Current Events in August 2010

West Virginia Attorney Darrell McGraw has filed suit, asking the Court to order the eight companies, which have refused to cooperate with his investigation, to surrender the records of their West Virginia-based accounts and to halt lending activities in the state.

Payday loans are high-interest loans or cash advances with interest rates that reach as high as 600-to-800 percent APR. The loans, typically made for 14 days, are secured by a post-dated check or an agreement authorizing electronic debits from the consumer's checking account.

"When a company sets foot in West Virginia, whether in person or over the Internet, my office has a duty to ensure the enterprise complies with state law," McGraw said. "Any company that makes payday loans must halt its usurious business and produce records identifying its victims."

The companies and principals sued by Attorney General McGraw's office are:

• Payday Loan Resource Center LLC and Moe Tassoudi of Scottsdale, AZ;

• DirectROI d/b/a Cash West Payday Loans and Mike Brewster of Chandler, AZ;

• First American Credit;

• LoanPointe LLC, Joe E. Strom, Benjamin J. Lonsdale, James C. Endicott and Mark S. Lofgren of Highland, UT;

• Eastbrook LLC d/b/a Ecash and GeteCash of Provo, UT;

• National Title Loans d/b/a National Cash 12 of Elsmere, DE;

• Payday Financial LLC d/b/a www.LakotaCash.com and Martin Webb of Timber Lake, SD;

• Payday Loans-ACH d/b/a www.ACHLoans.com of Emeryville, CA.

End run

McGraw says Payday Loan Resource Center attempts to circumvent state law by charging West Virginia customers a monthly fee to help them obtain Internet payday loans. A suit filed earlier this year by the Federal Trade Commission (FTC) charged Ecash and GeteCash with attempting to garnish wages without a court order. Lakota Cash claims to be an Indian tribe and therefore not subject to the laws of any state.

Since McGraw began investigating the industry in 2005, his office has reached settlements with 107 Internet payday lenders and their collection agencies, resulting in $2,452,979.87 in refunds and canceled debts for 8044 West Virginians.

"Payday loans are predatory traps for the many West Virginians facing difficult times," McGraw said. "We will continue to ask the courts to intervene whenever companies refuse to cooperate with our efforts to protect West Virginia citizens."

The new rules are part of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act that became law law earlier this year. Like previous changes, these new rules are designed to protect consumers by adding clarity and transparency to interactions between card issuers and holders.

However, as these new rules take away revenue opportunities for card companies, issuers are raising other fees or creating new ones to compensate. Bills.com, an online money resource, cautions consumers to be aware of the new rules and also learn how to avoid new fees.

"Unfortunately, one of the unintended consequences of these new regulations is that consumers must be more vigilant than ever as we enter a period of uncertainty surrounding fees and services," said Ethan Ewing, president of Bills.com. "These actions by most card issuers are perfectly legal, but they are certainly outside the spirit of the new law."

The first rounds of changes brought on by the CARD Act required issuers to provide more notice about interest rate increases to consumers, end controversial practices such as inactivity fees, and required more transparent communication around payment windows and information.

Changes in the law

The final set of changes that took effect on August 22nd, 2010 include:

• Maximum limit on late fee penalties of $25 or no more than your minimum payment due. The one exception allows for high penalties if the cardholder has multiple late payments within the past six months.

• Limiting penalties to one charge per issue. For example, the issuer cannot charge an additional penalty for each day a payment is late.

• Any increase in interest rates must be accompanied by a clear explanation for the reason behind the increase.

• Issuers must re-evaluate any interest rate increase six months after it is instituted to determine if there is cause to revoke the increase.

• The official end to inactivity fees so that issuers can no longer charge for not using a credit card over a certain time period.

Consequences of changes

These changes have not occurred in a vacuum. Because they mean card issuers will realized diminished revenue, these companies have begun to identify workarounds or even new fees to supplement their losses. The most straightforward example of these changes is a rise in annual fees by many card issuers.

According to a report by Pew Charitable Trusts, the industry's median annual fee on bank credit cards has jumped 18 percent between July 2009 and March 2010. Similarly, issuers have begun to raise balance transfer fees and foreign transaction fees, shorten billing cycles, and issue rebate cards that are exempt from the CARD Act to combat rate increases. Additionally, some issuers are skirting the ban on inactivity fees by raising annual fees but waiving or reducing them if cardholders meet an annual spending threshold.

Solutions

Bills.com suggests six strategies In order to avoid these fees:

1. Monitor your communications from your credit card issuer.

One of the best ways to stay abreast of changes specific to your cards or situation is to closely monitor information sent from your issuer. New regulations require much greater disclosure on all changes, so any update will be sent to your attention. Be alert for all mailings and read them carefully before throwing away or destroying.

2. Maintain prompt payment status with your credit card company.

Despite all these changes, the simplest way to avoid fees is to pay your credit card bills on time. By missing or being late on a payment you will incur fees, potentially increase your interest rate, and lower your overall credit score.

3. Pay down high balances to improve credit card utilization.

This will show that you can responsibly manage your credit limit, minimizing the chance of higher tiers of interest rates or reductions in credit limit. Additionally, better credit utilization will help boost your credit score.

4. Maintain activity on your credit card accounts.

By using the revolving credit lines that you need or want to keep and promptly paying on them, you can help avoid cancellation of those credit card accounts. This will also help avoid faux inactivity fees and help boost your credit score, while having a long existing credit line closed could lower your score.

5. Avoid over-limit fees through responsible spending habits.

Credit card issuers have begun to charge fees for opt-in over-limit coverage. By remaining aware of credit limits and balances, consumers can avoid a need for this service and these fees altogether.

6. New regulations do not apply to corporate or small business cards.

This means some small business owners might consider using personal cards for business expenses because of fee and rate limitations. However, these owners should remain cautious because their personal credit scores could suffer in the event of missed payments or defaults. Conversely, be aware of companies that are increasing solicitations for corporate card members to avoid new regulations.

As a result of the reforms passed in May 2009, many credit card issuers have increased interest rates and lowered credit limits for millions of credit card customers. The accounts have been closed unilaterally. As a result, millions of consumers have less access to credit than they did a year ago.

There was a recall of Peter Pan and Great Value peanut butter, sold nationwide. Both brands were produced by food giant ConAgra, at a plant in Georgia.

Before the outbreak had run its course several months later, billions of dollars worth of food products had been recalled and thousands had been sickened. Though the CDC attributed no deaths to the outbreak, several families claimed to have lost family members to complications of food poisoning.

And it wasn't just peanut butter that was recalled. Desserts and other food containing peanut butter also had to be recalled. Aside from the health risk to consumers, the economic toll to food companies was staggering.

Lesson learned, or was it?

The peanut butter recall of 2007 brought into sharp focus the inherent problems of a centralized food system, when problems at a single plant or producer can ripple throughout the system. The current recall of a half-billion eggs, possibly tainted with Salmonella, is another example.

The United Egg Producers, the industry trade group for egg producers, notes that fewer than 200 companies now control 95 percent of laying hens in the U.S. That's less than one tenth the number two decades ago.

When there's a problem at one of these producers' farms, it can quickly spread throughout the system. In the current recall, two producers in Iowa, Wright County Egg and Hillandale Farms appear to be the only producers so far implicated in the outbreak. Between the two operations, eggs are sold under 24 brands.

With fewer companies producing more of the nation's food, you might think it would be easier to assure quality, but apparently that's not the case, at least not in this instance. The Food and Drug Administration had never sent inspectors to the two Iowa-based facilities. Neither had the Department of Agriculture, which shares responsibility for eggs with the FDA.

Scrambled jurisdiction

Jurisdiction over eggs has been scrambled between numerous government agencies for the last 20 years, resulting in enormous delays in addressing the hazard posed by Salmonella enteriditis, a pathogen that infects the ovaries of chickens, causing their eggs to be internally contaminated, said Carolyn Smith DeWaal, Food Safety Director for the Center for Science in the Public Interest. The outbreak demonstrates the need for a food safety cop on the beat.

Ironically, new egg safety rules went into effect last month and a new food safety bill, greatly expanding FDA's enforcement powers, is stalled in the U.S. Senate.

The Senate should move immediately to pass S. 510 and Congress should move a bill that incorporates the strongest enforcement provision of each bill promptly to the President's desk for signature, DeWaal said.

The agency says the meat was distributed to delicatessens where they were further processed into sandwiches. A mumber of the delis are operated by Wal-Mart stores.

Wal-Mart said the recall involves Marketside Grab and Go sandwiches, but not individual packages of deli meat.

"We encourage customers who recently purchased this item to return it for a full refund," the company said in a statement.

The products subject to recall include:

• 25.5-pound cases of "Marketside Grab and Go Sandwiches BLACK FOREST HAM With Natural Juices Coated with Caramel Color" with the number 17800 1300.

• 28.49-pound cases of "Marketside Grab and Go Sandwiches HOT HAM, HARD SALAMI, PEPPERONI, SANDWICH PEPPERS" with the number 17803 1300.

• 32.67-pound cases of "Marketside Grab and Go Sandwiches VIRGINIA BRAND HAM With Natural Juices, MADE IN NEW YORK, FULLY COOKED BACON, SANDWICH PICKLES, SANDWICH PEPPERS" with the number 17804 1300.

The packages also bear vendor number "398412808" and the USDA mark of inspection. The meat products were produced on various dates from June 18 to July 2, 2010, and have various "Use By" dates ranging from August 20 to September 10, 2010. The products were distributed nationwide to a single retail chain.

The problem was discovered as a result of a retail sample collected by the State of Georgia that confirmed positive for Listeria monocytogenes. FSIS has received no reports of illnesses associated with consumption of this product.

Eating food contaminated with Listeria monocytogenes can cause listeriosis, an uncommon but potentially fatal disease.

Healthy people rarely contract listeriosis. However, listeriosis can cause high fever, severe headache, neck stiffness and nausea. Listeriosis can also cause miscarriages and stillbirths, as well as serious and sometimes fatal infections in those with weakened immune systems, such as infants, the elderly and persons with HIV infection or undergoing chemotherapy. Individuals concerned about an illness should contact a health care provider.

By James Limbach
ConsumerAffairs.Com

August 24, 2010
The owner of Apply2Save, a bankrupt Coeur d'Alene, Idaho, mortgage modification company, that allegedly defrauded hundreds of consumers nationwide is prohibited from ever operating a similar business in Idaho, according to Attorney General Lawrence Wasden.

Derek Oberholtzer entered a settlement agreement with Wasden's office that prevents Oberholtzer from acting as a debt or credit counselor and prohibits him from engaging in mortgage lending, brokering, or modification activities within Idaho or with Idaho consumers.

"Apply2Save operated for less than a year, signed up hundreds of clients, and took in millions of dollars," said Wasden. "Yet few consumers ever received the mortgage modification services they purchased."

"Apply2Save said they could help with my mortgage," Evelyn of Norwalk, CA, writes ConsumerAffairs.com. She says after the company debited her bank account for a $495.00 down payment and did nothing with her case, she was told they had everything they needed, paystubs, financial information etc, and it was good to go. "Two months later," she says, "I called, and nothing was done on my behalf. All that time I thought they were in contact with my mortgage company, instead was told they needed more information and my folder was sitting on someone's desk."

Tresha of Richland, MI, tells ConsumerAffairs.com she gave Apply2Save $500.00 to help save her home from going into forclosure. "Supposedly when they were done we were to give them another $500.00. But we gave up on them because they were stalling and doing nothing."

Wasden sued Oberholtzer and Apply 2 Save in April 2009, alleging the defendants accepted payments from consumers for services that they never performed.

Banned by Boise

In addition to banning Oberholtzer from doing business in Idaho, he is prohibited from obtaining a license to engage in any activity that the Idaho Department of Finance regulates. The settlement with Oberholtzer also incorporates the terms of the Federal Trade Commission's consent decree with Apply2Save, Sleeping Giant Media, and Oberholtzer.

The AG recovered $45,000 in restitution during his investigation of Apply 2 Save and will distribute the money to consumers who filed complaints with the office in 2008 and 2009. Consumers do not need to file new complaints or contact the office. Eligible consumers will receive restitution checks before the end of the year. Status updates regarding this settlement are available here.

Apply2Save and Oberholtzer filed Chapter 7 bankruptcy soon after the state sued. Oberholtzer received a discharge of his debts in April. Apply2Save's bankruptcy is continuing.

For information about Apply2Save's bankruptcy, consumers can call the court's Voice Case Information System at 208-334-9386. If consumers have legal questions about bankruptcy, they should contact a private attorney.

During the prior 16 months, the Attorney General has resolved five cases involving allegations of deceptive mortgage modification activities. The settlements resulted in more than 420 consumers receiving $84,110 in restitution.

"My office received more complaints about loan modification businesses last year than any other type of business," Wasden said. "With foreclosures still at record levels in Idaho, I encourage people facing foreclosure to use the free, professional assistance that is available. Most of the Idahoans we've heard from who paid for mortgage modification services have found that their situation only got worse."

By Mark Huffman
ConsumerAffairs.Com

August 24, 2010
Two members of a key House committee have sent letters to two egg producers at the center of the nationwide egg recall, requesting documents concerning their operations.

Rep. Henry Waxman (D-CA), Chairman of the House Energy and Commerce Committee, and Rep. Bart Stupak (D-MI), a subcommittee chairman, sent letters to Wright County Egg and Hillandale Farms of Iowa regarding recent voluntary recalls of eggs produced by their farms due to potential Salmonella contamination.

The two firms have recalled more than a half-billion eggs that could be tainted with Salmonella. The eggs are linked to an outbreak of Salmonella Enteritidis that federal health officials have been monitoring since May 10. An estimated 1,300 consumers have been sickened, by official estimates. The actual number may be much higher.

The two lawmakers requested the inspection records for the companies' facilities, the companies' internal protocols and standards for monitoring and analyzing their products, and documents related to allegations of health, safety, environmental, or animal cruelty violations for the companies or any related companies.

In the letters, Stupak and Waxman requested documents and information relating to the recent recall of more than half a billion eggs by the two companies, including when the companies first became aware of the Salmonella contamination and when they first notified government officials of the issue.

Inspection records

Stupak and Waxman also requested company inspection records, internal protocols for product monitoring, all documents relating to safety practices of egg production, and all communications among the companies' personnel regarding possible salmonella contamination.

"The recent recall of potentially hazardous eggs is yet another example of how our nation's food safety system is broken," Stupak said. "It is important that we discover exactly what happened to cause this recall so we can move swiftly to stop possible further contaminations in our food supply."

As chairman of the Subcommittee on Oversight and Investigations, Stupak has held 11 food safety hearings over the past four years examining what he calls the failure of the Food and Drug Administration (FDA) and the food industry to protect the nation's food supply. The subcommittee examined breakdowns in the system highlighted by E. coli in meat and fresh greens as well as the 2008 high-profile outbreak of salmonella linked first to tomatoes and later traced to jalapeno peppers.

Food Safety Bill stalled

Findings of the investigation and related hearings led Stupak and fellow Energy and Commerce Committee members John Dingell (D-MI) and Frank Pallone (D-NJ) to craft H.R. 2749, the Food Safety and Enhancement Act of 2009. Stupak says H.R. 2749 would establish a national food tracing system, making it easier for the FDA to respond to outbreaks of food borne illness.

The bill would provide the FDA with subpoena power, mandatory recall authority and require country of origin labeling on food. The bill overwhelmingly passed the House in July 2009 in a bipartisan vote. Despite strong support among many industry groups and the FDA, the Senate has yet to act on food safety legislation.

"Had strong reforms like those in H.R. 2749 already been in place, the FDA would have had the authority to issue a mandatory recall and take aggressive steps to stop the spread of these dangerous eggs," Stupak said. "The Senate already has countless examples and studies from the past few years as to why we need food safety reform but this egg recall gives them yet one more. As we investigate the egg recall I hope members of the Senate will realize how important the safety of our food supply is and pass our food safety legislation when they return in September."

By James Limbach
ConsumerAffairs.Com

August 24, 2010
Sales of previously-owned home were down sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, according to the National Association of Realtors (NAR).

Existing-home sales -- completed transactions that include single-family, townhomes, condominiums and co-ops -- dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June. Sales were 25.5 percent below the 5.14 million-unit level in July 2009.

Sales are at the lowest level since the total existing-home sales series launched in 1999, and single-family sales -- accounting for the bulk of transactions -- are at the lowest level since May of 1995.

Cautious optimism

NAR Chief Economist Lawrence Yun said a soft sales pace likely will continue for a few additional months. "Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September," he said. "However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.

"Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year," he said. "To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years."

Joel L. Naroff, President and Chief Economist of Naroff Economic Advisors, says It's not clear if the housing market hit a huge air pocket or crashed and burned. But, he says, "for now, this sector looks to be flaton its back."

Naroff sees the latest numbers as illustrative of consumer uncertaintly about the economy. "Unless households and businesses have confidence about the future, they are not going to buy homes or invest regardless of the interest rate," he said.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.56 percent in July from 4.74 percent in June; the rate was 5.22 percent in July 2009. Last week, Freddie Mac reported the 30-year fixed was down to 4.42 percent.

Rising home prices

The national median existing-home price for all housing types was $182,600 in July -- up 0.7 percent from a year ago. Distressed home sales are unchanged from June, accounting for 32 percent of transactions in July; they were 31 percent in July 2009.3

"Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses," Yun said. "Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward."

Total housing inventory at the end of July increased 2.5 percent -- to 3.98 million existing homes available for sale, which represents a 12.5-month supply at the current sales pace compared with an 8.9-month supply in June. Raw unsold inventory is still 12.9 percent below the record of 4.58 million in July 2008.

A parallel NAR practitioner survey shows first-time buyers purchased 38 percent of homes in July, versus 43 percent in June. Investors accounted for 19 percent of sales in July, compared with 13 percent in June; the balance were to repeat buyers. All-cash sales rose to 30 percent in July from 24 percent in June.

What's selling

Single-family home sales dropped 27.1 percent to a seasonally adjusted annual rate of 3.37 million in July from a pace of 4.62 million in June, and are 25.6 percent below the 4.53 million level in July 2009; they were the lowest since May 1995 when the sales rate was 3.34 million. The median existing single-family home price was $183,400 in July -- 0.9 percent above a year ago.

Single-family median existing-home prices were higher in 11 out of 19 metropolitan statistical areas reported in July in comparison with July 2009 (the price in one of 20 tracked markets was not available). However, existing single-family home sales fell in all 20 areas from a year ago.

Existing condominium and co-op sales fell 28.1 percent to a seasonally adjusted annual rate of 460,000 in July from 640,000 in June, and are 24.0 percent below the 605,000-unit level in July 2009. The median existing condo price5 was $176,800 in July, down 1.7 percent from a year ago.

Where they're selling

Regionally, existing-home sales in the Northeast dropped 29.5 percent to an annual pace of 620,000 in July and are 30.3 percent lower than a year ago. The median price in the Northeast was $263,800, up 4.8 percent from July 2009.

Existing-home sales in the Midwest fell 35.0 percent in July to a level of 800,000 and are 33.3 percent below July 2009. The median price in the Midwest was $151,600, down 2.8 percent from a year ago.

In the South, existing-home sales dropped 22.6 percent to an annual pace of 1.54 million in July and are 19.8 percent below a year ago. The median price in the South was $156,300, down 3.3 percent from July 2009.

Existing-home sales in the West fell 25.0 percent to an annual level of 870,000 in July and are 23.0 percent below a year ago. The median price in the West was $224,800, up 3.3 percent from July 2009.

The Home Affordable Modification Program (HAMP)began in April 2009.

In their Housing Scorecard for August, the Treasury Department and Department of Housing and Urban Development (HUD) report more than 37,000 homeowners received a HAMP permanent modification in July. Many others granted a trial modification have, for one reason or another, been denied or have been unable to keep up the new monthly payments.

Those denied a permanent modification often find themselves deeper in the hole, due to several months of reduced payments and fees.

"Chase Mortgage said we could do a trail loan modification so we did for six months," Robert, of Canyon Country, Calif., told ConsumerAffairs.com. "We were told after six months we did not qualify. Then we received a letter stating we need to come up with $17,000.00 or our house would go to foreclosure. We never talked with one person, we talked with many. They acted as if we never gave them a dime in those six months."

Program changes

The government attributes a drop off in the number of new trial modifications to changes in upfront documentation requirements, adopted June 1.

"This policy change streamlines the process to help more eligible homeowners convert to a permanent modification," the agencies said in their Report Card. "Homeowners in permanent modifications are experiencing a median payment reduction of 36 percent, or more than $500 per month."

Despite problems in the program, the government says there have been twice as many modification arrangements begun compared with foreclosure completions. More than 3.15 million modification arrangements were done from April 2009 through the end of June 2010. That number, however, includes trial modifications that may, or may not, have become permanent.

Bright spot

In a positive development in an otherwise still-dreary housing market, the government reports housing prices remained level in July after 30 straight months of decline, while some price predictions have improved.

In addition, historic low interest rates continued to promote home affordability and refinancing options for the nation's families. However, the market remains fragile with foreclosure starts showing a slight increase and serious delinquencies continuing to work through the pipeline.

"While there has been some stabilization in the housing market, it remains clear that we have more work ahead," said HUD Assistant Secretary Raphael Bostic. "Through the Obama administration's efforts over the past 16 months, we have seen increased price stabilization and improved home affordability for prospective, qualified homebuyers. At the same time, we know that we must continue to provide support to underwater borrowers, unemployed homeowners, and to the nation's hardest hit neighborhoods."

"Tax Lady Roni Deutch is engaged in a heartless scheme that swindled people with tax problems," Brown said. "She promises to significantly reduce their IRS tax debts, but instead preys on their vulnerability, taking large up-front payments but providing little or no help in lowering their tax bills."

Deutch manufactures credibility by boasting that her tax resolution law firm, which has annual revenues of at least $25 million, is the largest of its kind in the nation. She spends $3 million a year on advertising, much of it on late-night cable TV, and frequently offers tax advice on NBC's Today Show, CNN, and CNBC.

Desperate debtors turn to Deutch based on her misleading ads that feature fictional testimonials claiming she secured large reductions in the featured clients' federal tax debts, Brown said.

For example, her ad entitled "It's Your Turn" features three clients whom Deutch claims to have "saved" from having to pay thousands of dollars to the IRS. In fact, those clients still owe the IRS the full amount of their taxes, plus interest and penalties.

When potential clients call Deutch's boiler room, sales agents employ high-pressure sales tactics plus a series of misrepresentations and false promises to persuade them to retain her firm. The sales agents claim Deutch's success rate in dealing with the IRS is as high as 99 percent. But the percentage of clients whose tax bills Deutch actually reduces is a mere 10 percent.

More debt, not less

Rather than cut clients' debts, Deutch often escalates them. She places clients in an endless loop of requests for duplicate documents that increases her fees and, due to further delays in payments to the IRS, increases clients' IRS fines and penalties.

One woman from Pico Rivera, who owed the IRS $13,000, turned to Deutch after seeing a TV ad. She paid Deutch a $1,900 retainer, but by the time the Deutch firm ended its representation, she owed the IRS hundreds of dollars more in interest and penalties, and the IRS had placed a levy against her Social Security benefits. Despite failing to take any effective action on her behalf, Deutch refused to refund the woman's retainer by falsely billing her for time the firm did not spend on her case. Deutch regularly uses false billing statements to deny her clients' refund requests.

Hundreds of clients have filed complaints with the Attorney General and other government agencies, describing Deutch's failure to reduce their IRS debts as she advertised and her refusal to refund retainers of as much as $4,700.

Brown's lawsuit says thousands of consumers in California and around the country have fallen victim to Deutch's unlawful scam, losing millions of dollars that could have been used to pay their IRS tax liabilities. The lawsuit charges that Deutch operates a deceptive tax resolution scheme that employs "a bevy of false promises and misrepresentations."

Brown's action seeks to permanently prevent Deutch from engaging in such unfair business practices and false advertising, and force her to pay victims restitution of at least $33.9 million plus civil penalties.

Hillandale Farms issued a recall of eggs from two of its plants on Aug. 20, saying there have been laboratory-confirmed illnesses associated with the eggs. The announcement comes just two days after Wright County Egg in Galt expanded its Aug. 13 recall to a total of 380 million eggs.

How can you tell if the eggs in your refrigerator are included in the recall? Heres what you should look for on the egg carton:

• Plant numbers the four-digit plant number can be found on the short side of the carton. The numbers are preceded by the letter P.

• Julian date eggs are packaged with the Julian date on the short side of the carton after the plant number. The Julian date tells what day of the year the eggs were packaged without the month, so Jan. 1 is 001, and Dec. 31 is 365.

Hillandale Farms egg cartons affected by the recall will have these numbers:

• P1860 Julian dates ranging from 099 to 230
• P1663 Julian dates ranging from 137 to 230.

The Wright County Farms eggs that are being recalled are:

• P1720 and P1942 with Julian dates ranging from 136 to 229
• P1026, 1413,1946 with Julian dates ranging from 136 to 225

16 brands

The companies have identified more than 16 brand names under which the eggs were sold, but that information is incomplete. Some eggs were sold individually rather than in cartons, so they could be repackaged under other brands.

Eggs affected by the recall have been shipped since May 16 to grocery distribution sites, retail grocery stores, food wholesalers, distribution centers, and food service companies nationwide.

Safety tips

Even if your eggs aren't included in the current recall, Salmonella has become so common in eggs that it's a good idea for homeowners to treat them as hazardous substances.

The most important safety step is to be sure they're cooked thorough, according to the U.S. Agriculture Department.

• Scrambled eggs: Cook until firm, not runny.
• Fried, poached, boiled, or baked: Cook until both the white and the yolk are firm.
• Egg mixtures, such as casseroles: Cook until the center of the mixture reaches 160 F when measured with a food thermometer.

Better yet, you can use liquid eggs or frozen egg substitutes. These products are pasteurized and are therefore safer to handle and can be used in recipes that will not be cooked.

Here are some USDA points if you're using fresh shell eggs in recipies:

• Homemade ice cream and eggnog are safe if you do one of the following:

• Use a cooked egg-milk mixture. Heat it gently and use a food thermometer to ensure that it reaches 160 F.
• Use pasteurized eggs or egg products.

• Heating the eggs in one of the recipes other liquid ingredients over low heat, stirring constantly, until the mixture reaches 160 F. Then, combine it with the other ingredients and complete the recipe. Or use pasteurized eggs or egg products.
• Using pasteurized eggs or egg products.

In Florida, Attorney General Bill McCollum says he's stopping two such firms, at least temporarily. McCollum says his office has obtained a temporary injunction against Texas-based Credit Solutions of America, Inc., and Credit Solutions of America, LLC.

A Florida court ruled that these companies are prohibited from charging Florida residents an unfair up-front fee for purported debt settlement services. The ruling was issued from the bench earlier this week, and a written order will follow.

"Financially strapped Florida consumers are turning to these so-called debt-relief businesses as a last resort to try to regain control of their finances, only to lose more money in excessive up-front fees with little or no relief from their debt," McCollum said. "This ruling represents significant progress in reigning in these abusive practices."

Advance fees targeted

This is the second temporary injunction obtained by McCollum in recent months prohibiting debt settlement firms from charging Floridians unlawful fees. In April, Clearwater-based American Debt Arbitration (ADA), and Arizona-based Nationwide Asset Services, Inc. were similarly prohibited from charging unlawful fees.

The lawsuits against Credit Solutions and ADA were both filed in October 2009, and each petitions the court for full victim restitution, permanent injunctive relief, and civil penalties for violation of Florida's Deceptive and Unfair Trade Practices Act. The Attorney General's Economic Crimes Division is pursuing these enforcement actions, and litigation remains active.

Just last month, the Federal Trade Commission (FTC) announced the adoption of a new rule to protect consumers in credit card debt who seek debt relief help. Consistent with changes recommended to the FTC, beginning this October, for-profit companies that sell debt relief service by phone will be prohibited from collecting any fees before successfully settling or reducing a consumers outstanding debt obligation.

Additionally, starting in September, the FTC will require companies to disclose how much the process could cost and how long it may take consumers to see results.

The settlements resolve charges that Damian Kohlfeld and his two firms made millions of illegal recorded calls to consumers nationwide in an attempt to con them into buying extended auto warranties or service contracts. The robocalls misled consumers into thinking the callers were affiliated with consumers' car dealerships or manufacturers, and that their auto warranty was expiring or about to expire.

Burned

"We were contacted about the 'extended bumper-to-bumper warranty' on our vehicle, " Jimmie of Brandemburg, KY, writes ConsumerAffairs.com. We turned down the offer initially, however they continued calling offering us a better deal or price each time. We eventually decided that it would be to our advantage to take thier offer as our vehicle was getting older."

But he says, when he needed to use the warranty to fix a major transmission leak, "We learned that the warranty did not cover any seals, regardless of how major it was. Then the AC compressor went out on the van, again, we learned that it did not cover any AC problems. It appears that this bumper-to-bumper warranty is confined to only the 'internal' workings of the engine or transmission themselves."

Larry of San Diego , CA, says he was told by a pitchman that, "if I bought the 'no deductable plan' there would be no hassles and the warranty would cover everything my dealer warranty covered. One year later they refused to fix my water pump. Now I can't even get someone on the phone to listen to me."

Earlier this year, the FTC announced a settlement with two other defendants who helped make the robocalls, under which they have paid more than $655,000. The agency also announced a settlement in September 2009 with Transcontinental Warranty, Inc, the company that employed the defendants in this case to make the illegal prerecorded calls.

"Fortunately for American consumers, the telemarketers who were responsible for millions of unsolicited and annoying robocalls will never be able to telemarket again," said FTC Chairman Jon Leibowitz. "We've also taken away all of their money to provide redress for consumers who were defrauded. This case serves as a clear message: telemarketers who violate the privacy of ordinary Americans will have to pay the price."

Do Not Call violations

According to the FTC's complaint, Kohlfeld and the Chicago-based firms Voice Foundations, LLC, and Network Foundations, LLC, violated the FTC's Do Not Call Registry and falsely represented that:

• the telemarketers were calling from, or affiliated with, the manufacturer or dealer of the consumer's automobile;

• the consumer's original automobile warranty was about to expire; and

• the telemarketer had specific information about whether the consumer's vehicle was the subject of a recall.

The settlement requires Kohlfeld to pay more than $2.2 million. In addition, he is required to liquidate two investment accounts totaling approximately $130,000 and to sell his 2006 Mercedes. All of the money collected will be used for consumer redress.

The settlement order also bans Kohlfeld from telemarketing or assisting others engaged in telemarketing, prevents him from making the misrepresentations alleged in the FTC's complaint, and bars him from making any misrepresentations related to the sale of any goods or services.

The order specifically prohibits him from misrepresenting the cost, use, or effectiveness of any product or service or any of the refund policies associated with any product or services.

In addition, Network Foundations will pay $50,000 to be used for consumer redress. Voice Foundations has no assets to pay toward a judgment. If either of the companies later is found to have misrepresented its financial condition, it will be subject to a larger monetary judgment.

By Mark Huffman
ConsumerAffairs.Com

August 22, 2010 As the recall of tainted eggs grew to more than a half-billion late last week, three federal agencies were involved in the response, yet it was not clear which one was in the best position to lead.

On August 13, the Food and Drug Administration posted on its website a press release from Wright County Egg, one of the nation's largest egg producer, that millions of eggs were being voluntarily recalled because of possible Salmonella contamination. In the days that followed, FDA inspectors were reportedly dispatched to Wright County Egg facilities.

Because USDA is responsible for egg safety at processing plants, it is troubling that FDA is the lead agency in this investigation even though it has never inspected the Wright County Egg facility, said Rep. Rosa DeLauro (D-CT), a leading Congressional food safety advocate. Instead of reinforcing each others work, the current food safety system of split jurisdiction appears to have resulted in a disjointed inspection process.

So far, for reporters covering the story, most of the information has been coming from the U.S. Centers for Disease Control, which has little or no inspection or regulatory authority. But it was the CDC that first alerted the nation to the Salmonella outbreak and the agency has continued to be a source of information.

DeLauro says the outbreak, which has sickened at least 1,300 officially, but likely thousands more unofficially, is a strong argument for Congress to pass the Food Safety and Modernization bill, currently stalled in the Senate. The measure would give the FDA more authority to protect the food supply, including the authority to order food recalls, a power it does not now have.

The food safety bill cleared the House of Representatives a year ago, but the measure has become bogged down in the Senate. The bill appeared poised for approval in May when Sen. Diane Feinstein (D-CA) introduced an amendment banning the use of bisphenol A (BPA) in food and beverage containers, a move strongly opposed by the food industry. Though compromise language has reportedly been worked out, the measure has yet to get back on the Senate's front burner.

Preventable

This urgent nationwide recall is very disturbing, not only because it appears to have been preventable, but it also may have been the result of an inefficient and unresponsive food safety system, DeLauro said. Given the split jurisdiction between FDA and USDA over ensuring the safety of eggs, I fear the investigation and subsequent recall may have been delayed as FDA traced the source of the contamination.

DeLauro says the food safety bill, if approved, would increase inspections at high-risk facilities and establish performance standards for reducing food-borne pathogens, The granting of mandatory recall authority to the FDA, she says, would have removed tainted eggs from the food supply faster.

This bill, combined with the FDA egg safety rule that went into effect July 9, could have prevented or minimized this Salmonella outbreak, DeLauro said. In the long-term, we must create a single food safety agency that consolidates the work that is currently splintered across 15 federal agencies. One agency focused exclusively on protecting our food supply would prevent jurisdictional confusion, result in an efficient and responsive food safety system, and diminish the potential for future outbreaks such as this one.

First it was knocked from its perch by consumers' rising to cholesterol and now, incredibly, the edible egg is the latest everyday consumable to be scrambled, poached and whipped by Salmonella contamination.

The recall of hundreds of millions eggs follows a four-fold increase in Salmonella Enteritidis infections since May 2010 and health officials fear the worst may be yet to come.

On August 13, 2010, Wright County Egg, an Iowa egg producer, launched a nationwide egg recall and expanded it on August 19, the recall was expanded (see chart below). Yesterday, Hillandale Farms of Iowa recalled eggs sold under various brand names including Hillandale Farms, Sunny Farms, and Sunny Meadow (complete list below).

This is a crisis that's not likely to be over easily. Salmonella is about as unpleasant an infection as you can think of, even for healthy people, but it can be deadly for infants, the elderly, the chronically ill and anyone with a compromised immune system.

Although it's hard to think of anything more common in the food supply than the lowly chicken egg, consumption of the shelled ovoids has been declining steadily in recent years.

Americans used to eat one egg per day per person 1960s but the number is now down to about 257 per person per year, according to the Lempert Report, a food industry newsletter. But that figure doesn't count all the prepared food products that contain eggs and that may or may not have been handled with all due caution.

The problem, like so many other food safety issues, can be traced back to the industrialization of food production. When chickens wandered around barnyards, pecking away at bugs and corn and whatever else they could find, Salmonella was rarely a problem. But now that chickens live their lives in tight quarters, Salmonella has become a frequent intruder in the henhouse.

To be fair, it should be noted that the pesticide-soaked earth is no longer the safest spot to raise barnyard fowl, as a recent study found.

What to do

What's a homemaker to do? Well, you could fence in the backyard and install some laying hens, but that can cause problems with neighbors and, in many places, homeowners associations and local bureaucrats. Also, there's the no-so-slight problem of dogs, coyotes and others who aren't shy about helping themselves to a quick snack. Some cats also enjoy tormenting and even killing smaller chickens. Nature is natural, if not always kind.

But assuming you're using store-bought eggs (as they used to be called), the most important safety step is to be sure they're cooked thorough, according to the U.S. Salmonella Fears Scramble Egg Industry's Hopes, Homemakers' Grocery ListsAgriculture Department.

• Scrambled eggs: Cook until firm, not runny.
• Fried, poached, boiled, or baked: Cook until both the white and the yolk are firm.
• Egg mixtures, such as casseroles: Cook until the center of the mixture reaches 160 F when measured with a food thermometer.

Better yet, you can use liquid eggs or frozen egg substitutes. These products are pasteurized and are therefore safer to handle and can be used in recipes that will not be cooked.

Here are some USDA points if you're using fresh shell eggs in recipies:

• Homemade ice cream and eggnog are safe if you do one of the following:

• Use a cooked egg-milk mixture. Heat it gently and use a food thermometer to ensure that it reaches 160 F.
• Use pasteurized eggs or egg products.

• Dry meringue shells, divinity candy, and 7-minute frosting are safe these are made by combining hot sugar syrup with beaten egg whites. However, avoid icing recipes using uncooked eggs or egg whites.
• Meringue-topped pies should be safe if baked at 350 F for about 15 minutes. But avoid chiffon pies and fruit whips made with raw, beaten egg whites instead, substitute pasteurized dried egg whites, whipped cream, or a whipped topping.
• Adapting Recipes: If your recipe calls for uncooked eggs, make it safe by doing one of the following:

• Heating the eggs in one of the recipes other liquid ingredients over low heat, stirring constantly, until the mixture reaches 160 F. Then, combine it with the other ingredients and complete the recipe. Or use pasteurized eggs or egg products.
• Using pasteurized eggs or egg products.

Hillandale Farms Recall

Eggs affected by the Hillandale recall were distributed to grocery distribution centers, retail grocery stores and foodservice companies which service or are located in fourteen states, including the following: Arkansas, California, Iowa, Illinois, Indiana, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Texas, and Wisconsin.

Eggs are distributed under the following brand names: Hillandale Farms, Sunny Farms, and Sunny Meadow in 6-egg cartons, dozen-egg cartons, 18-egg cartons, 30-egg package, and 5-dozen cases. Loose eggs are packaged under the following brand names: Wholesome Farms and West Creek in 15 and 30-dozen tray packs. The loose eggs may also be repackaged by customers.

The only eggs effected by this recall have plant numbers P1860 or P1663 and Julian dates as follows:

P1860 Julian dates ranging from 099 to 230
P1663 Julian dates ranging from 137 to 230.

Only eggs with these plant numbers are affected - even though the brand name may be the same.

Julian dates and plant codes can be found stamped on the end of the egg carton or printed on the case label. The plant number begins with the letter P and then the number. The Julian date follows the plant number, for example: P1860 230.

Wright County Recall List

The Iowa egg producer behind the massive recall of 380 million eggs for possible Salmonella Enteritidis (SE) contamination has had its share of run-ins with state and federal regulators, mostly over labor, environmental and immigration policies.

The founder of Wright County Egg, a huge family agribusiness operation, pleaded guilty to federal immigration charges in 2003 and paid a record $2.1 million in penalties. The year before, the U.S. Equal Employment Opportunity Commission levied a nearly $1.5 million fine for sexual harassment and other abuse of female employees.

In early 2010 the owners paid a fine to settle state animal cruelty charges against their egg operations in Maine. Wright County Egg also is being sued for allegedly causing the salmonella poisoning of a Wisconsin woman, and a dozen more lawsuits linked to the outbreak are in the works, according to Bill Marler, a Seattle lawyer who specializes in food poisonings.

On his website, Marler suggests actual cases of Salmonella linked to bad eggs at nearly 50,000. He cites a statement late Thursday by the Centers for Disease Control that traceable cases may number over 1,200. Using the CDC's multiple of 38.5 unreported cases for every reported case, he comes up with 48,240 possible cases of the illness.

Food and Drug Administration inspectors have reportedly been at company farms since last week inspecting henhouses and testing eggs to determine the source of the contamination. The inspection was triggered by Wright County Egg's August 13 voluntary recall of shell eggs that it had shipped since May 19, 2010 to food wholesalers, distribution centers and foodservice companies in California, Illinois, Missouri, Colorado, Nebraska, Minnesota, Wisconsin and Iowa. These companies distribute nationwide.

Spike in illnesses

Since May 2010, CDC has identified a nationwide, four-fold increase in the number of SE isolates through PulseNet, the national subtyping network made up of state and local public health laboratories and federal food regulatory laboratories. CDC received reports of approximately 200 SE cases every week during late June and early July.

Normally, CDC has received an average of some 50 reports of SE illness each week for the past five years. Many states have also reported increases of this pattern since May 2010, CDC said.

Epidemiologic investigations conducted by public health officials in California, Colorado, and Minnesota have revealed several restaurants or events where more than one person ill with this type of SE has eaten. Preliminary information from these investigations suggests that shell eggs are the likely source of infections in many of these restaurants or events.

Traceback

FDA, CDC, and state partners conducted a traceback investigation and found many of these restaurants or events received shell eggs from a single firm, Wright County Egg, in Galt, Iowa. FDA said it is currently conducting an extensive investigation at the firm in Iowa. The investigation involves sampling, records review and looking for potential sources of contamination, such as feed.

The recalled shell eggs are packaged under the following brand names: Lucerne, Albertson, Mountain Dairy, Ralphs, Boomsmas, Sunshine, Hillandale, Trafficanda, Farm Fresh, Shoreland, Lund, Dutch Farms and Kemps.

State and local partners are also investigating human Salmonella infections in Arizona, Connecticut, Massachusetts, Maryland, North Carolina, Nevada, Oregon, Pennsylvania, Tennessee and Texas.

Four of the eight failed banks were in California.

The Illinois Department of Financial and Professional Regulation appointed the Federal Deposit Insurance Corporation (FDIC) as receiver for ShoreBank, established in 1973 to serve the city's South Side. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Urban Partnership Bank, Chicago, Illinois, a newly-chartered institution, to assume all of the deposits of ShoreBank.

• Sonoma Valley Bank, Sonoma, California; the bank has been taken over by Westamerica Bank, San Rafael, Calif. As of June 30, 2010, Sonoma Valley Bank had approximately $337.1 million in total assets and $255.5 million in total deposits.

• Los Padres Bank, Solvang, California. The bank has been acquired by Pacific Western Bank, San Diego, Calif. Los Padres Bank operated 14 branches. As of June 30, 2010, Los Padres Bank had approximately $870.4 million in total assets and $770.7 million in total deposits.

• Butte Community Bank, Chico, California, and Pacific State Bank, Stockton, California, closed by the California Department of Financial Institutions, which then appointed the Federal Deposit Insurance Corporation (FDIC) as receiver for the two banks. To protect depositors, the FDIC entered into purchase and assumption agreements with Rabobank, National Association, El Centro, California, to assume all the deposits and essentially all the assets of the two failed banks, which were not affiliated with one another. Collectively, the failed banks operated 23 branches. As of June 30, 2010, Butte Community Bank had total assets of $498.8 million and total deposits of $471.3 million; and Pacific State Bank had total assets of $312.1 million and total deposits of $278.8 million.

• Imperial Savings and Loan Association, Martinsville, Virginia. The bank, with only one location, was taken over by River Community Bank, N.A. As of June 30, 2010, Imperial Savings and Loan Association had approximately $9.4 million in total assets and $10.1 million in total deposits.

• Community National Bank, Bartow, Bartow, Florida, and Independent National Bank, Ocala, Florida. The two banks have been taken over by CenterState Bank of Florida, N.A. Collectively, the failed banks operated five branches. As of June 30, 2010, Community National Bank At Bartow had total assets of $67.9 million and total deposits of $63.7 million; and Independent National Bank had total assets of $156.2 million and total deposits of $141.9 million.

The cost to FDIC's Deposit Insurance Fund for this week's closings totaled $472.5 million. The largest portion of that was the $367.7 million required to close Chicago's ShoreBank.

But the J.D. Power and Associates 2010 U.S. Credit Card Satisfaction Study shows professed loyalty continues to slip due to continued skepticism that card issuers are focused on customers' best interests.

Overall credit card satisfaction in 2010 averaged 714 on a 1,000-point scale -- up nine points from 2009. However, customers who say they "definitely will not switch" primary cards in the next 12 months continues to decline, averaging 22 percent in 2010, compared with 25 percent in 2009 and 30 percent in 2008. While customers perceive card issuers as "financially stable" and even "reliable," they are significantly less likely to view them as "customer driven."

AMEX the leader

American Express ranked highest in customer satisfaction for a fourth consecutive year with a score of 769. Discover Card was second with a score of 757 and U.S. Bank ranked third with a score of 727. The common denominators of performance among the highest-ranked issuers are exceptional rewards and benefits offerings; superior service experiences across phone and online channels; and a focus on reducing problems and resolving those that do occur with minimum time and effort for customers.

Obviously, not everyone gives these companies high marks.

"I am just fed up with the poor service form American Express Rewards," Jirina of New York, tells ConsumerAffairs.com. "I pay my bill in full every month, but sometimes the payment doesn't get there on the day the Rewards service uses as a cut off. Each time I forfeit my points. I think it is super poor service."

Dawn of Chandler, AZ, thinks Discover Card "manipulates various means" to silently collect fees and interest payments. "I contacted Discover card as early as February, 2009 to request that they changed my due date to the 28th of the month which was something that it had no problem to do as it stated. Instead, Discover quietly changed my due date to the 26th and never bother to let me know that it could not accommodate my request or what it did."

Continued skepticism

"Despite massive efforts by the credit card industry during the past year to educate customers about credit card terms as a part of the CARD Act, customers' grasp of those terms continues to be elusive," said Michael Beird, director of banking services at J.D. Power and Associates. "Sixteen percent of card customers report that they did not receive CARD Act disclosures. Among those who did, only two-thirds state that the disclosures improved their understanding of how the act affects their individual circumstances. Furthermore, only one-third of cardholders say they 'completely' understand their credit card terms."

According to the J.D. Power Web Intelligence Division, online consumer conversations about credit cards indicate that many consumers perceive their relationships with credit card companies as an ongoing game of "cat and mouse," with each side trying to outsmart the other. Social media discussions regarding credit cards also indicate that many consumers view even CARD Act disclosures with cynicism.

Measuring satisfaction

The study, now in its fourth year, measures customer satisfaction with credit cards by examining six key factors: interaction; credit card terms; billing and payment process; benefits and services; rewards; and problem resolution.

The increase in overall satisfaction from 2009 is driven primarily by improvements in credit card terms and billing and payment process. The largest increase in satisfaction with credit card terms is among revolvers, or customers who typically carry account balances from month to month. In contrast, satisfaction among transactors, or customers who always or usually pay their entire credit card balance each month, has declined slightly, compared with 2009.

"It appears that revolvers are expressing a perception that 'it could have been worse,'" said Beird. "Although 29 percent of revolvers report experiencing a rate increase in 2010, compared with 24 percent in 2009, the increase was less obvious than among transactors -- 21 percent of transactors report a rate increase in 2010, compared with just 13 percent in 2009. In addition, revolvers, who tend to be more sensitive to fees and rates, are significantly more likely to say that CARD Act disclosures improved their understanding of their credit card terms."

By Mark Huffman
ConsumerAffairs.Com

August 20, 2010

The Iowa egg producer behind the massive recall of 380 million eggs for possible Salmonella Enteritidis (SE) contamination has had its share of run-ins with state and federal regulators, mostly over labor, environmental and immigration policies.

The founder of Wright County Egg, a huge family agribusiness operation, pleaded guilty to federal immigration charges in 2003 and paid a record $2.1 million in penalties. The year before, the U.S. Equal Employment Opportunity Commission levied a nearly $1.5 million fine for sexual harassment and other abuse of female employees.

In early 2010 the owners paid a fine to settle state animal cruelty charges against their egg operations in Maine. Wright County Egg also is being sued for allegedly causing the salmonella poisoning of a Wisconsin woman, and a dozen more lawsuits linked to the outbreak are in the works, according to Bill Marler, a Seattle lawyer who specializes in food poisonings.

On his website, Marler suggests actual cases of Salmonella linked to bad eggs at nearly 50,000. He cites a statement late Thursday by the Centers for Disease Control that traceable cases may number over 1,200. Using the CDC's multiple of 38.5 unreported cases for every reported case, he comes up with 48,240 possible cases of the illness.

Food and Drug Administration inspectors have reportedly been at company farms since last week inspecting henhouses and testing eggs to determine the source of the contamination. The inspection was triggered by Wright County Egg's August 13 voluntary recall of shell eggs that it had shipped since May 19, 2010 to food wholesalers, distribution centers and foodservice companies in California, Illinois, Missouri, Colorado, Nebraska, Minnesota, Wisconsin and Iowa. These companies distribute nationwide.

Spike in illnesses

Since May 2010, CDC has identified a nationwide, four-fold increase in the number of SE isolates through PulseNet, the national subtyping network made up of state and local public health laboratories and federal food regulatory laboratories. CDC received reports of approximately 200 SE cases every week during late June and early July.

Normally, CDC has received an average of some 50 reports of SE illness each week for the past five years. Many states have also reported increases of this pattern since May 2010, CDC said.

Epidemiologic investigations conducted by public health officials in California, Colorado, and Minnesota have revealed several restaurants or events where more than one person ill with this type of SE has eaten. Preliminary information from these investigations suggests that shell eggs are the likely source of infections in many of these restaurants or events.

Traceback

FDA, CDC, and state partners conducted a traceback investigation and found many of these restaurants or events received shell eggs from a single firm, Wright County Egg, in Galt, Iowa. FDA said it is currently conducting an extensive investigation at the firm in Iowa. The investigation involves sampling, records review and looking for potential sources of contamination, such as feed.

The recalled shell eggs are packaged under the following brand names: Lucerne, Albertson, Mountain Dairy, Ralphs, Boomsmas, Sunshine, Hillandale, Trafficanda, Farm Fresh, Shoreland, Lund, Dutch Farms and Kemps.

State and local partners are also investigating human Salmonella infections in Arizona, Connecticut, Massachusetts, Maryland, North Carolina, Nevada, Oregon, Pennsylvania, Tennessee and Texas.

Maryland has begun paying restitution to nursing homes and their residents in satisfaction of a lawsuit alleging that the state wrongly determined that certain patients could foot their own bills.

The lawsuit, filed in August 2005, alleged that the state's Department of Health and Mental Hygiene erroneously concluded that nursing home residents could afford co-payments for their care. That determination failed to take into account the debt that patients accrued while waiting to be approved for Medicaid coverage, according to the suit. Federal and state law requires states to consider patients' debt when calculating their income.

The payments, which will total $16 million, make the settlement the second largest in Maryland history among those where the state is the defendant, according to the plaintiffs' attorneys. Maryland will provide $8 million of the settlement funds, with the federal government paying the other half. The lawyers originally contended that the state owed $64 million for incorrect calculations made since 2002.

A similar suit filed against Washington, D.C. was also settled, with the city agreeing to to abide by the law in the future. The plaintiffs in that suit were not awarded damages.

Settlement could serve as model for other states

This is a great day for Maryland and Washington, DC citizens who need nursing home care but can't afford to pay for it, as well as the nursing homes who have provided that care for years without payment, Cy Smith, an attorney for the plaintiffs, said in a statement. We have succeeded in bringing Maryland and the District into compliance with federal law for the benefit of their neediest citizens, both now and for the future.

Smith told The Baltimore Sun that his firm is starting to send checks to nursing homes now. He said the suit wipes out a lot of debt for the class.

Ron Landsman, co-counsel on the case, said that the settlement ends three decades in which Maryland shirked its obligations under the Medicaid statute.

The state similarly expressed satisfaction with the outcome.

We think that things are pretty well resolved, John Folkemer, Maryland's deputy secretary for health-care financing, told The Washington Post. When someone is in a nursing home not only do you have to recognize what their obligations are, you have to recognize some of the debts they owe.

The class includes 12,000 nursing home residents and over 300 nursing facilities.

The settlement could serve as precedent for other states that fail to take patients' old debt into account when determining their Medicaid eligibility.

Consumers can obtain information at the official settlement website

.