000-01. The federal regulator that was supposed to protect ratepayers (the Federal Energy Regulatory Commission, or FERC) slept through the crisis. The California Attorney General moved to fill the enforcement void, launching an investigation of the industrys market conduct. California has filed dozens of lawsuits against generators and marketers, and the attorney general represented the state before FERC in California parties quest for $9 billion in refunds. The California Attorney Generals Energy Task Force has negotiated $3.3 billion worth of settlements that have provided about $2.6 billion in benefits to ratepayers.

    Investor Fraud

    The New York Attorney General has uncovered numerous fraudulent deeds and practices including illegal market timing and excessive fees by mutual fund companies, and reached financial settlements, many of them in groundbreaking cases resulting in profit disgorgements, penalties, restitution and fee reductions that put money back in investors pockets.

    Settlements reached by that office include such companies as Alliance Capital Management, which agreed to a $600 million package to cover its mutual fund misdeeds; MFS, which agreed to pay $350 million; Bank of America and Fleet Boston, which agreed to pay $675 million; and Janus, which agreed to pay $225 million. Strong Capital Management agreed to pay a $175 million settlement, with the president of the company contributing $60 million and accepting a lifetime ban from the industry.


    State attorneys general banded together to fight the tobacco companies, which for decades lied to the American public about the dangers lethal consequences of using their products. The result was an historic national settlement in1998 that required tobacco companies to pay the states $206 billion. Equally important, the Master Settlement Agreement prohibited marketing tobacco products to children and mandated other reforms of the industry practices that endangered public health.


    A coalition of nine state attorneys general recently filed a lawsuit challenging the Environmental Protection Agencys new relaxed mercury pollution standards. The suit asserts that the new rule fails to protect the public especially children from the toxic emissions from coal-fired power plants, the single largest source of uncontrolled mercury pollution. Mercury gets into the food chain and when consumed by young children and pregnant or nursing mothers can cause permanent brain and nervous system damage. Fish from waters in 45 states have been declared unsafe to eat because of the level of mercury they contain.

    Business Interests Target 'Activist' Attorney Generals...
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    CDC Recommends New Meningitis Shot for Adolescents, College Freshmen

    The Centers for Disease Control and Prevention (CDC) is recommending routine vaccination of children 11-12 years old, previously unvaccinated adolescents at high school entry, and college freshmen living in dormitories with the newly licensed meningococcal conjugate vaccine (MCV4).

    The new recommendation is designed to help achieve vaccination among those at highest risk for meningococcal disease. As the vaccine supply increases, CDC hopes, within three years, to recommend routine vaccination all adolescents beginning at 11 years of age.

    Meningococcal disease -- commonly called meningitis -- strikes up to 3,000 Americans, killing 300 people every year. Ten to 12 percent of people with meningococcal disease die, and among survivors, up to 15 percent may suffer long-term permanent disabilities including hearing loss, limb amputation or brain damage.

    The disease often begins with symptoms that can be mistaken for common illnesses, such as the flu. However, meningococcal disease is particularly dangerous because it progresses rapidly and can kill within hours.

    "This new vaccine can help protect adolescents and college students from meningococcal disease," said Dr. Stephen Cochi, Acting Director of CDCs National Immunization Program. "CDC encourages those at increased risk to take the opportunity to get vaccinated to help protect them from this serious disease."

    CDC recommends routine meningococcal vaccination for young adolescents at the pre-adolescent doctor visit at about age 11-12, and for those who have not previously been vaccinated, before entering high school at about age 15.

    CDC also recommends that college freshmen living in dormitories be immunized to reduce disease risk. College freshmen living in the close quarters of dormitories are at a higher risk for meningococcal disease compared with peers the same age who are not attending college. Also, all other adolescents who wish to reduce their risk of disease may elect to receive the vaccine.

    The new vaccine should offer longer protection than previous vaccines, is a single shot, and the most common reaction is a sore arm. However, it does not protect people against meningococcal disease caused by serogroup B bacteria. This serogroup of bacteria causes one-third of meningococcal cases in the United States. More than half of the cases among infants under the age of 1 year are caused by type B, for which no vaccine is licensed or available in the United States.

    The new meningococcal vaccine was licensed by the U.S. Food and Drug Administration (FDA) on January 14, 2005 for use in people 11-55 years of age. It is manufactured by Sanofi Pasteur and is marketed as Menactra.

    CDC Recommends New Meningitis Shot for Adolescents, College Freshmen...
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      Study Confirms 15-Passenger Van Rollover Risk

      A new research report finds that 74 percent of 15-passenger vans have significantly mis-inflated tires, increasing the risk of a rollover crash. The vans are popular with schools, churches, community groups and shuttle services but pose a serious rollover risk when heavily loaded.

      The National Highway Traffic Safety Administration (NHTSA) said the new research reinforces its existing concerns about 15-passenger vans. As a result, the agency reissued its consumer advisory for users of 15-passenger vans for the third time in the past four years.

      In a new research report related to improper tire maintenance on 15-passenger vans, the NHTSA study found that 74 percent of all 15-passenger vans had significantly mis-inflated tires. By contrast, 39 percent of passenger cars were found with significant inflation problems. NHTSA research has consistently shown that improperly inflated tires can change handling characteristics, increasing the prospect of a rollover crash in 15-passenger vans.

      "The vans are convenient, but drivers and passengers have to use extra caution. The risks associated with 15-passenger vans can be minimized if users take some basic safety precautions", said Jeffrey Runge, M.D, NHTSA administrator. "Routinely checking the condition of the tires, including the tire pressure, should be at the top of the list".

      To reduce the risks associated with 15-passenger vans, NHTSAs safety advisory recommends that:

      • drivers insist all occupants wear safety belts at all times;
      • drivers are trained and experienced;
      • tires are checked at least once a week, using the manufacturers recommended pressure levels; and
      • no loads are placed on the roof of the vehicle.

      Prior NHTSA research has shown that 15-passenger vans have a rollover risk that increases dramatically as the number of occupants increases from fewer than five to more than ten. In fact, 15-passenger vans with 10 or more occupants had a rollover rate in single vehicle crashes that is nearly three times the rate of those that were lightly loaded, with fewer than five occupants.

      Nearly 80 percent of those who died in 15-passenger van rollovers nationwide between 1990 and 2003 were not buckled up. Wearing safety belts dramatically increases the chances of survival during a rollover crash. In fatal, single-vehicle rollovers involving 15-passenger vans over the past decade, 91 percent of belted occupants survived.

      NHTSA said the public is responding to safety information about 15-passenger vans. Fatalities from 15-passenger van rollover van crashes have declined 35 percent since advisories began in 2001.

      While Federal law prohibits the sale of 15-passenger vans for the school-related transport of high school age and younger students, no such prohibition exists for vehicles to transport college students or other passengers.

      NHTSA is reissuing this advisory to specifically alert summertime users of 15-passenger vans. The agency also has prepared a flyer on 15-passenger van safety that is available on the web at

      A new research report finds that 74 percent of 15-passenger vans have significantly mis-inflated tires, increasing the risk of a rollover crash. ...
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      Side Airbags Help Mitsubishi, Toyota, Volvo Sedans Top Crash Test Ratings

      The cars earned the top rating of 5-stars for all seating positions

      The Mitsubishi Galant, Toyota Avalon and the Volvo V70 - all with side air bags - earned the top rating of 5-stars for all seating positions in the latest round of frontal and side impact crash tests conducted by the U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA).

      NHTSA's consumer information program uses a one to five star rating system, with five being the highest. Star ratings reflect a vehicle's ability to protect the driver and passenger in a crash.

      In this latest group of rollover testing, all newly tested passenger cars received 4-stars for rollover. NHTSA uses a five star scale, as well as a percent chance of rollover, to rate a vehicle on its likelihood of rollover in a single-vehicle crash.

      The latest release concludes NHTSA's crash test and rollover ratings for passenger cars for the 2005 model year. All results, including previously tested model year 2005 vehicles, are available at the agency's web site:

      Make and ModelClass/
      Rear Pass
      Rating 1
      Buick LaCrosse 4-DRPC/H55334
      Toyota Avalon 4-DR w/SABPC/H55554
      Chevrolet Malibu 4-DR w/SABPC/Me55544
      Ford Mustang 2-DRPC/Me554ND5
      Honda Accord 2-DR w/SABPC/Me55454
      Honda Accord 4-DR w/SABPC/Me55444
      Honda Accord Hybrid 4-DR w/SABPC/Me55444
      Mitsubishi Galant 4-DR w/SABPC/Me55554
      Nissan Maxima 4-DR w/SABPC/Me54444
      Pontiac G6 4-DR later release 2 w/SABPC/Me54554
      Subaru Forester 4-DR w/SABPC/Me55554
      Suzuki Verona 4-DR w/SABPC/Me34434
      Toyota Camry 4-DRPC/Me55434
      Volkswagen new Jetta 4-DR w/SABPC/Me44554
      Volvo V70 4-DR w/SABPC/Me55554
      Volvo XC70 4-DRPC/Me55554
      Chevrolet Cobalt 4-DRPC/C45244
      Saturn Ion 4-DRPC/C55344
      Scion tC 2-DRPC/C54444

      Shaded areas indicate new crash test or rollover results.

      PC = Passenger Car (H=Heavy, 3500 lbs or greater; Me=Medium, 3000-3499 lbs; C=Compact, 2500-2999 lbs; L=Light, 2000-2499 lbs; Mi=Mini, 1500-1999 lbs)

      w/SAB = with side air bags

      ND = No data. The instruments used to record the test data malfunctioned.

      1 = if involved in a single-vehicle crash
      2 = Valid for Pontiac G6s produced on and after January 24, 2005

      Side Airbags Help Mitsubishi, Toyota, Volvo Sedans Top Crash Test Ratings...
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      Telecom Taxes Decried

      Virginia, Maryland, Texas Lead the Nation

      U.S. state and local telecommunications taxes averaged 14.17 percent in 2004, more than double the average tax on general businesses, according to a study by the Council on State Taxation. The study is designed to highlight the group's call to simplify and reduce telecommunications taxes and related paperwork.

      The average state and local effective tax rate on telecommunications services of 14.17% in 2004 compared to 6.12% for general business nationwide, the study found.

      "Tax laws in the states are antiquated and take money out of the pockets of every American telecommunications consumer," Stephen Kranz, tax counsel for the Council on State Taxation, said in a statement.

      Maryland and Virginia lead the list of the most egregious offenders, the group reported. Virginia's 30 percent total telecom tax rate, for example, is higher than its tobacco tax rate. Maryland's 27 percent telecom tax rate landed it in the No. 2 position.

      Texas, where state lawmakers are currently battling over several telecom deregulation bills, landed in third position with its 25.3 percent rate, while Nebraska's 25.2 percent rate and Missouri's 24 percent rate rounded out the top five.

      "The state and local tax laws continue to impose high levels of industry specific taxation on telecommunications services," according to a summary of the study. "While some states have begun the process of reforming the state and local tax structure, much more is needed to reduce the high level of telecommunications taxation and administrative burden."

      The study found a telecommunications provider filed an average of 47,921 tax returns, compared to 7,501 returns for the average general business.

      Telecom Taxes Decried...
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      Tufts Study Finds Crestor Most Dangerous Statin

      FDA Previously Strengthened Warning on Drug Label

      More trouble for Crestor, the Astra-Zeneca statin that's been the target of safety complaints. Researchers from Tufts-New England Medical Center have found that Crestor has the poorest safety profile of the most commonly used anti-cholesterol drugs, the others being Lipitor, Zocor and Pravachol.

      The study, published in the latest issue of Circulation, the Journal of the American Heart Association, found the most serious reactions resulted in damage to the kidney (proteinuria/nephropathy), and muscle (rhabdomyolysis), which frequently resulted in patients requiring hospitalization.

      In March, the FDA issued a public health advisory outlining the identified risks and benefits of Crestor but critics argued the agency didn't go far enough.

      David Graham, a safety researcher at the FDA, had singled out the drug as deserving closer safety scrutiny during congressional hearings last fall.

      The advocacy group Public Citizen has also targeted Crestor and issued a blistering denunciation of the FDA's action, calling "another example of the agencys dangerous cowardice in failing to adequately protect people in this country from uniquely dangerous prescription drugs."

      But the lead author of the Tufts study said it's important not to overstate the dangers of the drug.

      "It is very important to note that as a family, statins are very safe drugs that have clearly been shown to reduce the risk of heart disease," said Richard H. Karas, MD, PhD, lead author of the study.

      "Although rosuvastatin (Crestor) was found to be less safe than others, it does not mean patients should immediately stop taking this medication."

      "In fact, the overall risks of rosuvastatin remain low, and people taking this drug should talk to their doctor before deciding whether to continue on it or stop it," Karas emphasized.

      Karas and his colleagues analyzed 145 rosuvastatin-associated adverse events reported to the U.S. Food and Drug Administration over its first year of marketing and compared the rates of such events with other statins simultaneously and during their respective first year of marketing.

      The review found that with either comparison, rosuvastatin (Crestor) was significantly more likely to be associated with rhabdomyolysis, proteinuria, nephropathy or kidney failure.

      "This study raises concern about the safety of this drug at the range of doses currently used in common clinical practice in the general population," said Karas. "I would advise healthcare providers to consider other statins as first-line therapy, to initiate therapy in appropriate patients at lower doses, to consider combination LDL-C lowering therapy, and to closely monitor patients for adverse events if rosuvastatin (Crestor) is used."

      Tufts Study Finds Crestor Most Dangerous Statin...
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      Massachusetts Sues Home Improvement Contractor

      Consumers paid but no work was done

      Massachusetts Attorney General Tom Reilly says he has obtained an emergency court order shutting down a Westfield, Massachusetts-based contractor accused of convincing area consumers to sign contracts for major home renovations, collecting more than $200,000 in deposits and then failing to deliver.

      Reilly obtained the court order from Hampden Superior Court Judge Peter Velis as part of a lawsuit against Andrew Clough and Reliable Construction, both of Westfield. The lawsuit alleges that Clough has been misleading consumers into paying thousands of dollars in deposits - ranging from $12,000 to $54,000 - for substandard or incomplete work. Homeowners also paid deposits in advance well in excess of the one-third of the total cost of the project permitted by law.

      "Today we stopped this contractor from doing business in Massachusetts," Reilly said. "Now we are focused on getting as much money as possible back for these homeowners and keeping this contractor from hurting anyone else."

      Reilly's lawsuit alleges that Clough and Reliable Construction violated the Massachusetts Consumer Protection Act and the Massachusetts Home Improvement Contractor Act by: executing contracts and taking payments for home improvement services and then failing to deliver the services; making false representations about how quickly they could complete their work; pressuring consumers into paying deposits in excess of one-third of the project's cost; refusing to give homeowners refunds even thought they did not finish the promised work; and failing to obtain construction permits.

      According to the complaint, Clough repeatedly misled consumers into paying large deposits by promising he could complete major construction projects in a matter of weeks. Several consumers also discovered that Clough had never obtained appropriate municipal permits. To date, 16 consumers have filed complaints against Reliable Construction or Clough alleging that he failed to complete a job or did substandard work.

      In one case, a Chicopee homeowner paid Clough $56,874 to build an addition estimated to cost $140,000. In September 2004, Reliable Construction removed part of the homeowner's roof, causing significant water damage to ceilings, furniture and carpeting. Soon after, a lumber company told the consumer it had placed a lien on his home because Clough had not paid a bill for materials.

      In 2004, complaints about home improvement ranked second on the year-end list of complaints filed by consumers with the Massachusetts Consumer Complaint Hotline.

      Massachusetts-based contractor accused of convincing area consumers to sign contracts for major home renovations, collecting more than $200,000 in deposits...
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      Wisconsin Sues Mortgage Lender

      Violated state's do-not-call laws, suit charges

      Wisconsin Attorney General Peg Lautenschlager has filed a lawsuit against First American Funding Company, LLC, a mortgage lender based in Columbus, Wisconsin, for violations of the state no-call laws.

      "Wisconsin citizens support our no-call law in overwhelming numbers, and have a right to expect telemarketers to obey the law and not bother them at home, in accordance with this right," Lautenschlager said. "Those who ignore Wisconsin laws that protect consumers, including very high profile laws such as 'no call,' can expect to be prosecuted."

      The lawsuit, which was filed in Racine County Circuit Court, charges First American Funding Company with:

      • Making unsolicited calls to Wisconsin residents without registering as a telemarketer;
      • Making at least nine unsolicited calls to Wisconsin residents on the no-call list;
      • Misrepresenting the nature of its solicitation calls.

      The complaint seeks to enjoin First American Funding Company from further violations of Wisconsin law and to recover civil forfeitures of $100 for each past violation.

      The lawsuit was commenced by Lautenschlager's Office of Consumer Protection with investigative assistance from the Department of Agriculture, Trade and Consumer Protection.

      Wisconsin Attorney General Peg Lautenschlager has filed a lawsuit against First American Funding Company, LLC, for violations of the state no-call laws....
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      Chicago Insurance Broker Settles Kickback Probe for $27 Million

      Illinois insurance brokerage giant Arthur J. Gallagher & Co. will pay $27 million to settle charges that it accepted millions of dollars from insurance companies in exchange for steering clients toward those favored companies.

      The settlement requires Gallagher to pay back $27 million to clients, including Illinois businesses and policyholders, who were subjected to Gallaghers steering policy.

      The steering policy urged Gallaghers brokers to direct their clients to pre-selected insurance carriers in order to achieve targeted levels of business with those carriers. The pre-selected carriers would in turn reward Gallagher with lucrative bonuses, called contingent commissions, for delivering the high-volume insurance business to them.

      Gallagher never notified its clients that its policy of placing business with favored carriers to obtain millions of dollars in contingent commission profits potentially conflicted with its professed goal of recommending to each client the insurance policy that was in the clients best interests.

      The settlement prohibits Gallagher from engaging in any further contingent commission arrangements. It further makes critical reforms to other business practices. Under the agreement, the Illinois Division of Insurance will verify Gallaghers compliance with these new business practice reforms.

      Our comprehensive investigation revealed Gallagher sought and obtained huge payments from insurers in return for steering them enough business to meet secret threshold targets, Illinois Attorney General Lisa Madigan said.

      Gallagher never should have accepted these payments without fully and clearly disclosing that these targets and payments created a potential conflict of interest between Gallagher and its clients. This settlement will guard against future conflicts of interest and help to return integrity to this industry.

      This settlement sets forth Madigans findings that Gallagher, the worlds fourth-largest provider of insurance brokerage services, operated under an undisclosed and unwaived potential conflict of interest by seeking to maximize contingent commission dollars by directing business to pre-selected insurers.

      Madigan praised Gallaghers full cooperation in the investigation and settlement process.

      To its credit, Gallagher recognized the need to quickly cooperate and provide my office with all the information we requested in our investigation. Its Chief Executive Officer, Patrick Gallagher, personally participated in settlement discussions, which facilitated a prompt and fair resolution to this situation.

      Chicago Insurance Broker Settles Kickback Probe for $27 Million...
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      Disability Insurance: A Broken Promise

      With major corporations slashing or withdrawing health care benefits from salary packages, cutting pension benefits and practicing blatant age discrimination when searching for employees, it's a tough time to be an employee, even if you're healthy. For those who have suffered injuries or become disabled, the consequences can be catastrophic.

      The exploding costs of health care create financial chaos for those unfortunate enough to become disabled. Sadly, even those who try to insure themselves against disability are often denied the protection they have paid for.

      At its most basic, disability insurance is coverage intended to provide 45 to 60 percent of gross income to workers who lose their wages due to a debilitating injury or illness. Disability insurance should, in theory, allow consumers to recoup enough of their wages to pay for their living expenses while they are disabled.

      Unfortunately, it's often not that easy. Buying a policy can be difficult, as underwriters often demand extensive documentation of one's well-being. In general, only the healthiest need apply and, no surprise, pre-existing conditions are not covered.

      There are differing forms of disability coverage, ranging from total disability, or "own-occupation" coverage, to "gainful occupation" coverage (being able to work but suffering limitations). The buyer can, in the words of, "expect to pay between 1-3% of your annual income in disability premium. There are many ways to increase or decrease the premium of a DI policy, and 1-3% is a generalization."

      Difficult as it is, finding a disability plan can prove to be a lot easier than actually collecting long- or short-term disability benefits when illness or injury strikes. Insurers may demand exhaustive documentation, repeatedly "lose" that documentation and generally place as many roadblocks as possible in front of an already exhausted and financially desperate policyholder.

      Vicki of Centralia, Washington, was on long-term disability (LTD) from Aetna for some time when she suddenly found her payments cut off for no reason.

      "Aetna was paying the full 60% of my disability income, but then they just stopped, they said I was no longer disabled. However, they never contacted me or my doctor about it, THEY decided this long distance!"

      Vicki contacted Aetna repeatedly and lost almost all of her material possessions in the meantime, as she could not work and couldn't afford her medical bills without Aetna's coverage.

      "Finally, Aetna sent me to their own doctor, who got very mad at them, stating that not only was I still very sick (and on the verge of being hospitalized) but Aetna was making it worse by pulling the financial rug out from under me! They finally did reinstate me, and started paying me again, but it was too late. I had lost my house and down payment, belongings, and car. I was able to find another place to live but had to pay a huge fee to get into the house."

      Vicki was forced to move hundreds of miles from her friends and family just to find an affordable place to live, and now lives in constant "fear and depression", barely able to eke out a living or pay her bills.

      Carolyn of Concord, North Carolina, bought a disability policy from Unum. Not long after, she was diagnosed with multiple sclerosis.

      "I was told I was a liar and knew all along I had this," she said in a complaint to "Now the medical bills are adding up and I am about to lose my home of 16 years. I want them to settle this now or explain to my children why they no longer can live in the only home they have ever lived in!"

      Insurers' Sweaty Palms

      The insurance industry's greatest fear appears to be that too many of its policyholders will become disabled and stay that way. To guard against that, they make it difficult to successfully claim disability and even harder to remain on the disability rolls. Many insurers demand frequent reassessments of the person's condition. Often they will simply stop paying and start the entire process from scratch.

      Paige W., of Oxford, Wisconsin, was a regular advocate of purchasing and maintaining long-term disability in her job as a human resources manager. When she suffered a fall at work and endured several years of pain and unsuccessful medical treatments, her doctor finally recommended her for LTD from Hartford Life and Accident Insurance Company.

      "After receiving the paperwork from [my doctor], they accepted the claim and paid 6 months of LTD. After that it was one reason after another to deny my claim," Paige said. "Not one thing had changed medically for me, but Hartford would say 'You have not provided sufficient proof of loss, or 'You have not provided suitable objective evidence of your condition', all those word games they play."

      Paige eventually litigated to receive Social Security Disability, but still has to face serious legal bills as well as caring for her children and fighting to get the disability she believes Hartford owes her.

      "I know that Hartford 'banks' on the plan that people will give up or die. Well, I can't. I have two small children who need me and they don't deserve all this either."

      According to's Frequently Asked Questions (FAQ) page, "[I]f you are currently in good health, you should have no difficulty qualifying for a policy. However, if your health declines or if you experience a disability, you may no longer be insurable (if you are still insurable, it will certainly be at a higher premium)."

      This is often referred to as "adverse selection." As one insurance agent puts it, "Only the sick people want the coverage, which makes it expensive, which drives out the healthy people who think it's just not worth it." In other words, healthy customers will be paying large sums of money to be covered in case they are injuredbut once they ARE injured, all bets are off.

      Such was the fate of Nadaleen B., of Painesville Township, OH, who was the victim of a terrible car accident in December 2004.

      According to her husband, Nadaleen's doctor diagnosed her with several bulging cervical discs in her spine, causing her frequent headaches and limiting her mobility. Nadaleen received both LTD and short-term disability (STD) coverage from MetLife, but "We had only received 2 checks from them, and then they stopped paying benefits."

      Nadaleen's husband contacted her caseworker repeatedly, to no avail. After repeated faxes, phone calls, and emails to her caseworker, supervisors, and further up the chain, Nadaleen's coverage was still denied, and with bills mounting in their household, she had to consider returning to work against her doctor's recommendation.

      "Nadaleen is still in lot of pain. We depend on 2 incomes to meet our mortgage, car payment, utility bills, and groceries. We only have my income at the moment and are being stretched to the limit financially and emotionally," her husband said.

      Planning for the Unplanned

      If disability insurance doesn't fulfill its promise of providing income for the injured or disabled while they recuperate and rebuild their lives, what are the best options for consumers?

      You might consider long-term care insurance as opposed to disability. Long-term care insurance covers the needs of the disabled and the elderly alike. The U.S. Government Accountability Office estimates that 40 percent of the 13 million people receiving long-term care services are between the ages of 18 and 64.

      As opposed to providing income replacement for the disabled or injured, long-term care insurance pays for the basic daily living services an individual needs when physically and mentally impaired. Of course, it pays nothing to replace your salary but given the uncertainty of collecting disability payments, this may not be a serious drawback.

      With the consumer protections stipulated by the Health Insurance Portability and Accountability Act (HIPAA), long-term care purchasers can deduct the expenses from their income tax returns as they would auto or medical insurance. However, long-term health care insurance is not a "cure-all" any more than disability insurance, and may be subject to as many stipulations.

      In the view of one insurance industry member, disability insurance best serves the self-employed or workers who stand to lose a great deal from injury or a disabling condition.

      "There is a self-employed guy who is a machinist and he needs his hands to weld and such to run his machinery business. Disability insurance might be very useful for him if he got into some sort of accident, like slipping in the snow or something, and badly damages his hand," said one industry insider. "The machinist might have long term care insurance, but it would not be able to use it in this instance since he only lost the use of his hand and does not need to be in a nursing home."

      Whether the options are disability, long-term care, or both, only the informed consumer stands a chance of purchasing the plan that's best for them. The following are basic tactics to keep in mind when looking for the right insurance coverage:

      • Shop smart, look around. Look at price and option comparisons from as many insurance companies as you can. Use the price and reliability indexes from rating companies like Standard and Poor's or Moody's. (Keep in mind that these companies, like credit bureaus, use differing criteria to make their judgments, so don't go with any single company's recommendation.)

      • Figure out how much coverage you need. Be realistic; if you become permanently disabled, your standard of living will inevitably decline. The trick is to make that decline manageable. Find out what level of coverage your employer provides, then decide if you need more. If you are self-employed or an independent contractor, see if you qualify for a group plan through a professional or trade association.

      • Ask questions, read the policy. Your life and health are more important to you than to anyone else. When dealing with an agent, ask all the questions you feel need to be answered. Make sure the agent gives you plenty of options. Get plenty of quotes from good companies. Then, read the policies. Yes, they're boring and hard to read but only what is actually written in the policy means anything; your agent's words and earnest assurances are dust in the wind; verbal promises mean nothing.

      • Do the math. Talk to your tax advisor or financial planner to determine what you can afford and what you think you will need to get by if you become disabled. Long-term and disability insurance providers offer estimates based on age, income, medical history, and investment records, so your entire financial portfolio will come into play when determining the best option for your care.

      • Think decades, not years. You may be paying on a policy for 20 or more years so be sure to factor inflation into the benefit package you choose.

      • Buy from major, AAA-rated insurers. This is no time to look for a spunky underdog. You want to buy from a company that will still be in business when you need to file a claim.

      For More Information

      Purchasing long-term or disability insurance is a comprehensive and complex process, one which cannot be easily addressed in a single article. There are numerous resources available to consumers interested in choosing the right long-term coverage option, including:

      • The Insurance Information Institute Contains thorough breakdowns of every type of insurance you can purchase, as well as tools to compare prices, find insurance agents, and defining insurance terms.

      • America's Health Insurance Plans Though this site is slanted towards the insurer's viewpoint, its "Consumer Information" section provides valuable guides to each major insurance category.

      • The U.S. Administration on Aging An office of the government's Department of Health and Human Services, AOA provides a wide range of information and resources for older Americans, particularly relating to insurance of all sorts.

      •'s Insurance Section You've heard your agent's sales pitch. gives you the rest of the story -- the real experiences of consumers, told in their own words.

      Disability insurance should, in theory, allow consumers to recoup enough of their wages to pay for their living expenses while they are disabled....
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      Illinois Passes Privacy Act

      The Illinois General Assembly has passed legislation that requires all companies and organizations, regardless of where they are based, to notify Illinois residents in the event of a security breach. The measure is modeled on a California law and follows the theft of more than 100,000 names from ChoicePoint earlier this year.

      Gov. Rod Blagojevich proposed the legislation days after public disclosure of a massive security failure in October involving Georgia-based ChoicePoint, which resulted in the theft of personal information, including social security numbers, of approximately 145,000 people in all 50 United States including roughly 5,000 in Illinois.

      "When a consumers personal information falls into the wrong hands, it can lead to devastating outcomes," said Gov. Blagojevich. "This legislation will help prevent thieves from gaining access to personal information and will help consumers react quickly to protect their credit when identity thieves succeed. I applaud the General Assembly for passing this legislation, so that Illinoisans are no longer left in the dark when their personal information is at risk."

      Too often these days, it seems that security breaches of personal information are the rule rather than the exception. Consumers need the power to fight back, Attorney General Madigan said.

      The most effective way to prevent the destructive effects of identity theft is to act quickly to regain control of your personal and financial information, but this can be accomplished only if the consumer is quickly notified when the security of this information has been compromised. This legislation is a clear victory for consumers.

      The Personal Information Protection Act requires that any entity that collects and maintains personal consumer information must notify all affected Illinois customers in the event of a security breach. Personal information is defined as a Social Security number, a drivers license number, bank or credit card number and pin codes in combination an individuals first name or first initial and last name.

      The bill requires that notifications be made without unreasonable delay. The provisions of the Personal Information Protection Act would be enforced by the Office of the Attorney General through the Illinois Consumer Fraud Act. Current Illinois law does not require companies to notify consumers when their private information may have been hacked into or exposed to unauthorized sources.

      The stronger requirement will provide dual benefits: making sure that those whose personal information has been stolen are quickly notified; and motivating organizations to improve their security systems to better protect personal information.

      The number of reported identity theft cases in Illinois rose 49 percent in the past year, from 7,474 reported identity theft victims in 2003 to 11,138 reported victims in 2004. A 2004 FBI Cybercrime study found that only 20% of companies report computer hackings to the police and half do not report them to anyone.

      Identity theft and consumer fraud are rapidly growing problems, costing Americans nearly $550 million last year, up from $430 million in 2003, according to the Federal Trade Commission. The FTC received 635,000 consumer complaints in 2004 about identity theft and consumer fraud.

      After the ChoicePoint breach in late February, the company initially notified only residents of California who might have been affected because of a California state law requiring the company to do so. However, in response to a letter initiated by Madigan and signed by 38 other state attorneys general, ChoicePoint agreed to notify more than 140,000 consumers nationwide whose personal and financial information might have been compromised, including those in Illinois.

      In addition to the legislation, the Governor and the Attorney General reminded consumers of practical steps they can take to protect their personal information from thieves:

      (1) never provide any personal information in response to an unsolicited request;
      (2) review your account statements regularly to ensure that your transactions are in order;
      (3) check your credit report to make sure no new credit accounts have been opened in your name;
      (4) do not use information that can be used to steal your identity (birthdays, names, social security numbers, account numbers) as passwords or account numbers; (5) limit the amount of personal information you divulge over the phone or to web-sites.

      The Illinois General Assembly has passed legislation that requires all companies and organizations to notify Illinois residents in the event of a security...
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      Trampoline Injuries on the Rise

      Annual injuries from backyard trampolines have nearly doubled in the past decade, according to a study by researchers at Rhode Island Hospital and its pediatric unit, Hasbro Children's Hospital. The study reviewed trampoline injuries to children from a sample of emergency departments across the United States.

      According to the study, nearly 75,000 children on average were seen in emergency departments for trampoline injuries each year during 2001 and 2002. This represents a marked jump from the early- to mid-1990s, when a similar study showed an average of almost half the number of injuries each year. Most of the injuries, 91 percent, occurred at home.

      "Parents so far have not gotten the message that trampolines should not be used in the home environment. They should be used in very structured, well-monitored environments, with proper supervision. Frankly, that supervision probably doesn't and can't happen at home," says James G. Linakis, MD, PhD, a pediatric emergency physician at Hasbro Children's Hospital and an associate professor of emergency medicine and pediatrics at Brown Medical School.

      Children's Hospital and the Rhode Island Hospital Injury Prevention Center, reviewed a sample of U.S. hospitals from the National Electronic Injury Surveillance System for 2001 and 2002. They compared the data to a previous study that examined trampoline injuries from 1990 to 1995. At that time, there were an average 41,600 emergency department visits for trampoline injuries per year, compared with 74,696 emergency visits each year during 2001 and 2002.

      Also, researchers found that injuries serious enough to require hospitalization increased dramatically -- jumping from 1,400 annually in the first study to 2,128 annually in the current study. In both studies, fractures or dislocations remained the predominant reason for hospitalization. However, by 2002, emergency rooms were seeing an increase in lacerations, or cuts, in children who needed to be hospitalized.

      "Trampolines, particularly trampolines at home, are an increasingly major source of injuries to children," Linakis says. "It's still a significant problem, and the problem is growing compared to the early '90s."

      According to the study, nearly 75,000 children on average were seen in emergency departments for trampoline injuries each year during 2001 and 2002....
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      Illinois Bill Would Protect Nursing Home Residents

      Illinois is considering legislation to address the problem of parolees and sex offenders living among vulnerable elderly and mentally ill residents in state-licensed nursing homes.

      Attorney General Lisa Madigan said House Bill 1465, the Vulnerable Adults Protection Act, would provide for the identification and management of convicted felons residing in nursing homes or other long-term care facilities, and provide for notification to other residents of the facilities.

      In Illinois, approximately 100,000 adults reside in licensed long-term care facilities. Madigan said this population must be protected from residents who, because of their criminal history, pose a risk of harm.

      However, Madigan said, the current intake process for residents of long-term care facilities fails to take into account an offenders criminal history and the corresponding risk he or she may pose to the vulnerable adults in these facilities.

      HB 1465, which amends the Illinois Nursing Home Care Act and the states Code of Corrections, is sponsored in the House by Rep. James Brosnahan (D-Evergreen Park) and in the Senate by Sen. Edward Maloney (D-Chicago).

      This bill would put into place common-sense measures to immediately ensure that violent offenders, including sex offenders, who seek admission to our states licensed facilities are identified and managed appropriately, Madigan said. Vulnerable adults must be protected from residents who, because of their criminal history, pose an unacceptable level of risk to these residents.

      The proposed amendment to HB 1465 will bring about important and immediate change to the nursing home industry. Not only will this legislation make the environment in nursing homes safer for residents and staff, this legislation will also make the communities where these facilities are located safer places, Brosnahan said.

      It has been demonstrated that this legislation is necessary to protect the elderly and the mentally ill, Maloney said. This extends to the residents of the communities in which these facilities are located.

      HB 1465 would amend the Nursing Home Care Act to require that the Illinois Department of Public Health (IDPH) create new rules, within 30 days after the bill is signed into law, providing a mechanism for the identification, risk assessment, care planning, treatment and discharge of violent offenders, including sex offenders.

      Madigan said licensed facilities would be prohibited from accepting a sex offender or an offender on parole, probation or court-ordered supervision, unless the facility has complied with the new provisions. Licensed facilities also would be required to provide written notification to residents of the facility if a sex offender or parolee resides in the home.

      Finally, the Act would be amended to allow access for law enforcement to residents who are sex offenders or under supervision to ensure compliance with the terms of the Sex Offender Registration Act and parole or probation conditions.

      The bill also would amend the Code of Corrections to require that the Illinois Department of Corrections (IDOC) provide critical information including sentencing orders, social investigations, evaluations, reports of disciplinary infractions and parole plans to the licensing agency when a parolee becomes a resident of a state-licensed facility during his or her parole.

      IDOC also would be required to provide written notification to the police chief and sheriff of the municipality where the home is located, as well as the licensing state agency IDPH, Department on Aging or the Illinois Department of Public Aid whenever a parolee is a resident at a home in their jurisdiction or under their agency.

      Madigans office also has drafted House Bill 2386, known as the Lifetime Supervision of Sex Offenders Act, which currently is under consideration in the Senate. Under HB 2386, mandatory supervised release would be extended to range from three years to the natural life of the offender based on the risk the sex offender poses to communities and families.

      Illinois Bill Would Protect Nursing Home Residents...
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      FDA Warns that Mexican Drugs May Be Counterfeit

      Buying drugs in border towns can be hazardous to your health

      The Food and Drug Administration (FDA) is warning consumers about the sale of counterfeit versions of Lipitor, Viagra, and an unapproved product promoted as "generic Evista" to U.S. consumers at pharmacies in Mexican border towns.

      Consumers who have any of these counterfeit products should not use them and should contact their healthcare provider immediately.

      Counterfeit versions of Lipitor (a cholesterol-lowering drug), Viagra (a treatment for erectile dysfunction), and Evista (a treatment and prevention medication for osteoporosis in postmenopausal women) can pose significant risks to consumers.

      Counterfeit Lipitor that contains no active ingredient or not enough active ingredient could present a long-term risk for the various complications of high cholesterol, such as heart disease. The counterfeit product purchased in Mexico was associated with several reports of high cholesterol in consumers who had used the product.

      Counterfeit Viagra that contains little or no active ingredient would be less effective than a legitimate product or altogether ineffective.

      Women who take the substandard generic Evista product that contains no active ingredient may be at risk for developing osteoporosis or for having their osteoporosis progress.

      The "generic Evista" was analyzed by FDA in coordination with the National Association of Boards of Pharmacy and was found to contain no active ingredient. The counterfeit Lipitor and counterfeit Viagra were analyzed by Pfizer, Inc. and were also found to contain no active ingredient.

      The "generic Evista" product was purchased from Agua Prieta, Sonora, Mexico and is labeled as "Raloxifeno, fenilox, 50 tabletas, 60mg", made or distributed by Litio and labeled as manufactured in Monterrey, Nuevo Leon, Mexico. The label has red triangles across the top and bottom. (See the website noted below for photographs of the products.)

      Counterfeit Lipitor and Viagra were purchased in the Mexican border towns of Juarez, Los Algodones, Nogales, and Tijuana. The counterfeit Lipitor and counterfeit Viagra products were labeled only in English, whereas legitimate Mexican pharmaceuticals are usually labeled in Spanish. In addition, the counterfeit Lipitor was provided in round white plastic bottles; however authentic Lipitor in Mexico is sold only in boxes of blister packs.

      FDA warns that prescription drugs purchased in foreign countries are not regulated by the FDA and do not carry the same FDA assurances of safety, effectiveness, and manufacturing quality as drugs purchased within the United States.

      FDA Warns that Mexican Drugs May Be Counterfeit...
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      Pennsylvania Cracks Down on Puppy Mill

      Owners will pay $50,000 to consumers

      The owners of a Lancaster County, Pennsylvania, kennel will pay more than $50,000 to consumers who bought sick or diseased animals, $25,000 in fines and investigation costs, and be required to comply with much stricter standards in the sale of puppies in the future.

      Pennsylvania Attorney General Tom Corbett said the restitution, fines and operating terms are part of a consent petition filed today in Commonwealth Court against Raymond and Joyce Stoltzfus, the owners of Puppy Love Kennel.

      The defendants were accused of selling sick or diseased dogs that, at the time of sale, were misrepresented as healthy and fit. In addition, misrepresentations were made about the age of the puppies and their status and registration as purebreds.

      The Attorney General's Bureau of Consumer Protection investigated complaints from consumers located in Pennsylvania, Delaware, Maine, Maryland, New Jersey, New York and Virginia who said the puppies that they purchased from the defendants required veterinary treatment for a variety of ailments including: parasites, upper respiratory infections, distemper, tapeworms, pneumonia, deafness, malnutrition, heart defects, hip dysplasia, parvo virus, kidney failure and other congenital illnesses.

      Consumers told Corbett's Office that Joyce Stoltzfus rarely responded to their repeated complaints about the health of their puppies. If she did respond, many consumers said she was confrontational or hostile.

      The Commonwealth believes the defendants routinely denied consumers their rights under the Dog Purchaser Protection Act or "Puppy Lemon" law, unless the consumer complained or threatened to complain to the Attorney General's Office.

      "Our consent petition forces the owners of Puppy Love Kennel to comply with the toughest restrictions ever placed on a dog seller in Pennsylvania," Corbett said. "The enhanced consumer restitution and strict sales and animal management guidelines are in place to stop this kennel from selling sick, diseased or defective animals."

      "The restrictions imposed go beyond what is currently required in the state and represent many of the changes that I would like to see in our existing law to further protect these young animals and their new owners," Corbett said.

      According to the attorney general, many of the enhanced restitution and guidelines required in the consent petition were modeled after dog protection laws already in place in New Jersey and other states.

      Under the terms of the consent, the defendants are required to:

      • Pay more than $50,000 in enhanced restitution to 171 consumers who filed complaints with the Office of Attorney General. Consumers will recover veterinary expenses as much as twice the purchase price of the puppy. Under current law, consumers can only recover vet expenses equal to the purchase price of the dog.

      • Pay enhanced restitution to consumers who purchased a puppy and incurred vet bills any time on or after March 13, 2005.

      • Pay nearly $25,000 in civil penalties and investigation costs.

      • Have their entire kennel population tested and treated by an independent licensed veterinarian by June 18, 2005. In addition, for health reasons, a 'kennel management' plan must also be implemented to separate the existing animals from the newer puppies entering the kennel.

      • Provide dog purchasers with proof that the puppy was examined by an independent licensed veterinarian at least 15 days before the sale. If the puppy has not been checked within the 15 days, the animal can be rechecked within 72 hours of delivery to the purchaser.

      • Provide consumers 14 days to have any clinical illnesses diagnosed and reported to defendants. Under current law consumers have 10 days to inform the seller of clinical illnesses.

      • Allow four inspections of its facilities by the State Department of Agriculture every year for the next three years in addition to any other required or random inspections performed.

      • Offer a full refund, replacement dog or agree to pay as much as twice the purchase price of the dog if the animal, within six months, is diagnosed with a congenital or hereditary defect. Under current law consumers have 30 days to report any congenital or hereditary defects.

      • Include the name Puppy Love Kennel or otherwise identify itself as a licensed kennel in all newspaper or other advertisements.

      • Provide every dog purchaser with true and accurate documentation about the puppy's purebred status, age and registration eligibility.

      • Provide a method for consumers to contact the defendants to register complaints or discuss problems with the puppies purchased.

      Pennsylvania Cracks Down on Puppy Mill: The owners of a Lancaster County, Pennsylvania, kennel will pay more than $50,000 to consumers who bought sick or d...
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      USA PATRIOT Act Rewards ChoicePoint, Other Private Databases

      "Identity Verification" Exposes Consumers to Risks

      Most Americans give their uncritical approval to renewing the USA PATRIOT Act, passed hastily by Congress in the aftermath of 9/11. Few realize that key provisions of the measure put every American's private personal data into the hands of the very bunglers so heartily vilified in recent months for selling, losing and misplacing hundreds of thousands of consumers' records.

      The drive to quickly ratify the sweeping measures so quickly passed a few years ago began in April, with Attorney General Albert Gonzales urging Congress to renew every single provision aspect of the Act before key provisions expire in December. "Now is not the time to engage in unilateral disarmament" when dealing with terrorists and their associates, he said.

      The words are stirring, as politicians' words so often are. Would the response have been as positive if Gonzales had said, "Now is not the time to delay giving all of our private records to ChoicePoint and LexisNexis?"

      The Watch List

      One of the key provisions of the PATRIOT Act, Section 326, mandates that banks set up a process to verify the identity of all new customers opening accounts of any kind. That system, called the Customer Identification Program (CIP), would be maintained as a database and cross-referenced against a government-provided "watch list" of known terrorists, suspected terrorists, and individuals being investigated for possible suspicious activity. The database would be used to track money laundering and financing of terrorist activities within the United States.

      This raises more than a few privacy concerns. No one wants to end up on a "watch list" simply for sharing a name with a known member of al-Qaeda, after all. But on its face, the system seems to make sense. Tracking the money trail is a proven way to establish criminal activity, as the FBI demonstrated by using the RICO act to take down organized crime families.

      However, just as with RICO, the potential exists to use this provision of the Act for far more than just cataloguing suspicious bank account activity. Moreover, a closer observation reveals that this extensive "data mining" actually leaves innocent Americans' private data more vulnerable to identity theft and misuse, not less.

      Know Your Customer, Know Your Enemy

      Section 326 is titled "Verification of Identification." It involves collecting and maintaining identity data on any customer opening a new financial account at participating institutions, "including name, address, and other identifying information". Since everything the government touches must have an acronym, this is called the "Customer Identification Program", or "CIP."

      This provision has brought forth a host of companies and banks offering software and database solutions that supposedly ensure the accurate collection of customer data needed to comply with this section of the act.

      The IntegraSys corporation's ID Verification software, for example, cross-checks and references 23 billion data records, including everything from credit report headers to "warm address lists" that target "known sites of fraudulent activity", such as hotel mailboxes, prisons, P.O. boxes, etc.

      Data-warehousing giant LexisNexis' Instant ID solution offers a Web-based "robust and high quality tool which financial institutions can utilize to verify and validate the identity of a person opening a new accountfast, convenient and effective solution to assist financial institutions in complying with the USA PATRIOT Act by verifying the identity of new account applicants."

      The government "watch lists" used to verify the customer's identity are maintained by the U.S. Treasury's Office of Foreign Assets Control (OFAC). OFAC's purpose is to implement and enforce economic sanctions against known terrorists, drug dealers, and the like, "to accomplish foreign policy and national security goals." OFAC publishes and regularly updates a list of "Specially Designated Nationals" (SDN's), known or suspected terrorists and accomplices, and makes it available on its website.

      OFAC itself does not mandate that financial institutions comply with identifying potential suspects ("hits") on the watch list. It instead leaves the duty of compliance up to individual financial regulators and the many companies that have stepped into the breach to provide identity verification. The official word from the Treasury Department's Office of Public Affairs is that "the final rule employs a risk-based approach that allows financial institutions flexibility, within certain parameters, to determine which forms of identification they will accept and under what circumstances."

      As Kevin Bankston, staff attorney for the Electronic Frontier Foundation puts it, this was "a huge sop for data warehousers" -- a way for information brokers to further their goals of gathering exhaustive data on consumers. Given the prohibitive amount of time and effort necessary to maintain constant compliance with the frequently changing OFAC lists, data brokers seized the opportunity to gain a new foothold in the identity business.

      Further complicating matters, although the PATRIOT Act became law on October 26, 2001, the Treasury Department did not issue guidelines on how Section 326 should be implemented until July of 2002. A final ruling on the guidelines was not issued until September of 2003, with a mandatory compliance date of October 1, 2003. Even given the necessity of extensive inquiries from banks to understand how the rules were to be implemented, the gap of two years between the passage of the law and the final ruling means banks were -- and are -- essentially free to use whatever means necessary to "verify customer identities."

      Moreover, a more dangerous aspect of the Act allows that information to be shared with governmental agencies and other financial institutions, often resulting in customers being shut out of banking privileges altogether.

      Section 314: Sharing Your Information

      According to the Treasury Department's Financial Crimes Information Network (FinCEN), Section 314 of the PATRIOT Act "permits financial institutions, upon providing notice to the United States Department of the Treasury, to share information with one another in order to identify and report to the federal government activities that may involve money laundering or terrorist activity."

      Essentially, this rule creates a vast web of personal data, traded between banks, credit bureaus, and the like, from which the government can pick and choose anyone it believes to be engaging in suspicious activity. This provision does have some advantageous aspects, as it was utilized to gather data in the Riggs Bank money-laundering scandal. However, it also means that many innocent Americans or foreign nationals can find themselves "unbanked" if their names match that of a suspected terrorist on the watch list, or if their Social Security Number was used in cases of identity theft.

      In their zealous attempts to comply with both OFAC's lists and FinCEN's own Section 314-related lists, many banks have closed customers' accounts suddenly and without explanation -- the hardest hit being those of Arab or Muslim descent, regardless of their actual intentions, citizenship, or activity.

      The actual requirements for information gathering under Sections 314 and 326 are actually not terribly daunting. Banks are required to ask for a full name, address (P.O. Boxes won't do), Social Security number, and date of birth from any customer wishing to open a new account as "minimum procedure." "Non-documentary verification" -- that is, proving a customer's identity apart from the papers they present -- can involve anything from using Section 314 to communicate with other banks regarding their financial history, to consulting with the major consumer reporting agencies (CRA's) to determine their credit activity.

      Although Section 326 mandates that banks give consumers "adequate notice" that these procedures are being used, the guidelines are so vague that nothing more than a verbal description of the actions being taken can suffice.

      In addition, banks are required to compile, submit, and maintain exhaustive records of the customer's identity, how it was verified, and any discrepancies encountered, for up to five years after the consumer closes the account. Imagine the prospect of bank employees coming and going with access to your personal information, even if you no longer maintain an account with that institution.

      Information brokers have been lobbying to move from the cumbersome "document solution" to a completely electronic ID-verification system, based solely around mining data records and using Social Security numbers as the linchpin. As one financial services firm puts it, "From conversations with financial institutions, manual solutions can take up to 25 times longer than automated solutions, which can lead to reduced service levels and inefficient processes at the bank."

      As they see it, "[u]sing a comprehensive identity verification solution provides the greatest protection against identity fraud while improving customer service, risk management, and operational efficiency."

      The key players in the drive for completely automated ID verification warehouses are by no means new to the game -- they are none other than data-mining giant ChoicePoint, and eFunds, the parent company of the ChexSystems banking data clearinghouse.

      Unholy Alliances

      Years before its now-infamous security breach and the loss of thousands of consumer records, ChoicePoint was a major government contractor. In fact, it is by most measure the federal government's primary source of information on individual Americans.

      The federal government has turned to commercial databases for information because it is not allowed to collect such data. In 1974, Congress passed the Privacy Act, which made it illegal for the government to operate its own "Big Brother" database. But Congress did not restrict private companies from conducting surveillance and gathering data on individual Americans. Nor did it prohibit the government from buying that information.

      Since at least April of 2001, the Alpharetta, Georgia-based data broker has been providing multiple government agencies with thousands of data records on individuals. According to the Electronic Privacy Information Center (EPIC)'s investigation, ChoicePoint owns dozens of information brokering or collecting services, trafficking in everything from medical records, to drug test results, to arrest and criminal records.

      One of their key acquisitions was the Bridger Insight software verification system, designed to provide "enhanced due diligence research to quickly uncover otherwise unknown customer information." The Bridger Insight system allows for a full-scale electronic identity verification, including helpful "risk assessment" scores as to whether or not the individual's identity data constitutes a concern, and full-page "verification reports" with "Pass" or "Fail" marks depending on the results.

      If this sounds like the work of a consumer reporting agency or credit bureau, ChoicePoint's pedigree as a spin-off of credit reporting giant Equifax bears that out. However, unlike Equifax, ChoicePoint is not officially classified as a consumer reporting agency, and thus not subject to the terms of the Fair Credit Reporting Act (FCRA).

      EPIC filed suit against ChoicePoint in 2004 for what it calls "subverting the policy goals of federal information privacy law." Also very much like a credit reporting agency, ChoicePoint was taken to task for providing inaccurate, outdated, and mixed-up consumer data records -- with a "90% error rate", according to Pam Dixon of the World Privacy Forum. Couple this with the sale of 145,000 data records to an admitted criminal enterprise, and ChoicePoint was the lucky recipient of Privacy International's 2005 "Lifetime Menace" award for being "an abuser and broker of personal information for many years now, collecting information on Americans and foreigners without having to adhere to strict privacy laws."

      Nevertheless, ChoicePoint's Bridger Insight system is one of the cornerstones of the PATRIOT Act's identity verification solutions, "help[ing] more than 4,000 clients simplify the process of achieving compliance and conducting due diligence."

      As detailed in's special report on ChexSystems, the Bridger Insight software system was partnered with eFunds' ChexSystems database in 2002 to "help streamline Section 326 compliance efforts of financial institutions," according to eFunds' senior vice-president Mark Spilsbury.

      The Scottsdale, Arizona-based "information solutions" company has positioned itself as a prime mover in the identity verification field. One of their major subsidiaries, Penley Inc., provides a host of ID verification products, including BackgroundWatch, which researches customer data and returns a three-tiered search result. The "Basic Search" returns general data, such as name, address, SSN, and the like. The "Extended Search" offers more in-depth information, including lists of property records and "possible friends and relatives" (emphasis added).

      The "Complete Search" contains all of this data, plus records of any sort of license, weapon registration, and voter registration. All of this information is integrated with the ChexSystems suite to track banking records and evidence of suspicious activity. The end result is a frighteningly complete portrait of an individual's personal records, containing all of their essential data and information.

      Furthermore, the "risk assessment" components allow participating financial institutions to not only study a customer's past banking history, but in the case of the QualiFile system, to actually make judgments on their future history based on "[a bank's] pre-determined risk strategy and a risk assessment score that scientifically predicts the likelihood that you will have to force-close this account."

      Penley has been a strong advocate of moving to a Web-based solution for its data warehousing for some time. Their cleverly named "ID Verification" system advocates a centralized, one-stop "turnkey" process, with (in their words) "simple 'pass' or 'fail' answers which require little interpretation by the frontline employees."

      The system apparently requires nothing more than an Internet connection and a Web browser to use -- no software or hardware required. Given that eFunds proudly proclaims its ownership of one of the largest debit databases in the world , and its ability to outsource its customers' operations to offshore call centers, the potential for identity theft and data mismanagement is tremendous.

      Apparently, the notion that a purely Web-based information database might find itself prey to hackers and data thieves is apparently not as high a priority as ensuring that the data is collected and sold to whomever wants it.

      Keeping Your Information Safe: What You Need To Know

      The sheer number of data mismanagement scandals in recent months has drawn Americans' attention to the fact that their private, personal information is no longer strictly their own. It can be traded among banks, provided to the government, and used by "information brokers" to sell consumers products, predict their shopping patterns, and determine their ability to open bank accounts, receive credit cards, or apply for loans. The PATRIOT Act's "identity verification" provisions grant data brokers even more power to hoard your information and use it for whatever purpose they wish -- or worse, mismanage it and let it fall into the hands of identity thieves.

      Sections 314 and 326 are not "sunset" provisions of the Act. They are permanent for as long as the Act remains law. As debate begins swirling over the necessity of the Act and its consequences for Americans, greater attention must be paid to the fact that the very thing this Act was passed to protect -- Americans' freedom and liberty -- was endangered by the ability of data sellers to take our information and turn it into a commodity.

      If you are concerned about your right to privacy and keeping your information safe, there are many resources to consult, including the following:

      The USA PATRIOT ACT: The full text of the act, a summary, related bills, and other information, direct from the Library of Congress.

      The Electronic Privacy Information Center (EPIC): A nonprofit, nonpartisan public research center that specializes in privacy rights, First Amendment protections, and civil liberties. EPIC has a special section devoted to ChoicePoint and its abuse of consumer privacy.

      The Electronic Frontier Foundation (EFF): Focused on protecting digital rights, freedom of expression on the Internet, and the right to online privacy. An arm of Consumers' Union, aimed at providing Americans with all the tips and knowledge they need to protect their personal and financial information.'s Financial Services Section: Full of the latest news regarding the financial world and how to make sure you can gain the services you need without sacrificing your privacy or rights as a consumer.

      Identity Verification Exposes Consumers to Risks...
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      Toyota And GM Ponder Joint Hydrogen Car Deal, Mitsubishi Goes Hybrid

      Mitsubishi Goes Hybrid

      The two biggest automakers in the world are talking about forming a joint venture to begin manufacturing hydrogen-powered cars. General Motors Corp. and Toyota Motor Corp. refer to the proposed undertaking as Project Apollo.

      Japan's Kyodo news agency reports that the automakers are expected to formally discuss Project Apollo at a top-level meeting this weekend in Japan. There is no formal or informal agreement between the two automakers, however.

      Fuel cell and hydrogen driven cars currently are about ten times more expensive to produce than conventional automobiles. The combined technological of the two companies would produce a large worldwide competitive advantage.

      GM is already working on fuel cell development with, with several Southern California companies and at its own Advanced Technology Center in Torrance. Toyota is the worldwide leader in hybrid technology.

      GM has insisted for years that it will have a commercially viable fuel cell vehicle ready for the market by 2010, and insiders say the company is well ahead of schedule in several key areas. Toyota has been a major proponent of hybrid technology, which combines standard gasoline engines with electric power.

      Carmakers see fuel cells as desirable because if they can be perfected, and if a retail fuel distribution system is developed, they would remove the auto industry from much of the debate over air pollution and fossil fuel consumption.

      The effort to produce fuel efficient if not green cars is spreading through the auto-industry, in large part because of Toyota's success with hybrid technology sales.

      In a effort to save what is left of its automobile sales share, scandal plagued Mitsubishi Motors will start selling electric cars in 2010.

      The company hopes to show off its expertise as well as mend its battered reputation by entering the hybrid and electric-car market. To that end Mitsubishi showed off a tiny test vehicle equipped with motors embedded in the rear wheels that run on a lithium-ion batteries.

      Sales of Mitsubishi cars have fallen since the automaker acknowledged five years ago it had been systematically hiding auto defects from authorities. Its global production in March dropped 11 percent from the same month a year ago.

      The Mitsubishi electric car, which will be available for test fleets next year, has a cruising range of 93 miles on a single charge and can be recharged in a regular home.

      Toyota And GM Ponder Joint Hydrogen Car Deal, Mitsubishi Goes Hybrid...
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      Federal Study Recommends Yearly Sealing of Treated Wood Decks, Playgrounds

      May 12, 2005
      Homeowners with decks or playground equipment made of treated wood should take note of a federal study that finds yearly application of oil- or water-based stains or sealants can reduce the amount of arsenic released by the wood.

      The data show that oil- or water-based sealants or stains that can penetrate wood surfaces are preferable to products such as paint, because paints and other film-formers can chip or flake, requiring scraping or sanding for removal, which can increase exposure to arsenic.

      Consumers should consider the required preparation steps -- sanding, power washing, etc. -- before selecting a product to minimize potential exposure to arsenic, both for initial application and re-coating, the study said.

      The results are from a study of chromated copper arsenate (CCA)-treated wood conducted by the Environmental Protection Agency (EPA) and the Consumer Product Safety Commission (CPSC).

      The information is based on first-year results from two-year studies initiated by CPSC and EPA in 2003 to determine which stains, sealants and paints are most effective in reducing potential arsenic exposure from existing CCA-treated structures. EPA tested the performance of 12 coatings on older wood and CPSC tested eight coatings (seven were the same as the EPA group) on new (as of August 2003) CCA-treated wood.

      CCA was a pesticide treatment commonly used in the past to prevent deck and playground wood from rotting and insect damage. Effective Dec. 31, 2003, the use of CCA to treat virtually all wood intended for residential use was eliminated.

      Key points for parents and consumers:

      • If you are concerned about potential exposure to arsenic, sealants, when applied at least once a year, have been shown to reduce dislodgeable arsenic from the wood.
      • Oil or water-based, penetrating sealants or stains are preferred.
      • As always, parents and other caretakers should follow these precautions for children who play on or near decks. Always wash hands thoroughly after contact with treated wood, especially prior to eating and drinking, and ensure that food does not come into direct contact with any treated wood.
      • At this time, EPA and CPSC said they do not believe there is any reason to remove or replace CCA treated structures, including decks and playground equipment.
      • Consumers should follow manufacturer recommendations when handling the wood, including the same precautions that workers should take: wear gloves when handling wood, wear goggles and dust masks when sawing and sanding, always wash hands before eating, and never burn CCA treated wood.
      • The majority of exposure that is estimated to occur to children is from hand-to-mouth activities (i.e., children touching the surface of CCA-treated wood and then putting his/her hand in his/her mouth). This activity is most prevalent in children aged 1 to 6 years of age.

      Federal Study Recommends Yearly Sealing of Treated Wood Decks, Playgrounds...
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      High Resting Pulse a Danger Sign

      A French study finds that men with a resting pulse of more than 75 beats a minute are a elevated risk of sudden cardiac death

      A French study finds that men with a resting pulse of more than 75 beats a minute are a elevated risk of sudden cardiac death. A heart beat that responds sluggishly to exercise is also a danger sign, the researchers found.

      The findings, published in the New England Journal of Medicine, are based on a study of 5,713 apparently health working men between the ages of 42 and 53 years. None had been diagnosed with heart disease.

      The test subjects underwent standardized testing between 1967 and 1972 and researchers examined data on the subjects' resting heart rates, the increase in rate from the resting level to the peak exercise level, and the decrease in rate from the peak exercise level to the level one minute after the termination of exercise.

      During a 23-year follow-up period, 81 subjects died suddenly.

      The risk of sudden death was increased in subjects with a resting heart rate that was more than 75 beats per minute and in subjects with an increase in heart rate during exercise that was less than 89 beats per minute, and in subjects with a decrease in heart rate of less than 25 beats per minute after the termination of exercise.

      "These three factors (were) strongly associated with an increased risk of sudden death," the researchers said.

      The research is the first large study to show an association between so-called heart rate profile and the future risk of sudden cardiac death in healthy people, said lead author Xavier Jouven, a physician at Georges Pompidou European Hospital in Paris.

      The test could be useful for men over 40 and women over 50 who have at least two risk factors for heart disease, which may include high cholesterol, high blood pressure, obesity or a family history of heart disease, physicians not associated with the study said.

      Sudden cardiac death is responsible for 5 percent to 10 percent of all U.S. deaths, or roughly 350,000 to 500,000 deaths a year. It strikes people as young as their 30s and 40s, often with no prior warning.

      Sudden cardiac death is responsible for 5 percent to 10 percent of all U.S. deaths. It strikes people as young as their 30s and 40s, often with no prior wa...
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      No Payday for Payday Lenders in Texas, New York

      Payday lenders have lost big in two of the nation's biggest states. Texas' House of Representatives today defeated a bill that would have loosened restrictions on payday loans and a New York appeals court earlier this week upheld a ruling that voided hundreds of payday loans.

      Without the state law, lenders in Texas operate under a bank model and use out-of-state affiliates to make loans, limiting interest rates and making it harder to squeeze more profit out of cash-short consumers.

      The Federal Deposit Insurance Corporation (FDIC) has been taking a dim view of banks' involvement in payday loans and other forms of predatory lending.

      In New York, an appeals court on Monday upheld a lower court decision shutting down a payday loan operation that targeted military families near Fort Drum; the decision voided hundreds of illegal loans.

      The State Appellate Division Third Department affirmed a lower court ruling finding JAG NY - which operates three NY Catalog Sales stores in Watertown and Queensbury - engaged in a scheme to make illegal high-interest loans to consumers.

      "It is clear that New York State will not countenance loan sharking of any kind," New York Attorney General Eliot Spitzer said.

      In issuing the lower court ruling last January, Justice Bernard J. Malone of State Supreme Court in Albany found that NY Catalog Sales violated laws that prohibit usurious loans, forced consumers to agree to unconscionable contractual provisions that constituted fraud, and made loans without a license.

      The January decision marked the first time a state court has found a payday loan offer to be a scheme to illegally circumvent New Yorks usury law.

      The lower court ruling found both NY Catalog Sales and its owner, John Gill, liable for the violations of law, and awarded monetary relief for injured consumers. The court decision also declared null and void any outstanding loan arranged by NY Catalog Sales with an interest rate that exceeds legal limits. It is estimated that there are hundreds of such loans.

      The appellate court ruling will allow a court-approved referee to review each individual loan to determine restitution for defrauded consumers. It is estimated that the value will be in the hundreds of thousands of dollars.

      In September 2004, Spitzer filed a lawsuit against NY Catalog Sales alleging that it was attempting to disguise its payday loans as "catalog sale" purchases. Payday loans are short-term unsecured loans that borrowers promise to repay out of their next paycheck. Due to the exorbitant interest rate of payday loans, as much as 400 - 900 percent, they are illegal in New York State.

      N.Y. Catalog Sales promoted the availability of fast cash of up to $500 in advertisements, flyers and store front signs to attract consumers into its stores. Consumers were told that, for every $50 to be borrowed, they would have to buy $15 in gift certificates or catalog merchandise.

      Consumers would then present the store with a check in the amount of the cash they wished to borrow and the cost of the merchandise or gift certificate. The store would agree to deposit the check on the consumers next payday.

      As in most payday loan scenarios, NY Catalog Sales customers were usually unable to repay their loan on their next payday, and fell into a cycle of repeating their transactions so that they could use the newly borrowed cash to cover the existing debt. With every "roll-over" of their loans, however, the consumers were required to purchase additional merchandise or gift certificates, quickly resulting in the total cost of the purchases exceeding the amount of money received by the consumers.

      In the past few years, Spitzers office has made other efforts to stop illegal payday lending schemes. In November 2004, Spitzer entered into a settlement with Las Vegas-based Cashback Payday Loans, Inc. which had been providing payday loans to New Yorkers over the Internet.

      The settlement barred Cashback from lending in New York State, voided outstanding loans with New Yorkers, and required the lender to pay restitution.

      In 2003, Spitzer filed a lawsuit to put a stop to a "rent-a-bank" scheme in which two Pennsylvania-based check-cashing companies contracted with a Delaware bank in an illegal effort to circumvent New York States laws that limit interest rates to 16 percent.

      Court Decision Shutting Down NY Payday Loan Operations Upheld by Appeals Court...
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      H&R Block, Household Settle Tax Loan Case

      Settlement Creates "Safe Harbor" for Future Loans, Block Claims

      H&R Block will pay $360 million to settle a class action lawsuit over its tax-refund loans, under the terms of a proposed settlement. The company says the settlement gives it a green light to continue the practice in the future.

      Block and its partner, HSBC Financial Services, were accused of gouging consumers who took out refund anticipation loans at interest rates frequently exceeding 100 percent.

      The settlement covers 28 million customers who made more than 55 million transactions with the company. It would consist of $110 million in cash and $250 million in coupons which consumers could redeem for $6 worth of tax-preparation services.

      Class members will also receive cash after plaintiffs' attorney fees are awarded by the judge, with the amount dependent on how many class members file a claim.

      H&R Block said the settlement would also create a "safe harbor" allowing Block and HSBC, which financed the loans, to continue to sell the products.

      "It really puts this whole issue behind us," company spokeswoman Linda McDougall said.

      The proposed settlement must be approved by U.S. District Judge Elaine E. Bucklo in Chicago. Bucklo rejected an earlier proposed settlement in 2003.

      Under the refund anticipation loan program, customers who owed a tax refund could receive most of the money in two to three business days by paying a fee to file the return electronically and a loan processing fee.

      According to a report released in January 2005 by the Consumer Federation of America (CFA) and the National Consumer Law Center (NCLC), consumers paid more than $1.4 billion in loan charges and fees in 2003 associated with RALs. These short-term loan terms reportedly had annual interest rates of 70 percent to more than 1,700 percent.

      H&R Block, Household Settle Tax Loan Case...
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      Fuel MAX Settles Federal Charges

      Fuel-saving technology is bogus, feds charged

      Operators who sent illegal spam and made deceptive claims for a bogus fuel-saving product have settled Federal Trade Commission charges that their e-mail and Web sites violated federal laws.

      The settlements bar violations of the FTC Act and the CAN-SPAM Act, and bar the defendants from making or assisting others to make deceptive product claims.

      In October 2004, the FTC filed a suit in U.S. District Court alleging that marketers, and the resellers working with them, were making deceptive claims for Fuel MAX and Super FuelMax products. The Web site operators and their affiliates - spammers who drove traffic to their site - made claims such as:

      • Increase gas mileage 27%+ by helping fuel burn better;
      • Reduce emissions by 43%;
      • Smoother engine;
      • Pays for itself FAST!!!!
      • Gives an extra 10% more horsepower;
      • Based on the size of your gas tank you will save from $8 for a typical 15-gallon gas tank, but larger V8 SUVs and trucks will save up to $20 per tank.

      The FTC alleged that the magnetic "fuel saver" does not save fuel, does not increase gas mileage, and does not reduce emissions. The agency claimed that the false claims violate the FTC Act. The agency also alleges that by providing promotional materials with false claims to affiliates, the defendants provided them with the means to violate the FTC Act.

      The FTC charged that by inserting the names of innocent third parties in the "from" or "reply to" fields - "spoofing" - and failing to provide a valid physical postal address, the marketers were violating the CAN-SPAM Act.

      Settlements with Mark C. Ayoub, his companies, Diverse Marketing Group, Inc., and Diverse Marketing Group LLC; and Floyd and Marcia Tassin and their company, Net Marketing Croup LLC, bar them from making misrepresentations in connection with the sale of fuel-saving devices or any product or service sold over the Internet. In addition, they prohibit them from providing others with the means and instrumentalities to commit deception.

      Operators who sent illegal spam and made deceptive claims for a bogus fuel-saving product have settled FTC charges that their e-mail and Web sites violated...
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      A Wolf in Pup's Clothing

      My dog is from a puppy mill. Last Christmas, in my haste to ensure the perfect puppy for my six-year old daughter, I went to what I thought was a network o..

      Pocket Pets May Carry Disease

      "Pocket pets" are cute but potential disease carriers, the U.S. Centers for Disease Control (CDC) warns. The term refers to small animals, often rodents, that are kept as pets and could fit in your pocket.

      Small pets have sickened as many as 30 people -- many of them children -- with dangerous, multidrug-resistant bacteria in at least 10 states, federal health officials are warning.

      Lately, the definition of pocket pets has expanded to include a few animals that are not quite that little, but that are housed in cages. Common pocket pets include rats, mice, rabbits, gerbils, hamsters, guinea pigs, and ferrets as well as rodents bought to feed other animals such as snakes.

      Unfortunately, owning a pocket pet can be hazardous to your health. The little critters can carry Salmonella and other diseases.

      The Salmonella germ is a group of bacteria that can cause diarrheal illness in humans. They are microscopic living creatures that pass from the feces of people or animals, to other people or other animals. Animals can carry this germ and not appear to be ill. Rodents, like reptiles, may spread Salmonella to people.

      Choosing a Pocket Pet

      When choosing a pocket pet, dont pick one that is quiet, tired, has diarrhea, or looks sickly. The pet should be lively and alert with a glossy coat free of droppings. The animals breathing should be normal. There should be no discharge from the eyes or nose.

      If one of the animals in the cage in a pet store has diarrhea or looks sick, the others may have been exposed to an infectious disease. Do not choose any of these animals as your pet. Wash your hands immediately after handling pet store animals or after touching animal cages or bedding.

      If your pet dies soon after you buy it, it could have been ill with a disease that could also make people sick. Tell the pet store and do not reuse the cage until it has been cleaned and disinfected.

      Tips for Preventing Salmonella from Rodents

      • Washing hands with soap and water after handling rodents or their cages and bedding is the most important thing you can do to reduce the risk of Salmonella transmission.
      • When cleaning up droppings from your pet, always wash your hands thoroughly afterwards. Young children, especially those younger than five years old, should be closely supervised when cleaning cages and should wash their hands immediately following handling rodent feces.
      • Do not eat food or smoke while handling your pet.
      • Do not handle pets in food preparation areas.
      • Do not kiss your pet or hold it close to your mouth.

      More information is available on the CDC Web site. Learn more about keeping yourself and your pet healthy by visiting CDCs Healthy Pets Healthy People web page.

      Pocket pets are cute but potential disease carriers, the U.S. Centers for Disease Control warns. The term refers to small animals that are kept as pets and...
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      Dish Network To Pay $50,000 for Missouri Do Not Call Violations

      Made telemarketing calls taht aren't allowed under state law

      Satellite television provider EchoStar Communications which does business as Dish Network will pay a civil penalty of $50,000 for telemarketing calls made to Missourians on the states No Call list, Attorney General Jay Nixon said.

      The assurance of voluntary compliance alleges that EchoStar and its authorized dealers placed telemarketing calls soliciting the sale of satellite television services since July 2001 to consumers on Missouris No Call list.

      As part of the agreement approved by Circuit Court Judge Lucy D. Rauch, EchoStar and its authorized dealers will cease calling Missourians on the list, and will provide Nixons office with a report of measures the company has taken to assure future compliance with state law.

      "Missouris No Call law was implemented to assure Missourians that they could sit down to the dinner table without constant, uninvited interruptions by incessant telemarketing calls," Nixon said. "Through our aggressive enforcement efforts, Missouri citizens can be assured that we will continue to take whatever steps are necessary to protect their rights and privacy."

      EchoStar will pay a civil penalty of $50,000 to the Missouri Merchandising Practices Revolving Fund, and any future violations could cost the company up to $2,000 per call.

      Currently, more than 1.9 million Missouri households have signed up for the Missouri No Call list. Missouri residents not yet on the list can have their numbers included or can file a complaint regarding a No Call violation via the Attorney Generals Web site or by calling 1-866-NOCALL1.

      To date, Nixons office has obtained more than $1,248,000 from businesses for violating Missouris No Call law.

      Dish Network To Pay $50,000 for Missouri Do Not Call Violations...
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      Oklahoma Nursing Home Shocks Inspectors

      Oklahoma Health Department inspectors say they found a shocking situation when they arrived at the Nobel Residential Care Home, along with more cockroaches than they could count. As a result, the residents of the nursing home were ordered evacuated to cleaner quarters.

      Department officials say an on-site monitoring visit determined that an emergency existed requiring immediate action to protect the health, safety and welfare of the residents of the home based on widespread infestation of rodents and insects.

      Inspectors say they found rodent droppings, urine-soaked kitchen plates and insects crawling all over residents' clothing and bedding.

      Noble Residential Care Home housed 34 residents. A separate, unlicensed building housed eight additional residents. An interagency relocation team from the OSDH, Department of Human Services, and the Department of Mental Health and Substance Abuse Services coordinated the relocation of the residents, working with the residents, their families and guardians to find new homes and make the transition as smooth as possible.

      James Joslin, assistant chief of Long Term Care Services at the OSDH, reported all residents were out of the building within 24 hours.

      "It is a credit to the assisting agencies as well as the receiving facilities that we were able to get these people moved so quickly. We regret the sudden disruption to the residents' lives but the living conditions in this facility fell well below the standards we expect of a licensed residential care home," Joslin stated.

      The facility has ten days to request a hearing on the decision to relocate the residents.

      "We take our responsibility to protect the residents of these facilities very seriously and we will continue our inspections to ensure the residents are receiving quality care and the operators are meeting state regulations. The residents continue to be our primary concern," said State Health Commissioner Dr. Michael Crutcher.

      The action included notice to the facility of the Department's plans to file a petition to not renew the facility's license.

      Oklahoma Nursing Home Shocks Inspectors...
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      Illinois Charges Hail Storm Chaser

      An Illinois judge has ordered "hail storm chaser" Robert Olson to pay $1.1 million in penalties

      An Illinois judge has ordered "hail storm chaser" Robert Olson to pay $1.1 million in penalties and $574,000 in restitution to consumers. Olson and his company, Hail Restoration inc., allegedly solicited storm-related roof repair jobs in the Chicago area and collected down payments but never did the work.

      "This was a particularly horrible case of home repair fraud that cost consumers hundreds of thousands of dollars," Illinois Attorney General Lisa Madigan said. "Under (this) order, Robert Olson will no longer be able to knock on consumers doors and use Hail Restoration to bilk consumers out of hard-earned dollars needed for home repair."

      The defendants also were permanently prohibited from doing home repair in the state of Illinois.

      Madigans office has received a total of 150 consumer complaints against Olson and Hail Restoration, alleging he accepted down payments from Illinois residents and then failed to repair damages to the consumers roofs. At last 30 complaints were filed by senior citizens.

      In December 2004, Madigan filed a lawsuit against Olson and Hail Restoration, alleging Olson and his team of sales representatives traveled the Chicago-area going door-to-door to solicit work by claiming consumers homes had sustained roof damage during storms. Many of the consumers signed contracts during the first visit by a Hail Restoration representative to their homes.

      Madigan said that as part of Hail Restorations scam, Olson and his sales representatives told prospective customers that repairs could be done to their homes at no cost to the customers. Olson negotiated, without a proper license, with the customers insurance companies. The customers then signed over to Olson the checks that were paid by their insurance companies to cover damages. However, after receiving the payments, Hail Restoration never made the repairs.

      According to Madigans lawsuit, on one occasion in June 2004, the defendants informed an elderly Maywood resident that she was entitled to have the hail storm damage to her home repaired at no cost. The elderly woman signed a contract with the defendants and signed over a $7,843 insurance check to the defendants. Following that, the defendants never showed up at her home to begin the repair work.

      The defendants were charged in December 2004 with multiple violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and the Home Repair and Remodeling Act for failing to complete the work for which they contracted and, in many cases where work was begun, for performing substandard work.

      Madigans lawsuit also alleged the defendants violated the law because they never obtained either a roofing license or a public adjusters license in Illinois and failed to inform customers of this. Finally, the lawsuit charged that consumers were not provided with the legally-required Home Repair: Know Your Consumer Rights pamphlet.

      Illinois Charges Hail Storm Chaser: An Illinois judge has ordered "hail storm chaser" Robert Olson to pay $1.1 million in penalties....
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      Credit Bureaus: Biggest Threat to Your Identity

      How Consumer Reporting Agencies Endanger Personal Information

      After each new identity theft scandal, credit bureaus scramble to offer customers the latest tips to protect their personal information from being stolen, misused, or abused. Yet some of the biggest dangers to Americans' personal information come from the credit bureaus and consumer reporting agencies (CRA's) themselves.

      The three major credit bureaus -- Equifax, Experian, and Trans Union -- all offer comprehensive, and expensive, "identity protection" packages, which claim to insure the user from damages incurred by misuse of their personal data and issue notifications of fraud to creditors and other agencies who view consumers' credit on a regular basis.

      Yet many Americans find themselves threatened with collection or unable to obtain credit due to a credit bureau's mistakes. The major CRA's consistently fail to report accurate information, change credit ratings based on erroneous data, and often "mix up" customers' information, resulting in innocent consumers being harrassed or penalized for actions they did not commit.

      Moreover, as Consumers Union pointed out recently, "When a company improperly breaches a consumer's sensitive information, the onus is on that consumer the victim to fix the problem." Customers have to contact the credit bureau and attempt to prove that they were not responsible for the actions committed using their identity, a process made more difficult by the lack of direct contact options most credit bureaus provide. receives a constant stream of complaints from irate customers regarding credit bureaus' inability -- or unwillingness -- to protect the personal information of the very people they claim to assist.


      Larry W., a computer support specialist from Centreville, Virginia, ordered his credit report from, a subsidiary of Experian. He was shocked to find that his personal information was gone and replaced with someone else's, one Lawrence W. of nearby Woodbridge, Va. His own name was listed as an alias, and he had access to all of the other man's personal records.

      "All of my information was mixed in with his, and still is," he says. He tried contacting Experian multiple times to address the error, and was told he could only change the information via their online dispute form, which encountered errors every time he tried to make changes. Larry is considering seeking legal counsel to resolve the issue and correct the changes.

      A similar circumstance befell John P., of Laurel, Delaware, in June of 2004. Experian mixed his identity with two other individuals who owed high levels of credit card debt, thus leaving John to be harassed by creditors and collection agencies constantly. "I have sent a certified letter to Experian, and I've made a complaint with the Federal Trade Commission ... I still can't seem to get this cleared," he said.

      The most common complaint from Experian customers revolves around "mixed identity" information on their reports, such as placing another person's credit obligations on their report, and the inability to contact any company representative to make changes.

      Any user wishing to confirm or change their data, or to use Experian's identity protection services, must first purchase a credit report and create a log-in account, thus ensuring that the company makes its money and has access to your information. In addition, Experian charges merchants or vendors any time it reports changes to a customer's account, perhaps explaining why customers' data is so often inaccurate or out of date.

      Trans Union

      Robert S., of Victorville, California, was a victim of Bank of America's recent loss of customer data tapes. He placed a "fraud alert" on his accounts, and yet, when he tried to purchase a cell phone for his elderly mother some time later, he found that he was denied credit because the phone vendor couldn't verify his identity with Trans Union.

      "The home telephone number Trans Union has on file for me is incorrect, and US Cellular is unable to verify my credit...My mother's safety is paramount in my mind, and the block Trans Union is providing could directly impact on her safety, should she need emergency service."

      Trans Union, like Equifax, requires customers to purchase their products in order to verify their information, such as their "ID Fraud Watch", which costs customers $43 per year. The "ID fraud watch" claims to offer comprehensive protection to users, including weekly "fraud watch" emails and regular access to a Trans Union credit report.

      Such conveniences are cold comfort to Mike R. of San Francisco. Mike was impersonated by an identity thief in a contact with MBNA, and Trans Union reported the activity as a "hard" credit inquiry on his report, thus lowering his credit score.

      Despite Mike's citing of the Fair Credit Reporting Act (FCRA), which demands creditors investigate inquiries, Trans Union did nothing about the new inquiry. In Mike's words, "[Trans Union] would not accept that [it] had any statutory responsibility to investigate the accuracy of some types of disputed information on consumer credit reports."


      Equifax customers recite a litany of failures to update personal data, mixing customers' reports and exposing their personal information, and an unwillingness to admit fault, let alone solve any issues.

      Meanwhile, their product line spotlights the Equifax Credit Watch Gold product, which offers daily credit alerts and unlimited credit reports for the token fee of $99.95 for twelve months.

      William C., of Gresham, Oregon, suffered heavy business losses and increased insurance rates when Equifax mixed his identity information with another individual, who had a different Social Security number and numerous derogatory entries on their report, thus damaging William's credit.

      "I proceeded to provide the correct information. Following this, Equifax proceeded to enter my correct SSN into the same incorrect old report and issue it out again and again."

      Another Equifax customer signed up for their "credit alert" service to receive notifications of major activity or changes to their credit file, only to find that "[w]hile I received their advertisements regularly, I never received a single alert even when I generated several credit activities where I know the lender used Equifax."

      What You Can Do

      On April 13th of this year, Federal Trade Commission chairman Deborah Platt Majoras testified that "the Commission receives between 15,000 and 20,000 contacts a week from victims of identity theft and consumers who want to learn how to avoid becoming a victim."

      While many options exist to protect consumers' data from scam artists, "phishers", and the like, what does one do when supposedly reputable credit agencies endanger their private information?'s special report on understanding credit, Plastic Prison, offers some basic tips on dealing with credit bureaus. In addition, here are a few tactics to pursue when investigating cases of inaccurate information:

      Get the right phone numbers. If you purchase a product from the three major credit agencies, you will be given a special toll-free number that grants you "member access" to its site. Don't bother with the numbers they give out publicly. Use the member access numbers to call them at all times.

      Keep records of everything. Make copies of all documentation you send to credit bureaus. Send any documents via certified mail and request that the Post Office track it from delivery to receipt. Any faxes should be sent with transmission logs that verify the contents were sent properly. If you've purchased credit products from one of the three bureaus, save a copy of and/or print it out for future reference. Each report will have a number, and that number will be your only way to maintain your access to the "members only" part of any credit bureau's site.

      Contact the authorities. Your local and state police, the utility companies you do business with, and the local and state governments should be made aware the minute you believe your identity has been compromised. Document any and every instance where inaccurate information on your credit report has caused you financial or legal hardship.

      Keep your information secure! Don't give out your Social Security number unless you have to. Use specialized passwords when making any online transactions. Avoid using easily-obtainable information like your date of birth, your mother's maiden name, etc.

      Credit Bureaus: Biggest Threat to Your Identity...
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      Polaris Scrambler, Sportsman ATVs

      May 3, 2005
      Polaris Industries is recalling selected Sportsman and Scrambler model ATVs because of a problem with the electronic control modules in some units.

      Affected by the recall are the following models: Polaris 2004.5 Sportsman 500, 2005 Sportsman 400, Sportsman 500, Sportsman 600, Sportsman 700, and 2005 Scrambler 500.

      Some 2004.5 and 2005 Model Year Sportsman and 2005 Model Year Scrambler 500 ATVs were assembled with possibly defective Electronic Control Modules (ECM) which may fail and overheat. If this were to occur, excessive heat could cause a fire, possibly resulting in serious injury or death.

      Affected units can be verified by comparing the last six digits of the Vehicle Identification Number (VIN) to the serial number range in bold type below. NOTE: Not all 2004.5 and 2005 vehicles are affected. Please review the affected unit table below.

      Polaris has received 26 reports of the ECM overheating. No injuries have been reported.

      Only select model year Polaris ATVs are part of this recall. The Sportsman ATV model and serial number identification decal is located on the right front side of the front radiator covering. The Scrambler 500 ATV model and serial number identification decal is located on top of the front cab cover. The VIN, or serial number is permanently stamped into the left frame rail behind the left front wheel of all Polaris ATVs.

      Model(s) AffectedModel Number(s)Serial Number Range - (last six numbers of VIN)
      2004.5 Sportsman 500A04CH50AR4XACH50A*4 407617-407876
      2005 Sportsman 400A05MH42AB4XAMH42A*5A 354270-354759, 360481-360630
      4XAMH42A*5B 411353-412822
      4XAMH42A*5A 353730-354269, 360631-360780
      4XAMH42A*5B 411593-411832, 413068-413137
      2005 Sportsman 500A05MH50AB
      4XAMH50A*5A 350562-351321, 355431-355580, 359016-359730, 362935-362979
      4XAMH50A*5B 407877-408216, 411873-411912, 415275-416014, 417015-417299
      4XAMH50A*5A 355581-355835, 358431-358715, 359831-360290
      4XAMH50A*5B 411913-412207, 415350-415419, 416015-416279, 417315-417614, 418310
      4XAMH50A*5A 350342-351590, 355280-355430, 358716-359790
      4XAMH50A*5B 408217-408556, 411833-411872, 415200-415274, 416280-416564, 417615-418114
      4XAMH50A*5A 350782-351051, 355130-355279, 359231-359630, 362765-363854
      4XAMH50A*5B 412208-412332, 415420-415754, 416715-417014, 418510-418704
      2005 Sportsman 600A05MH59AK4XAMH59A*5A 349790-350341
      2005 Sportsman 700A05MH68AK
      4XAMH68A*5A 349720-349789, 351776-352060, 353253-353487, 356181-356390
      4XAMH68A*5A 360901-361245, 362707-362764, 363575-363646
      4XAMH68A*5A 349130-349719, 351591-351775, 353488-353729, 355836-356180
      4XAMH68A*5A 360781-360900, 361286-361545, 362582-362706
      4XAMH68A*5A 362597-362609
      2005 Scrambler 500A05BG50AA4XABG50A*52 523011-523889, 527617-528602
      *=Check Digit. This could be either a letter or a number

      Polaris dealers sold these ATVs nationwide from August 2004 through February 2005 for between $5,999 and $7,299.

      Remedy: Free repair. Contact your Polaris ATV dealer to schedule an appointment for ECM replacement. Polaris has notified registered affected consumers directly about this recall.

      Consumer Contact: Call Polaris at (800) 765-2747 between 8 a.m. and 12 midnight ET everyday, or log on to the companys Web site at

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

      Polaris Scrambler, Sportsman ATVs...
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      Consumer Group Sues Whole Foods Market

      Natural foods retailer Whole Foods Market is named in a lawsuit filed by the Center for Science in the Public Interest (CSPI), charging that it sells a deceptively labeled fungus-based meat substitute manufactured by Quorn Foods, also named in the suit. CSPI says more lawsuits will follow.

      CSPI's suit charges that Avery Goodman purchased Quorn Naked Cutlets from Austin-based Whole Foods in September 2004. Shortly after eating the product, Goodman experienced a five-hour-long bout of stomach cramps, nausea, vomiting, and diarrhea, followed by two days of stomach pain.

      In response to a complaint from Goodman, Quorn Foods acknowledged that Quorn causes "allergic and adverse reactions" but rebuffed his suggestion that the company place warning labels on its products.

      Goodman is asking the court to require warning labels on Quorn packages and on Whole Foods' freezer cases. He is seeking a refund of the small amount of money he spent purchasing the Quorn, and is asking that his suit be certified as a class action so others could get refunds as well.

      CSPI says it is the first of what's likely to be a series of lawsuits, as it turns to the courts to stop deceptive labeling, fraudulent advertising, and the use of dangerous food additives. CSPI recently hired Stephen Gardner, a former assistant attorney general in New York and Texas, to direct its litigation efforts, which the group says are necessary since the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) have done a poor job enforcing the law in these areas.

      Quorn -- sold nationally in Great Britain since 1995 -- was introduced in the U.S. in 2002, positioning itself as a healthful alternative to meat products. Its packaging calls the main ingredient "mycoprotein," which the label describes as being related to mushrooms, morels, and truffles.

      In fact, mycoprotein is made from a fungus that is more akin to mildew than mushrooms, according to CSPI. Quorn's parent company, Marlow Foods, grows this fungus in giant vats, harvests it, and processes it to resemble chicken or ground beef.

      The larger problem with Quorn is that it causes allergic reactions in several percent of consumers. Many who eat Quorn foods will develop unsavory gastrointestinal symptoms such as the ones Goodman experienced, or even more serious, potentially life-threatening symptoms characteristic of anaphylactic shock.

      CSPI has repeatedly called on the Food and Drug Administration (FDA) to recall and ban Quorn, or at least require warning labels on it, but to no avail. Notwithstanding the reactions Quorn causes, the FDA has accepted the company's contention that the product is "Generally Recognized as Safe," or GRAS.

      In total, 169 Americans and almost 700 people in Britain and elsewhere have reported adverse reactions to Quorn products after finding a CSPI web site, Plaintiff Goodman says that he could have avoided his ordeal if there was a warning label, either on the package or on the freezer case in Whole Foods.

      "Whole Foods doesn't seem to care about the misery some people suffer after eating Quorn," said Goodman. "Apparently, they knew about the adverse effects before they sold it to me. Yet, they aggressively promoted it without any warning notice whatsoever. Is Whole Foods a reputable store? I'm not sure. I feel betrayed by the makers of Quorn, Whole Foods, and the FDA. They all knew about the danger of this 'health food,' but never bothered to let me know."

      The suit was filed in Travis County District Court, in Whole Foods' hometown of Austin, Texas, under Texas' Deceptive Trade Practices Act. Local attorney Austin Tighe of the law firm of Feazell & Tighe is co-counsel on the case.

      "This is a case where both Quorn Foods and Whole Foods know that this particular product literally makes people sick, yet they do nothing to warn consumers," said CSPI's Gardner. "The purpose of this lawsuit, and similar suits we intend to file, is to stop that kind of reckless corporate misbehavior."

      CSPI says that it hopes that its overall litigation initiative will encourage companies on their own to ensure that their products are safe and accurately labeled and advertised.

      Separately, CSPI recently negotiated some labeling changes with PepsiCo's Quaker Foods unit, eliminating the need to file a planned lawsuit. The products at issue include Quaker instant oatmeals with names such as "Strawberries & Cream" and "Peaches & Cream." The labels, however, do not make clear that those products have none of the advertised strawberries, peaches, or, for that matter, cream.

      Similarly, varieties of Quaker instant grits are branded "Country Bacon," "Real Butter," and "Ham 'n Cheese," yet those products have no bacon, butter, or ham, and virtually no cheese. Quaker, which was already considering revising its instant oatmeal labels, agreed to several of CSPI's suggested improvements. The new labels will more clearly state that these products are artificially flavored.

      "It is our hope that CSPI will be able to work with companies to iron out problems, obviating the need for litigation and expediting benefits to consumers," said Gardner.

      Also, CSPI has joined in a proposed class action lawsuit against the maker of Arizona Iced Tea. Led by Houston trial attorney Martin J. Siegel, this suit contends that the company is making fraudulent claims on the labels of its "Arizona Rx" line of drinks.

      Those products' labels variously indicate the presence of popular herbal ingredients such as echinacea, gingko biloba, valerian, ginseng, and sometimes vitamins. According to independent laboratory tests, the drinks had barely detectable levels of those ingredients. And according to CSPI, there is little or no evidence if any dose of those herbs and nutrients delivers the enhanced memory, reduced stress, or other health benefits that the company implies its drinks deliver.

      "The Food and Drug Administration has the authority to correct these kinds of deceptive claims on food labels, but despite our many complaints over many years, the agency has rarely acted," said CSPI executive director Michael F. Jacobson. "So long as the FDA keeps napping, we'll be hauling more and more food companies into court to protect consumers from fraud."

      Natural foods retailer Whole Foods Market is named in lawsuit filed by the CSPI charging that it sells deceptively labeled fungus-based meat substitute man...
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      No Benefits from Episiotomy, Study Finds

      Procedure has no benefits and actually causes more complications

      Routine use of episiotomy for uncomplicated vaginal births has no benefits and actually causes more complications, according to a review of scientific evidence sponsored by the HHS Agency for Healthcare Research and Quality (AHRQ).

      Episiotomy, one of the most common surgical procedures in the U.S., is the surgical cutting of the perineum -- the skin between the vaginal opening and the anus -- and is a common procedure used in an estimated one-third of vaginal deliveries to hasten birth or prevent tearing of the skin during delivery.

      But in an article in this week's issue of the Journal of the American Medical Association, researchers reported that episiotomy did not achieve any of the goals it is commonly believed to achieve.

      The researchers concluded that routine use of the procedure -- now undergone by more than 1 million U.S. women each year -- should be discontinued, and the incision should only be considered to speed delivery when the health of the baby is at risk.

      When providers restricted their use of episiotomy, women were more likely to give birth without perineal damage, less likely to need suturing, and more likely to resume intercourse earlier.

      Women who experienced spontaneous tears without episiotomy had less pain than women with episiotomies. Complications related to the healing of the perineum were the same with or without episiotomy.

      In addition, the evidence showed that episiotomy did not protect women against urinary or fecal incontinence, pelvic organ prolapse or difficulties with sexual function in the first three months to five years following delivery. No research described the long-term impact of episiotomy later in adult life when incontinence is most likely to occur.

      "The routine use of episiotomy has been standard for years, with apparently limited research to support it," said Carolyn M. Clancy, M.D., director of AHRQ. "This evidence could help many women with uncomplicated births avoid a procedure that is of no benefit to them."

      The evidence report concludes that any possible benefits of the procedure do not outweigh the fact that many women would have had less injury without the surgical incision. The scope of the review did not include neonatal outcomes, and therefore the report cannot comment on possible benefits of episiotomy for the babies.

      The review was conducted by AHRQ's Evidence-based Practice Center at RTI-International-University of North Carolina at Chapel Hill and Raleigh, North Carolina.

      Routine use of episiotomy for uncomplicated vaginal births has no benefits and actually causes more complications, according to a review of scientific evid...
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      Hyundai to Enter Hybrid Market

      Plans to build a hybrid with its sister company, Kia

      Hyundai and affiliate Kia Motors Corp. plan to enter the hybrid automobile market in 2006, with plans to sell small-size hybrid cars to the United States.

      The first hybrid models will be subcompact cars of Hyundai's Accent and Kia's Rio, which share production platforms. Hyundai has no plans to produce large-size hybrid vehicles for a while because of their low profitability according to a company spokesman.

      The automobile company may also produce rear-wheel-drive luxury cars in 2007 to capitalize on the success of BMW's premium cars and Toyota's Lexus. Hyundai currently produces only front-wheel-drive cars.

      The move by Korea's top auto manufacturer, which controls half the Korean market, is a step by Hyundai executives to move their company into the ranks of the world's top five car producers by 2010.

      Like many South Korean exporters, Hyundai must now cope with a stronger currency and higher steel prices, as well as a sluggish domestic economy. The company's first-quarter operating profits tumbled by almost one third.

      Hyundai to Enter Hybrid Market...
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      Michigan Warns Vonage About 911

      More 911 problems for Vonage

      More problems for New Jersey-based Vonage Holdings Corporation, a major provider of Internet-based telephone service. Michigan is accusing the company of misleading consumers about its emergency 911 service.

      In a Notice of Intended Action (NIA), Michigan Attorney General Mike Cox told the company it has failed to make it clear that customers do not have access to traditional 911 service. Last month, Texas Attorney General Greg Abbott filed a lawsuit against Vonage citing similar concerns.

      "Vonage needs to make sure its customers understand that normal 911 access may not be available to them," Cox said. "Emergency calls made through Vonage's service are often routed through call centers that may not be answered outside of regular business hours."

      Although Vonage advertises its "911 dialing" as a benefit, the feature has significant limitations compared to traditional phone service. Customers who use Vonage's service are not directed to operators who dispatch emergency vehicles. If emergency personnel do get the call, they may not be able to identify the caller's phone number or have information displaying the caller's address.

      "I don't know about most people, but I don't have the ability to time my emergencies," Cox said. "Vonage has ten days to respond to the NIA, or my office will file a lawsuit seeking injunctive relief and civil penalties."

      Michigan Warns Vonage About 911...
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      Study Confirms Children Safer in Back Seat

      A new study finds children are 40 percent safer in the backseat than the front in car crashes

      The single most important life-saving decision parents can make for their child is to use the rear seat and appropriate restraint devices every time they t..