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    Bill in Congress Would Ban Substandard Drywall, Steel, Cement

    "Junk should be ... shipped back to China," Rep. Stupak declares

    U.S. Congressman Bart Stupak (D-Mich.), has introduced legislation to block the import of substandard building materials. Consumers in Florida and elsewhere complained of allergy-like symptoms apparently resulting from a sulfur compound wafting from Chinese drywall in their homes.

    Americans expect structural building materials to be safe and effective, Stupak said. Industry testing and recent media accounts indicate much of the building materials pouring into the United States from overseas, particularly from China, are unsafe and unreliable.

    Stupak's bill also addresses concerns about substandard steel from China. In April 2008 the Congressional Steel Caucus held a hearing on the steel questioned and determined that U.S. Customs inspectors do not have the authority to reject inferior steel and cannot ensure that it will not end up in U.S. infrastructure.

    The U.S. Customs and Border Patrol (CBP) is the federal agency charged with enforcing trade laws at the border, but has no authority to enforce product safety standards. Stupak asked the agency to report back on CBPs current authority and what additional authority is needed to make sure substandard steel is not used in the United States, as well as what if any additional resources would be required for enforcement.

    The Michigan Congressman said that Chinas increased steel production has severe consequences for American steel producers, as well as domestic industries that use steel. Currency manipulation and policies by the Chinese government have encouraged substandard Chinese steel to flood the U.S. market, Stupak charged. Independent laboratory tests have confirmed that significant quantities of Chinese steel do not meet high-strength requirements, he said.

    This junk should be turned around and shipped right back to China, Stupak said. CBP made it clear in our discussions that they lack the authority to reject a product so I have introduced legislation to give the agency the authority to reject and not offload substandard building materials in the United States.

    CBPs testimony at the 2008 hearing focused on steel. The Chinese drywall complaints are of more recent origin but have provided ammunition for Stupak and others seeking a sharp curb on Chinese building materials.

    Consumers have complained of foul-smelling sulfuric odors and gases that are corroding electrical wiring in homes and may be responsible for chronic health problems. An estimated 35,000 homes have been affected in Florida, along with homes in Louisiana, Mississippi, Texas and Virginia.

    Although there are no high-profile documented cases of substandard cement entering the United States, Stupak included cement in the legislation as a precaution given recent reports of problems in other countries and the increased demand expected for cement as construction projects funded through the American Recovery and Reinvestment Act begin.

    A cheaper product does not save money when that product creates costly health and safety hazards for Americans, Stupak said. Federal law should ensure whether it is food, drugs, toys or building materials that the products imported into this country are held to the same rigorous health and safety standards as American-made goods. If not, then that product should never be allowed to enter our country.

    Stupak, as chairman of the House Energy and Commerce Committees Subcommittee on Oversight and Investigations, said he has found through 18 hearings he has held on unsafe imports of food and drugs that products are entering the United States "every minute" without proper inspection and without being held to the same safety standards as American-made goods.

    Bill in Congress Would Ban Substandard Drywall, Steel, Cement...
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    Emails Suggest Cozy FDA-BPA Industry Relationship

    Retailers drop products containing BPA despite FDA's position

    May 20, 2009
    Despite accumulating evidence and moves by retailers to drop products containing bisphenol A — commonly called BPA — the Food and Drug Administrations official position remains that the chemical can be safely used to make infant formula bottles.

    Now the Milwaukee Journal Sentinel reports that it has obtained emails that it says show the FDA relied on chemical industry lobbyists to help reach that conclusion.

    The emails show the lobbyists examined BPAs risks, tracked legislation that would have limited or banned it, and even monitored news coverage.

    In one case, the newspaper reports the FDAs deputy director requested information from the chief industry lobbyist to discredit a study that found the chemical caused miscarriages in workers exposed to it.

    In the document published by the newspaper, Mitchell Cheeseman, deputy director of the FDAs center for food safety and applied nutrition, said: Id like to get information together that our chemists could look at to determine if there are problems with that data in advance of possibly reviewing the study.

    In a report last October, a scientific panel assembled by the FDA to study the agency's position on the controversial found a lot to criticize. While not taking a position on whether BPA is safe, the panel criticized the FDA for allegedly ignoring studies that claim BPA is dangerous.

    In ignoring that research, the panel said, the FDA is creating what it called a false sense of security among consumers, who assume products containing BPA pose no threat because the FDA says its safe.

    Baby bottles

    Some retailers, including Wal-Mart, have taken those studies very seriously, pulling products containing BPA from their shelves, if the products are intended to be used by children.

    BPA is widely used in plastic manufacturing, since it is added to plastic to make it more rigid. It's used in clear, plastic water bottles, for example. It's also found in infant formula bottles.

    Studies have suggested that's not a safe use, since the animal studies involving the chemical have linked it to changes in body chemistry, and in some cases to increased cancer risk.

    At present, the FDA's position is that the levels of BPA in products used by both adults and children are not high enough to cause a health risk in humans. In taking issue with that position, the panel said the FDA does not have an adequate number of infant formula samples and relies too heavily on averages, rather than accounting for variability in the samples.

    It also noted that new research on BPA in adult humans and animals was published after the FDA draft report, but was not included in the final report. It took issue with the margins of safety for BPA exposure cited by the agency, as being inadequate.

    The FDA, at the time, said the advisory panel "raised important questions" and said the whole issue needs more study.

    Emails Suggest Cozy FDA-BPA Industry Relationship...
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    Texas Attorney General Takes on Text Message Scammers

    "Smishing" uses fake mobile messages to harvest personal data

    Texas authorities are warning consumers about the latest high-tech scam targeting cell phone users, called "smishing."

    Smishing enables spammers to dupe people into revealing personal information — including bank account numbers and personal passwords — with phony text messages to their cell phones.

    Consumers who fall for this scam are likely to have their identities stolen, and their bank accounts drained in short order.

    "Smishing" is the latest evolution of harvesting personal data for fraud. "Phishing" occurs when users receive seemingly legitimate emails from authorities asking for personal information, only to be redirected to a fake Web site where their personal data is stolen.

    "Vishing" is a similar technique used over Internet phone calling services such as Vonage and Skype. The scammers place hard-to-trace calls urging respondents to provide their personal data for various reasons.

    Many computer users have learned to identify and delete spam e-mails that falsely appear to originate from legitimate banks, credit card companies and government agencies. Internet service providers and spam filters often block these messages so they never reach their intended targets.

    Those types of spam filters, however, are not available for most cell phone text messages.

    "While misspelled e-mail messages and broken address links make it simpler to judge a spam e-mail, determining whether a text message is legitimate may be difficult," said the office of Texas Attorney General Greg Abbott. "There are no images — only text — and the message is usually short."

    Smishing messages, for example, may threaten consumers about a charge that can only be cancelled if the user visits the phony Web site displayed in the message.

    Another common smishing scam directs consumers to call a toll-free number to complete or cancel a financial transaction. "An operator at the number will helpfully take the callers credit card or debit account number — and use that information to defraud the caller," authorities said.

    Legitimate financial institutions do not call or e-mail customers seeking this information. Customers who are concerned about a purportedly pending charge should contact the service provider or bank directly and inquire about it.

    Abbot's office said consumers can protect themselves from getting taken in a smishing scheme by:

    • Never responding to text messages that ask for personal information;

    • Never calling any unknown telephone numbers provided in a text message;

    • Never clicking on any Web links provided in a text message. Activating those links may direct consumers to fraudulent Web sites -- or allow identity thieves to capture their personal information. Legitimate financial institutions do not call or e-mail customers for this type of information. Customers who are worried about a pending charge should contact the service provider or bank directly;

    • Deleting the phony text message

    Texas Attorney General Takes on Text Message Scammers...
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      Obama Orders Rollback of Preemptions on State Laws

      Decision hailed as victory for consumer protections

      President Obama today ordered federal government agencies to sweep their regulatory histories going back ten years for any regulation that would preempt or block stronger state laws and remove them, reversing a long-running trend towards "preemption" of laws that protect consumers at the state level.

      The memorandum, released today by the White House and published in the Federal Register, affirmed that "Throughout our history, State and local governments have frequently protected health, safety, and the environment more aggressively than has the national Government."

      "In recent years...executive departments and agencies have sometimes announced that their regulations preempt State law, including State common law, without explicit preemption by the Congress or an otherwise sufficient basis under applicable legal principles," the statement added.

      Under the new directive, heads of federal agencies would not be able to issue regulations that conflicted with state law unless the regulation specifically included language describing the preemption, or that did not cohere with existing federal orders governing preemption.

      The Constitutional Accountability Center (CAC) hailed the decision as a rebuke of the Bush administration's frequent usage of preemption, saying that "President Obama reaffirmed the critical role that state and local governments play in our constitutional system."

      In recent years, numerous industries have argued that federal laws should preempt state laws on a variety of topics, from roof strength standards for cars, to predatory lending laws, to cell phone contracts. The common business argument has been that a single, simple federal standard is easier for businesses to navigate than a patchwork of 50 different state laws.

      Critics charge that the real reason businesses favor federal preemption is that it's easier to lobby a few lawmakers on Capitol Hill to pass weak federal laws that block stronger state laws, and that national law should be a floor, not a ceiling, for state laws.

      Ian Millhiser, an attorney with the National Senior Citizens Law Center, said on his personal blog that "President Obama's policy memorandum shows that he understands that the federal government cannot be an obstacle to states who want to protect their citizens in a manner that goes above and beyond bare federal standards."

      Obama Orders Rollback of Preemptions on State Laws...
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      Swine Flu Spreads to 48 States; NYC Hard-Hit

      26 schools closed in NYC, attendance down citywide

      The H1N1 — "Swine Flu" — virus has now spread to 48 states, according to the U.S. Centers for Disease Control and Prevention (CDC). There are presently 5,710 confirmed cases.

      Forty countries have officially reported 9,830 cases of influenza A(H1N1) infection, including 79 deaths, according to the World Health Organization (WHO); 5,123 cases have been confirmed in the United States.

      New York City is among the hardest-hit areas in the U.S. At least 26 schools have been closed there and an assistant school principal died over the weekend of complications from the H1N1 flu.

      The closings are also having an effect on schools that remain open, as worried parents keep children home. In what Department of Education officials call a "significant drop," on Tuesday only 85.5 percent of New York City's 1.1 million students were present, compared with 88.5 percent a week before. In Queens, only 83.2 percent of students were present for school on Tuesday.

      We continue to see a rising tide of flu in many parts of New York City, said New York City Health Commissioner Thomas R. Frieden. As the virus spreads, we will look to slow transmission within the individual school communities by closing individual schools. Unfortunately, we fully expect to see more severe illness in the coming days, particularly among people who have underlying health problems."

      New York officials said Monday's death of a 16-month-old toddler was not related to swine flu. Jonathan Zamora of Queens was admitted to Elmhurst Hospital with flu-like symptoms and later died.

      Emergency rooms throughout New York filled up with concerned parents and sick children. ABC News reported more than 400 people crowded the emergency department at Elmhurst after the Zamora toddler's death.

      Table. U.S. Human Cases of H1N1 Flu Infection
      (As of May 20, 2009, 11:00 AM ET)
      States*Confirmed and Probable CasesDeaths
      64 cases
      0 deaths
      3 cases
      0 deaths
      488 cases
      2 deaths
      553 cases
      0 deaths
      55 cases
      0 deaths
      59 cases
      0 deaths
      88 cases
      0 deaths
      122 cases
      0 deaths
      25 cases
      0 deaths
      26 cases
      0 deaths
      8 cases
      0 deaths
      794 cases
      0 deaths
      105 cases
      0 deaths
      71 cases
      0 deaths
      34 cases
      0 deaths
      20 cases
      0 deaths
      73 cases
      0 deaths
      9 cases
      0 deaths
      39 cases
      0 deaths
      175 cases
      0 deaths
      171 cases
      0 deaths
      39 cases
      0 deaths
      5 cases
      0 deaths
      20 cases
      1 deaths
      9 cases
      0 deaths
      28 cases
      0 deaths
      33 cases
      0 deaths
      New Hampshire
      22 cases
      0 deaths
      New Jersey
      22 cases
      0 deaths
      New Mexico
      68 cases
      0 deaths
      New York
      284 cases
      1 deaths
      North Carolina
      12 cases
      0 deaths
      North Dakota
      5 cases
      0 deaths
      13 cases
      0 deaths
      43 cases
      0 deaths
      94 cases
      0 deaths
      55 cases
      0 deaths
      Rhode Island
      8 cases
      0 deaths
      South Carolina
      36 cases
      0 deaths
      South Dakota
      4 cases
      0 deaths
      86 cases
      0 deaths
      556 cases
      3 deaths
      72 cases
      0 deaths
      1 cases
      0 deaths
      23 cases
      0 deaths
      411 cases
      1 death
      Washington, D.C.
      13 cases
      0 deaths
      766 cases
      0 deaths
      5,710 cases
      8 deaths
      *includes the District of Columbia **one case is resident of KY but currently hospitalized in GA. This table will be updated daily Monday-Friday at around 11 AM ET. International Human Cases of Swine Flu Infection
      See: World Health Organization. NOTE: Because of daily reporting deadlines, the state totals reported by CDC may not always be consistent with those reported by state health departments. If there is a discrepancy between these two counts, data from the state health departments should be used as the most accurate number.

      No more dangerous than regular flu

      Although the new flu virus continues to spread rapidly, it is still no more dangerous than regular flu, U.S. health officials say. Patients hospitalized with the flu who have underlying problems usually fare worse than otherwise healthy people who have also been hospitalized.

      In an early release of the U.S. Centers for Disease Control and Prevention's journal Morbidity and Mortality Weekly Report, California health authorities assessed 30 people hospitalized for the H1N1 swine flu. One difference between these patients and patients with seasonal flu was their average age. At 27, the swine flu patients were much younger than most patients with seasonal flu who required hospitalization.

      Health officials in both the United States and abroad have previously reported that the H1N1 swine flu seems to be targeting teens and young adults, unlike the regular flu, which usually strikes hardest at the elderly and the very young.

      About two-thirds of the hospitalized patients in California had at least one underlying medical condition that put them at higher risk for influenza and its complications, Dr. Anne Schuchat, the CDC's interim deputy director for science and public health program, said during an afternoon teleconference Tuesday.

      "The most common conditions were chronic lung disease, conditions associated with immunosuppression, chronic heart disease, obesity and pregnancy. There were five pregnant women in this series of patients," she said.

      "Although the majority of hospitalized people infected with this new H1N1 virus recovered without complications, certain people did have severe and prolonged disease," Schuchat said. "None of these patients died. There are still some of these patients in the hospital, so we don't know whether they will make it or not."

      Find out everything you need to know about swine flu.

      Swine Flu Spreads to 48 States; NYC Hard-Hit...
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      Consumer Groups Challenge Chrysler Bankruptcy

      Consumers shouldn't lose their lemon law, defective vehicle rights, groups argue

      National consumer groups have filed objections in the federal bankruptcy court in New York that is overseeing the Chrysler bankruptcy proceeding, asking the court to preserve the rights of consumers who have suffered or will suffer injury or loss caused by defects in Chrysler vehicles to seek compensation from Chrysler.

      The groups do not aim to delay the bankruptcy, but to ensure that the new company that emerges does not leave customers who have been, or will be in the future, injured by Chrysler cars with no avenue for obtaining relief, according a statement issued by the groups.

      The objection was filed on behalf of the Center for Auto Safety, Consumer Action, Consumers for Auto Reliability and Safety (CARS), National Association of Consumer Advocates (NACA) and Public Citizen.

      Consumers are the only ones who can save Chrysler, said Rosemary Shahan, president of CARS, a non-profit consumer group based in Sacramento, Calif. Preserving their rights should be the first priority, not the last.

      We want to ensure that consumers voices are heard in the bankruptcy proceeding, said Adina H. Rosenbaum of Public Citizen, lead counsel for the consumer groups.

      No remedy

      Unless the groups succeed, the claims of families of victims who died due to unsafe Chrysler vehicles and people who suffered devastating and debilitating injuries will be wiped out. When the new Chrysler/Fiat company emerges from bankruptcy, owners of vehicles who seek refunds under state auto lemon laws will also be left without a remedy.

      For consumers injured, burned and paralyzed by defects in Chrysler vehicles, wiping out Chryslers liability destroys any possibility for an independent life, said Clarence Ditlow, director of the Center for Auto Safety. Taxpayers are already paying for Chryslers bailout; they shouldnt pay for injuries in crashes caused by Chrysler.

      As dealerships shut down in towns across the country, Consumer Action wants to ensure that consumers are not abandoned during the bankruptcy process, said Linda Sherry, director of National Priorities at Consumer Action.

      The groups objection was filed jointly with three individuals who have cases pending against Chrysler for injuries and deaths allegedly caused by Chrysler vehicles.

      Consumer Groups Challenge Chrysler Bankruptcy...
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      Internet Job Scams On The Rise

      Jobs sound too good to be true

      May 19, 2009
      College and high school graduations have produced thousands of new people in the labor force, seeking that first job. With a recession and rising unemployment, Pennsylvania Attorney General Tom Corbett is advising new graduates, along with other consumers seeking work, to be wary of Internet job scams.

      "It is important for all consumers to be watchful for online job scams, especially young people looking for part-time or summer work," Corbett said. "Falling for these schemes will not only leave you unemployed, but victims can also lose thousands of dollars and find themselves targeted by identity thieves."

      Corbett says con artists typically use Internet postings or websites like Craigslist to publish ads that offer high pay for part-time employment, including work as personal assistants, 'mystery shoppers' and check processors.

      The exact wording of these scams can vary greatly, but all of the offers have common themes:

      • They offer "easy money" for little work.

      • Consumers work from home, rather than an office.

      • It is difficult to meet your "employer" in-person, often because they travel frequently or are based overseas.

      • And consumers need to respond very quickly.

      Corbett said the most important element in all of these scams is that consumers will eventually be asked to wire-transfer money to another person:

      • Personal assistants may be asked to pay bills for the 'employer'.

      • Check processors may think they are handling payments for an overseas business.

      • 'Mystery Shoppers' may believe they are evaluating stores that deal with wire transfers.

      "In reality, victims are depositing counterfeit checks or money orders into their bank accounts and then wire-transferring that money to scam artists overseas," Corbett said. "Eventually, these bogus checks will be returned and banks will require consumers to repay any funds they withdrew."

      Corbett said that consumers should always be wary of online job offers that seem "too good to be true," especially any situation where you are being asked to wire-transfer money to someone you do not know.

      "It is important for all consumers to be watchful for online job scams, especially young people looking for part-time or summer work," Corbett said....
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      Teflon Suit Slides Off DuPont

      Cookware contains likely carcinogen

      A federal court in Des Moines, Iowa on May 1 dismissed a group of consolidated cases against chemical and housewares company DuPont. The 22 suits, consolidated from 15 states, alleged that DuPont knew for more than 20 years that cookware containing the company's non-stick coating, popularly known as Teflon, could make consumers sick, but concealed evidence of this from the public.

      U.S. District Judge Ronald Longstaff found that individual issues differing among the plaintiffs would each require their own inquiry, making the suits improper. In his order, the judge wrote that "the only common factor binding together all of the present plaintiffs is use of nonstick-coated cookware ... Each of [the other] issues will require an individualized inquiry, which the court believes will render each class action unmanageable."

      The actions alleged that, when heated to normal cooking temperatures, Teflon-coated pans release toxic particles that pose a health risk to consumers. The suits claimed that DuPont had a duty to warn consumers of the dangers of Teflon but failed to do so.

      The suits specifically singled out perflourooctanoic acid, colloquially known as PFOA, as the culprit of the emissions. The Environmental Protection Agency (EPA) has said that PFOA is likely a cancer-causing agent in humans. This concern originated with an EPA study showing the chemical to be present in the bloodstream of 90% of Americans.

      Millions of consumers were covered by the actions and, had they been successful, damages would have likely reached into the billions. At the time the suits were filed, attorney Alan Kluger said the class "could well contain almost every American that has purchased a pot or pan coated with ... Teflon."

      A whopping 70% of cookware sold in the United States contains a non-stick coating. The equipment is far more popular than traditional stainless steel cookware, which is generally preferred by chefs but harder to clean. Teflon was approved by the Food & Drug Administration (FDA) in 1960 after the agency found elevated levels of flourinated compounds on a hamburger cooked in a Teflon-coated pan but judged them to be of little significance.

      The suits sought damages, the cost of replacement cookware, and labeling warning consumers of the the possible dangers posed by Teflon. It also asked for the creation of two funds: one to monitor the health of class members, and another to fund scientific research to further study the potentially damaging effects of Teflon use.

      DuPont insists that no studies have ever shown Teflon to be dangerous. Indeed, DuPont's website has a prominently featured section devoted solely to the cookware's professed safety. DuPont notes that the EPA, on its own site, asserts that it "does not believe there is any reason for consumers to stop using any consumer or industrial related [non-stick coated] products." Further, DuPont points out that the U.S. Consumer Product Safety Commission (CPSC) rejected a petition to require warning labels for the cookware.

      However, the Environmental Working Group (EWG) notes that the EPA has never extensively tested the safety of Teflon. Indeed, in 2006 a group of scientific advisors to the EPA unanimously recommended that PFOA be considered a likely carcinogen.

      In that recommendation, the board members questioned why the EPA had ignored certain unpublished studies, and noted that the EPA itself had conceded that animal studies had provided "suggestive evidence" that PFOA is a possible human carcinogen.

      A study from the 1980s, which was never published, found tumors in lab rats linked to the chemical. A rebuttal study, conveniently funded by DuPont and 3M, questioned the former study's veracity.

      DuPont is the world's largest chemical company, second only to BASF. The company is responsible for the creation of a number of popular chemicals, including Teflon, Corian, Kevlar, and Lycra.

      Teflon Suit Slides Off DuPont...
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      Consumer Site Appeals FDA's Refusal to Release NUTRO Records

      Agency claims there is no investigation, so records should be released, site argues

      May 19, 2009
      ConsumerAffairs.com has appealed the refusal of the U.S. Food and Drug Administration (FDA) to release lab results, citizen complaints and other documents related to NUTRO pet food.

      The consumer Web site has received more than 800 reports from consumers who say their pets became ill and, in some cases, died after eating NUTRO products. ConsumerAffairs.com first requested the FDA documents under the Freedom of Information Action (FOIA) last spring, but the FDA denied the request, saying that granting it could interfere with law enforcement proceedings.

      Questioned by ConsumerAffairs.com reporter Lisa Wade McCormick, an FDA official who spoke on the condition of anonymity said that the request was denied because the agency was investigating NUTRO. But the FDA's Center for Veterinary Medicine (CVM) then issued a press release claiming that NUTRO was not being investigated.

      The CVM is not the FDA division that handles complaints about pet food and is not the division to which the FDA employee who confirmed the investigation is assigned.

      "Though the reports on whether the FDA is investigating Nutro have been conflicting, the FDAs official position is that there is no pending investigation of Nutro. Therefore, the FDA may not rely on the 'law enforcement' exemption of FOIA because, according to the FDA, there is no pending enforcement proceeding against Nutro," said Cameron Stracher, a New York attorney who represents ConsumerAffairs.com.

      Despite the FDA's denial that it is investigating NUTRO, consumers have confirmed that FDA inspectors came to their homes investigating their pets' deaths.

      In one instance, the FDA investigator told a consumer that he had learned of her pet's death by reading her complaint on ConsumerAffairs.com.

      Why not?

      "The FDA's odd insistence that there is no investigation -- when all the evidence indicates that there is -- leads to an even more obvious and urgent question," said James R. Hood, president of ConsumerAffairs.com. "If the agency is telling the truth and there is indeed no investigation, it seems logical to ask 'Why isn't there?'"

      "One would think that NUTRO and the FDA would be curious as to why so many pet owners have reported their animals became ill after eating NUTRO products and -- in some cases -- mysteriously improved when they were switched to other foods. A public relations blitz won't get to the bottom of it. The FDA needs to stop stalling and do its job," Hood said.

      Just yesterday, Sherri of Ann Arbor, Mich., wrote about her experience with NUTRO: "My pure bred Portuguese water dog began vomiting, having loose stools and acting lethargic after 4 months on Nutro Natural Choice Herring & Rice Formula. The vet could not explain, blood levels normal, intestinal antibiotics/probiotics given, intestines 2x normal size, surgery revealed no obstructions, every time food was readministered it began again. Vet suggested I stop Nutro after learning about other dogs problems. My dog is now on Natural Balance and is doing perfectly fine."

      Sherri said she contacted NUTRO about a week ago. They said they'd contact her vet, but so far, they have not, she said. They also said they'd send her an envelope for samples of the food. She said they have not done that, either.

      In her posting, Sherri urged other pet owners to contact the FDA and ask it to investigate.

      Read verbatim complaints and comments from consumers.

      Consumer Site Appeals FDA's Refusal to Release NUTRO Records...
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      U.S. Energy Savings Corp. Agrees to Refunds

      State cracks down on false promises of big savings

      Illinois Attorney General Lisa Madigan has reached an agreement with U.S. Energy Savings Corp. that will allow hundreds of Illinois consumers to terminate contracts and receive $1 million in restitution as a result of a lawsuit filed last year alleging that the alternative gas supplier sold fixed-rate gas contracts using misleading sales tactics that falsely promised significant consumer savings.

      My office has received a nearly unprecedented number of calls from consumers who were deceived by false assurances that they would receive significant savings by switching to this alternative gas supplier, Madigan said. This agreement will help to protect Illinois consumers and ensure that this company provides full, upfront disclosures about its products terms and conditions so that consumers can make informed decisions.

      Ann of Chicago told ConsumerAffairs.com in January that she had signed a U.S. Energy Savings contract because she thought the salespeople were with Peoples Gas. "Afraid I was scammed by signing a paper about keeping my gas bill low today," she said.

      In neighboring Indiana, Carter of Valparaiso had a similar experience.

      "In June 2008, when natural gas prices spiked very high, I was visited by a high-pressure sales team from U.S. Energy Savings Corp. and signed a 5 year fixed-price natural gas contract," he said. "The economic consequences have been terrible. Like many consumers who have gotten scammed by these energy contracts, my energy bills this year skyrocketed, while the price of natural gas plummeted to now less than half of the $1.09 per therm I am paying."

      "Based on my careful calculations, I have paid $400-500 more for gas just in the past four months because of this contract, despite keeping my thermostat ridiculously low (low 60s in daytime, 56 at night)," he said.

      Madigans lawsuit alleged that Illinois Energy Savings Corp., which does business as U.S. Energy Savings Corp., sold its Natural Gas Fixed Price Program to the participants of Northern Illinois Gas Companys (Nicor) Customer Select and Peoples Energy Choices for YouSM programs with deceptive claims that the fixed-rate program would offer significant savings by locking consumers into a consistent gas price before rates spiked.

      As part of this sales pitch, however, the companys door-to-door sales representatives failed to disclose that the fixed gas price was actually higher than prices historically offered by regulated utility suppliers such as Nicor. According to Madigans complaint, consumers were led to believe that they would automatically save money by enrolling in the U.S. Energy Savings program.

      The Attorney Generals lawsuit further alleged that U.S. Energy Savings sales representatives violated the Illinois Consumer Fraud and Deceptive Business Practices Act by failing to disclose the existence of an early termination fee, failing to properly identify themselves as representatives of an alternative natural gas company and failing to obtain consent from the account holder to switch gas suppliers from the regulated utility to an alternative supplier. U.S. Energy Savings denied the allegations in the lawsuit.

      The agreement requires U.S. Energy Savings to make $1 million available to pay as restitution to Illinois consumers. Eligible consumers will receive notice of the settlement within 30 days and must submit claim forms to U.S. Energy Savings by Aug.12, 2009. Also as part of the agreement, U.S. Energy Savings must allow current eligible customers to cancel contracts without paying an early termination fee.

      In addition, the agreement prohibits U.S. Energy Savings from using deceptive or unfair practices during the course of soliciting customers for natural gas supply contracts. Under the agreement, during solicitation, in any print materials, on its Web site and in its Welcome Letter for new customers, the company must make clear and conspicuous disclosures regarding: the type of product that consumers will receive, the price for service, terms and conditions of service, and the existence of any early termination fee.

      U.S. Energy Savings also must clearly disclose that consumers will be leaving their regulated utility company to enroll with the reseller of natural gas. The agreement also places a $50 cap on the amount that U.S. Energy Savings can charge customers for early termination. Finally, the agreement requires U.S. Energy Savings to investigate and terminate sales representatives who mislead consumers, provide false information during solicitations and forge contracts or agreements.

      Since 2005, the Attorney General has filed four lawsuits against alternative gas suppliers, and earlier this year, she drafted and negotiated pro-consumer legislation to regulate the alternative suppliers. The legislation, which was drafted by the Attorney Generals office and sponsored by Rep. Thomas Holbrook (D-Belleville), Rep. Marlow Colvin (D-Chicago) and Sen. Don Harmon (D-Oak Park), was enacted in April 2009 and requires stricter disclosure practices and limits termination fees.

      Specifically, the new law:

      • Requires all sales solicitations to clearly disclose the prices, terms and conditions of all products and services;

      • Prohibits suppliers from misrepresenting their affiliation with a gas utility, governmental body or consumer group;

      • Provides consumers with a right to cancel within 10 days after the gas utility notifies them of the switch and 10 days after the date of the first bill if they find that the service is not as promised;

      • Limits early termination fees to $50 and requires any agreement containing an early termination clause to disclose the total cancellation fee.

      Illinois consumers who would like more information about todays agreement or the new law should contact Madigans Consumer Fraud Bureau at (800) 386-5438.

      The State has reached an agreement with U.S. Energy Savings Corp. that will allow hundreds of Illinois consumers to terminate contracts and receive $1 mill...
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      West Virginia Gets Injunction Against Texas Debt Firm

      Able Debt Settlement blocked from doing business in state

      A West Virginia judge has issued an injunction, blocking Able Debt Settlement of Irving, Texas from doing business in the state. Attorney General Darrell McGraw sued Able Debt Settlement last month, saying consumers paid Able for services they never received.

      Able claims to settle consumers' debts for less than 50 cents on the dollar. Able charges consumers thousands of dollars for its services, but makes no effort to settle consumers' debts and then refuses to refund their money, McGraw charges. Instead of having their debt paid off, consumers are left with ruined credit and unpaid bills.

      Debt settlement companies usually claim to negotiate with consumers' creditors to repay outstanding debts, at a deep discount. Consumers are instructed to stop paying their creditors and to make monthly payments to the debt settlement companies instead. The premise behind debt settlement is that creditors will eventually be willing to settle outstanding debt for pennies on the dollar.

      With this injunction, Able is prevented from conducting any business in West Virginia, including any manner of debt settlement. Judge Irene C. Berger further ordered Able to contact its customers in West Virginia and advise them Able was prevented from operating in West Virginia. Finally, Judge Berger ordered Able to post a notice on its Internet website that its debt settlement services are not available in West Virginia.

      McGraw's consumer protection division started an investigation of Able in 2007 and previously obtained a temporary injunction against the company when it refused to comply with the investigation. Able tried to stop McGraw by, twice, asking the West Virginia Supreme Court to intervene. The Court refused Able Debt Settlement's petitions, allowing McGraw to continue the investigation.

      "Debt settlement companies that promise to negotiate debts on behalf of consumers and fail to provide any services will not be allowed to operate in West Virginia," said McGraw. "Consumers who need assistance with paying their bills should either consult an attorney or seek the services of a non-profit credit counseling agency."

      West Virginia Gets Injunction Against Texas Debt Firm...
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      Judge Orders Halt to Warranty Robocalls

      Senators spur FTC investigation against automated scammers

      Those annoying calls telling you that your car warranty is expiring and that youd better act now to do something about it should be a thing of the past -- at least for now.

      A federal judge has issued a temporary restraining order stopping telemarketing company Voice Touch, Inc., its principals James and Maureen Dunne, its business partner Network Foundations LLC, and Network Foundations principal Damian Kohlfeld from making any further calls in violation of the Do Not Call Registry and other provisions of the Telemarketing Sales Rule and the FTC Act.

      The move follows charges by the Federal Trade Commission that the defendants were operating a massive telemarketing scheme that used random, recorded phone calls to deceive consumers into thinking that their vehicles warranty is about to expire.

      Today the FTC has disconnected the people responsible for so many of these annoying robocalls, said FTC Chairman Jon Leibowitz. We expect to see a dramatic decrease in deceptive auto warranty calls, but we are still on high alert.

      If consumers continue to receive unsolicited robocalls to numbers on the Do Not Call registry, they should report them to DoNotCall.gov.

      Related matter

      In a related matter filed by the FTC, Judge John F. Grady of the United States District Court for the Northern District of Illinois issued a temporary restraining order against automobile warranty sales company Transcontinental Warranty, Inc., and its CEO and president, Christopher Cowart, who are clients of Voice Touch.

      In both cases, the court found that the FTC established a likelihood of success on the merits.

      The court barred deceptive claims about extended warranties, froze the defendants assets, and appointed receivers over Transcontinental and Network Foundations to ensure that documents are preserved and assets are not dissipated.

      The restraining orders are in effect until a preliminary injunction hearing set for May 29, at which time the judge will reassess what type of relief should remain in place until the case proceeds to trial.

      Constant annoyance

      The spam calls have targeted Americans randomly on both cell phones and landlines, even when the recipient is on the federal "Do Not Call" registry. The call plays an automated message that offers a deal on an extended car warranty.

      U.S. Senators Charles E. Schumer (D-NY) and Mark Warner (D-VA) had pressed the FTC for action and announced a few days ago that the agency expected to take action soon.

      "It's about time these robocalls were terminated," Schumer said. "This prompt, aggressive action by the FTC should provide a bit of relief to the Americans besieged by these fraudulent calls. Almost everyone knows someone who's received these calls. It's about time we find out who's behind them, and put a stop to this harassment."

      "In addition to violating the 'Do Not Call List' law, these scammers are peddling phony car warranties that exploit consumers," said Warner. "We've heard of Virginians receiving these calls when they do not even own a car, and others who are understandably upset that the automated calls tie-up their phone lines, costing them time and money."

      Schumer and Warner revealed that they themselves have both received these calls in recent weeks.

      Unrecognized number

      The scam begins when someone's phone rings from an unrecognized number. The caller then turns out to be a computerized voice selling car warranties with voice starting out by saying "Out of warranty? You are still eligible to reactivate warranty coverage. This is the final call before we close the file."

      The recording typically gives the caller an option to stop receiving calls, usually saying, "press two to be removed from the follow up list." However, the calls continue to come. The company making the calls has no idea what car a person is driving because the calls are randomly generated, so their contention that your warranty "is about to expire" is bogus.

      In his letter to Leibowitz, Schumer wrote, "Not only are these calls a nuisance, but they tie up land lines and can eat up a user's cell phone minutes, possibly leading to a higher cell phone bill due to overage charges. Consumers should not have to pay in both money and time for this or any other type of robo-dialer harassment."

      Judge Orders Halt to Warranty Robocalls: A federal judge has issued a temporary restraining order stopping telemarketing company Voice Touch, Inc....
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      North Carolina Locks Down Phony Locksmith Scam

      Attorney General targets scammers for false pricing

      May 15, 2009
      Scammers operating as locksmiths are ripping off consumers around the country, quoting one price on the phone but submitting a bill for a much larger amount once the work is done. In North Carolina, state officials have taken action against one network of phony locksmiths.

      "It's frustrating to find yourself locked out of your home or car, and it's even worse when someone you call for help tries to rip you off," North Carolina Attorney General Roy Cooper said. "Taking advantage of vulnerable customers is no way to do business, and were stepping in to stop it."

      A state court judge has agreed with Cooper's request for a temporary restraining order to bar several locksmith companies and their owners from advertising, offering or performing any locksmith services in North Carolina. Cooper is seeking a permanent ban on the companies, refunds for consumers, and civil penalties of $5,000 for each illegal act by the companies.

      Named as defendants in the lawsuit filed today are: 704 Locksmith, Inc. of Charlotte which does business in the Triangle area under several names including Raleigh Locksmith, Durham Locksmith, Apex Locksmith and Smithfield Locksmith; NC Charlotte Locksmith which does business throughout central and western North Carolina using a variety of names such as Charlotte Locksmith, Concord Locksmith, Hickory Locksmith, and Shelby Locksmith; Anna Konevsky of Charlotte, president of 704 Locksmith and NC Charlotte Locksmith; Locksmith Services, Inc. of Charlotte, which also operates as Cary Locksmith and Atlantis Locksmith; and Tamir Avraham of Charlotte, president of Locksmith Services, Inc.

      According to the Attorney General's investigation, the defendants advertise online and in the yellow pages using names, telephone numbers and addresses that make their companies appear to be local. In many cases, they use names and addresses that belong to legitimate locksmith businesses. Coopere says no one who works for the defendants is actually a licensed locksmith as required by law, but the companies advertise and perform locksmith services.

      North Carolina consumers have called these companies looking for a local locksmith who could come let them into their home, business or car. As alleged in complaint filed by Cooper's office, consumers are routinely quoted one price on the phone and then charged a much higher price by the locksmith who shows up to do the work. Consumers are typically told that their lock must be drilled even when that isn't necessary, which will cost them $100 more and destroy the lock. People are then charged another $100 or more to replace their destroyed locks. The defendants usually demand payment in cash, refusing to let consumers pay by credit card.

      To avoid falling victim to similar scams, Cooper recommends the following tips:

      • Whenever possible, check out a business before you do business with them by calling your state Attorney General's Office and the Better Business Bureau.

      • People who practice skilled trades such as locksmiths are required to be licensed. Before someone does work for you, ask if they're licensed and write down their license number.

      • Get a price quote in writing before you agree to any work.

      • For services you may need in an emergency, such as a locksmith or plumber, find a good one before an emergency happens. Ask family and friends for recommendations, check them out and then save their contact information so youll have it when you need it.

      More Scam Alerts ...

      Scammers operating as locksmiths are ripping off consumers around the country, quoting one price on the phone but submitting a bill for a much larger amoun...
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      New York Cracks Down on Immigration Ripoff Scheme

      Attorney General charges woman with fraud and deceptive practices

      The state of New York is moving to shut down an immigration scam that targeted and defrauded over a dozen immigrants out of tens of thousands of dollars.

      According to the complaint, Queens businesswoman Miriam Mercedes Hernandez would charge her victims up to $15,000 in exchange for help in securing permanent residence. She allegedly told clients she had the connections necessary to get their status adjusted within eight months.

      After eight months, however, her victims received none of the legal documentation they were promised. When they confronted Hernandez, she allegedly threatened to call the authorities if they complained to anyone. The lawsuit filed by Attorney General Andrew M. Cuomo seeks to bar her immediately from continuing her fraudulent business practice, as well as secure restitution for the victims and penalties and costs for violating New York law.

      "This city owes its history and its heritage to the immigrants who built it," said Cuomo. He called the case, "a classic example of fraud — lying, cheating and exploiting people trying to permanently make this country their home."

      Hernandez is charged with engaging in fraud and deceptive practices, as well as violating New York civil rights laws and the New York Immigrant Assistance Service Provider Law.

      She is said to have falsely promised assistance to over a dozen individuals seeking legal status. In order to secure her services, she would on occasion tell her clients that she would only help them if they could bring her up to ten additional clients. She would then charge them all up to $7,500 as an initial fee, and up to $15,000 per person in total in exchange for the promise of having their status adjusted within eight months. According to the complaint, Hernandez took the fees from her victims but never performed the services promised.

      The lawsuit is a result of the Cuomo's investigation into allegations that immigrants and their families are being targeted for fraudulent and unauthorized immigration related services with false promises of United States legal permanent residency and/or citizenship.

      The investigation has found that these individuals target specific ethnic communities through word of mouth and advertisements. Victims of immigration fraud lose thousands of dollars and risk being accused of filing false documents with the immigration authorities or becoming subject to deportation proceedings.

      New York Cracks Down on Immigration Ripoff Scheme...
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      H-P, Compaq Notebook Computer Batteries Recalled

      May 14, 2009
      Hewlett-Packard is recalling about 70,000 lithium-ion batteries used in its H-P and Compaq notebook computers because they can overheat, posing a fire and burn hazard.

      The firm and government regulators are aware of two reports of batteries that overheated and ruptured, resulting in flames/fire that caused minor property damage. No injuries have been reported.

      The recalled lithium-ion rechargeable batteries are used with various HP and Compaq notebook computers. Models that can contain a recalled battery include:

      HP Pavilion Compaq Presario HP HP Compaq

      The notebook model is located at the top of the service label on the bottom of the notebook. Batteries that can be subject to the recall will have one of the following bar code labels (^ in the code can be any letter or number):

      62940^^AXV^^^^ 65033^^B7U^^^^

      The computers were sold by computer and electronics stores nationwide, hp.com and hpshopping.com from August 2007 through March 2008 for between $500 and $3000. The battery packs, made in China, were also sold separately for between $100 and $160.

      Consumers should immediately remove the recalled battery from their notebook computer and contact HP to determine if their battery is included in the recall and to request a free replacement battery. After removing the recalled battery from their notebook computer, consumers may use the AC adapter to power the computer until a replacement battery arrives. Consumers should only use batteries obtained from HP or an authorized reseller.

      For additional information, visit the HP Battery Replacement Program Web site at http://www.hp.com/support/BatteryReplacement or call (800) 889-2031 between 7 a.m. and 7 p.m. CT Monday through Friday.

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

      H-P, Compaq Notebook Computer Batteries Recalled...
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      Growing Number of Adults in ATV Accidents

      Seniors account for high percentage of injuries

      May 14, 2009
      For the eighth year in a row, serious injuries caused by all-terrain vehicles (ATVs) increased, and children under age 16 continued to suffer a significant portion of those injuries, according to a report released by the Consumer Product Safety Commission (CPSC). Estimated deaths on ATVs increased as well.

      "Every year, more and more families are devastated by deaths and injuries caused by ATVs. This tragic problem continues to be in dire need of an aggressive and immediate solution," stated Rachel Weintraub, Director of Product Safety for Consumer Federation of America. "Congress, CPSC, state legislatures, the ATV industry, and the consumer and health care community still have miles to go before we adequately reduce the hazards caused by ATVs."

      "This new report shows more of the same -- continued high death and injury rates among children on all-terrain vehicles," said American Academy of Pediatrics President David T. Tayloe, Jr., MD, FAAP. "ATVs continue to kill and seriously injure children at alarming rates. The CPSC's meager efforts to stem the tide have been entirely ineffective, and industry has done nothing to make these dangerous vehicles safer."

      Major findings in the CPSC's 2007 Annual Report on ATV-related Deaths and Injuries include:

      • Serious injuries requiring emergency room treatment rose from 146,000 in 2006 to 150,900 in 2007, an increase of less than one percent that was not statistically significant. Since 2001, there has been a statistically significant 37% increase in serious injuries.

      • The estimated number of ATV-related fatalities fell slightly from 948 in 2005 to 882 in 2006. To date, 542 reports of ATV-related fatalities have been identified for 2007, but this number is expected to increase as additional data are gathered. The states with the highest numbers of reported deaths identified in the period 2005-2007 were West Virginia (143), Florida (123) and Kentucky (114).

      • In 2007, at least 107 children younger than 16 were killed on ATVs. This accounts for 20 percent of fatalities.

      • Children under 16 suffered 40,000 serious injuries in 2007 -- or 27 percent of all injuries. This is a 2 percent increase from the 2006 estimate. CPSC found that this decrease was not statistically significant. Since 2001, there has been a statistically significant increase of 17% in the number of children under 16 seriously injured on ATVs.

      The CPSC data include a risk estimate of ATV injuries per 10,000 four-wheel ATVs. The risk estimate for 2007 is 153.9 compared with 163 in 2006. In making this determination, CPSC estimated that there were 9.5 million ATVs in use in 2007 and 8.6 million in use in 2006. In August 2006, CPSC denied a petition filed over six years ago by consumer and health groups demanding action on ATVs. Instead, the Commission moved forward with a rulemaking that would result in ATV standards. There is no timeline for the full rulemaking process and work on the rulemaking appears to have stalled.

      The CPSC's rulemaking, however, describes the development of a "transitional ATV" for children age 14 and older, which is of particular concern to consumer and public health advocates. These ATVs would likely have engines larger than those currently recommended for children under 16.

      The CPSC, the ATV industry, the Consumer Federation of America, and many other consumer advocates recommend that children ages 12 through 15 not ride ATVs with engines larger than 90 cc's.

      On August 14, 2008, the President signed into the law the Consumer Product Safety Improvement Act, which includes a provision focused on ATVs dealing primarily with protecting the economic interests of the largest ATV manufacturers.

      The provision makes the current ANSI/SVIA voluntary standard mandatory; requires that the manufacturer of any ATV imported into the U.S. be party to ATV Action Plans; requires that CPSC continue its rulemaking process and consider multiple factors when categorizing youth ATVs; and requires that CPSC consult with NHTSA to determine the safety of numerous aspects of ATV safety.

      The ANSI/SVIA standard sets forth a description of a transitional ATV, which contradicts that of CPSC's proposed rule. The speed limit for transitional ATVs in the ANSI/SVIA standard is considerably higher than that in CPSC's proposed rule.

      "The CPSC data show that the hazards posed by ATVs continue unabated. Children should not be riding adult-size ATVs, ATVs must be designed to eliminate hazards and enforcement must be effective at both the federal and state level," stated Weintraub.

      Growing Number of Adults in ATV Accidents...
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      California Blocks Costly Property Tax Rip-Off

      Attorney General takes on reassessment scheme

      Two brothers who authorities say "ripped off homeowners" seeking help in reducing their property tax assessments are in hot water.

      California Attorney General Edmund G. Brown Jr. has filed suit against Sean and Michael McConville and their businesses, "Property Tax Reassessment" and "Property Tax Adjustment Services," seeking an end to the scam and at least $2.5 million in civil penalties.

      "These scam-artists ripped off thousands of homeowners for property reassessment services readily available free of charge," Attorney General Brown said. "This lawsuit seeks to end the deception and blocks these companies from continuing to scam homeowners."

      The suit contends that these companies:

      • Made and continue to make untrue and misleading statements with the intent to induce consumers to purchase products and services;

      • Distributed solicitations implying a government connection, approval or endorsement;

      • Distributed solicitations that appear to be billing statements; and

      • Engaged in unfair competition.

      The Southern California-based companies targeted tens of thousands of Californians looking to lower their property taxes with mailers that read like government billing statements, featured official-looking logos and demanded hundreds of dollars in payments for reassessment and reassessment appeal services.

      The statements warned homeowners that if payments were not received by the "due date" they faced late fees or would have their file marked "non-responsive" or "ineligible for future tax reassessments."

      Brown contends that neither company adequately informed consumers that they were not a governmental entity, the solicitations were not a bill, purchase of the services was not required and services were available free of charge from county assessors.

      Additionally, few, if any, of the property tax assessment services homeowners were billed for in 2008 were completed.

      These companies continue to solicit California homeowners and have recently sent out mailers with due dates of May 26, 2009.

      Last week, the Ventura District Attorney's Office charged one of the brothers, Sean McConville, with 20 felony counts for criminal conduct stemming from his property tax reassessment operations.

      To avoid becoming a victim, Brown says homeowners who believe their property value has declined and they are paying too much in property taxes should:

      • Never pay money for something they did not ask for; and

      • Avoid a middleman and instead contact a local county tax assessor's office for a free property value reassessment.

      California Blocks Costly Property Tax Rip-Off...
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      Craigslist Shuts Down "Erotic Services" Ads

      Pressure from Attorney Generals leads to revamp, more scrutiny

      Craigslist founder Craig Newmark announced today that the popular classified-ad site would shut down its "erotic services" section, and relaunch it as an "adult services" category, with much stricter enforcement of rules and higher fees for posting ads.

      The decision came in response to mounting criticism from Attorneys General of a number of states, who claimed Craiglist was enabling prostitution, human trafficking, and child exploitation.

      South Carolina Attorney General Henry McMaster even threatened to prosecute Craigslist CEO Jim Buckmaster if the company did not change its policies.

      "We are optimistic that the new balance struck today will be an acceptable compromise from the perspective of these constituencies, and for the diverse US communities that value and rely upon Craigslist," Newmark said.

      Under the new "adult services" category, submitted posts from legal adult service providers would be manually approved or rejected by Craigslist's staff, and would cost $10 to post, but could be reposted for $5.

      "It's clear to everyone that Craigslist's erotic services section was nothing more than an Internet brothel," said Illinois Attorney General Lisa Madigan. "I'm encouraged that craigslist has agreed to fundamentally change how they operate and monitor their site. The steps theyre taking are the only effective way to prevent the exploitation of women and children."

      Although both erotic services advertising and violent crime resulting from those ads have been a staple of the print newspaper industry, Internet services such as Craigslist have been singled out as enabling or increasing both sex trafficking and violent crimes.

      At least one high-profile serial murderer has been dubbed the "Craigslist killer," as he found his victims using the site.

      Newmark claimed that Craigslist was already much stricter in its ad policing procedures than most newspapers, attributing that to extensive cooperation of law enforcement, digital tracking and screening, and particularly the community's self-policing and moderation of ads that violate the site's terms of service.

      "Working in tandem with various other protective technologies, [community policing] is an inescapable force to be reckoned with for anyone set on abusing free internet communications across a broad array of posting types," Newmark said.

      Under Section 230 of the Communications Decency Act, Web site operators are not liable for the content that commenters post to the site. Online rights advocacy groups such as the Electronic Frontier Foundation criticized the Attorneys General, saying they had no legal recourse to pursue Craigslist for what its users did or did not do.

      "If site operators were forced to screen all third party contributions under risk of civil or criminal penalty, the Internet would lose many of the vibrant services that have made it so dynamic," said EFF attorney Matt Zimmerman.

      Zimmerman added that Web sites forced to comply with multiple states' wish lists of demands would be time-consuming and hinder their ability to do business.

      Critics of the decision claimed that it would merely push illegal sex workers and businesses out of the spotlight and make them hard to find, and that the decision seemed motivated more by a desire to pursue headlines than investigate real incidents of human trafficking or violent crime.

      Craigslist Shuts Down...
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      FDA Warns General Mills About Cheerios Claim

      "Heart-healthy" cholesterol-lowering claims challenged

      The Food and Drug Administration has fired off a warning letter to cereal maker General Mills, taking issue with its claim that Cheerios Toasted Whole Grain Oat Cereal can reduce cholesterol.

      In a letter to Ken Powell, Chairman and CEO of General Mills, the FDA said its review of the Cheerios label found serious violations of the Federal Food, Drug and Cosmetic Act. The agency said that if Cheerios reduced cholesterol the way the label said it does, then Cheerios isn't a cereal, its a drug. And an unapproved drug, at that.

      Based on claims made on your product's label, we have determined that your Cheerios Toasted Whole Grain Oat Cereal is promoted for conditions that cause it to be a drug because the product is intended for use in the prevention, mitigation, and treatment of disease, the agency wrote.

      Specifically, the FDA took issue with the following label claims:

      • "You can Lower Your Cholesterol 4 percent in 6 weeks"

      • "Did you know that in just 6 weeks Cheerios can reduce bad cholesterol by an average of 4 percent?

      • Cheerios is ... clinically proven to lower cholesterol. A clinical study showed that eating two 1 1/2 cup servings daily of Cheerios cereal reduced bad cholesterol when eaten as part of a diet low in saturated fat and cholesterol."

      The FDA says these claims indicate that Cheerios is intended for use in lowering cholesterol, and therefore in preventing, mitigating, and treating the disease hypercholesterolemia. And that's not all.

      According to the FDA's interpretation of the cereal box label, Cheerios is intended for use in the treatment, mitigation, and prevention of coronary heart disease through, lowering total and "bad" (LDL) cholesterol.

      Elevated levels of total and LDL cholesterol are a risk factor for coronary heart disease and can be a sign of coronary heart disease.

      Because of these intended uses, the product is a drug within the meaning of section 201(g)(1)(B) of the Act [21 U.S.C. 321 (g)P)(B)], the agency said. The product is also a new drug under section 201(p) of the Act [21 U.S.C. 321(p)] because it is not generally recognized as safe and effective for use in preventing or treating hypercholesterolemia or coronary heart disease. Therefore,under section 505(a) of the Act [21 U.S.C. 355(a)], it may not be legally marketed with the above claims in the United States without an approved new drug application.

      FDA has issued a regulation authorizing a health claim associating soluble fiber from whole grain oats with a reduced risk of coronary heart disease.

      Like FDA's other regulations authorizing health claims about a food substance and reduced risk of coronary heart disease, this regulation provides for the claim to include an optional statement, as part of the health claim, that the substance reduces the risk of coronary heart disease through the intermediate link of lowering blood total and LDL cholesterol, the agency said.

      The FDA said the claims made on the cereal box are not part of the soluble fiber/coronary heart disease health claim authorized under 21 CFR 101.81, and are therefore not permitted.

      The agency said Cheerios is a misbranded product because it bears unauthorized health claims in its labeling. It also determined that the company's Web site, wholegrainnation.com, is part of the Cheerios label because the address appears on the product label.

      That's problematic, the agency says, because the Web site makes several unauthorized health claims, including heart-healthy diets rich in whole grain foods can reduce the risk of heart disease.

      The agency said General Mills must respond to the warning letter within 15 days outlining specific steps it has taken to correct the violations.

      In a statement, the company said Cheerios soluble fiber heart health claim has been FDA-approved for 12 years, and Cheerios lower your cholesterol 4% in 6 weeks message has been featured on the box for more than 2 years.

      The science is not in question, the statement said. The scientific body of evidence supporting the heart health claim was the basis for FDAs approval of the heart health claim, and the clinical study supporting Cheerios cholesterol-lowering benefit is very strong. The FDA is interested in how the Cheerios cholesterol-lowering information is presented on the Cheerios package and website. We look forward to discussing this with FDA and to reaching a resolution.

      The FDA has fired off a warning letter to cereal maker General Mills, taking issue with its claim that Cheerios Toasted Whole Grain Oat Cereal can reduce c...
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