Current Events in January 2006

By Mark Huffman
ConsumerAffairs.com

January 31, 2006
Heres another excuse for being overweight you might have a virus.

A study in the American Journal of Physiology-Regulatory, Integrative and Comparative Physiology, reports a human virus has been shown to cause chickens to get fat. Some scientists have concluded that finding suggests the virus could contribute to human obesity as well.

Another factor, scientists say, is how fast obesity is spreading through the worldwide human population. The only thing that spreads as fast, they say, is an infectious disease.

"The nearly simultaneous increase in the prevalence of obesity in most countries of the world is difficult to explain by changes in food intake and exercise alone, and suggests that adenoviruses could have contributed," the authors say.

Scientists involved in the study gave chickens three types of human virus. They found that the chickens with a virus called Ad-37 became obese, even though they were on the same diet as chickens that remained at a normal weight.

Another virus, Ad-36, has already been linked to obesity in other types of test animals. Blood samples from overweight humans show a strong likelihood of carrying the antibodies for the virus. The authors say more research might establish a stronger link between viruses and obesity.

While some might dismiss the idea that you can "catch obesity," the authors say an infection link might explain a lot. For example, doctors have long been perplexed by the prevalence of obesity in the third world countries, existing along side starvation.

Some 127 million American adults are considered overweight, with nearly half classified as clinically obese. The Centers for Disease Control puts the price of dealing with obesity at about $78 billion.

The defendants, who do business online under several names but most prominently as Locatecell.com, have been sued for violating state consumer protection laws by misrepresenting that it is legal for them to obtain, possess and sell the phone records.

The temporary restraining order, issued by Judge Thomas Brown in Cole County Circuit Court, is believed to be the first such action against by a state against Internet businesses that illegally sell cell phone records.

Named as defendants are First Data Solutions Inc. and its principal owner, James Kester, of Knoxville, Tenn.; and 1st Source Information Specialists Inc., of Tamarac, Fla., and its directors Kenneth W. Gorman and Steven Schwartz of Jensen Beach, Fla.

"A company that we believe has been illegally obtaining the private information of consumers will be prohibited from doing business in Missouri," Nixon said. "This is a victory for the privacy concerns of Missouri citizens."

According to the defendants' Web site, for $65 anyone may enter a cell phone number and then receive the name and address of a cell phone user. For $110, anyone can enter a cell phone number and Locatecell.com will provider a list of calls made from that number.

Nixon had alleged in his suit that the defendants did not have authorization from the wireless and cellular telephone service providers to access the customer information and records that they advertise on their Web site.

The court order prevents the defendants from attempting to obtain, offering for sale, or selling any information from any cellular or land line telephone service provider regarding any of that provider's customers in Missouri. The defendants also cannot take orders from Missourians seeking telephone records. They also are prohibited from:

• Using the name or identity of any employee of any cellular or land line telephone service provider for any purpose;

• Contacting any cellular or land line telephone service provider for any purpose other than to access any of the defendants' own information;

• Possessing any Missouri customer information obtained from cellular or land line telephone service providers, regardless of form or manner of storage.

The Attorney General continues to seek preliminary and permanent injunctions against the defendants and is asking the court to order appropriate restitution for consumers and penalties for the state.

Nixon's office initiated an investigation into the company on Jan. 19, when an undercover investigator made an online transaction with Locatecell.com to purchase the records of calls made on his own private cell phone. Upon receipt of the records on Jan. 20, the Attorney General's Office filed for the temporary restraining order.

In its last meeting with Alan Greenspan in the chairman's seat, the Federal Reserve hit a new milestone as it raised short-term interest rates for the 14th time, but hinted that the end of rate increases is in sight.

The Fed said that though uneven, "the expansion in economic activity appears solid," noting that core inflation, which excludes food and energy, remains "relatively low" but expressed concern about rising energy prices and their possible effect on inflation.

So is the economy in good shape or not?

It's tough enough to get a handle on the country's economic picture under normal circumstances. Searching through reams of reports from the Federal reserve, combing the stock market trades for news, and reading every business newspaper on the racks can lead to volumes of arcane, and often contradictory, reports, leaving any interested observer more confused than when they started.

For example, The Department of Commerce released a report on Jan. 30 stating that consumer spending increased by 0.9 percent in December, reflecting a willingness by consumers to "tap assets" in order to continue purchasing goods, despite higher prices.

Simultaneously, the personal savings rate has dropped to below negative levels, the lowest it's been since the worst years of the Great Depression.

Overall economic growth slowed to 1.1 percent for the last months of Dec. 2005, the lowest rate in three years.

The Wealth Effect

And yet, economists and pundits are claiming that Americans are feeling free to spend more, banking chiefly on the appreciation of their houses in a blazing-hot market. The usage of "unrealized gains" in home equity produced what National Association of Realtors' (NAR) chief economist David Lereah called the "wealth effect."

The "wealth effect" enabled homeowners to tap their equity in order to pay off debts and buy new luxury items, or just to handle major expenses such as medical care, child care, and so on.

The problem is that the Consumer Price Index (CPI), the chief measure used by the Commerce Dept. to measure spending growth and reduction, doesn't account for costs for food and energy, which are considered "too volatile" to track.

This means that the current strife in Iran and Nigeria, which is pushing gas prices towards $3 a gallon, isn't being factored in to analyses of consumer spending.

And the usage of homes as ATM's is coming to an end. Housing markets are showing steep declines, particularly in expensive areas such as California's Bay Area, the greater New York area, and the Washington, D.C. metro region.

Massachusetts, another expensive state for housing, is seeing a 12-year-high on property foreclosures, due to the inability of many homeowners to meet their payments and the "flattening" of home appreciation rates.

Even the credit industry is conflicted about where the economy is going next.

A poll conducted by the Experian credit bureau and the Gallup research center claimed that "two in three" consumers planned to make credit card debt reduction a priority in 2006. The poll claimed that 77 percent of the respondents were "comfortable with their level of debt."

Subprime Lending "Booming"

Meanwhile, according to rival credit agency Trans Union, the market for subprime credit lending is booming.

An analysis conducted by the agency's "Market Intelligence" division claimed that "subprime borrowers" opened 16 percent more accounts between 2004 and 2005 than the previous year, while "prime risk" borrowers declined in their rate of new account openings by 5 percent.

The "subprime" or "fringe" economy, consisting of predatory and payday lenders, "creative" mortgage brokers, and so on, may be the real grease that's keeping the economic wheel turning. The subprime market generated gross revenue of $78 billion in 2001.

Payday lenders made $25 billion worth of loans in 2003, and thed disparities in lending are deliberately targeted to hit the working poor and minorities the hardest.

The "wealth effect" is just that -- an illusion, not much different from the special effects we've come to expect in fantasies that flash across the silver screen and the heavily-mortgaged plasma screens in our family rooms.

The real story may come from the ever-increasing number of households who are relying on shady lenders, credit cards, and over-mortgaged home equity just to make ends meet.

Until the economic pundits stop trying to spin the news and lay the facts out straight, the end result may be a lot of mixed messages and confused -- even misguided -- consumers.

January 31, 2006
Authorities in Yuba County, California were baffled by the sudden rash of identity theft reports. After investigating, deputies found a pattern all of the victims had purchased gas with debit cards at local Arco stations just before thieves broke into their bank accounts.

At the stations in Yuba City, Linda, Redding, Rocklin, Roseville, Willows and Sacramento, the investigators solved the mystery.

The credit card readers on the gas pumps had been slightly altered. New faceplates had been placed over the readers which captured the data from the card. Small cameras were focused on the key pad to record PIN numbers as consumers punched them in.

Once the thieves had the card information and the pin numbers, they created phony cards and visited the nearest ATM machine, where they stole a total of $110,000 from the victims accounts.

Authorities were able to trace the withdrawals to a single ATM at a nearby casino. After reviewing the surveillance tapes, they had a good description of the suspects. It didnt take them long to track them down, since they were still in the casino.

A spokesman for Arco says service station employees have been instructed to step up their monitoring of credit card readers.

Using cell phones in hospitals reduces the error rate in medical care because of more timely communication and rarely causes electronic magnetic interference, according to Yale School of Medicine researchers.

The study published in February's Anesthesia & Analgesia is believed to be the first to investigate whether use of cell phones by medical personnel has a beneficial impact on safety. It was based on 4,018 responses from attendees at the 2003 meeting of the American Society of Anesthesiologists.

Of those anesthesiologists who participated in the survey, 65 percent reported using pagers as their primary mode of communications and 17 percent said they used cell phones. Forty percent of respondents who use pagers reported delays in communications, compared to 31 percent of cellular telephone users.

The senior author, Keith Ruskin, M.D., associate professor in the Departments of Anesthesiology and Neurosurgery, said the electronic interference from cell phones was a problem in the past because of older telemetry equipment and analog cell phones.

"The new digital cell phones use much higher power and operate at a different frequency," Ruskin said. "The small risks of electromagnetic interference between mobile telephones and medical devices should be weighed against the potential benefits of improved communication."

He said the reported 2.4 percent prevalence of electronic interference with life support devices such as ventilators, intravenous infusion pumps, and monitoring equipment is much lower than the 14.9 percent risk of observed medical error or injury due to a delay in communication.

"Today's landmark settlement is a success story showing how Proposition 65, California's premier right-to-know law, protects our families and communities from the health risks resulting from exposure to toxic chemicals in our environment," said California Attorney General Bill Lockyer.

"The power of the law is stimulating the costume jewelry industry to employ methods to reduce and eliminate lead from their products in order to avoid having to warn consumers about the health risks."

The settlement requires defendants to meet new standards for lead-free and low-lead jewelry and to meet those standards as quickly as possible, but no later than 2008. After that date, they are required to halt sales in California of any product not meeting these tough new standards for lead content.

Lockyer filed the lawsuit in June 2004, alleging defendant retailers violated Proposition 65 by failing to warn consumers about the health risks of exposure to the lead contained in certain jewelry. Proposition 65 requires such warnings when consumers are exposed to substances known by the state to cause cancer or reproductive harm.

In December 2004 the retailers agreed to mediate. A group of 38 jewelry distributors voluntarily joined the mediation and are joining the settlement.

The defendants have agreed to pay a total of $1.7 million, including $100,000 in civil penalties; $250,000 for a jewelry testing fund; $325,000 to educate consumers about the health risks from exposure to lead and other heavy metals; and the remainder in attorneys' fees. Other companies will have the ability to join in the stringent standards of the agreement in order to avoid potential liability.

Lockyer was joined in the settlement by the Center for Environmental Health and As You Sow, private parties that initially filed 60-day notices with the Attorney General's office notifying their intent to sue under Proposition 65.

Lead has been listed under Proposition 65 since 1987 as a chemical that can cause reproductive harm and birth defects, and has been on the list of chemicals known to cause cancer since 1992.

The state's testing found high levels of lead in both the metallic and non-metallic components of the jewelry targeted in the case. The amounts were well above the level that triggers the requirement to provide a Proposition 65 warning to consumers.

Exposure to lead occurs chiefly from ingestion, such as eating or putting objects into the mouth, putting young children particularly at risk. Teenagers also can suffer adverse effects, which include brain damage, kidney damage, hearing loss, and impaired growth.

Companies that entered the settlement include Burlington Coat Factory, CBI Distributing, Claire's Boutiques, Claire's Stores, Express, Federated Department Stores, J.C. Penney, KMart, Macy's West, Mervyn's, Nordstrom, Ross, Sears, Target and Toys R Us. Remaining as litigants are Wal-Mart, Jordache, Cornerstone Apparel (Papaya stores), the Gerson Company, and Royal Items.

A House Republican's sweeping plan to effect large-scale reconstruction in the areas of Louisiana devastated by Katrina has run into a formidable roadblock -- opposition from the official in charge of the Gulf Coast recovery.

Congressman Richard Baker's (R-Baton Rouge) H.R. 4100, the "Baker Bill," would create a corporation to buy out damaged or flooded properties in the hardest-hit areas of Louisiana, thus enabling the owners to pay off their mortgages and avoid foreclosure.

The Louisiana Recovery Corporation would then sell the properties to developers for rebuilding, with right of first refusal going to the former homeowners." The corporation would be funded by bonds backed by the U.S. Treasury.

But Donald Powell, Gulf Coast recovery chairman, is opposing the Baker bill. Calling it a "needless layer of bureaucracy," Powell said that grants already approved by Congress would be sufficient to fund the rebuilding effort.

"I think it is a much better approach (than the Baker bill), a more direct approach," Powell told the New Orleans Times-Picayuna. "It puts the process in the hands of the local people. It doesn't put government in the real estate business."

"Biggest Land Grab in History"

Baker's plan -- and, for that matter, Baker himself -- comes with no small amount of controversy.

In the first days after Hurricane Katrina, Baker was alleged to have said, "We finally cleaned up public housing in New Orleans. We couldn't do it, but God did." Baker issued a lengthy press release claiming he was misquoted.

Baker's bill has been criticized as a disguised attempt to favor the mortgage industry by bailing local lenders out with government money, rather than incurring major losses from foreclosure of the destroyed property.

Opponents of the bill point to language that claims the homeowners will receive 60 percent of the home's equity, rather than 60 percent of the land's actual fair market value.

Many homeowners might be persuaded to take a quick buyout of homes that have been so badly damaged as to be irreparable, rather than face years of mortgage payments on property they can no longer use.

Pointing to Baker's history as a real estate developer, one blogger called the bill "the biggest land grab in history."

Slow Recovery

On the other hand, the Baker bill has been touted as the closest thing to a real solution to Louisiana's post-Katrina woes, particularly in light of complex and slow-moving efforts by the federal government to effect reconstruction.

Costs for emergency housing for the displaced have doubled or tripledcosts for trailers, for instance, have skyrocketed from $19,000 to $75,000, according to the Washington Post.

Lack of oversight governing the cleanup has enabled unscrupulous contractors to quadruple costs for debris removal. The various authorities involved in the recovery are entangled in bureaucratic snafus and an inability to do very much of anything.

Critics of the federal recovery guidance, such as Sen. Mary Landrieu (D-La.), called the White House's opposition to the Baker bill an example of "a continued lack of understanding for the magnitude of the devastation and the immense rebuilding task our state faces."

Supporters of the Baker bill say that Powell's reliance on block grants supports homeowners at the exclusion of renters, who do not have as much recourse in the event of losing their residences due to natural disaster.

Relying on federal flood insurance or grants may encourage New Orleans residents to simply rebuild where they live, which may lead to renewed destruction in the event of another hurricane or flood, or leaving the homeowners in possession of essentially worthless land.

Powell has encouraged property owners to seek assistance from agencies such as the Small Business Administration (SBA), but both the SBA and the Federal Emergency Management Agency (FEMA) have been criticized for not processing loan applications quickly enough, not providing correct information to applicants, and for continually changing the procedures for getting loans.

Baker has vowed to keep his bill alive, and will push for its support when it comes up for debate by the Senate Banking, Housing, and Urban Affairs Committee on Feb. 15th. "Bills have been passed before without presidential approval," Baker said.

AARP initially supported the program but said just before its passage that it might want to "build on it in the future." In a statement, AARP President Bill Novelli said problems with implementation of the drug assistance program needed to be addressed.

Additionally, John Rother, AARP's chief lobbyist, said his organizations wants Congress to change the way Medicare recipients' assets are counted in determining which ones are poor enough to qualify for special low-income subsidies, The Washington Post reported.

Also, Rother said AARP wants to reopen debate over a provision that would have directed health officials to negotiate directly with drug manufacturers over the prices they charge through the program. The White House has said that President Bush would oppose any attempt to revise the program.

AARP and Congressional Democrats had pressed for government price controls when the legislation was being debated. The Bush Administration favored a market-oriented approach that was eventually adopted, in which drugmakers negotiate prices with the insurance plans that sell the drug benefit to patients.

In his statement, AARP's Novelli said there had clearly been problems with implementation of the program.

"The bottom line is that some people are not getting the drugs they need. This is unacceptable," he said. "If an individual has proof of eligibility, there is absolutely no reason they should pay more than required or leave a pharmacy empty-handed."

AARP has been under attack from conservatives, who accuse it of pushing liberal programs, and from many of its own members, who accuse it of caving in to Republican pressure to support the GOP-backed Medicare plan.

Democrats in Congress have been promoting a bill that would make fundamental changes in the drug benefit. One of those changes would be empowering the government to jawbone drug makers, one of the revisions AARP now says it supports.

Cheaper than Canada

Novelli and other AARP executives insist the Medicare drug assistance program is not all bad.

An AARP investigation last month found that for many Americans, Medicare drug plans that cover all of a beneficiary's drugs can cost less than buying the same drugs across the border. The calculation takes into account premiums, deductibles, and copayments.

Pill for pill the actual price of some drugs may be cheaper in Canada but Medicare coverage is insurance, and so enrollees are therefore charged only copayments instead of full price.

The findings, detailed in the AARP Bulletin, emerged from an analysis of real combinations of drugs taken by people across the country. Using the drug plan finder on Medicare's website, AARP found the least expensive Medicare "stand alone" plan that covered their drugs and compared that plan's total cost to what that person spent in a year buying the drugs from an online Canadian pharmacy.

AARP used the plans' 90-day mail-order options because that's how more than 1 million consumers over 65 routinely get their drugs from Canada.

An example can be found with an interviewee named Donna from Anaheim, California.

Donna would pay $2,323.68 overall under a Medicare plan in her area for coverage of her six drugs nearly $1,400 less than the $3,718.40 charged by a low-cost Canadian pharmacy. This Medicare plan charges relatively high monthly premiums of $50.91 but has no deductible and gives continuous coverage for all her drugs through the "doughnut hole" gap. Her copays would range from $17.50 to $150 for every 90-day supply.

AARP's free publication, "The New Medicare Prescription Drug Coverage: What You Need to Know," is available in Spanish and English to members and non-members alike. This easy-to-understand resource describes how the new plans work and how to find enrollment assistance. To order the publication or get help, people can call AARP toll-free operators at 1-888-687-2277 or go to AARP's educational guide.

Enrollment information is available through state health insurance counseling programs (SHIP) in all 50 states and at many senior centers and offices on aging. Beneficiaries can find their local SHIP office online or by calling 1-800-677-1116.

Medicare's drug plan finder and other details are also available online. Or beneficiaries can call Medicare toll free at 1-800-633-4227 for assistance.

January 27, 2006
The National Highway Traffic Safety Administration (NHTSA) is recalling 74,000 2003 Audi A4, A6 and Volkswagen Passat sports sedans because of a problem with electrical components in the fuel pump.

Vehicles equipped with the 1.8 liter turbo charger, 2.8 liter V6 or 3.0 liter engines may suffer a fuel pump failure than can shut off the fuel supply to the engine.

Dealers will install a new fuel pump free of charge after the recall begins in March of 2006. Owners can contact Volkswagen at 1-800-222-8987 or audi at 1-800-822-2834.

Consumer may also contact NHTSA 1-888-327-4236 (TTY 1-800-424-9153), or go to www.safercar.gov.

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

Cingular Wireless has won a patent on the concept of using "emoticons" on mobile phones. The patent applies not only to graphic versions of the ubiquitous smiley/mad face but also to simple text versions. :)

Cingular says the aim of the patent is to enable the displaying of graphics on its subscribers' handsets, the patent would also prohibit sending simple text versions via a dedicated or programmable key.

The system may also support the import of emoticons and custom emoticons to one or more applications running on the mobile device, Cellular News reported. For example, in some embodiments, users may visit an out-of-band service (e.g., web page) to compose or upload custom emoticons that would then become available on the wireless device's palette.

The patent may be seen as bad news by devotees of the inane faces. On the other hand, if it restricts the spread of the moon-shaped faces, it's likely to be wildly popular in some quarters.

Don't believe it? :| Check it out. The patent number is US2006015812.

January 26, 2006
Data broker ChoicePoint, Inc., will pay $10 million in civil penalties -- the largest civil penalty in FTC history -- and $5 million in consumer redress to settle Federal Trade Commission charges that its security and record-handling procedures violated consumers' privacy rights and federal laws.

The firm last year acknowledged that the personal financial records of more than 163,000 consumers in its database had been compromised,

The settlement requires ChoicePoint to implement new procedures to ensure that it provides consumer reports only to legitimate businesses for lawful purposes, to establish and maintain a comprehensive information security program, and to obtain audits by an independent third-party security professional every other year until 2026.

"The message to ChoicePoint and others should be clear: Consumers' private data must be protected from thieves," said Deborah Platt Majoras, Chairman of the FTC. "Data security is critical to consumers, and protecting it is a priority for the FTC, as it should be to every business in America."

ChoicePoint, a publicly traded company based in suburban Atlanta, obtains and sells to more than 50,000 businesses the personal information of consumers, including their names, Social Security numbers, birth dates, employment information, and credit histories.

The FTC alleges that ChoicePoint did not have reasonable procedures to screen prospective subscribers, and turned over consumers' sensitive personal information to subscribers whose applications raised obvious "red flags."

Indeed, the FTC contends that ChoicePoint approved as customers individuals who lied about their credentials and used commercial mail drops as business addresses. In addition, ChoicePoint applicants reportedly used fax machines at public commercial locations to send multiple applications for purportedly separate companies.

According to the FTC, ChoicePoint failed to tighten its application approval procedures or monitor subscribers even after receiving subpoenas from law enforcement authorities alerting it to fraudulent activity going back to 2001.

The FTC charged that ChoicePoint violated the Fair Credit Reporting Act (FCRA) by furnishing consumer reports -- credit histories -- to subscribers who did not have a permissible purpose to obtain them, and by failing to maintain reasonable procedures to verify both their identities and how they intended to use the information.

The agency also charged that ChoicePoint violated the FTC Act by making false and misleading statements about its privacy policies.

ChoicePoint had publicized privacy principles that address the confidentiality and security of personal information it collects and maintains with statements such as, "ChoicePoint allows access to your consumer reports only by those authorized under the FCRA . . . " and "Every ChoicePoint customer must successfully complete a rigorous credentialing process. ChoicePoint does not distribute information to the general public and monitors the use of its public record information to ensure appropriate use."

The stipulated final judgment and order requires ChoicePoint to pay $10 million in civil penalties and to provide $5 million for consumer redress.

It bars the company from furnishing consumer reports to people who do not have a permissible purpose to receive them and requires the company to establish and maintain reasonable procedures to ensure that consumer reports are provided only to those with a permissible purpose.

ChoicePoint is required to verify the identity of businesses that apply to receive consumer reports, including making site visits to certain business premises and auditing subscribers' use of consumer reports.

The order requires ChoicePoint to establish, implement, and maintain a comprehensive information security program designed to protect the security, confidentiality, and integrity of the personal information it collects from or about consumers.

It also requires ChoicePoint to obtain, every two years for the next 20 years, an audit from a qualified, independent, third-party professional to ensure that its security program meets the standards of the order.

Finally, the settlement bars future violations of the FCRA and the FTC Act.

Aprotinin -- a drug approved by the FDA, marketed internationally for the last 13 years, and given to an estimated one million surgery patients to limit bleeding -- has now been proven to double a patient's risk of kidney failure, and increase the risk of heart attack, heart failure, and stroke.

The results, published in this week's New England Journal of Medicine, are based on an independent, non-commercial, observational study conducted by The Ischemia Research and Education Foundation (IREF).

"Our study provides compelling evidence of aprotinin's serious risks, and strongly suggests discontinuation of use and replacement with either of the two alternative generic and far less costly medications proven safe in this study," said IREF founder and principal scientist, Dennis T. Mangano, Ph.D., M.D.

"Certainly, our findings -- coming on the heels of the Vioxx experience -- indicate that the problem of drug safety is not only ubiquitous, but also much more elusive than previously thought."

In fact, Mangano said, the findings raise even more troubling concerns, for:

(1) aprotinin has been on the market for three times as long as Vioxx, yet few comprehensive safety studies have been conducted since approval;

(2) the life-threatening complications with aprotinin occurred far more frequently than those with Vioxx; and

(3) far less expensive generic alternatives to aprotinin which are equally effective in limiting bleeding have been available, but have been underused.

The article states that replacing aprotinin with one of two safe generic drugs would annually prevent as many as 11,050 dialysis complications, save at least $1 billion in healthcare (dialysis) costs, and reduce drug costs by at least $250 million.

Each year approximately one million patients worldwide undergo surgical treatment following a heart attack, with the majority of these patients receiving one of three antifibrinolytic agents to limit blood loss during surgery: aprotinin (Bayer Healthcare Pharmaceuticals, Inc.), aminocaproic acid (generic), or tranexamic acid (generic).

The two generic drugs have proven safe in limiting blood loss, and do not have the harmful effects of aprotinin. Patients scheduled for cardiac surgery should consult their physicians and avoid this risk, Mangano said.

Aprotinin was approved by the U.S. Food and Drug Administration in 1993 and is manufactured by Bayer under the brand name Trasylol. Over the past three years, Trasylol sales have accelerated, with 2006 sales projected in excess of $600 million.

"We estimate that as many as 10,000 patients may be unnecessarily on dialysis today due to aprotinin use. This serious impact on human lives underscores once again the necessity for meticulous, post -- approval surveillance, as well as ongoing, unbiased analysis of drug safety -- all conducted by entirely independent entities," said Mangano.

"This is easier said than done, however, for the economic forces are -- and will continue to be -- substantial, with little corporate incentive to identify safety problems once drugs are approved and marketed."

The New England Journal of Medicine article documents how aprotinin use was associated with a two-fold increase in renal failure requiring dialysis in patients undergoing both complex coronary artery surgery and primary surgery, excluding prior cardiac and current valve surgery.

Among primary surgery patients, Dr. Mangano and colleagues found that aprotinin use also increased risk of myocardial infarction (48 percent), heart failure (109 percent), and stroke (181 percent).

Neither of aprotinin's generic competitors, aminocaproic acid and tranexamic acid, was associated with increased renal, cardiac or cerebral events.

Aprotinin is at least ten times more expensive than its generic competitors.

"This is a major step forward in our ongoing effort the shut down illegal internet cigarette traffickers," said New York Attorney General Spitzer.

"These illegal enterprises cannot remain in business without a steady supply of cigarettes, and thus restricting that supply can be very effective. We will continue to pursue this goal by asking other cigarette manufacturers to follow Philip Morris's lead and reduce the flow of their cigarettes to these illegal traffickers."

The agreed-upon protocols provide for the:

• Termination of shipments of cigarettes to any of Philip Morris's direct customers that the attorneys general have found to be engaging in illegal Internet and mail order sales;

• Reduction in the amount of product made available to direct customers found by the attorneys general to be engaged in the illegal re-sale of Philip Morris cigarettes to the Internet vendors; and,

• Suspension from the company's incentive programs of any retailer found by the attorneys general to be engaging in such illegal sales.

"Our voluntary agreement with the state attorneys general builds on Philip Morris USA's existing trade programs and policies intended to preserve the integrity of our brands and the legitimate trade channels through which they are sold," said Denise Keane, Philip Morris USA executive vice president and general counsel.

"It sets a framework for continued information sharing with law enforcement and support of their efforts to eliminate illegal sales of Philip Morris USA products."

The attorneys general believe that virtually all sales of cigarettes over the Internet are illegal because the sellers are violating one or more state and federal laws, including:

(1) state age verification laws;
(2) the federal Jenkins Act (which requires that such sales be reported to state authorities);
(3) state laws prohibiting or regulating the direct shipment of cigarettes to consumers;
(4) state and federal tax laws;
(5) federal mail and wire fraud statutes; and
(6) the federal RICO law.

Many of the sales made by foreign websites also violate federal smuggling, cigarette labeling, money laundering and contraband product laws.

The attorneys general note that Internet cigarette sales also present a significant risk to public health, because most Internet vendors illegally fail to charge taxes, and it is well-established that lower cigarette prices lead to increased smoking rates.

Moreover, while "brick-and-mortar" retailers check photo IDs to prevent children from buying cigarettes, the vast majority of Internet sellers have age verification systems that are wholly inadequate.

Numerous studies have shown that the earlier an individual begins to smoke, the more likely it is that the person will become addicted, and thus age verification through photo IDs is essential to protect children from a lifetime of smoking.

Step #3

Today's agreement is the third major development in the Attorney Generals' multi-pronged effort to restrict the payment, shipment and supply operations of the illegal Internet cigarette traffickers.

In March 2005, the attorneys generals announced that the major credit card companies had all agreed to stop processing credit card payments for the Internet retailers. Later in the year, both DHL and UPS agreed to stop shipping packages for the vendors engaged in these illegal sales.

Philip Morris notes that it previously has penalized direct customers and retailers who sold its cigarettes illegally over the Internet and through the mails. Philip Morris is now the first tobacco product manufacturer to agree to reduce the supply of cigarettes to direct customers who supply vendors engaged in the illegal re-sale of Philip Morris cigarettes on the Internet.

The attorneys general commended Philip Morris for its cooperation in the effort to reduce these illegal sales. In addition, the attorneys general will be encouraging other tobacco product manufacturers to take steps to reduce the supply of their cigarettes that are re-sold by illegal Internet cigarette traffickers.

The negotiations with Philip Morris were lead by the New York Attorney General's Office. In addition, the attorneys general from the following jurisdictions have joined this agreement: Alabama, Arkansas, American Samoa, California, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Mexico, New Jersey, Northern Marianas, Oklahoma, Oregon, Puerto Rico, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming.

Federal contractors who have access to individual Social Security numbers (SSNs) present a potentially serious security risk, and greater protection of the sharing of numbers is needed, according to a new report from the Government Accountability Office (GAO).

Although private industry relies on contractual agreements and the usage of "best practices" standards to ensure contractor agencies do not have unauthorized access to SSNs or use them for purposes other than their task requires, there are "gaps" in the oversight and regulation of SSN sharing among industries such as the finance, telecommunications, maintenance, and tax preparation sectors, the GAO found.

Agencies such as the Federal Communications Commission (FCC), the Internal Revenue Service (IRS), and the Federal Trade Commission (FTC) all have differing regulations and enforcement ability regarding the use of SSNs in their jurisdiction.

"Companies and their contractors must adequately protect SSNs at every step of a business transaction," said Rep. Jim McCrery (R-LA), Chairman of the House Ways and Means Subcommittee on Social Security, which requested the report.

The GAO report examined the circumstances by which private companies share SSNs with third-party contractors.

Banks and financial institutions employed contractors for a wide variety of functions, from verifying new customer identities to outsourced debt collection processes.

Tax preparation companies will maintain databases of customers both past and present, including SSNs, in order to track possible errors their preparers might have made.

As each of the examined industries falls under a different area of federal regulation, the laws governing the use of SSNs are different for each industry.

Tax preparers, for instance, fall under IRS and FTC guidelines for disclosing and sharing taxpayer information with one another or third parties. Under the Gramm-Leach-Bliley Act (GLBA), the FTC mandates that tax preparers regulate their contractors "bytaking reasonable steps" to recruit and contract with companies that won't present security risks.

The IRS lacks resources for regular review of outsourced tax preparers, according to the GAO report. The agency relies on investigating complaints from taxpayers or local offices.

Another IRS trouble spot involves the lack of regulations for third-party tax preparers who file returns electronically.

One association of professional tax preparers told the GAO that "there were no explicit provisions restricting what various third party providers participating in electronic filing could do with taxpayer information once they possess it."

The IRS claimed that existing regulations covered sharing data from electronic tax filings, and that the agency was introducing new regulations to notify contractors that criminal penalties for unauthorized disclosure of information would apply to them.

The IRS is planning to outsource much of its debt collection enforcement to private companies throughout 2006, a move that is being criticized by longtime Treasury Dept. employees as dangerous.

At least one contracting vendor with the IRS was collecting data on taxpayers' political preferences while building a database on delinquent taxpayers.

Telecom Troubles

Telecommunications companies such as Verizon and Sprint Nextel present an even bigger gap in oversight of contracting.

Although the FCC has restrictions against the sharing or sale of customer proprietary network information (CPNI), the agency told the GAO that it "[knows] of no federal law that restricts the sharing of SSNs by telecommunications firms with their contractors, and that they do not regulate or oversee the privacy of customer information maintained or shared by telecommunications firms unless the information is included inCPNI."

The FCC claimed that the "limited jurisdiction" over CPNI prevents the agency from taking action when SSNs are disclosed or shared by third party contractors. However, the FTC can take enforcement action against contracting companies if the company is demonstrated to have violated its own privacy policies regarding information disclosure.

The major telecom companies have grown increasingly reliant on third-party companies such as Amdocs for recording and storing customer billing records. Sprint Nextel recently secured a preliminary agreement with Amdocs to handle the customer billing and service for its 45.6 million subscribers.

Amdocs has been the center of investigations by the Federal Bureau of Investigation (FBI) for possible criminal misuse or lax security regarding the CPNI data it collects.

Although the company is not mentioned specifically by name in the GAO report, the report notes that the FBI has requested the FCC consider greater regulation of overseas-based companies that collect and store CPNI data.

The scandal involving private companies selling customer cellphone records to any buyer centers around the unauthorized sharing of CPNI data collected by telecom companies. Speculation runs rampant that rogue employees of major companies may be selling this data on the side, or that third-party overseas companies are dealing the data out to companies such as Locatecell.com and Celltolls.com.

"Taking Every Precaution"

The report also discusses the impact that state laws governing the transmittal and disclosure of SSNs have had on developing industry-wide guidelines.

One company claimed that it was easier to take one state's laws -- such as California's 2004 law mandating disclosure of security breaches -- and apply them on a nationwide basis, rather than create rules for each state.

The GAO analysis concluded that although many of the industries examined in the report do provide measures of protecting SSNs in dealing with third-party contractors, the volumes of data involved and differing regulations leave wide loopholes for potential abuse and misuse.

The agency recommended that Congress consider drafting laws to close the gaps between the differing federal regulations, or to consider adding provisions to existing law that deal explicitly with third-party contractors.

In the GAO's words, "it is vital that any entity with access to personal information, especially to SSNs, take every precaution to protect this information from misuse."

"The personal information of millions of Americans has been compromised by data breaches at a wide variety of businesses," Rep.McCrery said in a press statement. "Congress must carefully examine any gaps in the law for safeguarding SSNs."

Drugs used to treat malaria and schizophrenia may have a role in treating brain-wasting disorders like mad cow disease.

The FDA recently gave the OK to researchers at the University of California in San Francisco to study quinacrine, a malaria drug, and a drug used to treat schizophrenia called chlorpromazine.

Three dozen patients, all very ill with the brain-wasting disease called Creutzfeldt-Jakob Disease, more commonly known as mad cow disease, will receive the medication.

We can't currently do much for diseases like mad cow. Abnormally shapred proteins called prions, rather than a germ, invade and damage the brain and can eventually kill you. But these two drugs have shown some promise.

The drugs help mouse cells contain prions and have already been given to two sick women. One showed significant improvement.

The two drugs require extensive research, and a lot more time, before we know if they work. Still, they may someday be used to treat mad cow and other brain-wasting diseases.

Four people have been arrested for their roles in two separate but related scams, one of which involved surplus foreclosure funds and victimized at least 20 Florida homeowners.

The other victimized an elderly South Florida homeowner through surplus foreclosure funds and mortgage fraud.

Agents from the Florida Department of Law Enforcement (FDLE) arrested attorney Terrence Rosenberg, Shannelle Brantley and Leighton Brown, all of Miami, for their roles in the mortgage fraud and surplus foreclosure funds scam.

Authorities also arrested Manuel Rosado Jr. of Miami in connection with the foreclosure surplus fraud scheme, in which Rosenberg also participated.

"Floridians should not have to worry about being targeted by con artists trying to cheat them out to their hard-earned money," said Attorney General Charlie Crist.

"The arrest of these individuals is significant because this is not the kind of criminal case that is made with any regularity," said FDLE Commissioner Guy Tunnell. "We hope that these arrests will send a message that this kind of fraudulent activity is totally unacceptable and unlawful, and that cases like this will be actively pursued and prosecuted."

Authorities contend that Rosado masterminded the foreclosure funds scam with attorney Rosenbergs assistance. Rosado allegedly used records from state courts in Miami-Dade and Hillsborough counties to locate surplus foreclosure funds left over from homes auctioned to satisfy mortgages.

Authorities say Rosenberg would then file court paperwork typically used to claim the funds for the homeowners, but would keep the funds for his personal use instead of disbursing them to the appropriate homeowners. He faces disbarment action before the Florida Supreme Court for his participation in the scheme.

The second scam resulted in the eviction of an elderly victim from her South Florida home. Investigators charge that Rosenberg and an accomplice approached the 68-year-old victim after learning she had recently lost her house due to foreclosure and persuaded her to pay them her surplus foreclosure funds, supposedly taking a fee for their help in locating a new house and using the remaining amount to purchase the house on her behalf.

Brantley is charged with assisting in the fraud by submitting fraudulent mortgage documents that enabled the thieves to purchase a house, which they quickly resold and kept the money for their personal use. The elderly victim, who was living in the new house when it was resold, was evicted by the new buyers. During the investigation that followed, Brown, 25, allegedly contacted witnesses and urged them to lie to the police regarding the fraudulent mortgage documents.

Miami-Dade County Inspector General Christopher Mazzella expressed his dismay at the proliferation of crimes targeting homeowners. "As the equity in homes increases because of the boost in property values, residential dwellings become attractive targets to criminal predators, he said.

The elaborate foreclosure and mortgage scheme concocted by the defendants to bleed the equity out of the victims' homes is suggestive of a growing crime problem that is seriously impacting homeowners nationally and in Miami-Dade County," Mazzella added.

Rosado and Rosenberg are charged with organized scheme to defraud and second-degree grand theft. Brantley is charged with filing a false document in a mortgage transaction and second-degree grand theft, while Brown is charged with being an accessory after the fact.

If convicted of all charges, Rosado faces a maximum sentence of 45 years in prison, Rosenberg faces up to 30 years in prison, Brantley faces up to 20 years in prison and Brown faces up to 5 years in prison.

The Federal Trade Commission has charged an employment-opportunity scammer and his companies with marketing a fraudulent U.S. Postal Service (USPS) employment program.

According to the FTC, the defendants misrepresented through ads and telephone pitches that they were connected with or endorsed by the Postal Service; that postal jobs were available; that customers would receive study materials that would help them pass the postal entrance exam; and that customers who pass that exam were assured jobs with the Postal Service. In reality, none of these claims are true.

The defendants ran classified ads across the country, such as:

*ANNOUNCEMENT* HIRING for 2005 POSTAL POSITIONS $17.50-$59.00 Plus+ hour. Full benefits. Paid Training Vacations. No Experience Necessary. Green Card OK CALL 1-866-329-0801

The FTC claims the ads led consumers to believe the defendants were hiring for postal jobs and therefore connected with, or endorsed by, the USPS.

The agency charges that when consumers called the number in the classified ads, telemarketers told them they were affiliated with, or were, the USPS and that positions were available in the consumers area.

The telemarketers also promised that if consumers passed the required entrance exam, they would receive a job with the USPS. They then told consumers they must pay a registration fee to take the test necessary to obtain postal employment and to obtain materials that purportedly would help them pass the test. Prices ranged from $128.80 to $168.20.

Contrary to what was promised, the packages consumers received did not contain materials that would enable them to pass the postal employment exam or gain employment.

In fact, applicants for many entry-level postal jobs are required to take a postal examination, but the tests are not regularly offered and there are no job placement guarantees based on score.

Information on postal jobs is available at local post offices, and information about required exams is provided free of charge.

More information is available at the USPS Web site, www.usps.com. Information about government jobs can be found at www.usajobs.gov.

The FTCs complaint named as defendants Jeffrey Wayne Simmons (a/k/a Wayne Simmons, a/k/a Wayne Stevens) and his companies, Information Resources of Nashville, LLC and Career Services, LLC.

A fourth case of bovine spongiform encephalopathy (BSE) has turned up in a Canadian cattle herd, according to Canadas Agriculture Minister, just days after Japan reinstated its ban of U.S. beef.

U.S. Agriculture Secretary Mike Johanns said he doubts the finding will affect beef or cattle trade with Canada. But Consumers Union said that both current and proposed Food and Drug Administration animal feed rules are inadequate to protect the public health.

Consumers Union urged the FDA to act now to keep high-risk cattle parts that are most likely to spread the disease out of animal feed.

"This latest case of mad cow disease in Canada points to a significant North American mad cow problem," said Michael Hansen, a biologist with Consumers Union specializing in food safety.

The cow, reported to be six years old, was born after FDA's and Canada's current feed restrictions went into effect, indicating that the restrictions are not strong enough to prevent the spread of this brain-wasting disease.

Consumers Union, in comments submitted to FDA in December, noted that new research conducted in the United Kingdom shows that minuscule amounts of infected cattle material can, if fed to other cattle, transmit mad cow disease.

"Based on this new research, if just one infected cow entered the U.S. feed supply and the brain and spinal cord of that animal were maximally dispersed in feed, it could potentially infect 45,000 other cows," Hansen said. "That's why we have to be extremely vigilant about keeping any infected animal material out of feed and food."

FDA recently proposed prohibiting brains and spinal cords of cattle over 30 months in animal feed.

Consumers Union recommends keeping all mammalian material out of animal feed, as has been done in the UK, but urges that at least brains and spinal cords, and other risky materials such as intestines known as "specified risk material" from cattle over 12 months, be prohibited.

In addition, it urges FDA to close three loopholes -- for cattle blood, restaurant wastes, and chicken coop floor wastes -- as it promised to do two years ago.

Some American farmers are also concerned. Dave Frederickson, President of the National Farmers Union, said he is deeply disturbed by the report. Frederickson said he would urge Johanns to immediately suspend all Canadian cattle imports while the situation is investigated.

Japan Reinstates Ban

Japan, meanwhile, has reinstated its ban on U.S. beef after prohibited bone materials were found in a recent shipment of American veal, just weeks after the two-year ban had been lifted.

Japan's agriculture minister, Shoichi Nakagawa, met with U.S. officials and warned that the shipment of prohibited bone materials was an unacceptable mistake.

The government barred Brooklyn-based Atlantic Veal & Lamb, the plant that sent the shipment, from selling meat to Japan and Johanns said he would take action against the department inspector who cleared the shipment.

The U.S. Department of Agriculture (USDA) opened the border between the United States and Canada last summer, after a two-year closure, for all cattle under 30 months. Animals under 30 months seldom exhibit symptoms of mad cow disease, but can still incubate it.

Mad cow disease is believed to be transmitted through eating infected material. When Canadian cattle are slaughtered in the United States, they are processed like U.S. cows into meat for human consumption, as well as into pig, chicken and pet food.

"We must also increase the USDA surveillance program, which is testing just 1 percent of all animals slaughtered in the United States," Hansen said. "We think USDA should be testing all animals over 20 months at slaughter. But at a minimum, USDA should test all high-risk cattle, and all cattle from Western Canada, from the Pacific Northwest and from Texas, where cases have been identified."

Johanns Confident

"I appreciated the opportunity to speak with Canadian Agriculture Minister Andy Mitchell today, who apprised me of the new BSE detection in Canada, Johanns said in a statement.

"I assured him that based on the information he supplied, I anticipate no change in the status of beef or live cattle imports to the U.S. from Canada under our established agreement. As I've said many times, our beef trade decisions follow internationally accepted guidelines that are based in science."

The Canadian Food Inspection Agency said it confirmed the disease in a six year old cross-bred dairy brood cow born and raised in Alberta. The agency said the source of the infection was likely contaminated feed and that no part no part of the animal entered the human food or animal feed systems.

Johanns said USDA will work with Canadian authorities to evaluate the situation, and recommend changes, as warranted.

"I am confident in the safety of beef and in the safeguards we and our approved beef trading partners have in place to protect our food supply. We will continue to adhere to international guidelines in our relationships with all trading partners, and my hope continues to be that we achieve a system of science-based global beef trade," he said.

"Our beef trade decisions follow internationally accepted guidelines that are based in science."

Johanns said USDA will continue to evaluate the situation as the investigation continues. He has directed USDA to work with Canada and its investigative team. Minister Mitchell has reportedly pledged his full cooperation.