Current Events in July 2006

America's largest bank is poised to go global. From its base in Charlotte, N.C., Bank of America is preparing to overtake Citigroup as "the world's No. 1 bank according to market value," although its business so far remains mostly in the U.S.

Bank of America's acquisition of credit card issuer MBNA vaulted it into the top tier, earning over $5 billion in revenue for the second quarter of 2006.

Analysts noted that the current push by the Federal Reserve Board to raise lending interest rates would have a greater effect on Bank of America's earnings than its competitors, because it is so dependent on U.S. consumers for revenue, Bloomberg News reported.

Much of the increase in revenue came from the bank's new "card services" division, made up of the remnants of MBNA and selling the company's famous "affinity" branded credit cards.

Part of Bank of America's success with the MBNA merger came partly from the firing of 6,000 employees, mostly based at MBNA headquarters in Wilmington, Delaware.

In a July 27 speech to the Wilmington rotary club, Bank of America CEO Bruce Hammond said the layoffs were regrettable, but would have been worse if MBNA had not been bought out.

According to Delaware Online, Hammond told the audience that "MBNA was suffering from a slowdown and struggling in the face of obstacles, including telemarketing restrictions that made it harder to sign up new customers."

MBNA's "slowdown" undoubtedly included a massive drop in revenue from customers paying off and closing their credit cards, leading to a 400 million dollar-plus earnings shortfall.

Hammond and other Bank of America executives were hit with a class-action lawsuit by angry shareholders, after news that the executives sold off their MBNA stock and pocketed millions of earnings.

The China Syndrome

In order to ensure more growth and profit, Bank of America is looking to make the great leap outward into the vast Asian market. The bank is aggressively pushing credit cards and other services in international markets, particularly China.

On July 28th, Bank of America named former Northeast regional banking president Bill Lorenz as its chief operating officer for Europe, the Middle East, Africa and Asia. Lorenz's task was, in the words of the Charlotte Observer, to "sell more credit cards, business loans and investment-banking advice overseas."

American businesses have found the Chinese market especially difficult to crack, due to cultural aversions to debt and credit spending.

Former Treasury Secretary John Snow was sent to China in October 2005 to sell Chinese investors and businessmen on the idea of using credit to increase spending and buying goods.

Although Snow's efforts were met with skepticism and he was unceremoniously replaced earlier this year with Goldman Sachs exec Hank Paulson, Bank of America is unfazed, and continues to move towards building business in China.

Heavy reliance on U.S. consumers to spend and borrow beyond their means could have damaging consequences for Bank of America.

If Americans continue to slow their spending due to high interest rates, and the spate of credit card holders paying their debts and closing the books continues, going global may be the only way for the banking behemoth to sustain its growth.

More than 220 state and local food safety and labeling laws including restaurant hygiene codes, milk pasteurization requirements, and even some states' warnings to pregnant women about drinking alcohol or consuming fish high in mercury would be killed if a bill before the Senate becomes law.

The National Uniformity for Food Act (S.3128) purports to bring about uniformity between Food and Drug Administration regulations and various state laws.

The real target, says the Center for Science in the Public Interest (CSPI), is California's Proposition 65, which requires warnings on products with ingredients that cause cancer or birth defects. However, many important food-safety functions are primarily carried about by local and state governments, and CSPI says this overly broad bill would eliminate those statutes as well.

"The fallout from this attack on California's Proposition 65 could be the destruction of hundreds of other state and local food safety and labeling laws in every state," said CSPI senior staff attorney Benjamin Cohen. "Parents pouring milk for their kids or dining in a restaurant shouldn't have to worry about getting a foodborne illness. Yet some Senators would place their constituents at greater risk of that just to please the powerful and politically connected food industry."

The bill is opposed by many governors, including California Governor Arnold Schwarzenegger (R), state attorneys general, and state agricultural and food safety officials.

The bill is also opposed by many public-health and environmental groups that say that California's Proposition 65 has been an important force in spurring manufacturers of consumer goods to avoid the use of many dangerous chemicals instead of putting warning labels on packages.

The law has spurred the removal of lead from wine bottles' foil caps and reduced arsenic levels in bottled water. While the law applies only to products sold in California, companies typically reformulate products nationally.

The House passed a companion measure, H.R. 4167, in March.

The U.S. Food and Drug Administration (FDA) is warning consumers not to purchase or use high-strength hydrogen peroxide products, including a product marketed as "35 Percent Food Grade Hydrogen Peroxide," for medicinal purposes because they can cause serious harm or death when ingested.

The agency also warned two Texas companies to stop hawking the product as a cure for cancer, AIDS, emphysema and other serious diseases.

"This concentration is not approved by FDA for any purpose," said Dr. Steven Galson, Director of FDA's Center for Drug Evaluation and Research. "No one has presented any evidence that hydrogen peroxide taken internally has any medical value. In fact, consuming hydrogen peroxide in the manner touted by these websites could lead to tragic results."

FDA recommends that consumers who are currently using high-strength hydrogen peroxide stop immediately and consult their health care provider.

FDA is working to stop companies selling high-strength hydrogen peroxide from making illegal medical claims about their products. These claims are illegal because these products do not have FDA approval and are therefore being sold illegally for medical indications without any proven clinical value.

The products can instead cause significant harm. As part of these efforts, FDA has issued Warning Letters to two firms illegally selling "35 percent hydrogen peroxide" products on Web sites for the treatment of AIDS, cancers, emphysema, and other serious and life-threatening diseases.

FDA has never approved high-strength hydrogen peroxide to be taken internally and considers hydrogen peroxide at 35 percent strength dangerous, even if handled according to the manufacturer's directions. This high-strength hydrogen peroxide -- more than 10 times stronger than the solution used in over-the-counter drugs to disinfect minor cuts -- is highly corrosive.

Ingesting hydrogen peroxide can cause gastrointestinal irritation or ulceration. Intravenous (IV) administration of hydrogen peroxide can cause inflammation of the blood vessel at the injection site, gas embolisms (bubbles in blood vessels), and potentially life-threatening allergic reactions.

FDA previously warned consumers, in an April 1989 press release, about the illegal promotion of industrial-strength hydrogen peroxide to treat AIDS and cancer, following at least one related death in Texas and several injuries requiring hospitalization.

The warning letters were sent to:

Mark Ovard
DFWX
301 W. Witt
Wolfe City, Texas 75496
www.dfwx.com/h2o2.htm

and

Donald Worden
Frad 35, Inc.
8050 PR 2543
Clyde, TX 79510
www.h2o2-4u.com

New research from the University of Cincinnati (UC) shows that dark-skinned people -- commonly thought to be "immune" to most skin cancers -- are more likely than whites to die from skin cancer and its related complications.

Hugh Gloster, MD, associate professor of dermatology at UC, says dark-skinned people -- including blacks, Asians, Hispanics and Indians -- develop fewer nonmelanoma skin cancers compared with whites.

But when the disease does occur, it is typically more aggressive and diagnosed in its later stages, which leads to disproportionately more deaths among minority populations.

The research was presented at the summer meeting of the American Academy of Dermatology in San Diego.

"There's a perception that people with darker skin don't have to worry about skin cancer, but that's not true," explained Gloster, lead author of the study. "Minorities do get skin cancer, and because of this false perception most cases aren't diagnosed until they are more advanced and difficult to treat."

"Unfortunately, that translates into higher mortality rates," he said.

Skin pigmentation cells, known as "melanocytes," produce a chemical called melanin that gives the skin color and helps block out damaging ultraviolet (UV) rays from the sun and artificial light sources like tanning beds. Dark-skinned people produce more melanin in the skin, and are therefore less susceptible to severe skin "burn" and UV damage.

Dark skin has more epidermal melanin, explained Gloster, which provides a natural skin protection factor (SPF) of more than 13 in dark-skinned blacks, and filters twice as much UV radiation as white skin, which has far less melanin.

Gloster and his UC colleague Kenneth Neal, MD, conducted a retrospective review of clinical data collected over the last 50 years by medical centers across North America, Asia and Africa to determine which epidemiologic and medical features of skin cancer are unique to dark skin.

They determined that while incidence rates of basal and squamous cell carcinomas and melanomas among whites have increased between 5 and 8 percent, rates among blacks for the same period remained relatively constant. More important, although fewer blacks developed skin cancer, a larger number of them died of the disease, Gloster said.

In addition, UC researchers noted that blacks were 8.5 times more likely to develop squamous cell carcinoma -- which occurs in the upper layers of the skin and is the second most common type of skin cancer -- on areas protected from to the sun (hand palms, toes and mucous membranes) than those areas of the body that are regularly exposed to the sun (the nose, ears and backs of the hands).

This, the researchers said, implies that UV radiation does not play as important a role in the development of squamous cell carcinoma in minorities as it does in whites.

Gloster said physicians should stress behavior modifications, including regular use of sunscreen and self-checks for significant changes in moles and skin texture, with all their patients.

"It's especially important that physicians stress these messages with young women," he adds. "Dermatologists are seeing an increased number of skin cancer cases in women under 30 -- and most are either former tanning bed users or people who don't regularly use sunscreen."

Melanoma, the most aggressive form of skin cancer, appears to develop differently in whites than in darker-skinned people in whom the disease usually appears on the palms, soles, and under the nails. These data suggest that UV radiation is not a significant risk factor for melanoma in dark ethnic groups. However, UV radiation is considered a chief cause of the disease in whites -- specifically from intense early-life and blistering sunburns.

According to the U.S. Census Bureau, 50 percent of the U.S. population will be black, Asian or Hispanic by the year 2050, which reinforces the importance of early detection and awareness among this population.

"We need to increase public awareness of skin cancer among ethnic minorities if we're going to decrease skin cancer-related deaths," added Gloster. "Prevention is key to fighting this disease."

The American Cancer Society estimates that more than 68,700 people will develop skin cancer in 2006 -- about 90 percent of them getting the most serious type, melanoma.

Even as consumers shift more and more of their daily tasks and chores to the Web, one famous form of online communication is losing its luster.

E-mail, that staple of your daily work and social life, is withering from a combination of excessive spam and the onslaught of "instant" messaging services for the attention-challenged.

A survey conducted by e-mail marketing company ReturnPath claimed that of the 20 million machines it was monitoring, 96.7 percent scored poorly on the company's "reputation" score for generating spam.

The computers were mostly unprotected personal PC's that were "hijacked" by hackers and virus writers to spread spam and other malware.

Companies such as ReturnPath and Postini sell themselves as providing e-mail security for businesses, through providing "whitelists" of approved senders, blocking spam, and providing better management of e-mail lists.

But while many enterprising companies have stepped into the breach for business, consumers may be retreating from e-mail to avoid the onslaught of Viagra ads, phisher e-mails, and Nigerian scams that can sneak through even the best spam blockers.

As far back as 2004, tech pundits and analysts were noting reduced usage of personal e-mail due to security and spam concerns.

Research conducted by the Pew Internet and American Life Project found that despite the passage of the CAN-SPAM legislation in 2003, 63 percent of Internet users were "less trusting" of the Web due to spam concerns, and 29 percent had reduced their overall usage of the Internet to avoid spam.

When Pew conducted a similar survey in 2005, 28 percent of e-mail users were getting slightly more spam in their inboxes than before, but it "bothered them less." However, phishing was a new and more dangerous concern, with 35 percent of those polled saying they received an e-mail that could have potentially compromised their personal information.

Instant Marketing

Meanwhile, the rise of instant messaging services, blogs, social networking sites, and mobile text messaging has given the younger set a much quicker option to communicate than e-mail, and opened a new goldmine for wireless companies and advertisers.

Business 2.0 magazine reported that teen usage of Web-based e-mail services dropped by 8 percent in 2005, while mobile providers raked in $70 million in profit from text messaging charges.

Of course, mobile communications has its own share of demons to contend with.

Mobile content provider Jamster has been criticized and sued for spamming cellphone users with unwanted text messages when they download a ringtone or screensaver from the service.

Arizona businessman Rodney Joffe recently won a court case against a mortgage company for sending him unsolicited text messages. Joffe himself is in the business of helping companies fortify their e-mail against spam and other threats.

And MySpace may be the world's most popular Web site, but when it comes to teens, it's becoming synonymous with a danger zone. A Texas teenager is suing the site for $30 million after being sexually assaulted by a 19-year-old she met through the site.

You've Got Mail ... For Now

Much as CD's supplanted vinyl and DVD's replaced cassettes (for better or worse), we may be looking at a wave of new technologies that will eclipse e-mail as the communication standard.

E-mail is certainly in no danger of going away, but it may end up filling more of a niche function as a business communication tool, or a service geared towards older Web surfers.

Teenagers and criminals, are, ironically, two of the sharpest population segments when it comes to analyzing trends and moving on to what's hot. Spammers are already adapting tactics to move their wares from e-mail to mobile, and teens already think e-mail is, like, so lame.

But the need for instant communication isn't just limited to the younger set, as evidenced by the legions of businesspeople and influence-peddlers you see clacking away on their Blackberries on any given day.

Eventually, e-mail will join faxing and snail mail in that part of history reserved for technologies that were all the rage, but just couldn't keep up with consumers' obsessive need to stay in touch constantly.

"Ethanol producers receive $2 billion in subsidies from taxpayers, with ADM getting the lion's share," said Tyson Slocum, director of Public Citizen's energy program. "It's important that the American people have an accurate representation of how this industry influences government officials to help determine how the public's money is spent."

Records show a significant discrepancy between what RFA told the government it spent on lobbying and what lobbying firms reported earning from RFA. As a result, RFA appears to have underreported its true lobbying expenditures to the public by at least $1,220,000 from 1999 to 2005.

In addition, the Illinois-based ADM has stated that it does no federal lobbying, but Public Citizen's review of publicly available information casts doubt on that claim.

After the company paid $100 million in 1996 to settle price-fixing allegations, ADM embarked on a new public relations strategy that focused on emphasizing the company's claim that it does not employ any federal lobbyists.

The contention has proved to be a useful tool to deflect criticism that some of ADM's strong financial position stems from generous public subsidies. As the nation's largest ethanol producer, it receives the largest amount of federal subsidies for its production.

The Lobbying Disclosure Act requires organizations that lobby on their own behalf or hire outside lobbyists in order to influence Congress or the executive branch to be registered as a lobbying entity or a lobbying client for the purpose of reporting lobbying activities to Congress and providing semi-annual estimates of their total lobbying expenses.

ADM has an office in Washington, D.C., staffed with at least four people, including government relations executives.

According to the Center for Responsive Politics, the company's political action committee and employees have made more than $2.1 million in federal campaign contributions since 2001, with 63 percent of that total going to Republican candidates.

ADM is attempting to influence public policy. Influence-peddling on Capitol Hill is primarily done through two means: campaign contributions and lobbying. It is very common -- and more effective -- for corporate interests that are attempting to persuade lawmakers to vote for pro-business policies to employ both methods simultaneously.

In its complaint letter about ADM, Public Citizen asks officials to determine whether ADM's government relations staff spends at least 20 percent of its time -- the legal threshold -- on activities to facilitate lobbying contacts with government officials.

Public Citizen believes it is possible that ADM will claim that its employees are exempt from filing because they are restricted to working through the various third-party organizations that the company financially supports, such as the Corn Refiners Association, the Renewable Fuels Association, the National Oilseed Processors Association, the National Corn Growers Association, the AgTrade Coalition and the U.S. Grains Council.

If this is the case, such third-party lobbying exposes serious flaws in the Lobbying Disclosure Act, as it easily allows companies to mask entirely their expenditures to influence the legislative and regulatory process.

Public Citizen also questioned whether ADM has hired lobbyist "consultants" to work on active legislative and regulatory matters pending before the federal government.

This is based on the 2002 Senate lobbying registration filings of former lobbyist Daniel G. Amstutz, who listed the "Farm Bill of 2002," "Trade Promotion Authority" and "Modernization of locks on Mississippi River System" as issues on which he lobbied for ADM. In 2003, Amstutz reversed himself, claiming in a letter to the secretary of the Senate that he was only a consultant and did not lobby for ADM.

Public Citizen contacted ADM in an effort to clarify this discrepancy but received no response.

July 27, 2006
Federal prosecutors are closing in on the real estate industry for alleged anti-competitive practices that restrict home buyers' and sellers' effective use of the Internet, the National Law Journal reported.

Regulators and consumer advocates claim that consumers are being denied access to all the homes listed for sale on public Web sites, such as Realtor.com, and that firms trying to offer cheaper services on the Internet are facing restrictions.

The regulators' concerns echo the findings of a USA Today report and a Consumer Federation of America study, which found that real estate interests control the state regulatory agencies that are supposed to ensure consumer choice and competition.

Most recently, the Federal Trade Commission filed a complaint on July 13 against the Austin Board of Realtors in Texas for allegedly violating antitrust laws by preventing certain sellers from marketing their listings on public Web sites.

The FTC is also reported to be looking into similar practices in Detroit, Indianapolis, Cleveland and Columbus, Ohio.

Also, a lawsuit against the National Association of Realtors is continuing to unfold in a federal court in Chicago, where the U.S. Department of Justice claims that NAR policies obstruct real estate brokers from offering better services and lower costs to online consumers.

The FTC is focusing on operators of multiple-listing services, which let brokers share data on homes for sale and list home sales on Web sites.

In the Texas case, the multiple-listings services operator was the Austin Board of Realtors (ABOR), which prevented certain homes from being listed on public Web sites. Those homes were owned by sellers who entered into nontraditional agreements with brokers who offered cheaper a la carte services, rather than the traditional full-service deal.

Such agreements, known as exclusive agency listings, offer sellers the option of selling their home themselves.

The ABOR policy, which has since been rescinded, had the effect of forcing consumers to list their homes with full-service, full-fee Realtors.

"We are disappointed that the FTC's press release implies that we are guilty of wrongdoing," David M. Foster, president and CEO of the Austin Board of Realtors, said in a statement.

In a proposed settlement of the case, ABOR is prohibited from adopting or enforcing any rule that treats one type of real estate listing agreement more advantageously than another, and from interfering with the ability of its members to enter into any kind of lawful listing agreement with home sellers. The settlement is still awaiting final approval.

The real estate industry has brought much of its trouble on itself by adopting "protectionist" measures, said, attorney Mike Cowie, a former assistant director at the FTC, in the National Law Journal's report.

"There likely will be litigation by smaller Internet-based retailers ... [who] would say they're being driven from the marketplace," said Cowie, now an antitrust lawyer in private practice.

"This is a serious breach of personal privacy," said Texas Attorney General Greg Abbott. "The business of using trickery to obtain consumers' cell phone records amounts to nothing more than the illegal trafficking of private information."

"There are tremendous privacy concerns at stake here," said Missouri Attorney General Jay Nixon said, who filed suit against Locatecell.com. "The phone records of citizens, companies or anyone else should not be available to whoever has a credit card."

Illinois Attorney General Lisa Madigan sued the company last week after Chicago police complained that undercover officers' lives were put at risk by criminals purchasing the officers' cell phone records.

In Missouri, an undercover investigator from Nixon's office initiated an online transaction with Locatecell.com to purchase the records of calls made on his own private cell phone. The investigator received the records a few days later.

Named as defendants in the lawsuit 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 director Kenneth W. Gorman, of Jensen Beach, Fla.

According to the defendants' Web site at www.locatecell.com, for $65, anyone may enter a cell phone number and then will receive the name and address of the cell phone user.

For $110, anyone can enter a cell phone number and Locatecell.com will provide a list of calls made from that number. Nixon said the defendants do 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.

"We believe this information has been obtained illegally, and we're asking the court to stop the dissemination of this information," Nixon said.

Texas AG Abbott said he has also contacted cell phone providers regarding the actions they are taking to better safeguard customer information.

Online data marketers promoting the calling record services charge between $50 and $200 for obtaining records of specific cellular phone calls, usually those made over the previous 30 days. Some Web companies falsely tell their customers that these records are public information.

To halt the business practices and to prevent the further spread of these Web sites, Abbott said he was demanding information from several dozen pirate Web companies illegally claiming to have access to private cell phone records for a price. The results of the investigation will determine what legal action may be warranted, he said.

Attorney General Abbott's investigation will also focus on liabilities against those who conduct transactions that open consumers to possible dangers, including possible victims whose information may have fallen into the wrong hands.

Some cell phone users, for example, may seek anonymity because they are protecting themselves from an abusive ex-spouse or a person stalking them. There are also concerns about the release of phone records of officers who work undercover.

What You Can Do

To prevent such abuses, Attorney General Abbott urges consumers to contact their cell phone companies to find out if any party has requested their cell phone records. Otherwise, consumers may have no way of knowing if their privacy has been breached.

Consumers may also request a unique password-protected account through their cell phone companies to prevent others from accessing these records.

The Federal Trade Commission and Federal Communications Commission are also investigating.

Offering a completely smoke-free environment is poised to become the latest differentiator in the competitive hotel industry, according to the latest J.D. Power and Associates 2006 North America Hotel Guest Satisfaction Index Study.

The study finds that 79 percent of hotel customers prefer a smoke-free environment that exceeds the boundaries of their guest room.

While consumers staying at luxury hotels (Four Seasons, Ritz-Carlton, etc.) are most likely to prefer a non-smoking environment, upscale hotels (Hilton, Westin, Marriott, etc.) have been quicker to adopt this policy. Marriott International Inc., for example, recently announced that all of its lodging brands in the United States and Canada will be 100 percent smoke-free starting in September, and Westin Hotels & Resorts have been 100 percent smoke-free since earlier this year.

"What was once a differentiator is now expected by consumers," said Linda Hirneise, executive director of the travel practice at J.D. Power and Associates. "We saw this in the case of branded premium beds and online check-in/check-out, where one hotel introduced the concept and others followed suit. We could see the same kind of trend with the issue of smoking.

"Banning smoking is increasingly commonplace at restaurants across the country, and is gaining a lot of public support; thus, doing so in hotels is a natural next step. However, while going smoke-free could be a powerful marketing strategy, at the end of the day, the key differentiator in a guest experience remains the quality of service," she added.

The study, now in its 10th year, measures overall hotel customer satisfaction across six hotel segments: luxury, upscale, mid-scale full service, mid-scale limited service, economy/budget and extended stay.

Seven key measures are examined within each segment to determine overall satisfaction: reservations, check-in/check-out, room, food and beverage, hotel services, hotel facilities, and costs and fees.

Overall hotel satisfaction increased in five of six segments in 2006, with only the luxury segment declining slightly in satisfaction versus 2005. This may be a result of many hotel brands investing in massive renovations and bundling more amenities and services as a way of enhancing the overall guest experience.

The following hotel brands rank highest in consumer satisfaction within their respective segments:

• Luxury: Four Seasons Hotels and Resorts
• Upscale: Omni Hotels
• Mid-Scale Full Service: Hilton Garden Inn
• Mid-Scale Limited Service: Drury Inn & Suites
• Economy/Budget: Microtel Inns & Suites
• Extended Stay: Residence Inn

The study finds that the costs and fees factor has significantly increased in importance to hotel customers, becoming either the most or second-most-important influencer of overall satisfaction across all six segments. At the same time, satisfaction with this factor has also declined significantly across several brands.

"Although there is a lot of optimism surrounding the hotel industry with respect to increased occupancy and development, several factors are still taking a toll on the industry," said Hirneise. "Economic forces such as soaring gas prices and increased cost of living are taking their toll on discretionary income. More than ever, travelers are looking for the best value for their money and are becoming more conscious of what each hotel offers as far as complimentary services and amenities when deciding where to stay."

The amenities that consumers most often mention as "must haves" across the various segments include: high-speed Internet access, pillow-top mattresses, complimentary breakfast, in-room coffee/tea maker and a 27-inch or larger television.

The quality of the high-speed Internet access, in particular, can have a strong impact on a customer's likelihood to return to the property and the brand. Fourteen percent of consumers experienced difficulties connecting to the Internet during their most recent hotel stay.

"Customers are extremely pleased with the availability of high-speed Internet access, but it absolutely has to work properly," said Hirneise. "Otherwise, satisfaction declines significantly, and it ends up hurting a brand more than helping."

The study also finds that 43 percent of consumers book their hotel reservations on the Internet -- up from 41 percent in 2005. Customers are twice as likely to book their reservation through a hotel brand Web site (28%) compared with an independent travel Web site (15%).

The 2006 North America Guest Satisfaction Index Study is based on responses from 42,211 people who stayed in a hotel between January and June 2006.

The state of New York has reached an agreement with one of the nation's oldest mutual fund management companies to settle charges that the firm permitted illegal trading of its funds.

Under the settlement, Waddell & Reed, Inc., based in Kansas City, agreed to pay $50 million in restitution to investors and make fee reductions totaling $25 million over the next five years. The company also will adopt a series of management reforms.

"The evidence in this case showed that company officials didn't just look the other way at timing activities, they facilitated the transactions with full knowledge that small investors were being harmed, state Attorney General Eliot Spitzer said.

The investigation found that Waddell & Reed managers had entered into secret agreements with mutual fund timers. Under these agreements, the timers paid extra fees to Waddell & Reed in exchange for trading privileges that were denied to typical investors.

Specifically, in exchange for fees ranging from 1/4 percent to 1 percent of the timers' money, the company exempted the timers from trading limits and other anti-timing policies put in place to protect long-term investors.

Investigation also determined that Waddell & Reed's senior management knew that timing activity was harming the firm's small investors, and yet the company did nothing to stop the harmful activity for a period of 18 months. During that time, the Company's prospectus created the false impression that Waddell & Reed vigorously policed timing activity.

Under the agreement, Waddell & Reed will increase efforts to halt market timing, take steps to ensure that fees charged to investors are negotiated at arm's length, establish an independent board of directors, and improve disclosure of fees and expenses to investors.

The Food & Drug Administration is warning consumers and health care providers not to use a product called "bismacine," also known as chromacine.

The FDA is investigating one report of a death and several reports of injury related to the administration of bismacine.

Bismacine is an injectable product that has been used to treat Lyme disease. But bismacine is not approved for anything, the FDA says, including Lyme disease.

Bismacine is not a pharmaceutical and is mixed individually by druggists. It is prescribed or administered by doctors of "alternative health" or by people claiming to be medical doctors.

"This product contains high amounts of bismuth, a heavy metal that is used in some medications taken by mouth to treat Helicobacter pylori (a bacteria that can cause stomach ulcers), but that is not approved in any form for use by injection," FDA said in a statement.

On April 20, 2006, one person died as a result of treatment with bismacine, and on March 29, 2005, another person was hospitalized after receiving a bismacine treatment, according to the agency.

Other individuals who have used or been administered this product have also suffered serious adverse events. Possible effects of bismuth poisoning include cardio-vascular collapse and kidney failure.

FDA is advising consumers and health care providers not to use bismacine. Individuals who believe they have suffered adverse events from receiving bismacine may wish to seek medical attention.

FDA said it is evaluating the product suppliers and will take additional action as appropriate.

It's called "vishing," and it's similar to "phishing" scams that rely on email to steal consumers identities. Vishing uses Internet telephone calls.

Wary consumers now know better than to click on e-mail links from unknown senders, so "vishers" have dropped links in favor of phone numbers. Using spoofed e-mail headers and camouflaged Caller ID information to make requests appear legitimate, con artists have managed to fool customers of Santa Barbara Bank & Trust, as well as PayPal members.

Victims report receiving either an e-mail that appeared to originate from their institution, or a phone call claiming that their account had experienced fraudulent activity and required immediate attention. When consumers called the supplied number, an automated system, much like legitimate customer service systems, instructed the unsuspecting victims to enter their account number in order to be connected to a customer service representative.

What sets vishing apart from run-of-the-mill phishing is its reliance on voip and computers to execute the attacks. War dialers, which sequentially call numbers in a given region, are used to pull in the maximum number of potential victim in a selected area. Virtual numbers and the ability to select both area code and prefix allow criminals to come up with phone numbers that are very close to the real ones. Voip is also a much less expensive platform from which to launch these attacks.

Experts remind consumers that common sense is the best form of defense with any type of scam.

If you are contacted by a company you do business with and are asked for your personal information, thank them for alerting you to the problem, hang up immediately, and then call the customer service number listed on the back of your credit card or on other verifiably genuine correspondence. If there is an actual problem, it can then easily be resolved, however if you were targeted in a vishing attempt, your information will stay secure and the institution being spoofed will now be aware that their customers are being scammed.

It's seldom a good idea to take part in an online survey, and a new email phishing scam underscores that point.

Consumers report getting emails purportedly from Chase Bank offering them $100 to take a two-minute online survey. Police say it's simply the latest twist in an online identity theft scam.

The email appears to be from Chase Bank's customer service department and tells the recipient they have been selected at random for the survey offer.

All they have to do is answer a few questions and the bank will slip an extra $100 into their account. The questions inevitably get around to the victim's personal financial information.

Of course, the offer is a fraud. Chase Bank says it would never solicit sensitive data through an email.

The bank is a frequent disguise for fraudsters, since it is so large and also has millions of credit card customers.

Consumer advocates say anyone with a Chase account might fall for the scam unless they stop to think first -- and reject any request that they take part in an online survey.

The reports says medication errors are so common in hospitals that, statistically, a patient will be subjected to a medication error each day of their stay.

While the study found that data on the costs associated with medication errors is limited, one study estimates the cost in the hospital setting alone at $3.5 billion. Another study estimates the cost for Medicare beneficiaries in an outpatient setting at $887 million.

To reduce medication errors, IOM recommended improving communication between patients and providers, enhancing the resources to support consumer-oriented drug information and medication self-management, increasing access to patient information by clinicians and consumers, improving drug product naming, labeling, and packaging, establishing standards for drug-related health information technologies, and providing incentives for the adoption of practices and technologies that reduce medication errors.

"I appreciate this comprehensive report from the Institute of Medicine. While our healthcare system is the envy of the world in many ways, clearly there is room for improvement. This report outlines an ambitious agenda for increasing the safety of the medication use process," said Sen. Charles Grassley (R-IA), Chairman of the Senate Committee on Finance.

The report recommended the Food and Drug Administration and others develop guidelines to make drug labels less cluttered and confusing. Grassley said action on that point should come sooner rather than later.

"Of particular interest to me as the chair of the Finance Committee, which has jurisdiction over Medicare, is the Institute of Medicines assertion that almost nothing is known about the benefits and risks of medications for people over age 80 and those taking medications for multiple conditions," Grassley said.

Addressing this point, the report calls for an increase in clinical trial studies as well as giving access to trial data to patients, providers, health insurers, researchers, and regulators. The report also concluded that many medication errors could be avoided if doctors adopted electronic prescriptions, hospitals instituted a standard barcode system for identifying drugs, and if patients were better educated about the drugs they were taking.

The IOM report was mandated by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

A person identified as an anonymous Dell insider leaked scores of documents to CRN, a computer industry publication, that indicated Dell knew of a dangerous battery malfunction for two years before a shocking video of an exploding laptop forced the company to Dec. 16, 2005 recall for about 22,000 laptops.

The source told CRN that the documentation, which included photographs of charred and melted laptops, was distributed to Dell executives years ago.

The documentation showed the following:

• One notebook was charred black for several inches on the bottom corner of the unit, about one-half inch from the system fan;

• Another notebook with a two-inch hole showing where a section of case had melted away, charred black and brown on the bottom of the unit, on the side, about half-way between the fan and the battery;

• More than a dozen notebooks where an inch or two of casing had melted away in the right-hand corner above the keyboard and just below the LCD;

• One system that was melted, mangled and charred black on the bottom corner of a notebook;

• More than one notebook with black charring around the Ethernet port;

• Several units that had melted and warped in the area immediately surrounding the cooling fan;

• Several units that had melted or burned away in the area covering and surrounding the laptop battery unit.

Despite the more than a dozen destroyed laptops mentioned above, in the Dec. 16, 2005 recall, the Consumer Product Safety Commission said, "Dell has received three reports of batteries overheating. The incidents involved damage to a tabletop, a desktop, and minor damage to personal effects. No injuries have been reported."

The ConsumerAffairs.com database has only one instance of a Dell laptop overheating.

"My laptop overheated enough to lightly burn my leg if not for clothing," wrote George of Inverness, Fla. "I spoke to Dell on several occasions and was told that nothing could be done because the unit was out of warranty. The unit lasted just short of two years after purchase before crashing."

Jess Blackburn, a Dell spokesman, would not say how many burned laptops have been returned.

"Any notebook that's returned to us that would have some kind of potential safety issue associated with it, gets not only our own engineering review but also that of a third party review," Blackburn said.

Blackburn said he can't speak to the accuracy of the CRN article because the author will not share the documentation from the supposed insider.

"I think Ed (the author) was referencing a dozen notebooks over a quarter in which we sold millions," Blackburn said. "But just because they're rare doesn't mean we don't take them seriously."

Consumers with Dell laptops can go to www.dellbatteryprogram.com to see if their laptop is affected and how to get the new battery.

Toyota has now recalled almost 800,000 vehicles in July, including 8,500 Prius hybrids as well as some Lexus hybrids sold in the U.S. The Japanese automaker is recalling 418,570 vehicles globally, including 150,000 cars sold in the U.S. and Canada because of a faulty crankshaft sensor.

The recall includes 8,500 Prius vehicles and 26,200 Echos in the U.S.

Last week Toyota recalled 367,594 SUVs, including hybrids, in the U.S because of loose clips in the floor carpet cover that might cause the accelerator pedal to stick.

The vehicles involved in that recall are the Lexus RX 330 and Toyota Highlander SUVs from 2004 to 2005 model years, and the Lexus RX 400h hybrid and Highlander hybrid SUVs from the 2006 model year.

Earlier in July, Toyota recalled 24,200 vans in Japan.

The three July recalls are the latest in a string of problems at Toyota raising doubts over whether the automaker can maintain quality standards amid booming sales.

The Prius recall for a faulty cranshaft sensor does not involve any hybrid components and Toyota will replace, free of charge, the crankshaft position sensor on recalled vehicles.

Toyota warned owners that the connector for the crankshaft position sensor may become disconnected causing the vehicle to stall. The automaker initiated the recall along with NHTSA.

Toyota said there have been no reported cases of accidents or injuries related to the recalled vehicles.

Toyota reports that because of "improper molding of the resin body of the crankshaft position sensor, engine oil may penetrate the seal and enter the connector" in the recalled vehicles.

"In addition, the shape of the locking tab to secure the sensor's wire- harness connector may be improper. In this condition, the oil may expand due to heat from the engine and deform the connector, as well as create pressure on the locking tab, causing the crankshaft position sensor to become disconnected."

If the crankshaft position sensor becomes disconnected while the vehicle is being driven, the engine will stall and will be unable to restart, according to Toyota.

Toyota will notify owners of the involved vehicles of the recall later this month. Owners are requested to contact their local Toyota dealer for diagnosis and repair upon receiving notification.

Last year, Toyota's recalls in the U.S. more than doubled as the number of recalls industry-wide registered a slight decline.

Toyota says it is working to maintain vehicle quality, even as it increases production to meet worldwide demand for its vehicles.

Just one year after the "Registered Traveler" program launched at Orlando International Airport, the company that created the private-sector concept reports a renewal rate of nearly 100 per cent.

"We have near-total customer satisfaction, so people apparently think it's worth the money," said Steven Brill, founder and chief executive officer of Verified Identity Pass, in an interview with ConsumerAffairs.com.

To get his $79.95 CLEAR card, consumers sign up online at www.FlyClear.com, submit their information to the Transportation Security Administration, and receive approval in less than two weeks.

Less than one per cent are rejected, Brill said.

With 25,700 people signed up for the pilot program in Orlando, Registered Traveler serves 10-15 per cent of the passenger traffic at the airport. As it expands to other airports within the next two years, it may serve more than half the passengers at a business-oriented location like LAX or Chicago's O'Hare, Brill predicted.

There's no cost to the government and passengers' privacy is protected more through Registered Traveler than it is through the E-Z Pass highway toll system. At least that's Brill's theory.

"The big difference between us and E-Z Pass is they have to know where you went because that's how they prepare your bill," he explained. "By having a set fee for a year, we don't need to know that and we don't know that. If I were subpoened and someone held a gun to my head, I couldn't tell you where or when any of our members used their card."

The 55-year-old Brill, who said he is a long-time member of the American Civil Liberties Union (ACLU), said his company includes an identity-theft warranty as part of the CLEAR card membership.

"There's a right way and a wrong way to do this," he said. "We built our website so that we can't track you."

There's an independent privacy ombudsman charged with fielding potential violations. He can post his findings on the website without interference from Brill or his staff.

The creator of Court TV and a magazine called The American Lawyer, Brill founded Verified Identity Pass three years ago.

"We decided Registered Traveler would be a private-sector program supervised and regulated by the TSA," he said. "We don't make security decisions. When someone applies to join our program, we send the information to TSA. They do the background check and give us a yes or a no. We do everything else."

According to Brill, 21 airports have expressed interest in Registered Traveler and three -- San Jose, Cincinnati, and Indianapolis -- have already signed contracts to work with his company. He also said eight Category X airports (the largest) showed interest during a conference call with the TSA last week.

The idea is that pre-screened passengers pass through security faster -- thereby reducing the crowding in remaining lanes and making all lines shorter in length and duration.

"They didn't make the George Washington Bridge wider when they added E-Z Pass," Brill said. "They just figured out a way to predict and allocate the number of people coming through with or without it. E-Z Pass is great for the person who has it but it's also good for the people who don't."

He said Registered Traveler works the same way.

"If our process moves 15 per cent faster and I put 10 per cent more people in my lane, my lane will go faster than before but the other lines and lanes will be shorter," Brill insisted.

He added that new equipment now being tested will permit passengers to leave shoes and jackets on, thereby speeding up the process by almost 45 per cent.

"Originally, everybody thought this was going to be one big government contract with usual suspects," Brill recalled, "but I thought taxpayers shouldn't pay for it. I also worried about the privacy implications of having one program that kept all the data was really ominous. And I wanted customer service to be good: if you call our 800 number, you want a real person to answer the phone in two rings. You want good service, privacy protections, competitive pricing, and the ability to cancel and get your money back the day you're not satisfied."

Brill's concept has many fans in Florida.

According to Henry Morgan of Ocoee, 30 miles northwest of Orlando International, "The last time I went through the CLEAR post and got to the X-ray line, the guy in front of me (who had waited 50 minutes to get to that point) said, 'Wow! How did you do that?' When I started explaining CLEAR, the TSA guy attending the roll-out part of the machine handed him a CLEAR brochure. I was completely through all of security in less than four minutes."

Morgan, a regional manager for Highline Products, flies an average of three times per month andt insists the program is worth the cost.

"It's still a bargain even though it is only in Orlando and only for outgoing flights," he said. "I no longer have to rise at an inhumane hour to make a 7 a.m. flight. In fact, my last flight was saved by CLEAR. Due to some unanticipated delays at home, I just made my flight. Had it not been for CLEAR, I surely would have missed it."

Morgan, whose home is 12 miles due west of downtown Orlando, said he has been a happy CLEAR customer since July 20, 2005 -- three days after it started.