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Current Events in August 2006

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    Mazda Plans Recall of Troubled RX-8

    Any engine that does not pass a specific vacuum test will be replaced according to Mazda.

    Mazda plans a voluntary recall of all 2004 and 2005 RX-8 sports cars along with some 2006s because of damage to the catalyst resulting from oil leaks in th..

    Dell Battery Recall May Not Be the Answer

    Engineers Say Computer Architecture Shares the Blame

    Following Dell's massive battery recall last week, mobile device designers are beginning to worry that the problem may be larger than the 4.1 million recalled batteries used in Dell laptops. It also appears Dell's recall is not a cure-all.

    "It's a matter of how systems are architected," Bodo Arlt, publisher of Bodo's Power Systems magazine in Germany told the EE Times, an online technology publication.

    "You need to know how much energy the computer extracts from the battery, and how a system is designed to manage the current flow that generates heat inside the battery. Knowing the limitation at the critical temperature is important," he said.

    In the wake of the recall, Sony, which manufactured the lithium-ion batteries, has taken much of the blame for the 12 reported incidents of burning laptops and hundreds unreported.

    Reports suggest that faulty crimping on a Sony production line may have introduced metal contamination to the cathodes of the affected battery packs.

    As was suggested in a ConsumerAffairs.com story on August 3, that contamination would likely yield some sort of combustion if the battery got too hot.

    The Dell recall may not end stories of Dell laptops going up in flames. Thomas Forqueran, whose Inspiron 1300 set his truck ablaze, did not have one of the 4.1 million recalled batteries. The 1300 is not one of the listed laptops.

    Some laptop designers believe that the architecture of the computer is to blame, not the rare battery defect.

    Dell laptops frequently place the battery toward the front of the laptop - near the two hottest components of the computer - the CPU and graphics processor. Whereas Apple and Sony, which use the same Sony batteries Dell recalled, tend to place their batteries toward the back, which may explain why there is only one known case of an Apple laptop igniting and no Sony cases.

    "If Dell used a thermometer that would automatically shut down the computer when the battery gets too hot, this could be avoided," Ronald Riley, president of the Professional Inventors Alliance USA, told ConsumerAffairs.com on August 3. "The point is, the computer should not be able to get hot enough to do that."

    There are also concerns that with the increased demand for lithium-ion batteries, there may be more frequent quality control issues.

    "It is basically a quality [control] problem in the cells," John Drengenberg, an electrical engineer and manager of consumer affairs for Underwriter Laboratories Inc. in Northbrook, Ill. told the EE Times. "Power density is increasing dramatically while battery cell materials have failed to keep pace."

    If materials cannot meet the electrical and safety requirements, the task of keeping the battery cool may rest in hands of computer designers, not battery manufacturers.

    A Sony spokesman in Tokyo said, "Our analysis thus far shows that a tiny metal particle that contaminated the electrolyte inside the battery cell caused a short-circuit." But he added, "Usually, that alone would not cause a fire, because the battery just goes dead at that point."

    "We believe the fire was caused by the combination of batteries and system architecture," he said.

    Dell has not commented on whether their architecture is to blame.

    Dell Battery Recall May Not Be the Answer...
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      Study Warns of Homeowner "Rate Shock"

      Subprime loans are becoming harder to repay

      A study warns that homeowners in the Midwest and South and minority communities nationwide are most at risk of mortgage rate shock as the three-fourths of all subprime home loans that are adjustable rate mortgages (ARMs) become harder for borrowers to repay.

      The report, "The Impending Rate Shock: A study of home mortgages in 130 American Cities," looks at which communities will be hit hardest by rising interest rates. It was issued by ACORN, a grass-roots community activist organization.

      Using data available under the Home Mortgage Disclosure Act, ACORN's study examines the extent of high-cost (subprime) lending in 130 metropolitan areas and the disparities between borrowers of different race and income levels.

      Borrowers with subprime loans are already paying higher interest rates and are more likely to be lower-income and have fewer resources to cope with the coming "rate shock" when their interest rates adjust even higher.

      The top 10 areas at the greatest risk of "rate adjustment shock," where high-cost loans represented more than two of every five home purchase and refinance loan, were largely concentrated in the South and Midwest. These areas are: Detroit and Flint, Mich.; Memphis, Tenn.; Jackson, Miss.; McAllen, El Paso, Laredo and Brownsville, Texas; Springfield, Ill.; and Birmingham, Ala.

      "Rate shock could mean and a sharp increase in foreclosures in some of the urban and minority communities that most need to build wealth through homeownership," said ACORN President Maude Hurd. "Too many of our neighbors are being steered into ARMs without given an option for a fixed rate and without given an explanation of the risks."

      Racial Disparities

      The study revealed that minority neighborhoods are at a greater risk of rate shock than neighborhoods that are predominantly white, because of the disproportionately high share of subprime loans held by homeowners in these communities.

      In most metropolitan areas, upper-income minority borrowers are at a greater risk than upper and lower-income white borrowers as well.

      There were 12 metropolitan areas where upper-income African-Americans were at least three times more likely to receive a high-cost loan than upper-income whites. Five of those areas are in California -- San Francisco, Oakland, San Jose, Los Angeles, and San Diego.

      The disparities were even greater between upper-income African-Americans and upper-income white homebuyers. The study identified 15 metropolitan areas where upper-income African-Americans were at least five times more likely to receive a high-cost purchase loan than upper-income whites.

      And upper-income Latinos were at least five times more likely than upper-income whites to receive a high-cost refinance loan in the following seven metropolitan areas: San Francisco, Calif.; Bethesda, Md.; Washington, D.C.: San Jose, Calif.; Bridgeport, Conn.; New York, N.Y.; and Santa Ana, Calif.

      ACORN used a sample of 275 lenders that are owned by 15 of the largest lenders in the country. According to industry estimates, these lenders represent 65.5 percent of all residential mortgages originated in 2005 and 55 percent of the subprime market.

      ACORN recommends that federal banking regulators require lenders to underwrite risky loans, such as interest-only and option ARMs, based on the borrower's capacity to repay the mortgage during the life of the loan considering the highest interest rates, the maximum possible negative amortization, and significant increases in monthly payments after the introductory minimum payment period expires.

      Borrowers are advised to seek HUD-certified homeownership counseling to receive advice about receiving an appropriate loan and to ensure they are not taken advantage of by unscrupulous lenders. Borrowers can also call a local ACORN office for assistance.

      The complete text of the report is available online (.pdf file).

      Study Warns of Homeowner 'Rate Shock'...
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      DIRECTV Telemarketers To Pay $75,000 Penalty

      Companies allegedly broke the Do Not Call rule

      The Federal Trade Commission has entered into a court settlement with Nomrah Records, Inc. and its president, Mark Harmon, defendants in the recent DIRECTV telemarketing case.

      Under the settlement, Harmon will pay a $75,000 civil penalty and both he and the company will be barred from violating the Do Not Call (DNC) Rule and Telemarketing Sales Rule (TSR) in the future.

      In December 2005, the Commission charged DIRECTV and other defendants that telemarketed on DIRECTVs behalf with violating the DNC Rule and the TSR by calling consumers, despite the fact that their numbers were on the National DNC Registry.

      In settling the charges, DIRECTV paid $5.3 million, representing at the time the largest-ever DNC penalty obtained by the Commission.

      The stipulated final judgment and order against Nomrah and Harmon contains strong injunctive relief, barring them from calling consumers on the DNC Registry, as well as from violating any other provisions of the TSR in the future.

      The judgment and order also requires Harmon to pay a $75,000 civil penalty, with the stipulation that $400,575 will become due if he is found to have misrepresented his financial condition to the Commission. Finally, the order contains standard record keeping and reporting terms to ensure the defendants comply with the order.

      Litigation continues against several other companies and individuals.

      DIRECTV Telemarketers To Pay $75,000 Penalty...
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      Dell Notebook Computer Batteries

      August 15, 2006
      Dell is recalling about 2.7 million Dell-branded lithium-ion batteries made with cells manufactured by Sony. The recall affects about 2.7 million battery packs (an additional 1.4 million battery packs were sold outside the U.S.).

      These lithium-ion batteries can overheat, posing a fire hazard to consumers.

      Dell has received six reports of batteries overheating, resulting in property damage to furniture and personal effects. No injuries have been reported.

      The recalled batteries were sold with or sold separately to be used with the following Dell notebook computers:

      • Latitude D410, D500, D505, D510, D520, D600, D610, D620, D800, D810;
      • Inspiron 6000, 8500, 8600, 9100, 9200, 9300, 500m, 510m, 600m, 6400, E1505, 700m, 710m, 9400, E1705;
      • Dell Precision M20, M60, M70 and M90 mobile workstations; and
      • XPS, XPS Gen2, XPS M170 and XPS M1710.

      "Dell" and one of the following markings are printed on the batteries: "Made in Japan," "Made in China," or "Battery Cell Made in Japan Assembled in China." The identification number for each battery appears on a white sticker.

      The batteries were sold through Dell's Web site, phone and direct sales as part of a service replacement program, and catalogs from April 2004 through July 2006. The computers with these batteries sold for between $500 and $2850 and individual batteries sold for between $60 and $180.

      Consumers should stop using these recalled batteries immediately and contact Dell to receive a replacement battery. Consumers can continue to use the notebook computers safely by turning the system off, ejecting the battery, and using the AC adapter and power cord to power the system until the replacement battery is received.

      For additional information, contact Dell toll-free at (866) 342-0011 between 8 a.m. and 5 p.m. CT Monday through Friday, log on to the firm's Web site at www.dellbatteryprogram.com, or write to: Dell Inc., Attn: Battery Recall, 9701 Metric Blvd., Austin, Texas 78758.

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

      Dell Notebook Computer Batteries...
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      Insider: Dell Knew of Battery Problem for Years

      A former Dell technician says Dell has known about the problem for more than two years

      Dell's recall of 4.1 million fire-prone laptop batteries takes the heat off the company for now, but a former Dell technician says Dell has known about the problem for more than two years.

      Robert Day, Dell's lead acoustic technician from 1997-2005, said the computer company received hundreds of laptops that were charred or melted as a result of the defective battery, which Dell is now recalling.

      Day shared hundreds of photos of laptops with ConsumerAffairs.com that he downloaded prior to leaving the company in January 2005. His lab was next to the Product Safety Investigations lab (PSI).

      Day says Dell tried to hide the problem from the public for years. "They didn't want anyone to know how serious of a problem it was," Day said.

      The photos are from one of PSI's technician's archives. By 2005 there were 14 technicians in that lab.

      The findings of each lab, including the PSI, were submitted monthly to executives, so Day said there is no way many of the senior executives at Dell have not known about this problem for years.

      He said after Dell started using the Sony batteries in 2003, the PSI started receiving so many charred laptops that Day's lab, located next to the PSI, had to store many of the laptops.

      Day said he didn't know how many charred laptops Dell received as a result of the batteries, but said it was, "in the hundreds."

      Day sent ConsumerAffairs.com over 300 photographs of about 100 different laptops. It appears that about 12 of those melted laptops were the result of the battery while the rest were from various other electrical shorts and CPU fan failures. He said there were many more battery-burned laptops than that, but he only had access to one technician's archives.

      Day now works as a technician for Apple and said he left Dell after he turned in a Dell executive involved in a sex scandal. Dell did not return two phone calls.

      Sony Batteries Blamed

      The recall of the batteries is the largest electronics-related recall ever conducted by the U.S. Consumer Product Safety Commission.

      The batteries were made by Sony Corp. and placed in in some models of Dell's Latitude, Inspiron, XTS and precision mobile workstation notebooks that were shipped between April 1, 2004, and July 18 of this year.

      On August 3, ConsumerAffairs.com reported the story of Thomas Forqueran, stranded at Lake Mead State Park in Nevada after a Dell laptop set his vintage truck ablaze.

      That story came in the wake of two other summer Dell laptop blazes -- one in which cameras caught an exploding Dell laptop at a conference in Japan. The other took place in Illinois where a Dell laptop spurted flames for over five minutes and forced an evacuation of an office building.

      Airline regulators have also become alarmed and may ban laptops in planes.

      Ronald Riley, president of the Professional Inventors Alliance USA, said the battery is the prime suspect in the laptop fires.

      Riley gave two possible reasons for the battery combustion. He said the battery could have an internal short, as part of a manufacturer's defect, causing the battery to explode. He said any number of variables could trigger the flames.

      He also said it's possible that when the battery gets hot, it "wants" to expand, but has no room.

      "As the temperature rises, the conductors and plates buckle because they have no room to expand," Riley said. "If Dell used a thermometer that would automatically shut down the computer when the battery gets too hot, this could be avoided. ... The point is, the computer should not be able to get hot enough to do that."

      Insider: Dell Knew of Battery Problem for Years...
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      Sleepy Truck Drivers a Significant Safety Risk

      Highways crowded with large trucks are much less safe if the drivers haven't had a good night's sleep

      Highways crowded with large trucks are much less safe if the drivers haven't had a good night's sleep.

      A new study says truck drivers who have severe sleep apnea or who sleep less than five hours each night while at home are more likely to suffer from sleepiness, performance impairment and decreased task vigilance while behind the wheel.

      The results of the study appear in the second issue for August 2006 of the American Journal of Respiratory and Critical Care Medicine, published by the American Thoracic Society.

      Allan L. Pack of the University of Pennsylvania and six associates tested 247 commercial drivers at high risk for sleep apnea and 159 at lower risk for sleep impairment.

      They evaluated the role of short sleep duration at home over one week in 340 drivers, with 55 sleeping less than five hours. Of the 406 drivers examined for sleep apnea, 118 had mild to moderate forms of the disease, and 28 had severe sleep apnea.

      "In the United States, approximately 5,600 people are killed annually in crashes involving commercial trucks," Pack said. "Falling asleep while driving is an important factor in serious crashes involving commercial vehicles, prompting the question, why?"

      According to the authors, the two culprits are chronically insufficient sleep and obstructive sleep apnea.

      The researchers defined mild to moderate sleep apnea as "from 5 to less than 30 temporary breathing pauses per hour of sleep," a process that decreases the amount of oxygen in the blood. Severe sleep apnea, on the other hand, involves more than 30 breathing pauses per hour.

      However, the investigators also found that 77 percent of those with mild sleep apnea and 56 percent of with moderate sleep apnea did not have what could be termed "pathologic sleepiness" as a result of their problem.

      The authors used the Epworth Sleepiness Scale to assess subjective sleepiness, the Multiple Sleep Latency Test to objectively determine the driver's propensity to fall asleep, and the Psychomotor Vigilance Task to assess behavioral alertness and define vigilance lapses. These tests were administered in addition to a normal sleep test (polysomnography) to measure breathing pauses and movement disorders in the sleep laboratory.

      "In this study, we showed that both subjective and objective sleepiness, as well as performance impairments are common in our sample of commercial driver's license holders," Pack said. "Our analyses reveal that chronic short sleep duration is a risk factor for subjective sleepiness, objectively measured sleepiness and performance impairments. The results for sleep apnea are less clear."

      Sleepy Truck Drivers a Significant Safety Risk...
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      Obesity Expert Calls Processed Food "Toxic"

      Consumers Can't Be Blamed for Making Bad Choices When Nearly All Choices Are Bad

      Today's processed food is loaded with sugars that alter the body's hormonal balance, creating a "toxic environment" and an "addiction" to food...

      Dell Plans Huge Recall of Troubled Batteries

      Company Bows to Safety Concerns in Wake of Fires

      As stories about Dell laptop fires spread, Dell has decided to recall 4.1 million laptop batteries, a Dell insider told ConsumerAffairs.com.

      The insider, ex-Dell engineer Robert Day, said the problem appears to be caused by batteries Sony manufactured for Dell between 2003 and 2006.

      A source at the U.S. Consumer Products Safety Commission, who did not want to be identified, confirmed the recall but said full details would not be made available until early tomorrow morning.

      A Dell spokesman confirmed the company had "negotiated conditions of the recall" with the U.S. Consumer Product Safety Commission. It will be the largest electronics-related recall ever conducted by the agency.

      The spokesman said the batteries were made by Sony Corp. and placed in in some models of Dell's Latitude, Inspiron, XTS and precision mobile workstation notebooks that were shipped between April 1, 2004, and July 18 of this year.

      On August 3, ConsumerAffairs.com reported the story of Thomas Forqueran, stranded at Lake Mead State Park in Nevada after a Dell laptop set his vintage truck ablaze.

      That story came in the wake of two other summer Dell laptop blazes -- one in which cameras caught an exploding Dell laptop at a conference in Japan. The other took place in Illinois where a Dell laptop spurted flames for over five minutes and forced an evacuation of an office building.

      Airline regulators have also become alarmed and may ban laptops in planes.

      Ronald Riley, president of the Professional Inventors Alliance USA, said the battery is the prime suspect in the laptop fires.

      Riley gave two possible reasons for the battery combustion. He said the battery could have an internal short, as part of a manufacturer's defect, causing the battery to explode. He said any number of variables could trigger the flames.

      He also said it's possible that when the battery gets hot, it "wants" to expand, but has no room.

      "As the temperature rises, the conductors and plates buckle because they have no room to expand," Riley said. "If Dell used a thermometer that would automatically shut down the computer when the battery gets too hot, this could be avoided. ... The point is, the computer should not be able to get hot enough to do that."

      Dell did not return two phone calls.

      Dell Plans Huge Recall of Troubled Batteries...
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      Laptop Fires Worry Airline Safety Regulators

      Laptops may be banned entirely on airplanes

      The use of laptop computers on airliners may be banned entirely because of a series of incidents involving overheated batteries, including a May 15 incident in which a laptop caught fire in an overhead luggage compartment as a Lufthansa airliner prepared to leave Chicago's O'Hare International Airport, The Wall Street Journalreported.

      The U.S. Consumer Product Safety Commission has documented 339 cases in which lithium and lithium-ion batteries overheated, began to smoke or exploded since 2003, the Journal said.

      Laptop fires have also been a problem on the ground. Two outdoorsmen narrowly escaped injury when their Dell laptop exploded and set fire to their pickup truck, setting off ammunition stored in the glove compartment.

      The Federal Aviation Administration (FAA) has recorded 60 incidents involving laptops and other battery-powered devices since 1991, according to the Journal.

      In February, a United Parcel Service air cargo plane caught fire in Philadelphia and a shipment of batteries is suspected to be the cause. In 2004, a television news crew's battery exploded aboard an aircraft chartered by Vice Presidential candidate John Edwards, forcing an emergency landing.

      The National Transportation Safety Board (NTSB) has held hearings on the issue and is reportedly considering new rules tightening the use and transport of battery-powered devices on commercial airliners.

      Laptop Fires Worry Airline Safety Regulators...
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      Special Agent's Laptop Stolen, Data on Pilots Missing

      By Martin H. Bosworth
      ConsumerAffairs.com

      August 12, 2006
      While Homeland Security was issuing color-coded alerts and warning travelers of the dangers of liquids on a plane, the theft of data on 40,000 licensed pilots went largely unnoticed.

      The Department of Transportation (DOT)'s office of the Inspector General (OIG) reported that a laptop belonging to a special agent assigned to the agency's Miami office was stolen on July 27th.

      The laptop, which the agency claimed was password-locked, contained personally identifying information on roughly 133,000 Florida residents, including:

      • Personal information on over 86,000 commercial driver's license holders in the Miami area, including names, addresses, and Social Security numbers.

      • Information on over 40,000 licensed pilots in the Florida area

      • Data on 9,500 personal and commercial license holders in the Tampa area who received their credentials from a particular office in Largo, Florida.

      Ironically, the agent responsible for the data was part of a task force investigating the acquisition of driver's and pilot's licenses using false information, and whether fraud was being committed at the licensing facility in question.

      The unidentified agent had been working at home with the data, and had missed a security upgrade that would have encrypted the laptop against intrusion, The Register reported.

      A spokesman for the OIG stated that the agent had left the computer in a government-owned vehicle, and when he returned to pick it up, he noticed it was missing. Further investigation revealed that the vehicle had been tampered with.

      "We do not have reason to believe that the perpetrators targeted the computer based on knowledge of thedata," the OIG said in a statement. "However, we are taking all possible steps to inform Florida residents. We have dispatched a team of Special Agents to the Miami area to work with the Miami-Dade Police Department."

      The DOT is offering a $10,000 reward for return of the laptop or information on its whereabouts. No information was provided as to why the theft was not made public until August 10th, or what the current status of the agent was.

      Observers noted the potential danger of the information being loose in "the wild," as anyone who had access to the data could use it to gain false credentials for pilot's and driver's licenses.

      Same Old, Same Old

      The DOT laptop disappearance is the latest in a series of computer thefts and data breaches that has reached nearly absurd levels.

      Government agencies, in particular, have been experiencing unheard-of levels of "laptop theft" and equipment losses, all of which contained valuable personal data that could be used for fraud and data theft.

      The Veterans' Administration (VA) still claims the dubious honor of being the agency with the largest breach of personal data, due to the loss and retrieval of a laptop containing personal and medical information on 26.5 million veterans.

      The VA reported recently that a desktop computer containing information on another 38,000 veterans had been stolen from the offices of Unisys, a contracting company that was assisting the VA with processing insurance claims.

      Unisys announced that it would provide a year of free credit monitoring for any veteran potentially affected by the computer theft, free of charge.

      Although the VA withdrew its own offer of credit monitoring for the stolen laptop after it was recovered and tested, California-based data analysis company ID Analytics recently offered to monitor the veterans' credit data to look for patterns of fraud and misuse, also at no charge.

      ID Analytics published a study in 2005 that claimed small breaches of data were more dangerous than large exposures of information, given the amount of data to sift through, and that it was unnecessary to alert affected individuals every time there was a potential breach.

      Special Agent's Laptop Stolen, Data on Pilots Missing...
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      HSBC Security Flaw Exposes Millions Of Customers' Data


      America may have the market cornered on embarrassing data security breaches, but other countries are catching up fast. A security flaw in the UK's HSBC Bank online banking system has left over three million customers' accounts dangerously vulnerable to outside attack from hackers.

      A research team from Cardiff University discovered the flaw and alerted HSBC on August 9th. According to the team, the flaw has been active for at least two years, rendering many accountholders' finances vulnerable to hacking "within nine attempts," they said.

      Professor Antonia Jones, leader of the research team, told The Guardian that "as long as this flaw exists, customers are at risk. For banks or institutions that are making huge amounts out of their customers not to protect them is pretty scandalous."

      HSBC downplayed the discovery of the flaw, saying that, "It is an extremely sophisticated attack that would require a particular and time-consuming focus on one individual victim" and therefore criminals wouldn't be bothered to try it.

      The Cardiff team declined to provide details about the flaw, saying that they would publish their full findings later in the year.

      The team did say that hackers who use "keyloggers," remote programs that can hijack a user's machine and make records of the keystrokes as they type, would be most able to take advantage of the HSBC flaw.

      According to Cambridge University's Richard Clayton, HSBC's online banking security would not sufficiently protect users from a keylogger.

      The password system involves providing random letters from a secret "pass phrase" to gain access to your account. Although this was thought to be sufficient to fool keyloggers, Clayton claims the new find has a way around that.

      "They have an anti-keylogging system that doesn't work they might as well not have it" Clayton said. "The only reason it's a theoretical [flaw] is that they're fortunate no bad guys have [exposed it] yet.

      A keylogger was discovered last year by researchers working for Florida-based Sunbelt Software. That discovery led Sunbelt's team to a treasure trove of financial information stolen by unknown parties, believed to be based in Russia.

      Sunbelt president Alex Eckelberry personally contacted victims of the hack and publicized the keylogger's existence.

      Security experts and tech geeks furiously debated the threat level of the flaw after the announcement. One commenter on the tech web site Slashdot expressed amusement at the news, saying that it would take nine tries and many possible factors for the flaw to present a danger.

      "Whereas, at another bank which asks for a username and passcode, the dishonest individual with the keylogger only needs me to log in ONCE to have the run of my account," they said. "So why is this news?"

      "Andy," an anonymous and self-proclaimed "ex-bank hacker," posted his theory on the flaw on the Web, saying that HSBC's online banking security relied too heavily on repeatable number sequences, and didn't factor in the ability of hackers to wait out multiple login attempts before the challenge returned to a sequence the keylogger recorded.

      "The rest is easy peasy, lemon squeezy, as they [say] in the business," he said.

      HSBC Security Flaw Exposes Millions Of Customers' Data...
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      GlaxoSmithKline Settles Illegal Pricing Scheme

      Company inflated the price of drugs, suit charged

      A settlement has been reached with GlaxoSmithKline (GSK) to resolve allegations that the company inflated the price of drugs, including medications for cancer patients.

      Under the settlement, which was reached in conjunction with a settlement by the U.S. Department of Justice and the National Association of Medicaid Fraud Control Units, GlaxoSmithKline (GSK) will provide over $1 million in restitution to New York's Medicaid program, which represents New York's share of an agreement involving over 40 states for two drugs used in connection with cancer treatment, according to New York Attorney General Eliot Spitzer.

      Additionally, GSK will pay $940,000 to Medicaid for claims relating to payments for an antibiotic.

      GSK, under a separate settlement of a private class action suit in federal court in Boston, will also establish a national restitution fund of approximately $40 million to which Medicare consumers in New York and across the nation and the New York Elderly Pharmaceutical Insurance Coverage (EPIC) program may make claims.

      "Our lawsuit helped stop a longstanding practice that inflated the cost of drugs for people suffering from cancer and cheated the Medicaid system" Spitzer said. "Today's settlement provides significant restitution for consumers and the Medicaid program."

      Spitzer sued GSK and two other pharmaceutical manufacturers in 2003 on charges of having made false statements that inflated the average wholesale price (AWP) of a class of drugs known as anti-emetics, which help people deal with the side effects of chemotherapy, and other drugs.

      The practice had two main consequences: First, it caused government health plans and consumers nationwide to overpay for certain drugs. Government health plans overpaid because they reimbursed pharmacies and doctors at the inflated price; Medicare beneficiaries overpaid because they paid, as coinsurance, a percentage of the inflated amount.

      Second, an inflated AWP allowed the companies to market the drugs to doctors, pharmacists and other health care providers with the promise that they could keep the "spread" between the actual price of the drug and its inflated reimbursement rate, thereby providing a financial incentive for doctors to choose the companies' drugs over competitors' products.

      The settlements have the following components:

      • GSK will pay the New York Medicaid program a total of $1.53 million in restitution for inflating the prices of three specific drugs -- Kytril and Zofran, injectable anti-nausea drugs used in connection with chemotherapy, and Amoxil, the antibiotic. Under federal law, the federal Medicaid program will receive an additional $470,000 from New York's settlement of GSK's inflated pricing of Amoxil;

      • GSK will establish a nationwide fund of approximately $27 million to which EPIC, New York's program that provides drug coverage for seniors with Medicare, may present its claims;

      • GSK will establish a nationwide fund of approximately $13.5 million to which Medicare beneficiaries in New York State who paid inflated coinsurance amounts for certain drugs may make claims; and

      • GSK will pay New York $740,000 to cover the costs of the state's investigation.

      In addition, GSK will report to the New York Medicaid program two federally defined prices, one of which is used to set current Medicare Part B reimbursement.

      The cases filed against two other drug manufacturers, Aventis and Pharmacia, are pending, as are numerous other similar suits filed by counties, states and private plaintiffs.



      A settlement has been reached with GlaxoSmithKline (GSK) to resolve allegations that the company inflated the price of drugs, including medications for can...
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      "Angel" Warns Job Seekers of Identity Theft Risk

      By Martin H. Bosworth
      ConsumerAffairs.com

      August 10, 2006
      Millions of Americans use online resume boards to get new jobs and make new connections, posting their resumes for thousands of employers to view.

      One unforeseen side effect of this practice is that it leaves job hunters wide open to potential data fraud, as virtually all resumes contain personally identifying information, with some unsuspecting job seekers even posting their Social Security numbers online.

      Now online job hunters can rest a little easier, because there's an "angel" watching out for them, and ready to warn them if they've posted too much sensitive data to be safe.

      Carnegie Mellon University professor Latanya Sweeney has developed a program called "Identity Angel," a sort of specialized search engine that trolls online job boards and other sources to look for what she calls the "Holy Trinity" of personally identifying information -- a person's name, address, and Social Security number.

      Although the first two are all too easy to find on the Web, finding all three is the gold standard for anyone who wants to commit fraud or steal someone's identity.

      If the Identity Angel program finds all three, and can locate the person's e-mail address, they will receive an automated message warning them that their identity may potentially be in danger.

      Sweeney, an acclaimed computer scientist and privacy expert and director of the Laboratory for International Data Privacy at Carnegie Mellon, developed the tool as a method of warning people as to how easy it was to obtain a credit card using someone else's identity.

      As far back as 1996, Sweeney was developing systems to extract personally-identifying data from text documents.

      In a 2005 presentation to the American Association for Artificial Intelligence (AAAI) on the uses of AI in homeland security systems, Sweeney outlined how she developed a new system designed to target information in "rosters," online lists of information that were not easily searchable by keyword or phrase, such as a Google Web search.

      According to Sweeney, when job seekers who had the Holy Trinity combination of personal data and a viable e-mail address were contacted, every single one removed their information shortly thereafter.

      "Imagine a benevolent program that e-mails people for whom information, freely available on the Web can be combined sufficiently to impersonate them in financial transactions," Sweeney wrote. "This is the ambitious goal of 'Identity Angel.'"

      The program has been active since July 23rd, and has already captured thousands of records containing the three necessary components for fraud.

      Sweeney told National Public Radio that many of the initial responses to the original "Identity Angel" e-mail complained that it was endangering them, or that it was a fraud. She noted that the e-mail was retooled to explain their purpose more clearly.

      Testifying before the Department of Homeland Security's Privacy and Integrity Advisory Committee in June 2005, Sweeney advocated the belief that tools like Identity Angel would enable people to secure their identities while not sacrificing their privacy rights.

      "Following the events of September 11, there is a common false belief that in order for America to be safe, the public must give up its privacy. This is not necessary, "Sweeney said.

      Millions of Americans use online resume boards to get new jobs and make new connections, posting their resumes for thousands of employers to view....
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