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    FTC Sues "Debt Elimination" Programs

    Its Telemarketers Violate Do Not Call Rule

    The Federal Trade Commission and the Washington State Attorney General have asked a federal judge to order Debt Solutions Inc. and three other telemarketers in Washington and Florida to stop charging consumers hundreds of dollars for a "debt elimination program" that offers a false promise of substantially reduced interest rates and thousands of dollars in savings.

    The agencies jointly filed the action in U. S. District Court in Seattle, seeking an injunction against them and refunds to consumers.

    "The defendants' so-called 'debt elimination program' was not the answer for consumers who found themselves in financial hot water," said Lydia Parnes, Director of the FTC's Bureau of Consumer Protection.

    "There are a variety of legitimate options to reduce debt, including more realistic budgeting, credit counseling from reputable organizations, debt consolidation programs, and, if need be, filing for bankruptcy. In every case, though, people should be wary of any business that claims it can negotiate substantially lower interest rates on credit cards and loans."

    According to the FTC and the State of Washington's complaint, since at least 2002, Debt Solutions Inc., DSI Financial Inc., DSI Direct Inc. and Pacific Consolidation Services Inc. have telemarketed and sold what they call a debt elimination program by making unsolicited phone calls to consumers nationwide, and by marketing the program on several Internet Web sites, including www.debt2wealth.com and www.acceleratedfinancialinc.com.

    The complaint alleges that the defendants falsely represented to consumers that they would be assigned a financial consultant whose special relationships with creditors will enable the consultant to negotiate substantially lower interest rates, saving consumers thousands of dollars, reducing their monthly payments, and paying off their debts three to five times faster -- all without higher monthly payments.

    In fact, according to the complaint, consumers who purchase the program typically do not have their interest rates lowered at all, and, if they do, the reductions are rarely more than one percentage point.

    Consumers are promised a full refund if they do not save at least $2,500, but few consumers have received the guaranteed refund, according to the agencies' complaint. Before buying the program for $399 to $629, the complaint alleges, consumers are not told that the promised savings may take decades to achieve, or that most of the savings will result from simply paying more money every month, not from reduced interest rates.

    The defendants also claim the program is endorsed by the Financial Standards Council in Canada and the Registered Financial Planners Institute of North America, but both claims are false, according to the complaint.

    The FTC and the State of Washington's complaint alleges that the defendants violated Section 5(a) of the FTC Act by falsely representing that purchasers will

    (1) save thousands of dollars in a short time;

    (2) have credit card and loan interest rates reduced substantially;

    (3) pay off their debt much faster without higher monthly payments; and

    (4) reduce their monthly credit card and loan payments.

    The complaint also alleges that they falsely represent that they have special relationships with credit card companies and lenders, and that their program is endorsed by the two organizations mentioned above. It also alleges that they misrepresented their money-back guarantee.

    The complaint further alleges that the defendants violated the TSR and Washington state law by misrepresenting projected savings, failing to disclose the limits of their money-back guarantee, calling phone numbers listed on the Do Not Call Registry, failing to pay the required annual fee for access to DNC-listed numbers, and calling persons who had asked them to stop calling. The defendants also violated Washington state law by engaging in unfair or deceptive acts or practices and unfair methods of competition.

    FTC Sues "Debt Elimination" Programs: The agencies jointly filed the action in U. S. District Court in Seattle, seeking an injunction against them and refu...
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    FDA Prohibits Use Of Antiviral Drugs In Poultry

    Wants to help preserve the effectiveness of these drugs for treating or preventing influenza infections in humans

    The Food and Drug Administration wants to prohibit the extra-label use in poultry of two classes of approved human antiviral drugs in treating influenza. The reason? The agency says the measure is necessary to help preserve the effectiveness of these drugs for treating or preventing influenza infections in humans.

    Specifically, the order prohibits the extra-label use by veterinarians of anti-influenza adamantane and neuraminidase inhibitor drugs in chickens, turkeys, and ducks. Extra-label use is the use of a drug in a manner that is not in accordance with the approved labeling.

    "Todays action is a preventive measure designed to protect the public health and illustrates FDAs high level of commitment and key role in preparing for a possible influenza pandemic, which is a top priority for our nation," said Acting FDA Commissioner Dr. Andrew von Eschenbach.

    Currently, no drugs are approved for the treatment or prevention of influenza A in animals. However, two classes of antiviral drugs are approved in the United States for the treatment or prevention of influenza A in humans. Under the Animal Medicinal Drug Use Clarification Act of 1994 (AMDUCA) veterinarians can legally prescribe these human antiviral drugs to protect animals from influenza.

    Under AMDUCA and its implementing regulations, FDA can issue an order prohibiting certain extra-label uses in animals if such extra-label use presents a risk to the public health. FDA has considered all available information and has concluded that the extra-label use of anti-influenza adamantane and neuraminidase inhibitor drugs in chickens, turkeys, and ducks presents a risk to public health.

    FDA may add other animal species to the prohibited list as new data becomes available.

    Thus far, there have been no reported cases of avian influenza H5N1 in the U.S. Nor is FDA aware that there is ongoing extra-label use of these antiviral drugs in the U.S. by poultry producers. However, concerns have been raised by a number of public health organizations, such as the World Health Organization, Food and Agriculture Organization, and the World Animal Health Organization, that the extra-label use of these drugs in poultry could lead to the emergence of resistant strains of type A influenza.

    This is of particular concern if the avian influenza H5N1 (commonly known as bird flu) that has been identified in other countries were to emerge in the U.S.

    Influenza viruses mutate frequently. Some mutations confer drug resistance to influenza viruses. Repeated and improper use of anti-influenza drugs could allow resistant influenza viruses to flourish.

    FDA Prohibits Use Of Antiviral Drugs In Poultry...
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    Congress Turning Against Seniors?

    April 21, 2006
    Is Congress turning against seniors? The Alliance for Retired Americans thinks so. It says the current Congress has "proved to be yet another direct assault on the quality of life for retirees."

    In its annual voting record analysis, the organization said it found that 39% of U.S. Representatives and 40% of U.S. Senators scored 0% on such issues as Medicare, retiree benefits, tax breaks and pensions.

    In fact, a majority of Republicans scored 0%. Notable politicians who received a score of 0% included Sen. Rick Santorum of Pennsylvania and Rep. Katherine Harris of Florida, each facing a tough Senate race in 2006.

    Since releasing its first voting record in 2001, the Alliance said it has documented a disturbing trend of anti-senior sentiment in Congress. The trend continued in 2005. Scoring 60% or below constitutes a failure to stand up for seniors - and 53% of the House and 56% of the Senate received scores below a passing grade.

    There was a clear distinction along party lines. While Republicans in both the House and Senate scored an average of 6%, Democrats averaged 95% in the House and 98% in the Senate.

    "With so many Republicans scoring zero in both the House and Senate, but no Democrats scoring zero in either chamber, Republicans have a lot of catching up to do to be considered a friend to retirees," said George J. Kourpias, President of the Alliance.

    "Congress had several opportunities to make senior-friendly changes, such as allowing the Medicare program to negotiate for lower drug prices, extending the enrollment period without penalty, and lowering rebates to drug manufacturers. It didn't take advantage of those opportunities," said Edward Coyle, the Alliance's Executive Director.

    "The only politicians who will be mentioning Medicare this election year will be those who saw these problems and voted to fix them."

    "Rather than fix the obvious flaws in the Part D drug program before chaos ensued," Kourpias echoed, "this Republican-controlled Congress elected to deepen the deficit crisis and play favorites with America's most wealthy by rewarding them with tax cuts, at the expense of retirees and seniors."

    Seniors represent a crucial voting bloc, which votes in larger numbers than any other segment of the population, and the Alliance, which is affiliated with the AFL-CIO, said it plans to educate and mobilize retirees across the country to elect a more senior-friendly Congress in November.

    To see the Alliance vote breakdown for each member of Congress, see www.retiredamericans.org/votingrecord.

    Congress Turning Against Seniors?...
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      Florida Investigates Fake Caller IDs

      March 20, 2006
      Florida Attorney General Charlie Crist has issued investigative subpoenas to a website company that allegedly sells calling cards that allow parties to display fraudulent numbers on caller ID, a practice known as "spoofing."

      Crist said spoffing allows stalkers, identity thieves, home intruders, telemarketers and possibly worse, to hide their identity when making calls to consumers.

      One of the companies being investigated allegedly sells a virtual "calling card" for $10 that provides 60 minutes of talk time. The user dials a toll-free number, then keys in the destination number and the number the caller wishes to display on caller ID.

      The company's website also provides optional voice scrambling that can alter a person's voice, such as from male to female or adult to child, the Attorney General's office said.

      "People use caller ID to protect themselves from unwanted calls and contact from those who would do them harm," said Crist. "It is wrong for individuals or businesses to deceive our citizens, and this cannot be allowed to continue unchecked."

      The spoofing investigation comes on the heels of the Attorney General's filing of lawsuits against two Florida companies 1st Source Information Specialists, Inc. and Global Information Group, Inc.

      The companies are accused of deceiving employees of wireless telephone companies, such as Cingular Wireless and Verizon, into selling private telephone calling records of Florida consumers. Investigators with the Attorney General's Office believe this practice may have been assisted by spoofing.

      The subpoenas were issued under Florida's Deceptive and Unfair Trade Practices Act, Chapter 501 in Florida Statutes. Telemarketers are required by Federal Trade Commission regulations to make either their company's phone number or the phone number of the company or charitable organization they are representing visible on consumer caller ID systems.

      Other concerns raised by spoofing include identity theft, as individuals can use spoofing to pose as a bank and steal personal account information from their unsuspecting victims.

      Florida Investigates Fake Caller IDs...
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      Minor Mutations Found in Bird Flu Virus

      Changes Increase Chances of Human Infection

      Scientists at The Scripps Research Institute, the Centers for Disease Control, and the Armed Forces Institute of Pathology have identified what the researchers described as a possible pathway for a particularly virulent strain of the avian flu virus to "gain a foothold in the human population."

      The H5N1 avian influenza virus, commonly known as "bird flu," is a highly contagious and deadly disease in poultry. So far, its spread to humans has been limited, with 177 documented severe infections, and nearly 100 deaths in Indonesia, Vietnam, Thailand, Cambodia, China, Iraq, and Turkey as of March 14, 2006, according to the World Health Organization.

      "With continued outbreaks of the H5N1 virus in poultry and wild birds, further human cases are likely," said Ian Wilson, a Scripps Research professor of molecular biology and head of the laboratory that conducted the recent study. "The potential for the emergence of a human-adapted H5 virus, either by re-assortment or mutation, is a clear threat to public health worldwide."

      Of the H5N1 strains isolated to date, the researchers looked at A/Vietnam/1203/2004 (Viet04), one of the most pathogenic H5N1 viruses studied so far. The virus was originally isolated from a 10-year-old Vietnamese boy who died from the infection in 2004. The hemagglutinin (HA) structure from the Viet04 virus was found to be closely related to the 1918 virus HA, which caused some 50 million deaths worldwide.

      Using a recently developed microarray technology -- hundreds of microscopic assay sites on a single small surface -- the study showed that relatively small mutations can result in switching the binding site preference of the avian virus from receptors in the intestinal tract of birds to the respiratory tract of humans. These mutations, the study noted, were already known in some human influenza viruses to increase binding for these receptors.

      The study was published by ScienceXpress, the advance online version of the journal Science.

      The study was careful to note that these results reveal only one possible route for virus adaptation. The study concluded that other, as yet "unidentified mutations" could emerge, allowing the avian virus to switch receptor specificity and make the jump to human-to-human transmission.

      The work was supported by the National Institute of Allergy and Infectious Disease, the National Institute of General Medical Sciences and the National Institutes of Health.

      Minor Mutations Found in Bird Flu Virus...
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      Wal-Mart to Begin Dispensing "Morning After" Pill This Week

      Wal-Mart will begin stocking the prescription drug in its pharmacies across the country

      The "morning-after" contraceptive known as Plan B comes to the nation's largest retailer this week. Wal-Mart will begin stocking the prescription drug in its pharmacies across the country. The chain made the decision after the Massachusetts pharmacy board ruled it must do so in its 44 Massachusetts pharmacies.

      Illinois had previously required Wal-Mart to stock the pill, which consists of a high dose of hormones that women can take three to five days after unprotected sex to prevent pregnancy.

      Three Massachusetts women had sued Wal-Mart for not carrying the pill, leading to the Board of Pharmacy's decision. There had also been protests around the country by activists who labeled Wal-Mart as "anti-woman" and noted it was the only large pharmacy chain in the country that failed to carry the product.

      Ever since the drug was approved by the FDA, Wal-Mart had said that "for busienss reasons" it chose not to stock the pill. But after bruising battles including a massive gender-discrimination lawsuit and criticism of its high-deductible health plan, Wal-Mart management apparently decided it did not need to give its critics any more ammunition.

      However, it remains to be seen whether Plan B will actually be available at Wal-Mart pharmacies. The company says it will allow pharmacists who object to the pills for personal reasons to refuse to dispense them, sending customers elsewhere.

      But since Wal-Mart has driven many rural pharmacies out of business, it is the only full-service pharmacy in many of the regions it serves. Thus, the decision to let pharmacists decide what they will and won't dispense could provoke a new round of recriminations. In some areas, consumers are also circulating petitions demanding Wal-Mart rescind the policy.

      Pressure groups on the other side are also mobilizing. At least 16 states are considering legislation that would allow pharmacists to refuse to fill prescriptions for any kind of birth control.

      Wal-Mart to Begin Dispensing Morning After Pill This Week...
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      Feds Propose Tougher Controls On Work At Home Schemes

      The new rule changes are proposed to go into effect later this year

      The Federal Trade Commission has proposed tougher rules to protect consumers who are targeted by work-at-home scams. The new rule changes are proposed to go into effect later this year.

      If approved, the rule would require any company promising earnings from their business opportunities to provide documented proof of those claims. Currently, the FTCs Franchise Rule only provides for examination of business opportunities that require an investment of more than $500. The change would remove that minimum amount and open many more work-at-home offers to federal scrutiny.

      The proposed rules are getting the strong backing of many state attorneys general around the country, including Mike Beebe of Arkansas. Beebe says work at home scams are a growing problem, but consumers can protect themselves by asking a few questions:

      • Can the seller prove that most of the current participants actually earn the income promised by the seller?

      • What is the total cost of the work-at-home program, including supplies, equipment and membership fees?

      • What tasks will I have to perform?

      • Will I be paid a salary, or will my pay be based on commission?

      • Who will pay me?

      • When will I get my first paycheck?

      "While there are legitimate home-business offers, others that promise fast money for minimal work are always too good to be true," Beebe said. "You wont discover the hidden pitfalls in most business opportunities until youve spent your own money, only to realize that you wont break even, let alone turn a profit."

      Feds Propose Tougher Controls On Work At Home Schemes...
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      Cunard Adds a Queen to its Fleet

      The Queen Victoria has already been projected as the most luxurious of its type

      Queen Victoria would be proud.

      The new cruise ship bearing her name has already been projected as the most luxurious of its type.

      The new vessel begins service in December 2007, joining the Queen Mary 2 and the Queen Elizabeth 2 in an expanding Cunard fleet.

      Its first cruise will be a 10-night North European itinerary, starting December 11, followed by a holiday-week voyage to the Canary Islands on December 21.

      "This vessel will offer classic Cunard luxury and experience while at the same time providing the most up-to-date amenities and facilities, along with new impressive innovations," said Carol Marlow, the cruise lines president and managing director.

      The innovations include a three-story theater, a retractable glass roof, an art gallery, and a library with 6,000 books.

      The ship will also have restaurants, shops, pools, and a myriad of other amenities expected by 21st century cruise passengers. Only 14 per cent of the 1,007 cabins have no sea view, while nearly three out of four feature balconies.

      The $540 million ship will cater for more than 2,000 passengers, since many cabins will hold more than one person. The latest queen in the Cunard fleet will restrict first sailings to pre-registered bookings but begin taking all bookings on April 3.

      For further information, contact Cunard (Tel. 800-7CUNARD, www.cunardline.com).

      Cunard Adds a Queen to its Fleet...
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      Consumers Protest Replacement Car Key Prices

      It shouldn't cost hundreds of dollars to get a key replaced

      The Center for Auto Safety is asking the federal government to stop automakers and their dealers from charging consumers hundreds or even thousands of dollars to replace keys with embedded computer codes.

      The consumer group charges that car companies refuse to release the computer information that aftermarket stores or locksmiths would need to provide replacement keys at competitive prices.

      The complaint with the Federal Trade Commission also claims that the theft-prevention value of the so-called smart key systems is overrated.

      "The specter of auto theft does not justify auto companies picking the pockets of consumers by charging hundreds of dollars more for replacement keys than they could in a competitive market," according to the complaint.

      A spokesman for the Alliance of Automobile Manufacturers said some automakers already provide the needed information to locksmiths and the industry as a whole is looking for a uniform way to make key codes available without increasing the threat of vehicle theft.

      The Center for Auto Safety says the typical cost of replacing a single so-called smart key is more than $150 or roughly 12 times the cost of the average mechanical key. The cost rises into the thousands of dollars if the automaker or dealership replaces a vehicle's electronic control module.

      Some advanced systems are programmed so that the modules are matched to a unique set of keys. If the original keys are lost or damaged, the module also must be replaced.

      Center for Auto Safety asked the federal government to stop automakers and their dealers from charging consumers hundreds of dollars to replace keys with e...
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      NY Accuses H&R Block of IRA Marketing Fraud

      The suit alleges that the H&R Block Company steered hundreds of thousands of its clients into IRAs that were virtually guaranteed to lose money

      New York Attorney General Eliot Spitzer has filed suit against H&R Block, the nation's largest tax preparation company, accusing it of fraudulent marketing of individual retirement accounts (IRAs).

      The suit alleges that the H&R Block Company steered hundreds of thousands of its clients into IRAs that were virtually guaranteed to lose money because of a combination of hidden fees and low interest rates.

      "The conduct described in today's complaint is particularly appalling because many of those hardest hit were working families who struggle to save," Spitzer said.

      "Instead of providing these families with accurate information that would have allowed them to make informed choices, H&R Block steered them into retirement accounts that actually shrank over time."

      The Attorney General's office began the investigation in 2005 after receiving information from an H&R Block tax preparer.

      Over the past four years, H&R Block opened more than half a million "Express IRA" accounts for its tax preparation clients. Customers were told that the IRA paid "great rates" and was "a better way to save," but 85 percent of the customers who opened the accounts paid the company more in fees than they earned in interest.

      More than 150,000 H&R Block customers closed their accounts, incurring additional undisclosed fees, as well as nearly $6 million in tax penalties.

      The civil complaint cites internal documents showing that H&R Block's senior management knew that many of its customers were losing money on their Express IRAs.

      For example, in a 2002 email to Mark Ernst, the company CEO, a district manager complained about the impact of these accounts on customers: "I really don't think maintenance fees should exceed the amount of interest that we are paying on these accounts. Clients won't be happy seeing [their] investments decreasing ..."

      Ernst forwarded this email to the Express IRA product manager and added his own comments: "The attached note . . . reflects the general sense that I think exists -- that Express IRA is the right thing for our clients, but the product is designed to nickel and dime clients to the point where our field people [don't] feel as good about the product as they should... ."

      Some H&R Block employees (including the person who brought the information to the Attorney General) actually refused to promote the product to clients.

      In 2003, an internal H&R Block report prepared by the Express IRA product manager described the growing concerns of tax professionals about the product in the following way:

      "Top 4 reasons tax pros are not offering the product:

      1. $15 setup fee 'it's too steep for my clients'
      2. $15 recontribution fee 'they've already paid once, why charge them again?'
      3. Low interest rate 'my client will never make up the fee'
      4. $10 annual maint. fee 'my clients have to pay this in addition to the $15 fee.'"

      The company's management took no action to address these concerns. Instead, H&R Block continued to tout the Express IRA as a good way for lower and moderate income people to save.

      The complaint contends that the company pushed the Express IRA in an effort to encourage repeat customers for its tax preparation services and to maximize its fee revenue.

      Spitzer's lawsuit specifically alleges that H&R Block, based in Kansas City, failed to adequately disclose its fees to its customers, failed to warn that the interest paid would not cover the fees in certain instances, and misleadingly described the interest rates as "great" when they were at times less than one percent annually.

      This misleading and incomplete disclosure violated New York's consumer fraud law and was a breach of the company's fiduciary duty to its clients, the AG's office said. Relief sought includes an injunction from further violations of New York law, damages and civil penalties.

      The company said it would defend itself against the allegations.

      NY Accuses H&R Block of IRA Marketing Fraud...
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      Congress Considers "Worst Data Bill Ever"

      By Martin H. Bosworth

      March 16, 2006
      A new identity theft prevention bill in Congress is drawing such heavy criticism that a number of influential consumer groups have united against it, with some calling it the "worst data bill ever."

      House Resolution (H.R.) 3997, the "Financial Data Protection Act," is coming under fire from the U.S. Public Interest Research Group (PIRG), the Consumer Federation of America (CFA), the Privacy Rights Clearinghouse, and many other groups, for preempting strong state fraud prevention laws with weaker federal laws.

      Critics say the bill opens loopholes that would enable companies to avoid notifying customers if data breaches occur.

      The bill is currently up for vote by the House of Representatives' Financial Services Committee. PIRG's Ed Mierzwinski issued a statement urging committee members to reject the bill, saying "We believe consumers today would be worse off under this bill than if nothing passed."

      The resolution amends the Fair Credit Reporting Act (FCRA) to mandate protections for consumer information in order to prevent an identity breach.

      Under the Data Protection Act, if a company engages in a "reasonable" investigation and determines a possibility that stolen information can harm consumers, they can then notify them "without unreasonable delay."

      The bill also limits consumer notification of data breaches to cases where "substantial harm" has occurred, defined as "material financial loss to or civil or criminal penalties imposed on the consumer or the need for the consumer to expend significant time and effort to correct erroneous information relating to the consumer."

      Mierzwinski said that if H.R. 3997 had been in place when ChoicePoint lost the records of 145,000 people to a Nigerian identity theft ring, the public never would have heard about it.

      "We believe individuals need to know whenever their sensitive personal information has been breached," he said.

      The bill's sponsor, Rep. Steve LaTourette (R-OH), ironically bemoaned the slow pace of notification of data breaches in a Dec. 2005 press release urging passage of his resolution.

      LaTourette cited the loss of customer data belonging to the ABN AMRO mortgage group, and said "The company is taking a good step by notifying customers, but it's bothersome to me that the tape has been missing nearly a month and the public and Congress are just learning about it."

      Sweeping Preemptions

      The bill also preempts virtually all state law enforcement power over identity theft and data breaches, remanding investigative power exclusively under federal agencies such as the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), and other federal agencies.

      The bill also mandates that any company affected by a data breach offer its customers six months of free credit monitoring, but only after the customers have been directly affected by identity theft or fraud.

      Many corporations already offer free credit monitoring for one or two years in case of breaches, even without direct evidence that every involved customer or employee was affected, as in the case of Verizon losing a laptop containing employee data to theft.

      The bill does enable consumers to "freeze" their credit records to prevent thieves from opening new accounts in their name, but only once their information was actually misused. In other words, they would have to wait for an identity crime to occur in order to prevent it.

      Mierzwinski hammered the bill for what he called "locking the door after the horse has already left the barn."

      "All consumers should have the right to sleep at night without worrying about identity theft, by placing a freeze on their accounts. It's the only proven way to stop identity theft before it starts," he said.

      A new identity theft prevention bill in Congress is drawing such heavy criticism that a number of influential consumer groups have united against it....
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      Credit Bureaus Introduce New Scoring System

      Just when it seemed consumers were getting a handle on how credit scores -- those three-digit numbers that can determine your lending rate for cars, credit cards, and mortgages -- were generated, the three major credit bureaus have introduced a new scoring system that shares data from all three agencies.

      The new system, "VantageScore," is designed to provide better reports and more accurate data, and covers a more extensive consumer base, including the elusive "thin credit file" for consumers who have little to no credit history.

      It's also a direct challenge to the Fair Isaac Corporation's FICO score, which provides the most commonly used credit scoring for mortgage lenders and other agencies.

      The FICO score has, until now, been the model for the three bureaus -- Equifax, Experian, and Trans Union -- to directly gauge customer credit worthiness, or to develop their own scores.

      With the arrival of the Vantage Score, the major players in the credit industry are claiming that they "will provide consumers and businesses with a highly predictive, consistent score that is easy to understand and apply."

      But some observers say that the new scoring model won't change the biggest problem consumers face when it comes to credit scoring -- inaccurate or incomplete data in their individual reports.

      Remaking the Grade

      The VantageScore system utilizes data culled from a sampling of millions of credit files reviewed by the three agencies, creating a single consistent score, utilizing "cutting-edge, patent-pending analytic techniques."

      According to company press, the new score would provide far less variation than the proprietary scores used by some of the major bureaus.

      The FICO score model grades consumers' credit ratings based on factors such as debt-to-income ratio, credit usage and history, bad credit items, and so on.

      Whereas the FICO score ranges from 300 to 850, with most Americans scoring between 670 and 700, the new VantageScore goes from 501 to 990, with each score range being grouped by letter. Consumers with scores in the 900 and higher range would be grouped in the "A" range, while those in the 600 and below range would receive a grade of "F."

      Borrowers are often frustrated in their attempts to gain new credit, as each bureau utilizes its own proprietary credit score, often wildly differing from one another. Equifax switched to using the FICO score in 2005, but Trans Union and Experian utilize their own scores.

      Fair Isaac has been criticized for not disclosing the inner workings of its credit scoring algorithm, citing it as a proprietary business secret.

      Although each involved agency would utilize the VantageScore in offering information to lenders, there would still be variances in data from each bureau, owing to the differences in data they collect on consumers.

      Michael Nathans, president of "alternative" credit bureau Payment Reporting Builds Credit (PRBC), said that as long as some bureaus report payments from consumers and others don't, there will always be inaccuracies in a consumer's credit report that they will have to correct.

      "There is a great deal of information from people who are paying their bills on time, and the credit bureaus don't care enough to track it," he said.

      Vantage Point

      PRBC and other agencies like it have been challenging traditional credit models by using systems based on utility payments, rental payments, and so on.

      The "thin credit file" market can gain access to better rates by using these systems, and they represent a coveted new area of expansion for all the major players in the credit industry.

      The major credit bureaus claim that VantageScore will offer "more predictive scoring" on thin-file consumers, but details were scant as to how the new score would elicit more accurate information.

      Representatives at Fair Isaac were skeptical that the new score would be immediately adopted for use by lenders and businesses. Fair Isaac vice-president Ron Totaro told USA Today that the new numbering system would cause confusion for people.

      A borrower with a FICO credit score of 800 had "excellent credit," he said, but under the new VantageScore system, that would only grant them a letter grade of "C."

      PRBC's Nathans joked that the day of the VantageScore announcement, he received many e-mails claiming "the big 3 bureaus were out to kill FICO." Nathans thought Fair Isaac was "prepared" for the competition from VantageScore, and will continue to look for ways to get new data for their own lending scores.

      According to the press statement, the VantageScore system was developed by VantageScore Solutions, LLC, an "independent" company created and owned by the three major bureaus. Federal law prohibits the three bureaus from directly sharing data on consumer records.

      The 3 major credit agencies had previously agreed to create a "data protection standard" to make sure information transmitted from lenders and other businesses to the bureaus was not tampered with. Critics noted that this move also did not address the question of inaccurate data in the credit reports themselves.

      Credit Bureaus Introduce New Scoring System...
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      Identity Theft Victims Getting Younger

      March 15, 2006
      Stealing a baby's identity, it turns out, is like, well, taking candy from a baby.

      The Federal Trade Commission reports the number of identity theft complaints involving Americans 18 or younger nearly doubled in the past three years.

      Why are identity thieves targeting kids? Because, the FTC says, it's easy.

      Children have no credit history, so they have clean records. No one will know the child's identity has been stolen for years, since children won't be applying for loans or getting credit cards.

      All an identity thief needs is the child's Social Security number, which almost all have for their parents' tax reporting purposes. The FTC says that number should be guarded as closely as any adult's private financial information.

      Parents should keep an eye out for billing collection notices in a child's name or anything that indicates business is being done with a child's information

      Identity Theft Victims Getting Younger...
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      Air Fares Rise; So Do Crowding, Delays

      Fares will drop but delays will rise as the busy skies get even more congested

      There's good news and bad news for airline passengers. According to the Federal Aviation Administration, fares will drop but delays will rise as the busy skies get even more congested.

      Maybe so, but short term fares are headed straight up. Low-fare leader Southwest Airlines is leading a broad fare hike across the airline industry, raising fares by up to $10 for a one-way ticket as the company seeks to offset an expected $600 million jump in its jet fuel costs.

      Most other major U.S. airlines have matched the move by Southwest. But a spokesman for JetBlue Airways said that carrier has not raised fares.

      Southwest raised fares in January and late last week, it did it again. It boosted rates again over about two-thirds of its network, ranging from $2 on flights up to 400 miles to the $10 increase, to $309, for its most expensive walk-up fares -- the first time a Southwest fare has exceeded $299.

      Complicating matters for those suffering through those delays is the cramped quarters on board, which the FAA suggests will get even worse.

      The predictions came in Washington during the FAA's 31st annual industry forecast. And they matched similar projections from the Air Travelers Association, the Air Transport Association, and at least one airline president.

      Airlines boarded 669 million people last year, up 6.6 per cent from the year before, but, if the FAA is right, will board more than a billion that's right, billion with a b by the year 2017.

      Many of those passengers will be flying on smaller regional jets as airlines, reeling from huge hikes in the cost of fuel, seek to replace gas-guzzling larger jets.

      Fuel prices are expected to rise another 15 per cent in 2006 before gradually declining over the next five years. But unrest in the volatile Middle East, source of much aviation fuel, could upset those estimates.

      Not surprisingly, some lines are eliminating routes as a cost-saving measure a move the FAA predicts will cause a 0.2 per cent decline in the probable number of domestic passengers this year.

      While 2006 is still projected as a difficult year for most carriers, a turnaround is possible by 2007. At least that's the opinion of Secretary of Transportation Norman Mineta, a speaker at the FAA conference.

      "For the first time in several years," Mineta said, referring to 2001 terrorist attacks that sent the industry reeling, "we're no longer talking about recovery."

      Airline CEOs might not agree: the International Air Transport Association projects a combined industry loss of $4 billion this year. FAA administrator Marion C. Blakey called the projection a momentary "bump in the road" and said there has been significant growth in the industry.

      But Southwest Airlines chairman Herb Kelleher said the government's business forecast was "probably realistic."

      Air Fares Rise; So Do Crowding, Delays...
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      Capital One Buys North Fork Bank

      The combined company will be one of the 10 largest banks in the United States

      Capital One Financial Corporation is already a major credit card company. Now it wants to be a major retail bank as well, announcing it will acquire New York's North Fork Bancorporation in a stock and cash transaction valued at approximately $14.6 billion.

      The combined company will be one of the 10 largest banks in the United States, based on deposits and managed loans, and the third-largest retail bank in the New York region, the nation's largest deposit market.

      "North Fork is a great strategic fit with Capital One and brings balance and diversification to our company," said Richard D. Fairbank, Chairman and Chief Executive Officer of Capital One.

      Capital One already has a small presence in retail banking. Its subsidiary, Hibernia National Bank, operates more than 300 branches in Louisiana and Texas.

      North Fork, a bank holding company with operations in the greater New York region, provides a full range of financial products and services to its retail and commercial customers, including deposit products and consumer, business and mortgage loans, along with other services.

      With approximately $36.6 billion in deposits, as of December 31, 2005, and 355 branch locations throughout New York, New Jersey and Connecticut, North Fork is the third-largest depository institution in the greater New York region.

      The combined company will have deposits of more than $84 billion, a managed loan portfolio of more than $143 billion, more than 50 million customer accounts, and 655 branches.

      Capital One Financial Corporation is already a major credit card company. Now it wants to be a major retail bank as well, announcing it acquired NY's North...
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      Study: Asthma Patients Think It's Temporary

      Think your asthma is temporary? It's not

      Think your asthma is temporary? It's not, but a new study finds that over half of adults with serious asthma believe they only have asthma when they have symptoms, leading them to avoid taking the medications that could prevent the next attack.

      Asthma is a chronic lung condition characterized by difficulty breathing that affects over 20 million Americans.

      While asthma is one of the most common chronic conditions in the US, it is particularly prevalent among inner city populations. East Harlem, where the study was conducted, is one of the communities hardest hit by asthma.

      "We surveyed 198 adult patients hospitalized with asthma about their beliefs and behaviors regarding their disease," said Ethan Halm, MD, MPH, Associate Professor of Medicine at Mount Sinai School of Medicine and lead author on the study, reported in the March issue of Chest.

      "More than half of them thought they only had asthma when they were having symptoms. They are treating asthma more like a cold or flu that will go away between attacks, than as the serious, chronic disease which it is," he said.

      Dr. Halm and his colleagues from Mount Sinai and from Rutgers University labeled this the "no symptoms, no asthma" belief. Patients who thought this way were one third less likely to take their asthma medication daily.

      "This is particularly troubling because daily use of anti-inflammatory medications is proven to improve asthma control, reduce rates of hospitalizations, and is the cornerstone of guideline recommended best practice." said Dr. Halm.

      Forty percent of the patients believed they had chronic asthma, while six percent thought they had asthma some of the time.

      When asked about the lifelong nature of asthma, 20 percent of patients felt they would not always have asthma and 15 percent expected the doctor to cure them of asthma. Male patients, those over 65 years old, and patients with no usual place of care were more likely to hold the "no symptoms, no asthma" belief.

      "Our findings suggest that there may be a fundamental disconnect between how patients and physicians think about and manage asthma. As clinicians, we need to find better ways to uncover patients underlying health beliefs as a critical first step in trying to help them understand and treat their asthma as a serious but controllable chronic disease." said Dr. Halm.

      "We need to find ways to tailor our educational efforts to individual beliefs and behaviors if we are to make headway in improving outcomes for our patients and reducing costs to the system."

      Study: Asthma Patients Think It's Temporary...
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