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    Pet Food Class Action - Menu Foods

    One case is settled but controversy over destroyed pet food continues


    Recall-tainted Menu Foods destruction of a huge amount of evidence is having a potentially devastating impact on at least two ongoing court cases.

    The company last year settled a $24 million lawsuit that grew from the largest pet food recall in U.S. history. The case was heard in New Jersey and parties are still wrapping up various items on the docket, but now a Washington state litigant is charging that the company illegally destroyed thousands of samples of food, potentially leaving him without evidence to pursue his claim.

    During discovery for the New Jersey suit, the defendants collected thousands of cases of pet food — both recalled and non-recalled — in their warehouse. In December 2007, the defendants claimed that preserving all of these samples was an unnecessary waste of time and money. The court agreed, and allowed the defendants to destroy all but 500 units of recalled pet food.

    Relying on a research model compiled by their expert, a Purdue statistics professor, the defendants claimed that these units would provide sufficient evidence for any future suits relating to the recalled food. The courts order allowed the destruction of all other unorganized product, including food not implicated in the New Jersey recall but directly related to at least two other suits pending at the time.

    Donald Earl, a plaintiff in a Washington state suit against defendants Menu Foods and the Kroger supermarket chain, filed a motion objecting to the orders in January 2008. Earls suit involved cake style cat food, which does not contain gluten and was not implicated in the March 2007 recall. Laboratory tests of Earls food showed that it was contaminated with acetaminophen and cyanuric acid, nitrogen-based chemicals often used to artificially boost a foods apparent protein content. Neither chemical was discovered in the recalled food.

    Criminal prosecution

    Earls objection says that the defendants are highly motivated to destroy as much evidence as possible, to limit liability outside the recall period, as well as to avoid possible criminal prosecutions for violations of the Food, Drug, and Cosmetics Act.

    In his pleadings, Earl contends that the defendants grossly exaggerated the time and money it would take to organize and store all of the samples, and points out that it was defendants own lack of care which created the burden in the first place. Moreover, Earl asserts that he did not receive notice of the evidence-destruction agreement until January 2008, a full month after the court approved the plan. Despite his allegations, the court dismissed Earls objection without comment in February 2008.

    Earl also filed a motion in Washington state court, where his own suit was pending. That court rejected his claim in February 2008.

    Menu accuses Earl of pursu[ing] a protracted campaign of baseless appeals and of whipping up scurrilous allegations of misconduct against Menu Foods counsel. In October 2008, the Washington court awarded Menu almost $5,000 in attorneys fees and expenses relating to Earls litigation.

    Undeterred, Earl filed a second objection and motion to intervene in January 2009. Earl again claimed that the now-destroyed evidence was crucial to his own suit, and that he was substantially prejudiced by its disposal. Earls motion also alleged that Menu was well aware of the relevance of the non-recalled pet food when it asked for permission to destroy it.

    The companys first quarter 2007 financial filing specifically stated that several lawsuits were pending in North America, and that the U.S. Food and Drug Administration had commenced a criminal investigation to determine whether the company violated the Food, Drug, & Cosmetic Act. The company noted that additional actions or investigations may arise in the future. Moreover, Menu was served with a summons in Earls Washington action in July 2007, months before they filed their New Jersey motion to destroy evidence.

    Earls 2009 objection asserts that [a]n order permitting destruction of evidence is contrary to rule and law, is void, and must be vacated. The New Jersey Rules of Professional Conduct, based on national ethics standards for attorneys, forbids a lawyer from altering or destroying a document having potential evidentiary value. Earls motion points out that while the unorganized product is no longer relevant to the New Jersey case, it is directly material to his own suit.

    Motion denied

    In a two-page order issued in February, Judge Noel Hillman denied Earls motion to intervene, holding that Earl has not demonstrated that he has an interest in the unorganized inventory requiring that this Court vacate its prior orders regarding that inventory.

    Model Rule of Professional Conduct 3.4(a) prohibits the destruction of any evidence with potential evidentiary value. Earl correctly notes in his 2009 objection that there is little case law relating to motions to destroy evidence, presumably because the overwhelming majority of practicing attorneys would prefer not to put their licenses at risk by filing such a motion in violation of the rule. However, most courts have adopted the rule that a party to a suit has the duty to preserve evidence when she is on notice of potential litigation.

    A landmark case in this area is Fire Insurance Exchange v. Zenith Radio Corporation, a 1987 decision from the Supreme Court of Nevada. There, an insurer sued a TV manufacturer, claiming that a faulty set was the cause of the insureds house fire. The insurance company had not saved the TV, however, and the court dismissed the case. The court ruled that there is a duty to preserve evidence even when an action has not been commenced and there is only a potential for litigation.

    With regard to Menus actions, the affected suit was more than potential — it had been occurring for some time. The company received notice of Earls lawsuit nearly six months before it filed its request to destroy evidence.

    The companys actions also have the potential to adversely affect another class action suit. Blaszkowski v. Mars, filed in Florida in May 2007, alleges that several brands of pet food — including some made by Menu — contained ground up roadkill, blood, hair, and euthanized animals, among other items. The destroyed evidence from the New Jersey suit would likely have been directly material to this action as well.

    The court undoubtedly had broad discretion to limit the amount of material produced during discovery, given the potentially vast amounts of possibly contaminated food. But Earl claims that it was another matter entirely for the court to order destruction of already-produced evidence, especially when it was potentially useful — and perhaps even critical — in at least two other cases involving a common defendant. Indeed, Earl contended that the evidence was unique and irreplaceable.

    In any event, the courts have sided decisively with the pet food manufacturers, and there is no evidence that they will change their minds anytime soon.

    Recall-tainted Menu Foods destruction of a huge amount of evidence is having a potentially devastating impact on at least two ongoing court cases....
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    Digital Converter Box Program Vows to Replace Expired Coupons

    Feds claim program is back on track after multiple stumbles

    It might sound like a rerun but the federal government says that this time it really, really has figured out how to help taxpayers make the transition to digital over-the-air television.

    With the once-postponed June 12 deadline for the nationwide conversion to digital TV approaching, the program has now started to accept replacement requests from eligible households whose coupons expired without being redeemed. The reason for that, in many cases, was that they were mailed out after their expiration date but that little fact wasn't noted in the government's latest self-congratulatorily effusive announcement.

    "This is very good news for Americans who were unable to redeem their coupons before they expired," said Anna Gomez, acting administrator of the National Telecommunications and Information Administration (NTIA). "With the backlog of applications now eliminated, consumers can apply for coupons and get assistance right away, allowing them to continue to receive important local television news and emergency information by purchasing a converter box at a reduced cost.

    Of course, it's not good news for consumers who have already made the conversion and are finding that they can no longer receive the stations they've come to depend on.

    "We live in a remote area on a mountain. We always had great free TV. Only ever needed an indoor antenna, got plenty of channels," said Chris of Cairnbrook, Pa. "So now we have the converter boxes. ... We get only 3 channels and they are either non-viewable with checkerboard appearance and intermittent freezing and no sound, or no signal at all.

    "Boy, that surely was worth the money the government made us spend for their bright idea!" Chris said. " We live paycheck to paycheck and don't have money for new TVs or antenna's or satellite. We don't get cable up this mountain. Thanks a lot for taking away another piece of our life. You're on a roll now."

    Then there are those for whom the government's belated attempt to get organized simply comes too late.

    Jean of Reno, Nev., said her coupon expired before she could find a store that would accept it. "I was refused a replacement coupon and ended up buying a box at full price as one of our stations had already converted and the other two were planning on converting about 10 days later," she told ConsumerAffairs.com.

    "The box by the way didn't work, but I am expecting a replacement," she added. "It cost me $40 additional and I still don't have a box."

    How to apply

    If an eligible household has redeemed one coupon toward the purchase of a TV converter box and the other coupon has expired, then it will be approved for a single replacement coupon, Gomez said.

    Consumers may apply for replacement coupons by calling 1-888-DTV-2009 (1-888-388-2009), mailing an application to P.O. Box 2000, Portland, OR 97208 or faxing an application to 1-877-DTV-4ME2 (1-877-388-4632). Deaf or hard of hearing callers may use 1-877-530-2634 (TTY).

    NTIA also claims that the coupon program has eliminated its waiting list and is processing all coupon requests as they come in with a maximum nine-business day turnaround time.

    On January 4, 2009, the coupon program ran out of money and placed incoming coupon requests on a waiting list, to be fulfilled as previously issued coupons expired. The economic stimulus bill provided NTIA $650 million to issue at least 12.25 million more coupons, to start mailing coupons via first class mail and to ensure vulnerable populations are prepared for the transition from analog to digital television transmission.

    Applications are now being processed on a first come, first served basis while supplies last.

    I urge all consumers who are still unprepared for the transition to act today to get their converter boxes and resolve any technical issues well ahead of the June 12 deadline, Gomez said, placing the blame for being "unprepared" on citizens whose pleas for help have often been ignored by their government.

    Consumers can receive digital television today by purchasing and connecting a TV converter box (with or without a government coupon); buying a digital TV; or subscribing to cable, satellite or another pay service.

    Consumers who currently have coupons in hand should use them immediately. The coupons may not be used as a rebate and must be presented to the retailer at the time of purchase.

    The DTV Delay Act established June 12, 2009, as the final date by which all full-power television stations in the country will be required to shut down analog broadcasts. However, some stations and entire markets may choose to switch before then. The Federal Communications Commission says that of the nation's nearly 1,800 full-power televisions stations, a total of 641 stations 36 percent-- terminated their analog signals as of February 17, 2009.

    Digital Converter Box Program Vows to Replace Expired Coupons...
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    Florida Targets Fraudulent Foreclosure "Rescue"

    Company charged with deceptive marketing, victimizing Hispanic community

    Florida Attorney General Bill McCollum is suing a Miami company and its owner on charges the company is engaged in foreclosure rescue fraud.

    According to the lawsuit, Lincoln Lending Services, LLC targeted Hispanics facing foreclosure and charged up-front fees for loan modification services — both in violation of the Foreclosure Rescue Fraud Prevention Act, according to the state.

    "Our citizens should not be targeted when they are in a time of financial distress and are desperately trying to protect their homes," said McCollum.

    According to consumer complaints, Lincoln Lending advertised for mortgage foreclosure assistance and rescue services. The complaint contends that to get around the statutory prohibition against up front charges, the company would have consumers pay $2,700 for "forensic analysis" services, then sign a contract for alleged modification services.

    The forensic analysis fee was allegedly created to circumvent the new law, which was created last year, the state maintains. Lincoln's business of offering legal services, directly or indirectly, constitutes the unauthorized practice of law and violates FS 877.02(1).

    The Attorney General's Economic Crimes Division determined Lincoln Lending also forwards consumers to an attorney working under the business names of Florida Foreclosure Law Center, LLC and Florida Homeowner Assistance Center, LLC.

    The lawsuit asks the Court to issue a temporary injunction against the company while litigation continues. It also seeks consumer restitution and ultimately a permanent injunction prohibiting the company and its owner, Rita Gomez, from engaging in similar business practices.

    Florida Targets Fraudulent Foreclosure...
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      Red Meat Consumption May Increase Death Risk

      New study shows greater likelihood of cancer occurrence

      Health advocates have long cautioned consumers about eating too much red meat. Now a new research study may add more fuel on the fire.

      A report in the March 23 issue of Archives of Internal Medicine says people who eat more red meat and processed meat appear to have a modestly increased risk of death from all causes and also from cancer or heart disease over a 10-year period.

      In contrast, a higher intake of white meat appeared to be associated with a slightly decreased risk for overall death and cancer death.

      "Meat intake varies substantially around the world, but the impact of consuming higher levels of meat in relation to chronic disease mortality [death] is ambiguous," the authors write as background information in the article.

      Rashmi Sinha, Ph.D., and colleagues at the National Cancer Institute, Rockville, Md., assessed the association between meat intake and risk of death among more than 500,000 individuals who were part of the National Institutes of Health-AARP Diet and Health Study.

      Participants, who were between 50 and 71 years old when the study began in 1995, provided demographic information and completed a food frequency questionnaire to estimate their intake of white, red and processed meats. They were then followed for 10 years through Social Security Administration Death Master File and National Death Index databases.

      During the follow-up period, 47,976 men and 23,276 women died. The one-fifth of men and women who ate the most red meat - a median or midpoint of 62.5 grams per 1,000 calories per day - had a higher risk for overall death, death from heart disease and death from cancer than the one-fifth of men and women who ate the least red meat, median of 9.8 grams per 1,000 calories per day.

      When comparing the one-fifth of participants who ate the most white meat to the one-fifth who ate the least white meat, those with high white meat intake had a slightly lower risk for total death, death from cancer and death from causes other than heart disease or cancer.

      "For overall mortality, 11 percent of deaths in men and 16 percent of deaths in women could be prevented if people decreased their red meat consumption to the level of intake in the first quintile," the authors wrote. "The impact on cardiovascular disease mortality was an 11 percent decrease in men and a 21 percent decrease in women if the red meat consumption was decreased to the amount consumed by individuals in the first quintile. For women eating processed meat at the first quintile level, the decrease in cardiovascular disease mortality was approximately 20 percent."

      There are several mechanisms by which meat may be associated with death, the authors note. Cancer-causing compounds are formed during high-temperature cooking of meat. Meat also is a major source of saturated fat, which has been associated with breast and colorectal cancer. In addition, lower meat intake has been linked to a reduction in risk factors for heart disease, including lower blood pressure and cholesterol levels.

      "These results complement the recommendations by the American Institute for Cancer Research and the World Cancer Research Fund to reduce red and processed meat intake to decrease cancer incidence," the authors conclude. "Future research should investigate the relation between subtypes of meat and specific causes of mortality."



      "Meat intake varies substantially around the world, but the impact of consuming higher levels of meat in relation to chronic disease mortality [death] is a...
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      Rising Health Premiums Growing Problem For Consumers

      Even privately insured families have trouble keeping up

      Trouble paying health plan premiums and difficulty affording out-of-pocket expenses for medications aren't just problems of the uninsured anymore. They're also concerns for families with private insurance, according to the C.S. Mott Children's Hospital National Poll on Children's Health.

      "Often times, the federal government focuses on kids who don't have any coverage at all, and they are certainly in very vulnerable circumstances. But we wondered whether children with private insurance are also vulnerable," said Matthew Davis, M.D., director of the National Poll on Children's Health. "In this poll, we found that over two-thirds of parents are concerned about out-of-pocket health care costs, and about two-thirds are concerned about the premium costs and deductibles of their health plans."

      While these concerns were found among parents across all demographic groups, parents in the middle income bracket making $30,000 to $59,999 per year showed the greatest concern.

      "Parents in this group make enough money to afford private insurance but not enough to comfortably cover the additional costs of that insurance," Davis said.

      Seventy-nine percent of these parents were concerned about the out of pocket costs; 74 percent were concerned about the costs of the deductible; and 73 percent were concerned about premiums.

      The poll also finds among parents of all demographic groups:

      • 32 percent are concerned their private health insurance does not cover the costs of all the care their child needs

      • 20 percent are concerned their private health insurance does not cover their children's medicines.

      "Over the next few months, as the economic crisis is expected to worsen, we're likely to see stress among privately insured families continue to increase. That may spell trouble for kids in terms of getting care in a timely way and for health care institutions that depend on people seeking care to stay in business," Davis said. "The federal government and perhaps state governments need to step in to ensure that individuals with private insurance — especially kids — don't fall behind in their care at this time."

      Rising Health Premiums Growing Problem For Consumers...
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      Connecticut Probes Acai Berry Scams

      Bogus weight loss claims, unauthorized charges at issue

      Connecticut Attorney General Richard Blumenthal is investigating the business practices and questionable science associated with Acai berry products -- primarily pitched by Internet-based companies as a wonder treatment for weight-loss.

      Blumenthal's office has received numerous consumer complaints related to Acai berry purchases, and is investigating with other states.

      There is no competent scientific research that demonstrates any of the claimed effects of Acai berry, including weight loss, detoxification and increased energy and vitality, Blumenthal said.

      Blumenthal said various companies selling Acai berry products -- in addition to bogus weight loss claims -- have improperly charged consumer credit cards.

      After promising 14-day "free trials" of Acai berry products, the companies often make it virtually impossible for consumers to cancel the trial, resulting in charges to consumer credit cards ranging anywhere from $59 to $89.

      Even worse, some consumers never even receive the product within the trial period -- making it impossible to try the product before deciding whether to cancel.

      That's what happened to Robin of Covington, Ga., who complained to ConsumerAffairs.com about her dealings with Advanced Wellness Research.

      "I ordered the free trial of Acai Berry capsules for $4.99. It took 2 weeks to get the bottle. That's their SCAM..you have to call withing 14 days to cancel. It's hard to cancel when you haven't received the product! ... On my next credit card statement, I had been charged $78.81 on 2/7/09 and another $83.80 on 2/22/09."

      "There are no magical berries from the Brazilian rainforest that cure obesity -- only painfully real credit card charges and empty weight loss promises," Blumenthal said. "Aggressive Acai berry pitches on the Internet entice countless consumers into free trials promising weight loss, energy and detoxification. These claims are based on folklore, traditional remedies and outright fabrications -- unproven by real scientific evidence.

      "In reality, consumers lose more money than weight after free trials transition into inescapable charges. We will investigate these allegedly misleading or deceptive nutrition and health claims and take action under our consumer protection statutes -- as we have done with other food products. As problematic as the berries are the bills.

      "Supposedly free online product offers commonly entail costs. These false celebrity endorsements and fake blogs show the dark side of online marketing."

      David Schardt, senior nutritionist for Center for Science in the Public Interest, said, "If Bernard Madoff were in the food business, he'd be offering 'free' trials of aai-based weight-loss products. Law enforcement has yet to catch up to these rogue operators. Until they do, consumers have to protect themselves."

      More Scam Alerts ...

      Connecticut Probes Acai Berry Scams...
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      Tier IV Pricing Challenges Doctors And Patients

      New insurance policies leave customers footing more of the bill

      Many health insurance policies include prescription drug coverage, covering most of the cost of medicine, with the consumer paying a $15 to $30 co-pay. But a new pricing system implemented by many U.S. insurance companies could give some policy-holders sticker shock on their next visit to the pharmacy.

      Health insurance companies are rapidly adopting this new system, commonly called Tier IV, for many of the expensive drugs used in the treatment of several diseases like rheumatoid arthritis, multiple sclerosis, hemophilia, hepatitis C and certain types of cancer.

      For these expensive drugs, the co-pay is replaced by a system requiring the consumer to pick up 20 to 40 percent of the cost.

      "The Tier IV pricing system essentially represents discriminatory pricing for certain patients," said Dr. Charles King, a rheumatologist in Tupelo, Miss. "Asking my patients to pay 20 to 40 percent of their drug costs out-of-pocket, often up to $600 each month, means they will not have access to these life-altering therapies. My office has been flooded with calls from worried patients since the Tier IV system took effect. They are fearful of losing access to medicines that afford them the ability to lead independent, productive lives, and this is of great concern to me as their rheumatologist."

      Robin Bates, a 34 year-old patient of Dr. King's has suffered from rheumatoid arthritis since she was 21, and was faced with the challenge of purchasing her expensive Tier IV treatment from a specialty pharmacy assigned to her by her insurer. Her treatments were costing her well over $1,000 per year on top of her insurance premium, leaving her baffled as to why this was happening.

      "I can't function without my medication, and I have four small children and a husband who need me; I have to be able to get up and go," said Bates. "But, this Tier IV pricing system made me wonder if I could find a cheaper medication — which I couldn't — and for a moment, I stopped considering the best option for my treatment, and started looking for the most affordable one."

      Charged by this kind of fear and frustration, physicians, health care professionals, patients and caregivers in Mississippi recently rallied together and overwhelmed phone lines and message boards demanding fair pricing and appropriate access-to-care, and their efforts worked. As a result of this action, Blue Cross Blue Shield of Mississippi has lowered out-of-pocket expenses for Tier IV drugs to 10 percent of the cost of the drug with a $200 maximum co-pay per month.

      The American College of Rheumatology says it believes it is important for physicians, patients and caregivers in all states to come together and overturn the Tier IV pricing system, which it says has lead to a severe access-to-care issue. For the Mississippians who rallied against Tier IV pricing, the results were great — they influenced change in one of the biggest insurance companies in the United States.

      "Picking up the phone and making a call to your insurance company, contacting members of Congress, contacting local news outlets, and simply learning more about Tier IV pricing can make a huge impact in your state, just as it did in Mississippi," said ACR President, Sherine Gabriel, MD.



      A new pricing system implemented by many U.S. insurance companies could give some policy-holders sticker shock on their next visit to the pharmacy....
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      QVC to Settle Deceptive Claims Charges

      Dietary supplements, anti-cellulite skin cream at issue

      TV home shopping channel QVC, Inc. has agreed to pay $7.5 million to settle Federal Trade Commission charges that it made false and unsubstantiated claims about three types of dietary supplements in violation of an FTC order, and about an anti-cellulite skin cream in violation of the FTC Act.

      The agency claims QVC, one of the worlds largest multimedia retailers, violated a 2000 FTC order barring it from making deceptive claims for dietary supplements.

      According to the commission, QVC aired approximately 200 programs in which false and unsubstantiated claims were made about For Women Only weight-loss pills; Lite Bites weight-loss food bars and shakes; and Bee-Alive Royal Jelly energy supplements.

      In addition, the complaint charged that QVC violated Section 5 of the FTC Act by making unsubstantiated claims about Lipofactor Cellulite Target Lotion.

      The settlement requires QVC to pay $6 million for consumer redress and a $1.5 million civil penalty. In addition, the settlement expands the prior FTC order and further bars QVC from making unsubstantiated claims that any drug or cosmetic eliminates or reduces a users cellulite.

      QVC aired ads that werent true and violated an FTC order, said Eileen Harrington, Acting Director of the FTCs Bureau of Consumer Protection. Simply put, we arent going to let QVC get away with this. The company is responsible for the product claims made on its programs, and we expect that going forward, QVC will do a better job for its audience and make sure that its programs are truthful and not deceptive.

      The ads allegedly included:

      • Unsubstantiated claims that the weight-loss supplements could cause people to lose significant amounts of weight, maintain their weight loss for a long time, and prevent carbohydrates from being stored as fat;

      • False claims that the weight-loss supplements could prevent dietary fat from being absorbed in peoples bodies; unsubstantiated claims that the energy-enhancing supplements could reduce fatigue and increase energy in people with severe fatigue and other physical ailments; and

      • Unsubstantiated claims that Lipofactor lotion could reduce cellulite, including measurable decreases in the sizes of individuals arms, legs, and abdomens.



      QVC to Settle Deceptive Claims Charges...
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      California Shuts Down Statewide "Home Repair" Scheme

      Attorney General, state licensing board target inadequate, overpriced jobs

      March 23, 2009
      Attorney General Edmund G. Brown Jr. and the Contractors State License Board (CSLB) have finalized an agreement that will stop a massive service and repair scheme that unfairly overcharged thousands of Californians for "shoddy and woefully inadequate" home repair work.

      "This massive scheme defrauded thousands of California homeowners who were charged exorbitant fees for shoddy and woefully inadequate home repair work by unlicensed and unskilled contractors," Attorney General Brown said. "The agreement stops the illegal practices and gives homeowners a chance to recover some of their losses."

      A months-long investigation by the Attorney General's Office and the Contractors State License Board found that SRVS Charge Inc. and its affiliated companies had been cheating some 6,000 customers each year for overpriced and substandard home repair work since 1989.

      To stop the companies' illegal practices and provide restitution to those who were victimized, Brown and the CSLB reached a settlement with:

      - SRVS Charge Inc. and its affiliates,

      - Principal owner, Sarkis Terabelian, 43, of Burbank;

      - General manager, Zohrab "Rob" Mkhitarian, 40, of Burbank; and

      - Associates Marine Metspakyan, 33, Avetik Avo Gyandzhyan, 38, Lilit Lusparyan, 28, Alisa Oganyan, 35, Estine Akopyan, 28, and Vardui Terabelian, 45.

      The defendants operated various service and repair companies that employed electricians, plumbers, and heating and air-conditioning technicians in Southern California, the San Francisco Bay Area, and the Sacramento region. These companies routinely targeted elderly Californians.

      Exorbitant customer fees enabled Sarkis Terabelian, Mkhitarian, and his associates to purchase two helicopters, a Mercedes-Benz, and real property valued in excess of $1 million. Title to these vehicles and real property were seized by the Attorney General's Office last year and will be released as a result of the settlement.

      SRVS Charge Inc.'s scheme worked like this:

      The company placed millions of dollars in telephone directory advertising, including many full-page ads. The ads, which listed different company names, claimed a 100% satisfaction guarantee and senior discounts. When customers called the numbers listed in any of the ads, they would be directed to a central call center.

      - Many times repairmen would be dispatched from a different company than the customer called.

      - Often, these workers had not undergone the criminal background check required of all contractors and Home Improvement Salespeople licensed by the Contractors State License Board since January 1, 2005.

      - Customers were charged high prices for emergency home service and repair, often unrelated to the actual home repair work. Much of the work was poorly done or never completed.

      - If a customer refused to pay, the company would file a lien against the home to force payment.

      Because the company used multiple business names, it was difficult, if not impossible, for customers to seek recourse for incompetent workmanship, incomplete work, or any other issue that arose on their project. Customers were often denied refunds, despite the existence of the "100% satisfaction guarantee" promised in the ads. Over several years, the Attorney General and the CSLB shut down affiliates of SRVS Charge, Inc. But instead of ending their scheme, the defendants continued to run their company under a labyrinth of business names and fraudulent contractor license numbers that were interchangeable. When CSLB either revoked a license or received an excessive number of complaints, the company would establish a new corporate identity and business would continue without interruption. As part of its investigation, CSLB conducted undercover stings against service technicians suspected of using these fraudulent licenses and referred instances of the illegal activity to the San Diego, Los Angeles, Santa Clara, and Sacramento County district attorney's offices. In one instance, the San Diego District Attorney's Office found that a service technician had also committed burglary and theft and is now being prosecuted for his crimes. Attorney General Brown entered into a final agreement with the defendants in San Diego Superior Court on March 12, 2009, and the agreement was made public today. The settlement provides for the following.

      • A permanent injunction against the defendants' prior illegal activities. This includes:

      • CSLB monitoring of the defendants' operations for one year;

      • Mandatory registration of all company service technicians with CSLB. This requires technicians to undergo a criminal background check;

      • Capping the number of business licenses that the defendants can use to a maximum of five;

      • Preventing the defendants from charging exorbitant fees or fees that have nothing to do with the actual work that is performed;

      • Fully disclosing to CSLB the names of the directors, officers, and employees of their company; and

      • Mandatory customer complaint tracking with proper complaint investigation and reasonable efforts to resolve them.

      • Prohibiting the defendants from engaging in false advertising.

      • $3 million in penalties and restitution to be distributed as follows:

      • $1.3 million to be used for consumer restitution;

      • $450,000 to be assessed in penalties for state Business and Professions Code violations; and

      • The remainder to be used to reimburse CSLB for investigative costs, legal costs, and costs of monitoring future compliance with the judgment.

      • "This settlement is a victory for California consumers and legitimate contractors, and brings resolution to thousands of hours of investigative work," said CSLB Registrar Steve Sands. "Victims will now be able to regain some of their money, and CSLB will be able to watch this company closely so others aren't harmed."

      • If the terms of the settlement are violated, the defendants could face jail time.

      • The following companies are affiliated with the defendants and are included in the settlement:

      • American Electric (CSLB #834398)

      • American Home Repairs, Inc. (CSLB #834206)

      • 59 Minute Service (CSLB #837697)

      • Cal Repair Services, Inc., dba Pick Red Plumbing (CSLB #797241)

      • Answering Resources, Inc., dba Thrifty Electric (CSLB #723375)

      • Orbell Enterprises, Inc., dba Plumbing One (CSLB #713006)

      • USA Services, Inc. (CSLB #775863)

      • Love My Home, Inc. (CSLB #811361)

      • Electric Avenue, formerly A Plus Electric Company (CSLB #569322)

      • American Electric 911 Fast Inc. (CSLB #826916)

      • Pro Electric Co. (CSLB #670171)

      • RG Electric (CSLB #516892)

      • Pacific West Heating & Air Conditioning (CSLB #604150)

      If you think you have been the victim of fraud by this company and its affiliates, please contact the Contractors State License Board at 1-800-321-CSLB (2752) and press 7.

      Massive scheme defrauded thousands of homeowners who were charged exorbitant fees for shoddy and woefully inadequate home repair work by unlicensed and uns...
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      Babies, Bathtime, and Cancer?

      Researcher disputes 'toxic bubble bath' study

      By Trevor Butterworth

      March 22, 2009
      An alarming new report by the Campaign for Safe Cosmetics claims bath products for babies contain carcinogens, but by the standards it used to measure risk from formaldehyde and 1,4-dioxane shouldn't we be even more worried about bathwater, tomatoes and fried chicken? And did the activist group actually measure exposure?

      The Campaign For Safe Cosmetics (CSC), a coalition of activist groups that have been campaigning for years about chemical exposure in personal care products has released a new report — No More Toxic Tub — on the apparent cancer risks from baby bath products. The study was dutifully transcribed by news media outlets, including ConsumerAffairs.com and USA Today, which headlined the piece Group finds carcinogens in kids bath products.

      Many children's bath products contain chemicals that may cause cancer and skin allergies, according to a report released Thursday by the Campaign for Safe Cosmetics, wrote Liz Szabo in USA Today. Twenty-three of 28 products tested contained formaldehyde, the report says. Formaldehyde — considered a probable carcinogen by the Environmental Protection Agency — is released as preservatives break down over time in a container.

      There followed a description of the study, comments from a scientist who worked with the cosmetics manufacturer saying there was no cause for concern and an environmental health pediatrician.

      The story perhaps explains why only one percent of health journalists said health reporting in the U.S. was excellent.

      First, the CSC is driven by a group of environmental activist groups with a long history of hyperbole. The study was self-published, it wasnt peer-reviewed; in fact, it wasnt even scientific — if one takes science to be formulating a hypothesis and testing it against the full range of data.

      If USA Todays reporter had interviewed any cancer researchers on the studys content, or did any background research on the chemicals (instead of finding a source against the study and one for it — lazy, formulaic journalism which gets the story off the desk in super quick time), the result would not be the inevitable panic among consumers when confronted with the headline Group finds carcinogens in kids bath products.

      First of all, some information crucial to understanding cancer risks from STATS survey of 401 randomly chosen members of the American Association for Cancer Research. Only one in four thought that cancer-causing agents were unsafe regardless of the dose (28 percent). This is important because if every carcinogen was carcinogenic at any level, one would have to start a Campaign for Safe Vegetables — which would have the unfortunate and silly goal of removing most vegetables from peoples diet.

      The CSC is not interested these kind of distinctions. A carcinogen is a carcinogen is a carcinogen — and no risk, even the most wildly hypothetical, is justifiable (in cosmetics that is — members of the coalition presumably drink coffee, alcohol, eat carrots, smoke and so forth).

      And mews organizations such as USA Today dont seem interested in the fact that this is not how science assesses cancer risks.

      CSCs report focused on two chemicals: formaldehyde and 1,4-dioxane.

      Formaldehyde

      Formaldehyde is widely used in manufacturing for a vast array of purposes, including foam insulation material, plywood adhesives, explosives, and disinfectants. It is a nearly colorless gas with a pungent odor usually used and stored in a solution. It is lethal at very high doses by ingestion and considered a human carcinogen by the International Agency for Research on Cancer due to a weak association with nasal cancer incidence in workers with chronic exposure to formaldehyde.

      The Carcinogenic Potency Project at U.C. Berkeley notes that formaldehyde damages DNA, kills cells and causes cell proliferation in both rodents and humans, but that the risk declines markedly at levels that do not kill cells.

      Formaldehyde also occurs naturally in some fruits and food.

      The risks of formaldehyde have been assessed as exposure from manufacturing in 1979 and long-term studies of workers exposed to high levels of the chemical (the National Cancer Institute explains why it is so difficult to prove that formaldehyde exposure in workers is linked to cancer); exposure from mobile home air (which caused a controversy in the wake of Hurricane Katrinas need for mobile homes), and normal home air.

      The most substantial risk came from manufacturing through gas inhalation. Workers were exposed to levels so high that they were nearly equivalent to those used in tests that caused tumors in 10 rodents.

      The average daily exposure to formaldehyde in conventional home air (over 12 hours per day) is 80 times less than the amount that produced tumors in 10 percent of rodents. This is close to that of coffee, where average daily exposure is 90 times less than the amount that produced tumors in 10 percent of rodents.

      Where does our exposure to formaldehyde come from? As the eleventh edition of the Report on Carcinogens by the National Toxicology Program notes:

      "The general population may be exposed to formaldehyde through its use in construction materials, wood products, textiles, home furnishings, paper, cosmetics, cigarette smoke, and pharmaceuticals. Formaldehyde released to indoor air from construction materials, furnishings, and cigarettes are major sources of exposure. Cigarettes may contribute as much as 10% to 25% of the indoor exposure. Automobile exhaust is a major source of formaldehyde in ambient air. In addition, formaldehyde can be absorbed through the skin from cosmetics or contact with other consumer products containing formaldehyde."

      Formaldehyde is used in some cosmetics as a preservative, and the Campaign for Safe Cosmetics claims that 23 out of 28 products they tested contained formaldehyde at levels of between 54 and 610 parts per million.

      The European Union has stipulated that the total content of formaldehyde in the finished cosmetic product must not exceed 0.2% — which is equivalent to 2000 parts per million. In other words, the products assessed by the CSC were well within European safety margins. There is no indication that this could pose a risk. CSC did find one item which released levels above the EU limits — Baby Magic Baby Lotion.

      But here we come to the fundamental methodological flaw in the report — one that underscores the need for real, peer-reviewed scientific analysis of chemical exposures and health and not activist reports designed to maximize media attention through sensationalism: The Campaign measured how much formaldehyde was in the product, but not how much a child would actually be exposed to or absorb in the course of using that product.

      Heres the CSC testing protocol:

      Formaldehyde: 1 to 2 grams of product sample was weighed to the nearest milligram, and placed into a glass vial. 20 milliliters of an aqueous buffer (pH=5 acetic acid) was added volumetrically. The sample vial was sealed with a teflon lined cap, vortexed and then placed on a shaker table for 12 hours. 0.5 to 1 milliliter of the aqueous buffered extract was volumetrically transferred to a 250 bottle to which 100 milliliters of organic free dionized water had been added; 4 milliliters of acetic acid buffer was added to the bottle to maintain a pH=5 and then 6 milliliters of a 2,4-Dinitrophenyl hydrazine (DNPH) solution was added. The 250 ml bottles were placed in a shaking water bath with the temperature maintained at 40 degrees C for 1 hour to complete the derivatization. The aqueous derivatized sample was transferred to a separatory funnel and extracted with methylene chloride. The methylene chloride extract was concentrated and exchanged to a final 5 milliliter volume of acetonitrile (ACN). 10 microliters of the acetonitrile extract was introduced into an Agilent HPLC. The HPLC column was a Restek Ultra Aqueous C18 (150mm x 4.6mm). A 70%/30% ACN/water to 100% ACN eluent gradient program was used to elute the derivatized formaldehyde which was detected with an ultraviolet detector set to 365 nanometers. Standards of formaldehyde were derivatized and extracted similarly. Method blanks were used to assess background contamination from formaldehyde.

      In other words, not only did all but one of the products meet the EU safety guidelines, they may or may not expose infants and children to formaldehyde at the levels found. It is unlikely that a parent is going to place an infant in a shaking bath filled with water at 104 degrees Fahrenheit for an hour.

      This isnt meant to be flippant. If formaldehyde in bath lotions is as dangerous to children as the Campaign for Safe Cosmetics claims, why didnt it measure actual exposure? And why didnt the media spot — by simply reading the report — that it failed to do this?

      This is the ongoing problem with activist studies: they arent really scientific and, of course, they always manage to confirm what the activist group is lobbying against.

      1,4-dioxane

      The other chemical highlighted by the Campaign for Safe Cosmetics is 1,4-dioxane, which occurs in small amounts in cosmetics as a byproduct in manufacturing, and which cosmetics companies strive to remove. The Campaign found that 32 out of 48 products tested (67%) contained 1,4-dioxane at levels ranging from 0.27 to 35 ppm — and noted that the chemical was banned by the EU in cosmetics (although it isnt banned in the U.S. and the FDA is not, apparently, concerned about the trace amounts in cosmetics.)

      The IARC has declared 1,4-dioxane as possibly carcinogenic to humans. The National Toxicology Program has described it as reasonably anticipated to be a human carcinogen based on studies in rodents where the chemical was consumed through drinking water and at very high levels. The FDAs position on the chemical is that: The 1,4-dioxane levels we have seen in our monitoring of cosmetics do not present a hazard to consumers.

      Concerns initially were raised in the 1970s, when studies at the National Cancer Institute found an association between 1,4-dioxane and cancer in animals when 1,4-dioxane was administered in high levels in the animal feed. However, the levels in cosmetic products are far lower than those found to be harmful in feeding studies and, for the most part, the types of products in which it is found are only in contact with the skin for a short time.

      As a precaution, FDA followed up with skin absorption studies, which showed that 1,4-dioxane can penetrate animal and human skin when applied in certain preparations, such as lotions. However, further research by FDA determined that 1,4-dioxane evaporates readily, further diminishing the already small amount available for skin absorption, even in products that remain on the skin for hours. (Robert L. Bronaugh, "Percutaneous Absorption of Cosmetic Ingredients," in Principles of Cosmetics for the Dermatologist, Philip Frost, M.D., and Steven Horwitz, M.D., Eds. St. Louis: The C.V. Mosby Company, 1982)

      The other confounding problem with 1,4-dioxane is that we are exposed to it routinely in tap water, either by drinking or when we shower (as a volatilized compound), and in seafood, cooked meat, fried chicken, deep fry oil, ripe tomatoes, tomato paste, peppers, coffee, herbs and spices (within the range of 2-15ppm). In fact, given that 1,4-dioxane is more easily absorbed by ingestion and inhalation rather than absorption (due to its propensity to evaporate), the route of exposure is much more likely from the water we wash and shower in than through skin absorption from a cosmetic lotion.

      Again, this underscores the need for exposure to be measured, and not simply to examine whether a solution contains 1,4-dioxane or not. Is a child actually exposed to more 1,4-dioxane through eating a regular meal and drinking water than through using a lotion? If 1,4-dioxane is as dangerous as CFSC claims, surely this is more alarming?

      But there is considerable controversy over how dangerous 1,4-dioxane really is. The studies all focus on inhalation and ingestion rather than absorption, and required substantial quantities of the chemical to produce cancer in the lab animals. This underscores the important of distinguishing the presence of a chemical from actual exposure.

      Should you take the Campaign for Safe Cosmetics report seriously?

      It will be obvious by now that we are exposed to formaldehyde and 1,4-dioxane from a multiplicity of routes, and in each case absorption through cosmetics is, arguably, the least significant route of exposure. There is much greater concern in the regulatory and scientific research about environmental release and exposure from other sources.

      The problem with the Campaign for Safe Cosmetics is that its report isnt scientific. It is an argument that any exposure to a chemical that can be shown to cause cancer in any possible way should be banned. This is not consonant with mainstream scientific or regulatory thinking.

      Second, the Campaign equates presence with exposure. But if you cant show that a chemical is being absorbed, you cant measure its effect. A tank full of gasoline is lethal if you drink it, but the fact that its sitting in your car doesnt pose the same degree of risk.

      Third, the bodys metabolism — even in an infant — is capable of processing many chemicals quickly and without any negative consequence. Even chemicals that are dangerous at high levels can have no negative effect whatsoever. If this wasnt the case, almost every known food would be toxic.

      There is also increasing disquiet among toxicologists about the reliance on high doses of a chemical in animals to determine human cancer risks. As the Carcinogenic Potency Project notes in its latest evaluation of cancer risks: The chronic, high dose rodent cancer test is not much use in understanding human cancer risk. Tumor development is likely due to high dose effects or processes that are not relevant to humans.

      In pursuing its cause, the Campaign for Safe Cosmetics systematically avoids addressing the science in a scientific way, and acknowledges no scientific limitations to its claims despite failing to develop the kinds of tests that would actually support its conclusions.

      We need real science. And we need the media to be able to distinguish what counts as real science and what is merely self-serving activism.

      ---

      Trevor Butterworth is a Senior Fellow at STATS, a research organization affiliated with the George Mason University. He received his BA and M.Phil from Trinity College Dublin and did graduate work in philosophy and intellectual history at Georgetown University. He received an M.S. from Columbia University's Graduate School of Journalism, where he was awarded the Sevellon Brown Prize for outstanding knowledge of the history of the American press.



      Babies, Bathtime, and Cancer? An alarming new report by the Campaign for Safe Cosmetics claims bath products for babies contain carcinogens....
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      Court Snuffs Vioxx Suit

      Individualized issues rule out class action, judge decides

      Individualized issues of proof have killed off another consumer class action, this one brought against Merck by consumers seeking to recover expenses resulting from their use of the heart medication Vioxx.

      New Jersey Superior Court Judge Carol Higbee ruled that problems with individualized issues of proof, including why the drug was prescribed and how much each consumer paid, would be unmanageable.

      The judge conceded that her decision was likely a death knell for most of the putative class members, since individual damages are so small that few if any are likely to bring suit on their own behalf. The judge insisted, however, that the court cannot find that a class action is a superior form of resolution, either.

      The judge said that the court would have to make an individualized inquiry into whether concealment of cardiovascular risks played a role in the consumers decision to purchase the drug. As a result, the plaintiffs had failed to show a causal nexus between the companys representations and consumers ascertainable loss — the money they paid for the drug. These issues built an insurmountable barrier to class action.

      The case was brought on behalf of all consumers — except those in California — who purchased the drug from its introduction in June 1999 until September 2004, when it was withdrawn from the market due to safety concerns. The plaintiffs asserted claims under the New Jersey Consumer Fraud Act, alleging that Merck knowingly used misleading advertising to hide the risks presented by the drug.

      Vioxx, an anti-inflammatory drug prescribed widely for arthritis and other ailments causing chronic pain, was withdrawn from the market after several studies showed it led to an increased risk of heart attack and stroke.

      A study in 2000 found that the risk of these events was four times that of patients on an over-the-counter painkiller, and that the elevated risk began during the patients second month on the drug. In 2001, Merck began its own three-year study, which it cut short after finding that long-term use of Vioxx doubled the risk of heart attack or stroke.

      In 2007, Merck settled another Vioxx class action for $4.85 billion. Unlike the economic suit, that claim was on behalf of patients who suffered cardiovascular problems from the drug, including heart attacks and strokes. That same year, the New Jersey Supreme Court declined to certify a class claiming that Merck deceived health insurance companies about Vioxxs safety.

      At its zenith, Vioxx was a widely-used and extremely profitable drug. The drug netted Merck $2.5 billion in 2003, and was prescribed to over 80 million patients worldwide during its five-year run. The drug was one of the most widely-used ever to be withdrawn from the market,



      Court Snuffs Vioxx Suit...
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      Jackie Joyner-Kersee: FDA "Insensitive" to Asthma Patients' Problems

      Sen. Grassley investigating federally-mandated "death machine" inhalers

      Jackie Joyner-Kersee

      A ConsumerAffairs.com investigation that exposed what asthma patients nationwide call a life-threatening ban on medication that gave them instant relief — their chlorofluorocarbon (CFC) albuterol inhalers — has triggered action and support from Sen. Chuck Grassley (R-IA) and four-time Olympic track and field star Jackie Joyner-Kersee.

      Grassleys office is reviewing the more than 200 complaints ConsumerAffairs.com has received from asthma and pulmonary patients nationwide who are outraged by the recent ban on CFC rescue inhalers and say the hydroflouroalkane (HFA) alternatives they must now use under federal law leave them gasping for air.

      Staffers in California Senator Barbara Boxers office and Connecticut Congresswoman Rosa L. DeLauros office also said they would review our investigations findings. But Emilia DiSanto, chief investigative counsel in Grassleys office, decided to take a deeper look and review all the complaints ConsumerAffairs.com has received about the problems and concerns asthma patients have with HFA inhalers.

      Our review continues, DiSanto told us earlier this week.

      Meanwhile, among the growing number of asthma patients worried about the ineffectiveness of HFA inhalers is three-time Olympic gold medalist Joyner-Kersee, who said federal bureaucrats are being "insensitive" to the life-threatening problems asthma patients are experiencing.

      Ive had problems with HFA inhalers, she said during an exclusive interview this week with ConsumerAffairs.com. I didnt feel like I was getting the same rescue effect that I was before with my (CFC) inhaler. Im telling you, I thought they made a mistake when they gave me that (HFA inhaler). To me, it was differentand I was getting lightheaded. It doesnt have the same effect as my CFC inhaler. Im not feeling it.

      The woman many consider the greatest female athlete in history said our investigation had shed light on a problem that could impact the more than 40 million asthma patients across the country.

      Im glad you brought this to my attention, said Joyner-Kersee, an advocate for asthma awareness. We need someone fighting for us on thisasthma is a silent killer.

      Silent killer

      Im concerned about the lives of others with asthma, she added. Like the person who is not on top of their medication or taking their asthma seriously. Or some young child who might reach for an HFA inhaler and find out it doesnt work for them.

      As ConsumerAffair.com has reported, CFC inhalers are banned in the United States — as of December 31, 2008 — under an international agreement called the Montreal Protocol on Substances that Deplete the Ozone Layer.

      According to the Food and Drug Administration (FDA) — and other supporters of this 1987 agreement — the CFC propellant in the inhalers damages the ozone.

      CFCs reduce the amount of ozone in the ozone layer that surrounds the earth and protects the earth against the sun's harmful rays, the FDA said in a written statement. The loss of ozone can increase the risk of skin cancer, cataracts, and other health problems.

      Asthma and other pulmonary patients must now use environmentally friendly — and expensive — inhalers that contain the propellant hydroflouroalkane (HFA).

      The FDA, pharmaceutical companies, and pulmonologists say the HFA inhalers have a different feel and taste — and asthma patients need to take deep breaths when using them.

      But they say the four HFA inhalers now on the market — ProAir, Proventil, Ventolin, and Xopenex — — are just as effective as CFC inhalers when properly used.

      The more than 200 asthma and pulmonary patients whove contacted ConsumerAffairs.com, however, disagree.

      So do the hundreds of asthma and pulmonary patients whove contacted The National Campaign to Save CFC Asthma Inhalers . The California-based group is lobbying Congressional leaders to amend the Clean Air Act and make CFC inhalers permanently legal in the United States.

      No relief

      New inhalers, like this Proventil model, are powered by non-aerosol propellants

      ConsumerAffairs.com receives complaints almost daily about HFA inhalers from asthma patients across the county. Most say the inhalers do not give them quick relief and sometimes make their asthma worse.

      Unfortunately for me, the HFA inhalers do not relieve my asthma, Star R. of Whitethorn, Calif., wrote us. Since November 2008 to the present I have had increased, terrifying asthma attacks that the HFA inhalers have done little to control. I have found that in an emergency the HFAs are worthless and, therefore, quite dangerous.

      I was never informed that my inhaler formulation had been changed to a different propellant, she added. The way I found out was in the middle of the night, during an asthma attack, when my new HFA inhaler didn't work.

      Some asthma patients have experienced allergic reactions to the ethanol or other ingredients in the HFA rescue inhalers.

      I cannot use HFA albuterol inhalers as I am allergic to the propellants in all of them, says Paulette B. of Sacramento, Calif. I tried two different ones and they made me cough really badly and my lungs burned awfully. They gave me an awful headache and caused nausea, too. I fortunately still have a few CFC albuterol inhalers and then will have to go to a nebulizer only. I may die if I cannot have my CFC inhaler.

      Many asthma patients also say theyre not convinced the CFCs in their old inhalers harm the ozone.

      They all say theyre environmentalists. What asthma patient doesnt want clean air? many have asked us. But they believe the government picked the wrong product to ban.

      I found out that the effect that the CFCs in the old inhalers were actually proven to only show negligible effects on the ozone, if any at all, Heather C. of Abilene, Texas, told us. Shame on the FDA and everyone else involved in making this come aboutI wonder if this will lead to any deaths or hospitalizations in regard to not getting the relief you must get from these (rescue) inhalers.

      The increased cost of the HFA inhalers is another concern many asthma patients have repeatedly expressed. HFA inhalers do not have a generic version and can be five to ten times more expensive than their $5 CFC albuterol counterparts.

      The new inhaler is about $40, say Suzanne G. of Jackson, Wyoming. Apparently, I will need three a month for a total of $120. My CFC inhaler cost me around $12 and lasted over a month. So I'm out $108 a month.

      (But) the cost is not as burdensome as the loss of a normal athletic and basic life for a young woman and mother, she adds. The HFA inhalers do not work as effectively as the CFC inhalers in rescue situations. I have to take twice as much medicine with the HFA inhalers, and the HFA inhaler clogs causing medicine to go up in the air instead of into the mouthpiece and lungs. This is really scary for me. I cannot exercise at the gym like before, and I dare not go for a run. I cannot play with my 4-year-old daughter like I used to do for fear of a complete bronchial shut down.

      The skyrocketing costs of HFA inhalers are also worrisome to Joyner-Kersee, founder of a non-profit organization that helps children in her hometown of East St. Louis, Illinois.

      Cost has always been a concern with me, Joyner-Kersee said. With there not being a generic of this (HFA inhaler).its very expensive. I dont want to see some of my asthmatic counterparts dropping and drying (because they cant afford their medicine).

      FDA won't budge

      Despite asthma patients concerns, ConsumerAffairs.com has learned the FDA is not likely to change its position on CFC inhalers.

      CFC inhalers damage the ozone, spokesman Christopher Kelly told us. People will have to get used to the new (HFA) inhalers. Kelly said his agency researched its decision to phase-out CFC inhalers for several years.

      He referred us to pages of documentation on the FDAs Web site about the ban and the safe and effective alternatives for CFC inhalers.

      There are three albuterol HFA inhalers and one levalbuterol HFA inhaler that are alternatives to albuterol CFC inhalers, one posting states. Each of the HFA inhalers is different. It is important to remember that it is the deep breath that gets the medication into a patient's lungs, not the force of the spray. The spray from an albuterol HFA inhaler may feel softer than the spray from an albuterol CFC inhaler, but this will not affect the amount of drug that a patient breathes into their lungs.

      The posting adds: If patients have problems with the albuterol HFA inhaler, they should talk to their healthcare provider as a different product may work better for them.

      Kelly said the FDA knows many consumers are upset about the ban on CFC inhalers.

      More than 300 consumers, he said, filed complaints with FDA last year about this action 295 by phone and 39 by e-mail. The complaints concerned the cost increase and patients getting used to the new formulation," Kelly said. But I don't think our position is going to change on this."

      Kelly and other proponents of the ban say a generic alternative should be available in a few years, which will reduce the cost of HFA inhalers. Some pharmaceutical companies and the The Partnership for Prescription Assistance now offer programs and coupons to help consumers cover the increased costs of HFA inhalers.

      "Advocates" sit it out

      During our investigation, weve also talked to The American Lung Association and supposed advocates of asthma patients whove emphasized the salient issue for patients is to get their disease under control.

      Someone who uses a 'quick reliever' inhaler many times a day does not have well-controlled asthma, said Dr. Norman H. Edelman, chief medical officer for the American Lung Association. Patients shouldn't need their quick relief inhalers more than two to three to four times a week. Asthma is a variable disease and doctors are always readjusting medications and dosages. If patients are not getting good asthma control, they need to talk to their doctor.

      Edelman said asthma patients will notice a difference when using an HFA inhaler. It's a softer feel. The particles are more finely disbursed and people don't feel that same blast.

      Patients must also prime the HFA inhalers and keep them clean to prevent build-up and blockage of the medication.

      But as far as we know, the studies done on these (HFA inhalers) show that when they are used properly, they are as effective as the old (CFC) inhalers, Edelman said.

      A clinical professor at the University of Florida — and the co-author of a 2007 paper in the New England Journal of Medicine about the transition to HFA inhalers — agrees the four HFA-albuterol inhalers now are the market are safe and effective alternatives for asthma and pulmonary patients.

      There was a wide range of studies done on these (HFA inhalers), pharmacist Leslie Hendeles told us. These were double-blind, random, placebo studies. The FDA was careful to require studies (on HFA inhalers) to detect any differences and make sure they were equivalent (to CFC inhalers.").

      Proper technique

      Hendeles said he reviewed all the HFA inhalers now on the market for his article in the New England Journal of Medicine.

      We analyzed the data. There isn't a hint that any one of those drugs doesn't work as well as CFCs. The difference is everyone in those studies was trained to use the HFA inhalers correctly.

      That's why Hendeles suggests patients work on the technique" they use with these new inhalers.

      What I tell our patients is 'let me see how you use (the HFA inhaler) and maybe I can make some suggestions to get an increase of the medicine in your lung.' Studies that have examined how people use inhalers have shown many dont use them correctly.

      He added: I'm also going to throw out the possibility that the HFA inhaler is less forgiving (to bad technique) than the CFC inhalers. If you didn't have good technique with a CFC inhaler it may be magnified with the HFA inhaler.

      Hendeles said he's had excellent results with patients who've improved their technique. I've rarely had anyone come back (with complaints) who is using the correct technique. It's uncommon.

      Some patients also respond differently to the various HFA inhalers, he said. We've had a lot of patients say the ProAir (which has ethanol) doesn't work for them and we've switched them to Ventolin, (which doesn't have excipients other than the propellant) and they say they're okay.

      Other patients, he said, have trouble with the HFA inhalers because they don't clean them as often as their CFC devices.

      Unlike the CFC inhalers, the HFA propellant plugs the opening if patients don't follow the directions, Hendeles said. What we have found is people are — after using them a few times — may not be washing them. That makes them clog and they don't get a full dose. Or some patients may not prime the (HFA) inhaler when it comes out of the package or if they haven't used in a few weeks.

      If people say they're having trouble with these inhalers, Hendeles added, ask them how often they're washing them.

      Decision was political

      Hendeles also told us the decision to ban CFC inhalers had nothing to do with protecting the environment. The motivation, he said, was political.

      Why was it political? asked Hendeles. "Some years ago, the United States, along with other countries, signed an agreement to phase out all CFCs. Thats political. Secondly, Congress amended the Clean Air Act to include this (ban). Thats political.

      He disagrees with political and environmental officials who say CFC inhalers harm the ozone.

      The science is not there that these (CFC inhalers) were damaging the ozone, he told us. A majority of the damage (from CFCs) came from refrigerators and air conditioners.

      A medical exemption allowing CFC inhalers to remain on the market was included in the Montreal Protocol when it was signed in 1987. At the time, there weren't viable alternative propellants for CFCs. But that exemption was removed when HFA-albuterol inhalers became available. In 2005, the FDA determined CFC inhalers were no longer "essential" and said they must be phased out by December 31, 2009.

      Longtime asthma patients say their CFC inhalers are medically essential because the HFA alternatives do not relieve their breathing problems during an attack.

      Ive had it with these HFA-metered-dose inhalers, says Wendy W. of Springfield, Illinois. They dont work. I have had to resort to using an electric nebulizer machine to dispense my fast-acting relief medicine.

      Wendy and other asthma patients also take issue with those who suggested they arent using their inhalers correctly — or cleaning them according to the directions. They say they know how to use the HFA inhalers — and they clean them regularly. And nearly every patient whos contacted us says their asthma was in control until they used an HFA inhaler.

      I am 43 year old and have (had) asthma since for the past 31 years, says Kathleen Ann F. of Fresno, California. I have always had my asthma under control and have never had to use any kind of inhaler until 2003. The reason for my use of an inhaler is the fact that I am allergic to many chemicals that were and are used at my place of employment. I have used albuterol, which was the most effective treatment I have used. Since the ban on CFCs and the change in inhalers allowed to be prescribed it is almost unbearable to continue working.

      Kathleen and scores of other pulmonary patients also say anyone who suggests they need to take deep breaths when using an HFA inhaler has never had an asthma attack.

      How are asthmatics who are suffering an asthma attack supposed to inhale deeply when they are having trouble breathing in the first place? she asks.

      "Insensitive"

      Joyner-Kersee echoes those sentiments.

      I think those comments about breathing deep and cleaning your inhaler are insensitive and come from people who are not asthmatics.

      She added: I do have my asthma under control and I noticed a difference with these HFA inhalers.

      During our interview, Joyner-Kersee offered to lend her voice to help asthma patients who are struggling with HFA inhalers and want their trusty and affordable CFC devices back on the market.

      I would support 100 percent changes in the law (to bring back CFC inhalers), she said. We need a voice (on Capitol Hill) to take a serious look at this and not let us asthmatic die by the wayside.

      The founder of The National Campaign To Save CFC Asthma Inhalers said hed like Joyner-Kersee to join his team, which has launched a grassroots effort to convince lawmakers in Washington D.C. to change the Clean Air Act.

      We are very pleased to hear that a world-class athlete of Jackie Joyner-Kersees stature supports our campaign to permanently legalize CFC inhalers, and that she agrees with us that the problems that many patients have with HFA inhalers cant be solved by improved inhaler technique, said Arthur Abramson. We greatly appreciate her support, and wed love to have her join our campaign.

      Abramson is also grateful that Sen. Grassleys office is taking a closer look at this issue.

      Sen. Grassley has had a reputation for many years as the leading defender of patient health and safety in Congress several others in Congress like to talk a good game when it comes to patient safety, but most of them are owned by drug companies and/or environmental extremist groups, Democrats and Republicans alike.

      He added: We are confident that when Senator Grassley understands the magnitude of this problem, and reviews the substantial clinical and anecdotal evidence that we have (including three years worth of FDA MedWatch data) that proves that the replacement HFA MDIs (metered-dose inhalers) are not nearly as safe and effective for all patients as CFC MDIs are, he will work with us to permanently legalize CFC inhalers, even though it will require us to abrogate certain provisions of the Montreal Protocol, amend the Clean Air Act, and upset a handful of drug companies.

      Asthma patients like Leonard S. of Wisconsin hope something is done soon to get CFC inhalers back on the market.

      The HFA alternatives, he says, are death machines.

      How many of us will wind up in the morgue thanks to these HCA inhalers? Leonard asks. This is quack medicine at its best. Death comes to those who cannot deliver sufficient albuterol to the lung. The pressure required to push the inhalant must be able to overcome the opposing pressure of an inflamed lung. An HFA (inhaler) fails all the way. It's a death machine.

      Read consumers' comments about the new inhalers.



      Jackie Joyner-Kersee: FDA Insensitive to Asthma Patients' Problems...
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      Texas Takes on Scams Targeting Seniors

      Lead card and fake grandchild hoaxes investigated

      The state of Texas has shut down a direct mail marketing firm that it says operated an unlawful "lead card" scheme and targeted senior citizens.

      Prospect Pros LLC, which did business as American Seniors Alliance, used improper tactics to obtain senior citizens' personal information. According to state investigators, the firm packaged and sold the unlawfully obtained information to insurance companies and sales solicitation firms.

      In early 2006, the attorney general took legal action against four "lead card" generation schemes, including Prospect Pros in early 2006. All but one — Lead Concepts Inc. and its owner Christopher Weir — have been resolved.

      Prospect Pros produced and mailed misleading direct mail solicitations that were intended to alarm senior citizens. The mailers featured urgent messages in boldface type, appeared to come from government agencies and were intended to obtain the recipient's personal information via postage-paid return cards.

      Prospect Pros, for example, mailed a "Medicare Update" that purported to provide information about changes to the Medicare program and appeared to be sponsored by the federal government. By law, the lead card solicitation must state clearly that it is not affiliated with any governmental agency. Other mailers appeared to inform older Texans about estate and probate tax avoidance.

      In other cases, mailers were designed to make elderly recipients think their government benefits might be in jeopardy and that returning the cards would preserve those benefits.

      Under the agreed final judgment, Prospect Pros LLC, Prospect Pros Inc. and owners William D. and Lynn Thompson are prohibited from sending misleading or untrue direct mail to senior citizens.

      In the future, they must clearly disclose when mailers are sent on behalf of a particular insurance agent or other vendor and that these representatives may contact seniors who respond. The newly required disclosures will ensure that senior citizens are aware of the direct mail solicitations' true purpose.

      "Grandparent scam"

      Texas authorities also warned seniors to be wary if they receive a call from someone claiming to be a grandchild in trouble. Those calls could be from a con artist trying to get money in an old ruse called the "grandparent scam."

      In this scam, con artists call and says something like "Hi, grandma," or "Hey, it's your favorite grandson." The con artists then claims they've had an accident, were arrested, or in some other type of trouble and need money. Many times, they claim they're calling from Canada.

      "The 'grandchild' also insists that the victim not tell anyone else, which increases the odds that the fraud will be successful," Texas authorities warn. "If all goes according to the con artist's plan, the victim will wire money to the 'grandchild.'"

      When senior citizens learn this is a scam, their money is gone. And authorities say it's unlikely their funds will be recovered.

      "This type of fraud is particularly troubling, as it plays upon a grandparent's natural desire to protect a grandchild," Texas officials said. "Although variations of this scam have been around for a long time, it has become more sophisticated with the proliferation of information on the Internet."

      Authorities say con artists now use personal information gleaned from family blogs, genealogy Web sites, social networking Web sites, and online newspapers. That information often gives the callers more credibility.

      To protect themselves from getting taken in this scheme, seniors should be wary of the following red flags:

      • Callers requesting money;

      • Callers claiming to be in Canada or other foreign location;

      • Callers insisting on secrecy;

      • Callers pressuring them to take quick action;

      • Callers with unfamiliar voices;

      • Callers requesting money be sent by wire transfer. Those funds are hard to track and almost impossible to recover, authorities say;

      • Elusive callers who get personal details wrong;

      Seniors who receive a call from any relative asking for money should ask personal questions that only a family would know, authorities says. They should never "fill in the blanks" for any caller.

      Seniors should also ask for the callers name and a phone number where they can reach them. And always verify the caller's story with another family member.

      Texas seniors who have lost money in this or any scam can contact the Office of the Attorney General at (800) 252-8011 or file a complaint on the Attorney General's Web site. .

      More Scam Alerts ...

      The state of Texas has shut down a direct mail marketing firm that it says operated an unlawful "lead card" scheme and targeted senior citizens....
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      Recession Has Consumers Thinking Of Hanging Up Cell Phones

      Sagging economy has users dropping service, choosing prepaid

      It's hard to imagine anything coming between consumers and their cell phones, but a sagging economy might be the thing that finally does.

      As fears about the recession become more widespread, millions of Americans are on the verge of disconnecting expensive cell phone plans, according to a survey by Opinion Research Corporation.

      Two out of five Americans with contract-based cell phones — 39 percent or 60.3 million consumers — are likely to cut back on their cell phones to save money if, as is widely expected, the economy gets worse over the next six months, according to the survey of 2,005 Americans conducted by ORC for the New Millennium Research Council.

      The survey on cell phones and economic trends also finds that:

      A potentially major shift in consumer habits at the expense of contract-based cell phone service is underway as more consumers seek to save money in the face of the recession. No fewer than 40 million Americans — 26 percent of consumers with contract-based cell phone service — are "more inclined today than...six months ago to look at a way to save money on your cell phone bill, such as by switching to a prepaid cell phone service." This group includes 38 percent of those in households making $35,000 a year or less, 32 percent of African Americans and 30 percent of those aged 18-34.

      Cell phone extras, such as Internet connectivity, email and texting, are also likely to take a hit in the economic downturn. A total of 19 million Americans — one in five cell phone users with cell-phone extras — have "considered cutting back" (5 percent) or actually "have cut back" (15 percent) on such features "in the last six months because of actual job loss, fear of job loss, the recession, or any other related financial concerns." More than two out of five cell phone users with extras on their phones (41 percent) say it is "very" (19 percent) or "somewhat" (21 percent) likely that they will cut back on cell phone extras "if the economy gets worse in the next six months." Fewer than two in five (39 percent) say it is "not likely at all" that they will make such cuts in the face of a deepening recession.

      "The era of cell phone penny pinching is officially here," said NMRC's Allen Hepner. "Thanks to the recession, the U.S. cell phone marketplace is undergoing fundamental changes that will just get bigger as the economic downturn deepens. What we see in these survey findings is clear evidence that most consumers will keep a cell phone during this recession, but only after shifting to less expensive cell phone plans, such as prepaid, and also by scaling back on cell phone extras including Internet connectivity and texting."

      Graham Hueber, senior researcher, Opinion Research Corporation, said consumers are already beyond "just thinking about" changing their habits, but are already making changes.

      "For example that, we see that 8,740,000 Americans — that is 19 percent of consumers with a cell phone — report that they already have 'discontinued cell phone service in the last six months because of actual job loss, fear of job loss, the recession, or any other related financial concerns," Hueber said. "This strongly suggests that a recession-related shift in attitudes and purchasing habits is already underway."

      Nearly one in five Americans who now have prepaid cell phone service say they switched in the last six months from a contract-based cell phone service due to job or recession-related concerns, according to the survey.

      Recession Has Consumers Thinking Of Hanging Up Cell Phones...
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      California Authorities Arrest "Loan Modification" Scam Artists

      Defendants charged with bilking homeowners in trouble

      Attorney General Edmund G. Brown Jr. today announced the arrest of two scam artists — Mary Alice Yraceburu and Marianne Curtis — who "coldly and heartlessly" conned over one hundred and sixty victims out of thousands of dollars for non-existent loan modification services.

      "These scam artists coldly and heartlessly preyed on Californians desperate for help in saving their homes," Attorney General Brown said. "Homeowners in financial trouble have to be on guard against loan modification fraud, so they don't make a bad situation worse."

      Attorney General Brown today filed 49 felony charges Orange County Superior Court against Mary Alice Yraceburu, 45, of Riverdale and Marianne Curtis, 67, of Costa Mesa.

      Yraceburu was arrested today in Fresno County and Curtis was arrested today in Orange County on the following charges:

      • 24-counts of grand theft;

      • 25-counts of violations of California's foreclosure consultant statutes;

      • One special allegation that the total value of theft was over $65,000;

      • One special allegation that the total value of theft was over $100,000;

      Both women are convicted felons who have served time in state and federal prisons.

      The two women operated a company called Foreclosure Freedom, which sent hundreds of fliers to Californians promising help in stopping the foreclosure of their homes. The fliers read: "FINAL NOTICE — Respond only to this notice immediately." This is similar to First Gov scam, which the Attorney General stopped late last year.

      When homeowners called the number on the flyer, they were told their mortgages could be renegotiated to a lower monthly payment. Victims, however, were required to pay thousands of dollars in up-front fees and were instructed not to contact their lenders.

      Victims were assured the company had "private lenders and specialists exclusive to their company who are very experienced in the options and methods used to renegotiate home loans," yet neither of the women who operated the company had real estate licenses, legal training, or any experience in the home mortgage market.

      Investigators found no evidence of any successful loan modifications and most of the victims were either forced into bankruptcy or lost their homes to foreclosure.

      Assets seized through search warrants served at Foreclosure Freedom and the bank accounts held by Yraceburu and Curtis totaled over $10,000. If convicted of all charges, Yraceburu and Curtis face 21 years in prison.

      California Authorities Arrest...
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      New Jersey Sues Verizon Over Deceptive FiOS Marketing

      State alleges telecom failed to live up to bargain promises

      Remember Verizon's promise to buy its FiOS customers flat-screen television sets and other promotional gifts? Well, the state of New Jersey says the company failed to deliver in many cases, and the state has filed suit against the telecom giant.

      The Office of the Attorney General through its Division of Consumer Affairs has filed suit against Verizon New Jersey, Inc., alleging that its marketing, sales, billing and customer service practices for its FiOS television, telephone and internet services are deceptive and misleading.

      The state also alleges that Verizon charged consumers higher prices for service than prices quoted in door-to-door solicitations and advertisements and also charged activation fees after consumers were told that such would be waived.

      "FiOS is touted for its clearer picture but Verizon obscured the truth from potential customers in its advertising and sales pitches," New Jersey Attorney General Anne Milgram said. "Deception and misrepresentations have no place in the marketplace and we will hold businesses accountable when they violate the public's trust."

      In its four-count complaint filed in State Superior Court in Essex County, the state alleges that Verizon violated the Consumer Fraud Act through unconscionable commercial practices, misrepresentations and knowing omissions of material facts, as well as the Advertising Regulations.

      The state specifically alleges that Verizon engaged in the following conduct:

      • Quoting one price for FiOS Service in door-to-door solicitations, direct mail advertising and otherwise, then billed consumers at a higher price;

      • Charging consumers an activation fee, after the salesperson in the door-to-door solicitation waived the fee;

      • Charging consumers for services, such as movie packages, that were never ordered;

      • Representing that movie packages were free, then billing consumers for such services;

      • Advertising promotional gifts, yet failing to provide consumers with the opportunity to contract for the types of FiOS service necessary to obtain the promotional gifts;

      • Using the term "additional charges apply" in advertisements, without providing a description of those charges;

      • Failing to provide consumers with the rewards letter or other instructions necessary to receive their promotional gifts;

      • Failing to provide consumers with a copy of their signed contract;

      • Representing that consumers are entitled to receive promotional gifts, but failing to provide promotional gifts;

      • Providing consumers with promotional gifts only after significant delay and/or after consumers made repeated calls or other contacts with Verizon;

      • Billing consumers at a price other than that initially quoted;

      • Billing, on a monthly basis, inconsistent amounts to the same consumers with the same services;

      • Failing to honor a consumer's request to cancel the FiOS service; and

      • Making it very difficult (i.e. long delays, varied telephone numbers) for consumers to reach a customer service representative in order to address or resolve issues as to promotional gifts, services and/or billing.

      "Verizon conducted a very aggressive marketing campaign to introduce its FiOS service, which included promotional gifts that were never to be provided," said David Szuchman, New Jersey's Consumer Affairs Director. "We will seek to ensure that Verizon complies with all relevant laws when advertising and selling services and products."

      To date, the Division has received 266 consumer complaints related to FiOS marketing and sales.

      New Jersey Sues Verizon Over Deceptive FiOS Marketing...
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      Pet Food Class Action Preemptively Thrown Out

      Judge rules individual inquiries preclude class certification

      A judge preemptively nixed a class action against Wal-Mart and dog food manufacturer Menu Foods, among others, ruling that the need for individual factual inquiries made a class action untenable.

      The suit alleged that "Ol' Roy" brand pet food, sold in Wal-Mart stores, was branded as "Made in the USA," when in fact several ingredients were manufactured overseas. Specifically, the plaintiff claimed that wheat gluten in the dog food came from China, a worrisome development given recent reports of pets becoming sick from China-manufactured food ingredients. The proposed class consisted of all consumers in eight states who bought Ol' Roy pet food before March 16, 2007, and who had not received a refund.

      The suit was filed in April 2007 by lead plaintiff and Nevada resident Margaret Picus, represented by San Diego-based Blumenthal, Nordrehaug & Bhowmik. The action alleged violations of the Nevada Deceptive Trade Practices Act and similar statutes in the seven other subject states.

      The plaintiff alleged that the "Made in the USA" labeling was in bold, capital letters, and was essentially identical on all Ol' Roy products. Moreover, Picus pointed out that all eight states included in the suit expressly prohibited sales of products mislabeled as to geographic origin. This seeming uniformity across consumers made the suit look like an ideal class action.

      Judge Philip Pro, however, ruled that individual issues precluded class certification. The plaintiff would have to prove, for example, that every class member bought the food because of the "Made in the USA" labeling. This would require an individual factual inquiry into each consumers thinking, defeating the efficiency and commonality that make class actions so appealing.

      The judge's decision was unusual in that he denied class certification before any substantial discovery had been performed. Indeed, the court noted that so-called preemptive motions are generally disfavored, since "the shape and form of a class action evolves only through the process of discovery." However, the court determined that the class was untenable as a matter of law, and "it would be a waste of the parties' resources and judicial resources to conduct discovery on class certification." The full decision is available online.

      The suit was originally consolidated with a now-famous multi-district class action in New Jersey, which alleged that tainted food distributed by Menu Foods and others led to the death of hundreds of pets. That action consisted of over 100 suits that grew out of the largest pet food recall in U.S. history, and settled in April 2008 for an eye-popping $24 million. The Ol' Roy suit, however, was severed from the Menu Foods action in 2008.

      Individual inquiries, especially into causation or injury, are often the death knell for class actions. Recently, a Washington judge threw out a class action against Microsoft that alleged similar fraudulent labeling, ruling that the plaintiffs had not proved that the labeling was what caused consumers to buy computers.

      The suit alleged that "Ol' Roy" brand pet food, sold in Wal-Mart stores, was branded as "Made in the USA," when in fact several ingredients were manufactur...
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      Are Identity Theft Services Worth the Cost?

      "Protection" often does little that consumers can't do for selves


      While identity theft is a growing problem, services that offer to protect consumers from this menace may not be the answer, according to a report compiled by the Consumer Federation of America (CFA).

      Capitalizing on the anxiety surrounding identity theft, dozens of services have sprung up claiming to protect consumers' identity for fees that can add up to hundreds of dollars a year. But when CFA studied the websites of 16 for-profit identity theft services, it found that the descriptions of how they help consumers are often confusing, unclear, and ambiguous.

      Furthermore, these services may not always offer the protection that consumers are led to believe they will get, the group claims.

      CFA's new report explores the types of services currently offered in the marketplace, the fees they charge, how they describe what they do, the claims they make about the benefits of membership, and how what they do compares with what consumers can do to protect themselves.

      "Some of these services may be helpful to consumers, but none can absolutely prevent your personal information from being stolen or used," said Susan Grant, CFA Director of Consumer Protection and author of the report.

      Many of the benefits that these services advertise are things that consumers can do on their own for free or at minimal cost. CFA encourages consumers to follow Ten Easy Steps to Protect Your Personal Information and Detect Fraud:

      • Practice mail security.

      • Guard your Social Security number.

      • Lock and shred.

      • Stop prescreened credit and insurance mailings.

      • Keep private information to yourself.

      • Be safe online.

      • Look at your bills and bank statements promptly.

      • Monitor your accounts online frequently.

      • Check your credit reports regularly.

      • Pay attention to debt collectors.

      In examining identity theft services websites, CFA said it uncovered troublesome practices. Some make overly broad assurances about their ability to prevent consumers from becoming victims. Other key problems that CFA found:

      • Identity theft services often fail to provide clear, complete information about what they do and how they work, and in some cases the cost is not disclosed until consumers click to enroll.

      • Many identity theft services tout insurance as a benefit, but few provide details about the coverage.

      • Guarantees don t always provide the protection that consumers may expect.

      • Some identity theft services place fraud alerts on all customers credit bureau files, even if they re not victims, and make misleading claims about how the alerts will protect them.

      • Some identity theft services provide credit reports to customers by requesting the free reports that consumers are entitled to once a year under federal law, preventing them from being able to get their free annual reports on their own.

      • The personal information that consumers provide to identity theft services could be at risk if it is not adequately secured.

      • Many services attempt to limit consumers legal rights by requiring mandatory binding arbitration for disputes in their terms of service.

      To address these concerns, CFA recommends that policymakers in government and business take several pro-active steps.

      "The Federal Trade Commission and state attorneys general should investigate and take enforcement action to stop misleading claims and practices that harm consumers, such as preventing them from requesting their free annual reports," said Grant. "They should also examine how secure the extremely sensitive personal information is that consumers provide to these companies."

      CFA said it believes that rules to govern identity theft services and industry best-practices would both be helpful. The group also suggests that identity theft services should be explicitly prevented from requesting consumers free annual reports on their behalf and consumers should have stronger rights regarding their credit reports.

      "Since it s their information, consumers should be able to check their credit reports online, whenever they want, at no charge," said Grant. "Furthermore, consumers should have the option to place a flag on their credit bureau files requiring creditors to contact them to verify requests for new credit accounts or changes in existing accounts, regardless of whether they are already identity theft victims."

      To help consumers decide whether to purchase identity theft services and which ones to consider, CFA recommends that they ask themselves:

      How likely that you will become an identity theft victim?

      • How much does the service cost and how does that compare with doing the same things on your own?

      • What specific action will the service take on your behalf if you become an identity theft victim?

      If consumers are considering purchasing identity theft services, CFA s provides Six Questions to Ask When Shopping for Identity Theft Services:

      • Does it monitor more than credit reports?

      • How does the service help you if you are a victim?

      • Will it prevent you from getting your free annual reports when you wish?

      • Should you look for identity theft services that offer insurance?

      • Does the guarantee really protect you?

      • What are the costs and terms?

      To offer the best value to consumers, CFA believes that identity theft services should have the following characteristics:

      • Clearly disclose the exact services and costs.

      • Monitor public and private databases and other places typically unavailable to consumers that may contain their personal information.

      • Alert consumers of suspicious activity related to their personal information by their choice of email, phone, text message or mail.

      • Provide actual assistance, not just advice, to resolve consumers problems if they become identity theft victims.

      • Guarantee to do what they promise with no exceptions buried in fine print and no attempt to limit consumers legal recourse through mandatory binding arbitration.

      No service that CFA looked at appeared to meet all of these criteria, and none is a panacea, the report concludes.

      Are Identity Theft Services Worth the Cost?...
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      CD Sales Decline, Downloads Rise in 2008

      8 million more purchases of digital music in previous year

      In the 80's, compact disks replaced vinyl LPs as the preferred medium to listen to music, and now, nearly three decades later, digital downloads threaten to make dinosaurs of CDs.

      According to market research firm The NPD Group digital music purchasers increased by just over 8 million in 2008 — to 36 million Internet users. Purchases of online digital music downloads increased by 29 percent since last year; they now account for 33 percent of all music tracks purchased in the U.S.

      NPD's Digital Music Study, an annual tracking study covering the music industry, also revealed that there were nearly 17 million fewer CD buyers in 2008 compared with the prior year.

      The decline in CD buyers cuts across all demographic groups, but was particularly focused on teens and consumers age 50 and older.

      "Rising incidence of paid downloads is a positive development for the industry, but not all lost CD buyers are turning to digital music," said Russ Crupnick, entertainment industry analyst for The NPD Group.

      NPD also reported that there were 13 million fewer music buyers in the U.S. last year, compared to the prior year, led by a 19 percent drop in CD sales. Only 58 percent of Internet users reported purchasing CDs or digital music downloads last year, versus 65 percent in 2007.

      Consumers' primary reason for not purchasing CDs was that they were spending less on entertainment overall, because of the recession. Consumers were also concerned about the price of CDs, and expressed satisfaction with the collection of titles they already own.

      Among the reasons consumers cited for preferring digital music over CDs was that they could choose only the songs they wanted to purchase, and could immediately download and listen to their purchases.

      NPD says it has found evidence that music listening is increasing. For example awareness and usage of Pandora, a leading online radio station, doubled year over year to 18 percent of Internet users; one-third of those who were aware of Pandora report using the service.

      Similarly, the percentage of consumers claiming to listen to music on social networks climbed from 15 percent in the fourth quarter of 2007 to 19 percent in the year-ago period.

      Nearly half of U.S. teens are engaging with music on social networks, which is an increase from 37 percent a year ago; among college-age Internet users, the percentage increased from 30 percent in 2007 to 41 percent in 2008.

      "The trends we're seeing in our consumer tracking studies are evidence of the continued transformation of the music industry," said Crupnick. "Just as music piracy and the advent of digital music ended the primacy of the CD, we are beginning to see new forms of listening challenge the practice of paying for music. The music industry now has to redouble efforts to intercept and engage these listeners, so they can create revenue through upselling music, videos, concert tickets, and related merchandise."

      CD Sales Decline, Downloads Rise in 2008...
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      Pennsylvania Settles Miley Cyrus Fan Site Suit

      Fan club members were unable to buy tickets early

      Pennsylvania Attorney General Tom Corbett announced a settlement in a suit against the official website of teen pop star Miley Cyrus, ensuring that Pennsylvania members will have their subscriptions extended after they were unable to buy concert tickets as promised.

      In September 2007, Corbett began receiving complaints from angry Cyrus fans, who paid nearly $30 for membership in the MileyWorld.com fan club, in part because of assurances that they could purchase concert tickets before they were made available to the public. The website failed to inform consumers, however, that the tickets were sold within the first 15 minutes of being offered to fan club members. More egregiously, the website allegedly continued offering "pre-sale" codes, which allowed access to the early ticket sales, after all the tickets were already sold out, rendering the codes useless.

      Most of the complaining consumers were unable to get tickets to "Hannah Montana" concerts in late 2007 and early 2008. Hannah Montana is the star's alter ego and the character she plays on the Disney show of the same name.

      The settlement, technically known as an Assurance of Voluntary Compliance (AVC), was reached with Interactive Media Marketing of Nashville, the company that runs the site. Under the agreement, Interactive Media Marketing is required to extend club membership by four months for 996 Pennsylvania consumers. The company is also required to clearly disclose terms and conditions of future pre-sale ticket programs on its website, assuring that the problem doesn't repeat itself.

      A recently settled Tennessee class action against MileyWorld.com provided an additional two months of benefits to all affected fan club members. As a result, eligible Pennsylvania consumers will have their benefits extended for a total of six months.

      The Tennessee suit, filed in November 2007, alleged that the website "deceptively lured thousands of individuals into purchasing memberships, based on the understanding that by joining, they would be able to purchase tickets before they were offered for sale to the general public." The suit was filed on behalf of Kerry Inman of New Jersey by the firms Robert Peirce & Associates of Pittsburgh and Glassman, Edwards, Wade & Wyatt of Memphis.

      The settlement is a step forward for online consumers. Internet-based fan clubs and other organizations are harder to regulate and hold accountable, given the transient nature of many online players.



      Pennsylvania Attorney General Tom Corbett announced a settlement in a suit against the official website of teen pop star Miley Cyrus....
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