Current Events in July 2009

Perhaps partly satisfying its critics, the U.S. Food and Drug Administration (FDA) says it is taking several actions to reduce the risk of overdose in patients using pain medications such as Darvon and Darvocet that contain propoxyphene. The agency said the actions were taken because of data linking propoxyphene and fatal overdoses.

The consumer group Public Citizen has been calling on the FDA to ban Darvon altogether, saying that the "old pain killer is a plain old killer."

Instead, the agency is requiring manufacturers of propoxyphene-containing products to strengthen the label, including the boxed warning, emphasizing the potential for overdose when using these products. These manufacturers will also be required to provide a medication guide to patients stressing the importance of using the drugs as directed.

In addition, the FDA is requiring a new safety study assessing unanswered questions about the effects of propoxyphene on the heart at higher than recommended doses. Findings from this study, as well as other data, could lead to additional regulatory action.

Physicians need to be aware of the risk of overdose when prescribing these drugs. They should carefully review patient histories and make appropriate treatment decisions based on the warnings and directions stated within the drugs label, said Janet Woodcock, M.D, director of the FDAs Center for Drug Evaluation and Research. Prescribers and patients should be aware of propoxyphenes potential risks when used at doses higher than those recommended. Therefore, the FDA is requiring manufacturers to provide more information to help physicians and patients decide whether propoxyphene is the appropriate pain therapy.

Sidney Wolfe, M.D., director of Public Citizens Health Research Group, testified in January before a Food and Drug Administration (FDA) advisory committee and pointed to information from the Federal Drug Abuse Warning Network (DAWN) in 2007 that found 503 deaths determined by medical examiners to be related to the use of propoxyphene.

Public Citizen first petitioned the FDA to remove the drug from the market in 1978. The organization petitioned a second time in 2006 and, when the FDA failed to take action, Public Citizen sued the agency in 2008.

Propoxyphene has one of the worst benefit-to-risk ratios I have ever seen for a drug, and yet it has long been one of the 25 top-selling drugs in the country, Wolfe said. Pharmacies filled 21 million prescriptions in 2007.

In its announcement today, the FDA said that to "further evaluate the safety" of propoxyphene, the agency plans to work with several groups including the Centers for Medicare & Medicaid Services and the Veterans Health Administration to study how often the elderly are prescribed propoxyphene instead of other pain relievers and the difference in the safety profiles of propoxyphene compared to other drugs.

Propoxyphene manufacturers are required to submit the requested safety labeling changes to the FDA within 30 days, or to provide a reason why they do not believe such changes are necessary. If they do not submit new language, or if the FDA disagrees with the language the companies propose, the Food, Drug, and Cosmetic Act provides strict timelines for discussions regarding the changes. At the end of these discussions, the FDA may issue an order directing the labeling changes as deemed appropriate to address the new safety information.

Also today, the FDA denied a citizen petition from the public interest group Public Citizen requesting a phased withdrawal of propoxyphene.

The agency said in its response that despite the FDAs serious concerns about propoxyphene, the benefits of using the medication for pain relief at recommended doses outweighs the safety risks at this time. The FDA also noted that it plans to further evaluate the safety of propoxyphene and will take additional regulatory action if necessary.

Propoxyphene has been on the market since 1957. It is a widely prescribed member of a group of drugs known as opioids and is used as a treatment for mild to moderate pain. The most frequent side effects of propoxyphene include lightheadedness, dizziness, sedation, nausea, and vomiting.

By Jon Hood
ConsumerAffairs.com

July 6, 2009
A group of Canadian consumers has filed a class action lawsuit against Aeroplan, a frequent-flier program spun off from Air Canada. The lawsuit concerns a policy change that resulted in thousands of consumers losing miles they had built up over years as loyal Aeroplan members.

In late 2006, Aeroplan changed its policy, requiring consumers to either redeem or add points at least once every year. Previously, customers only had to do this at least once every three years.

While consumers who lost points to the policy change can technically reinstate them, they must pay a $30 flat fee plus a cent for each mile restored. This means that plaintiffs looking to make long-haul transatlantic flights could end up forking over $1,000 just to use points they had already earned.

The suit alleges that plaintiffs were not properly notified of the change in policy. The plaintiffs specifically claim that letters and e-mails sent to members didn't sufficiently stand out from other routine mailings sent by the service.

The suit seeks reinstatement of any revoked points, $50 in compensatory damages for each affected plaintiff, and punitive damages.

Aeroplan stands by both its policy and the adequacy of notice, stating that it will vigorously defend any class action, should one be authorized by the court.

Aeroplan may have enacted the new policy to prevent a run on the bank of sorts, in which too many passengers try to cash in on miles at the same time, draining the airline of revenue in an already shaky economic climate.

In May, Aeroplan posted low profits in its quarterly report, citing vastly lower consumer spending. The margin was startling, however; the company took in $23.2-million, compared to $42.1 million just a year earlier.

Currently, Aeroplan has around five million members.

The operators of a debt collection firm will pay $225,000 to settle charges with the Federal Trade Commission. The FTC accused the company of using false threats and other unlawful tactics to collect consumers' debts.

According to the FTC complaint, the defendants, who had about three million consumer accounts and collected debts in every state, told consumers their nonpayment of debt would result in garnishment of consumers wages, arrest, or legal action., none of which was true.

The FTC alleged that the defendants used illegal and abusive debt collection methods: they called consumers before 8 a.m. or after 9 p.m.; called their workplace when the collectors knew or had reason to know that the calls were inconvenient; told employers, co-workers, relatives, and neighbors about the consumers' debts; continued calling after receiving consumers written demands to stop; and used harassing and abusive tactics such as calling many times a day, calling right back after a consumer hung up, and using profane or other abusive language.

Consumers filed hundreds of complaints with the FTC, the Metropolitan New York Better Business Bureau, various state attorneys general, and the defendants, according to the complaint. The defendants often failed to address the law violations alleged in the complaints and often dismissed complaints without significant investigation or disciplinary action against employees, the FTC said.

Even in the face of substantial evidence of debt collection violations, the defendants collectors often went unpunished or merely received a warning, the complaint stated. The settlements prohibit the defendants from further violations of the FTC Act and the Fair Debt Collection Practices Act.

The settlement with Oxford Collection Agency, Inc., doing business as Oxford Management Services; Richard Pinto; Peter Pinto; and Charles Harris imposes a civil penalty of $1,060,000, all but $225,000 of which will be suspended. The settlement with Salvatore Spinelli, individually, and d/b/a Salvatore Spinelli, Esq., Attorney-at-Law, also imposes a $1,060,000 civil penalty, which will be suspended based on his inability to pay.

The full judgments will become due immediately if the defendants are found to have misrepresented their financial condition. The settlements also contain record-keeping and reporting provisions to allow the FTC to monitor compliance with the orders.

July 6, 2009
If you happen to be a heavy coffee drinker, you might be helping your brain protect itself from Alzheimers disease.

While a number of advanced Alzheimers drugs and treatments have been developed in recent years, University of Florida researcher Gary Arendash believes coffee drinkers -- and other caffeine consumers -- are not just protecting themselves, but actually treating symptoms that might appear.

The study gives evidence that caffeine may be a viable treatment for established Alzheimers disease and not simply a protective strategy, Arendash said.

Human subjects were not used in the study, only mice. But Arendash and his colleagues believe the findings offer up a lot of hope. Using mice that were bred to develop Alzheimers, the fed half of the laboratory animals a heavy diet of caffeine once they saw signs of the disease.

In other words, they waited until after the mice had developed Alzheimers disease before beginning the treatment.

Arendash said the research team was surprised at the results. The mice fed the caffeine performed much better on memory tests than those that didnt receive the caffeine.

Alzheimers currently is an incurable, progressively fatal disease that affects humans as they age, robbing them of all memory functions. The researchers say the fact that they have been able to reverse the diseases effects on cognitive ability is particularly significant.

Recent research into Alzheimers treatment has focused on the clumps that form in the brains of Alzheimers patients, interrupting normal memory function. The clumps are sometimes caused by two enzymes and heavy doses of caffeine, it appears, prevents those enzymes from forming.

Researchers say they are eager to launch clinical trials with human subjects, believing they are close to ending a scourge of aging. They say caffeine is safe for most people and easily absorbed by the brain, and appears to directly attack the disease.

More than five million people in the U.S. are living with Alzheimers disease, according to the Alzheimers Association. Alzheimers and dementia triple the health care costs for people age 65 and older.

A group of consumers has filed a class action lawsuit against Verified Identity Pass (VIP) after the company refused to provide refunds to members of its popular Clear program, which reduced security wait times for consumers willing to pay an annual fee and undergo preemptive security screenings.

Clear closed on June 22 after a dispute with a senior creditor. Lead plaintiff Stephen Perkins received an e-mail saying that, because of financial constraints related to the credit problem, VIP could not issue refunds to existing customers.

The suit, filed in New York by San Francisco law firm Schneider Wallace Cottrell Brayton Konecky, alleges that VIP continued charging customers until the minute it shuttered its doors, and that it has since refused to reimburse passengers. The suit calls Clear a cut-and-run gambit, and alleges counts in conversion, fraud, breach of contract, negligence and unjust enrichment. The plaintiffs are seeking both compensatory and punitive damages.

The program allowed passengers access to fast lanes, saving considerable time and hassle during the airport check-in process. To be eligible, passengers had to pay an annual membership fee and undergo extensive security screening, which included providing social security numbers, fingerprints, and eye scans. Since its 2005 inception, the program had been implemented at 18 airports and boasted around 250,000 members.

VIP claimed that the program could reduce security wait times to as little as five minutes. When the program was initiated last year at Hartsfield-Jackson International Airport in Atlanta -- the nation's busiest air hub -- the average wait time fell to just ten minutes.

The program was especially appealing to business travelers, who tend to fly often and are more willing to pay to reduce the stress of traveling. However, Clear members were never exempt from many standard-fare security procedures, like removing laptops from their cases and taking off their shoes before boarding.

Confidentiality concerns

The program's official website, flyclear.com, is adamant that any confidential information provided by Clear customers will be protected. The website maintains that any personal information would only be used for another Clear-like program that is approved by the Transportation Security Administration (TSA).

The website doesn't say, however, whether consumers would need to provide authorization before having such information handed over. The site also says that all customers will be notified by e-mail once their information has been permanently deleted.

VIP has reason to be overly cautious about customers' personal data. Clear was suspended last August when a laptop containing confidential information of 33,000 members was stolen from San Francisco International Airport. The computer, which contained names, addresses, and drivers' license numbers, was stolen from a locked office in the airport. After the incident, the TSA ordered VIP to take extra measures to protect customer information, including encryption of its computers. The information on the laptop was password-protected but not encrypted.

Not surprisingly, Congress isn't willing to give VIP the benefit of the doubt this time around. Last week, the House Homeland Security committee asked the TSA to release any information it has on data still being held by VIP. The committee asked the TSA to explain what role it will take in protecting the information, and emphasized that the sale, disposal, transfer, or destruction of this type of data cannot be undertaken without safeguards designed to ensure that the information will not be compromised. The committee has asked for a response by July 8.

Consumers looking for information or further guidance from VIP have been left in the lurch as well. Under the heading, How Can I Contact Clear? the Clear website refers consumers back to -- the website, at flyclear.com. In case there was any confusion, the site further explains that Clears call center and customer support email service are no longer available. VIP has not yet filed bankruptcy, according to the webpage.

CitiGroup, Bank of America and Capital One have all, in recent days, began raising customers interest rates, in many cases saying it has nothing to do with the customers performance and everything to do with making up for losses before new laws and regulations tie their hands early next year.

Chase has singled out its customers with the lowest interest rates, raising the minimum monthly payment from two percent of the balance to five percent. In many cases this action turns the credit card payment into the size of a home mortgage.

"This is what many of us feared about a law that didn't take effect right away," Sen. Chuck Schumer (D-NY) told The Washington Post.. "It was never going to take this long for the credit card companies to get ready for the new reforms. Instead, issuers are using the delay in the effective date to wring more dollars out of their customers. It is against the spirit of the law, and it is just plain wrong."

Rep. Carolyn Maloney (D-NY) authored the Credit Card Holder Bill of Rights legislation signed into law in May. She has been besieged with complaints from angry consumers.

Rate hikes on existing balances being reported by news media and consumers, even when consumers pay on time and follow the rules, are unfair and deceptive and must be stopped, she said. Capricious actions like these are why Congress overwhelmingly passed, and President Obama signed, my credit card reform bill: to level the playing field on behalf of consumers.

Maloneys protests not withstanding, Congress is pretty much powerless to stop credit card companies from raising rates and adjusting minimum payments, because they are allowed to do so under current laws and regulations. The changes do not take effect until February 2010.

Maloney notes that in another few weeks, one new rule will take effect requiring banks to provide a 45-day notice of any rate hikes. She and other Democrats on the Hill are using the consumer outcry over credit card company behavior to press for still more legislation.

All of this flurry of news is another example of why we need President Obamas Consumer Financial Products Safety Commission-- which the House will be considering in the weeks ahead, Maloney said.

In the Senate, Banking Committee Chairman Christopher Dodd (D-CT) also threw his support behind creation of the Consumer Financial Products Safety Commission.

The Administration is addressing the colossal failures that led to the economic crisis with a bold and aggressive plan, said Dodd. Creating an independent agency whose sole focus is protecting consumers - be it credit card holders, anyone with a bank account, or families with mortgages or student loans is really the key to creating the foundations for a stronger economy.

Dodd said banks that harm consumers with their policies do so at their own peril.

It is unbelievable that some of the same irresponsible actors that helped create the current financial mess would argue that we are doing too much for consumers, he said. Dont they realize that they need a healthy customer base if they want to continue to be successful?

But he American Bankers Association essentially says I told you so, noting the passage of the Credit Card Holders Bill of Rights in May is bringing about these changes.

The new legislation restricts the ability of credit card companies to price based on the individual risk of the customer, the ABA says in a statement. As a result, the system becomes a one-size-fits-all model, meaning that interest rates will likely increase for nearly everyone, including those with a good credit history, as those who successfully manage their credit will be subsidizing those who have not.

In this new environment, the bankers say, card limits will be lowered since lenders will be limited in managing risk going forward. Even customers that have a good credit score or have never missed a payment will likely see less credit available to them.

July 2, 2009
About 400,000 Simplicity drop side cribs are being recalled. The crib's plastic hardware can break or deform, causing the drop side to detach. When the drop side detaches, it creates space between the drop side and the crib mattress. Infants and toddlers can roll into this space and become entrapped which can lead to suffocation.

Federal safety regulators say they are aware of one death involving an 8-month-old child from Houston, Texas who became entrapped and suffocated between the drop side and the crib mattress when a plastic connector on the drop side broke. CPSC also is aware of an additional 25 incidents involving the drop side detaching from the crib.

In six of these incidents, the drop side detached because the plastic flexible tab deformed or broke. In four of the drop side detachment incidents, other plastic parts, including connectors or tracks, deformed or broke. In two of the incidents, two children became entrapped between the drop side and the crib mattress. There were no reported injuries.

The cribs were imported by Simplicity Inc. and SFCA Inc. of Reading, Pa. The firms are apparently no longer in business and unable to aid in the recall, the CPSC said.

This recall involves all drop side cribs with a different or 'newer' style of plastic hardware from those cribs recalled in September 2007. This newer style of Simplicity hardware can be identified by a flexible plastic tab at the top of the lower tracks. The recalled model numbers include but may not be limited to: 8050, 8325, 8620, 8745, 8748, 8755, 8756, 8765, 8778, 8810, and 8994, 8995, 8996.

The cribs, made in China, were sold at department stores, children's stores, and mass merchandisers nationwide from January 2005 through June 2009 for between $150 and $300.

Consumers should immediately stop using the recalled cribs and find an alternative, safe sleeping environment for their baby. Consumers should immediately return the crib to the place of purchase for a refund, replacement or store credit.

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

By Lisa Wade McCormick
ConsumerAffairs.com

July 2, 2008
Animal shelters call them the "July 4th dogs." They're dogs who run off during Fourth of July celebrations because they're frightened by the loud noises. These scared and panicked canines are then rescued by animal control officers or Good Samaritans and taken to local shelters.

According to the Humane Society of the United States (HSUS), animal shelters nationwide are growing accustomed to seeing these "July 4th dogs."

But the HSUS says there are some simple steps pet owners can take to protect their canines — and ensure they don't become one of those lost pets.

"With a little bit of planning and forethought, you can enjoy the excitement of the Fourth of July and know that your animal companion is safe, sound, and enjoying a little peace and quiet," said Nancy Peterson, an issues specialist with The Humane Society if the United States.

Advice from HSUS

To protect your pets this Independence Day, the HSUS offers the following advice:

• Never use fireworks near or around your pets;

• Avoid taking pets to fireworks displays;

• Keep pets indoors at home in a sheltered, quiet area. Some animals become destructive when frightened. Remove any items that pets can destroy or that could be harmful if chewed. Leave the television or radio on if you leave home;

• If your pet is distressed by loud noises like thunder, talk to your veterinarian before July 4th about ways to alleviate any fears or problems that may arise during fireworks displays;

• Never leave pets outside unattended — even in a fenced yard or on a chain. When they're scared, pets who normally wouldn't leave the yard may escape and become lost; others could get tangled in their chain;

• Make sure your pets are wearing their identification tags. That way they can be returned if they escape and become lost. Animals found running loose should be taken to a local animal shelter so they can reunited with their owners;

Never leave your pets in the car. In just a few short minutes, pets can suffer serious health effects — or even die — from breathing the hot air inside a car. And partially opened windows do not provide enough air and could give thieves an opportunity to steal your pets.

The American Society for the Prevention of Cruelty to Animals (ASPCA) also reminds pet owners watch their animals closely during Fourth of July picnics and other celebrations. Some party foods and drinks — and even sunscreens and grilling products — could poison to your pets.

Advice from ASPCA

The ASPCA also warns pet owner to never use fireworks around their animals. Other safety tips from the ASPCA's Animal Poison Control Center include:

• Never leave alcoholic drinks unattended where pets can reach them. Alcoholic beverages can poison pets. If ingested, the animal could become intoxicated and weak, severely depressed, or go into a coma. Death from respiratory failure is also possible in severe cases;

• Do not apply sunscreen or insect repellent products to your pet that are not specifically labeled for use on animals. Ingestion of sunscreen can result in drooling, vomiting, diarrhea, excessive thirst, and lethargy. Misuse of insect repellent that contains DEET can also lead to neurological problems in pets;

• Keep matches and lighter fluid out of pets reach. Some matches contain chlorates, which could damage blood cells and result in difficulty breathing — or kidney disease in severe cases. Lighter fluid can irritate a pet's skin, and if ingested, can produce gastrointestinal irritation and central nervous system depression. If lighter fluid is inhaled, aspiration pneumonia and breathing problems could develop;

• Keep your pets on their normal diet. Any change, even for one meal, can give pets severe indigestion and diarrhea. This is especially true with older animals, which have more delicate digestive systems and nutritional requirements. And remember, onions, chocolate, coffee, avocado, grapes, raisins, salt and yeast dough are potentially toxic to pets;

• Never put glow jewelry on pets or let them play with these items. While the luminescent substance is not highly toxic, excessive drooling and gastrointestinal irritation could still result from ingestions. And intestinal blockage could occur from swallowing large pieces of the plastic containers;

• Keep citronella candles, insect coils, and oil products out of pets reach. Ingestion of these products can cause stomach irritation or central nervous system depression. If inhaled, the oils could cause aspiration pneumonia in pets.

"While exposure to lit fireworks can potentially result in severe burns and/or trauma to the face and paws of curious pets, even unused fireworks can pose a danger," the agency says. "Many types contain potentially toxic substances, including potassium nitrate, arsenic and other heavy metals."

Pet owners who suspect their animals have ingested a poisonous substance can contact the ASPCAs Animal Poison Control Center at (888) 426-4435. A $60 consultation fee may apply.

Ohio is among the states that is trying to put foreclosure rescue scams out of business. Ohio Attorney General Richard Cordray has filed lawsuits against three operations - 21st Century Legal Services, Foreclosure Home Assistance, LLC, and Michael Brotherton, who does business as Financial Emergency, Inc.

"Ohio has zero tolerance for these predators," Cordray said. "They prey on Ohioans who are vulnerable and are seeking answers during desperate times. We issued warnings last month ordering them to stop their illegal practices, but they continued anyway. Now, we will work through the courts to stop them permanently."

According to Cordray's lawsuit, Cleveland-based Foreclosure Home Assistance, LLC charged consumers $1,500 for loan modifications, forbearance plans and other foreclosure prevention services. In some cases, the company offered foreclosure protection to tenants, claiming it could transfer the property deed from the landlord to the tenant. Despite its promises, the company failed to deliver.

Michael Brotherton, operating as Financial Emergency, Inc., offered similar foreclosure prevention services in Greene County. According to Cordray's lawsuit, Brotherton advertised his services on the Internet and through the mail. Brotherton charged consumers up to $1,269, saying he could work with lenders and creditors to negotiate debt settlements or workout agreements with mortgage holders. Brotherton failed to deliver.

Also failing to deliver was 21st Century Legal Services, which promised to help homeowners restructure their home loans, a promised service for which they charged $1,500 to $2,600. According to the lawsuit, the company instructed consumers to stop making payments on their home loans and to stop contacting their lenders.

Consumers were instructed to make out several post-dated checks, each approximately equal to their monthly mortgage payment, and believed 21st Century would take care of the rest.

Cordray's lawsuits charge each company with violations of Ohio's Consumer Sales Practices Act and Debt Adjusters Act. Cordray asks the court to hold the companies responsible for reimbursing consumers and to assess a $25,000 civil penalty for each violation.

"In all three of these cases, we believe more victims are out there," said Cordray.

When you purchase a prepaid calling card, how closely do you measure the number of minutes? If the card is a 60-minute card, are you sure there are 60 minutes of time on it? There might not be.

A leading distributor of prepaid calling cards has agreed to pay $1.3 million to settle Federal Trade Commission charges that the calling cards failed to deliver the number of minutes advertised.

In tests conducted by the FTC, the calling cards on average provided less than half of the advertised calling minutes.

The settlement resolves a lawsuit the FTC filed in April 2008 against New Jersey-based Clifton Telecard Alliance One, LLC (CTA) and its owner, Mustafa Qattous.

The commission charged that the company misrepresented the number of calling minutes consumers would get with its calling cards, charged hidden fees, and failed to disclose that consumers cards would be charged whether or not the calls are connected.

CTA is a major player in the multi-billion dollar prepaid calling card industry. It markets cards under a variety of brand names, including African Dream and CTA Mexico, primarily to immigrants who rely on the cards to call friends and family in other countries.

The cards, sold through a large network of retailers, gas stations, and other outlets, come in denominations ranging from $2 to $20, and can be used to call hundreds of countries around the world. CTA also sells cards for domestic calling.

As part of the settlement announced, the court entered a judgment of $24.4 million against CTA, suspending all but $1.3 million of that amount. The settlement also bars CTA from misrepresenting the number of minutes of talk time a consumer will receive using a prepaid calling card.

The company is required to disclose to clearly and conspicuously any material limitations on the use of a prepaid calling card, including any fees or other charges.

The settlement is part of a continuing crackdown on fraud in the prepaid calling card industry. In February 2009, the FTC announced that another major group of major prepaid calling card companies agreed to pay $2.25 million to settle similar charges.