Dietary Supplement Ad Creator Settles FTC Charges, Now Required to Post a Million Dollar Performance Bond
The creator of allegedly false and misleading advertising for Gero Vita International’s dietary supplements has settled Federal Trade Commission charges. Chase Revel is required to post a $1 million performance bond before advertising, marketing, or selling any food, drug, dietary supplement, device, or health-related service. As part of the settlement, he also will pay $27,500 for consumer redress.
“Consumers have a right to expect the ads they read to be truthful,” said Lydia Parnes, director of the FTC’s Bureau of Consumer Protection. “Anyone who cooks up false or misleading claims in an ad -- from those who write them to those who sell the product -- will be held accountable.”
In its complaint, the FTC alleged that seven corporations, A. Glenn Braswell, Revel, and three other individuals deceptively marketed five of their dietary supplements, mostly through direct mail advertising, including The Journal of Longevity, a direct mail ad that purported to be a health-information magazine.
The challenged products included: “Lung Support Formula,” a dietary supplement that purportedly cured nearly all breathing and respiratory problems, including asthma, emphysema, and smoking-related damage; “Antibetic Pancreas Tonic,” an herbal supplement that purportedly treated or cured both Type I and Type II diabetes; “G.H.3,” also known as “Theraceuticals GH3 Romanian Youth Formula,” marketed as an anti-aging product that could reverse and prevent Alzheimer’s disease and other forms of dementia; “Chitoplex,” a chitosan-based weight-loss product that purportedly enabled users to lose weight without diet or exercise; and “Testerex,” a yohimbe product touted as effective in treating 62 to 95 percent of cases of impotence and erectile dysfunction.
According to the complaint, Revel created misleading ads for Lung Support, Antibetic, and G.H.3., as well as ads for other products the defendants made that were not named in the complaint. He is the final defendant to settle the FTC’s charges.
As part of the settlement, Revel is prohibited from making false, misleading, or unsubstantiated efficacy or safety claims for any food, drug, dietary supplement, device, or health-related service. He also is prohibited from using misleading ad formats (including phony magazines), misleading or unsubstantiated expert endorsements, and misleading scientific evidence. Before he can advertise, market, offer for sale, sell, or distribute a food, drug, dietary supplement, device, or health-related service for human use or consumption, he must first obtain a $1 million performance bond, or irrevocable letter of credit, or put the full amount into an escrow account supervised by an approved escrow agent.
Revel will pay $27,500 for consumer redress. If it is found that he misrepresented his financial status, he will be responsible for the full judgment amount of $1 million. Revel also is the subject of a 1994 stipulated order with the FTC involving the advertising and marketing of pinhole eyeglasses.
The Commission vote to authorize staff to file the stipulated final order was 5-0. The stipulated final order for permanent injunction was filed in the U.S. District Court for the Central District of California on January 23, 2006.
NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.
Monday, January 30, 2006
Friday, January 27, 2006
Wal-Mart's Dream Tower Heater Fan Recalled
The Consumer Product Safety Commission, in conjunction with Wal-Mart, recalled approximately 75,000 oscillating heaters known as Maxi-Heat™ Dream Tower Heaters.
The government agency said that the wires inside the oscillating heater can short circuit and spark, posing a fire hazard to consumers. The manufacturer had reported more than cases of short circuits, but no injuries.
The recalled model is CH920. The ceramic portable electric heaters are the oscillating tower type. They are grey and have a control panel attached to the top of the unit. “Maxi-Heat™” is printed on the control panel. The model number is printed on the ETL label on the bottom of the back side of the unit.
These units were sold at Wal-Mart stores between August 2005 and December 2005 for $40. Consumers should immediately stop using the appliance and call King of Fans toll-free at (866) 443-1291 between 7 a.m. and 7 p.m. E.T., Monday through Friday.
The Consumer Product Safety Commission, in conjunction with Wal-Mart, recalled approximately 75,000 oscillating heaters known as Maxi-Heat™ Dream Tower Heaters.
The government agency said that the wires inside the oscillating heater can short circuit and spark, posing a fire hazard to consumers. The manufacturer had reported more than cases of short circuits, but no injuries.
The recalled model is CH920. The ceramic portable electric heaters are the oscillating tower type. They are grey and have a control panel attached to the top of the unit. “Maxi-Heat™” is printed on the control panel. The model number is printed on the ETL label on the bottom of the back side of the unit.
These units were sold at Wal-Mart stores between August 2005 and December 2005 for $40. Consumers should immediately stop using the appliance and call King of Fans toll-free at (866) 443-1291 between 7 a.m. and 7 p.m. E.T., Monday through Friday.
One Year Later, ChoicePoint Writes A Check
After a serious data breach last year that prompted U.S. Senate scrutiny and international media attention, data broker ChoicePoint has settled charges with the U.S. Federal Trade Commision, resulting in a hit to earnings for the publicly traded company.
According to the FTC, ChoicePoint acknowledged that the personal financial records of more than 163,000 consumers in its database had been compromised and will pay $10 million in civil penalties and $5 million in consumer redress to settle Federal Trade Commission charges that its security and record-handling procedures violated consumers’ privacy rights and federal laws. The settlement requires ChoicePoint to implement new procedures to ensure that it provides consumer reports only to legitimate businesses for lawful purposes, to establish and maintain a comprehensive information security program, and to obtain audits by an independent third-party security professional every other year until 2026.
“The message to ChoicePoint and others should be clear: Consumers’ private data must be protected from thieves,” said Deborah Platt Majoras, Chairman of the FTC. “Data security is critical to consumers, and protecting it is a priority for the FTC, as it should be to every business in America.”
ChoicePoint is a publicly traded company based in suburban Atlanta. It obtains and sells to more than 50,000 businesses the personal information of consumers, including their names, Social Security numbers, birth dates, employment information, and credit histories.
The FTC alleges that ChoicePoint did not have reasonable procedures to screen prospective subscribers, and turned over consumers’ sensitive personal information to subscribers whose applications raised obvious “red flags.” Indeed, the FTC alleges that ChoicePoint approved as customers individuals who lied about their credentials and used commercial mail drops as business addresses. In addition, ChoicePoint applicants reportedly used fax machines at public commercial locations to send multiple applications for purportedly separate companies.
According to the FTC, ChoicePoint failed to tighten its application approval procedures or monitor subscribers even after receiving subpoenas from law enforcement authorities alerting it to fraudulent activity going back to 2001.
The FTC charged that ChoicePoint violated the Fair Credit Reporting Act (FCRA) by furnishing consumer reports – credit histories – to subscribers who did not have a permissible purpose to obtain them, and by failing to maintain reasonable procedures to verify both their identities and how they intended to use the information.
The agency also charged that ChoicePoint violated the FTC Act by making false and misleading statements about its privacy policies. Choicepoint had publicized privacy principles that address the confidentiality and security of personal information it collects and maintains with statements such as, “ChoicePoint allows access to your consumer reports only by those authorized under the FCRA . . . ” and “Every ChoicePoint customer must successfully complete a rigorous credentialing process. ChoicePoint does not distribute information to the general public and monitors the use of its public record information to ensure appropriate use.”
The stipulated final judgment and order requires ChoicePoint to pay $10 million in civil penalties – the largest civil penalty in FTC history – and to provide $5 million for consumer redress. It bars the company from furnishing consumer reports to people who do not have a permissible purpose to receive them and requires the company to establish and maintain reasonable procedures to ensure that consumer reports are provided only to those with a permissible purpose. ChoicePoint is required to verify the identity of businesses that apply to receive consumer reports, including making site visits to certain business premises and auditing subscribers’ use of consumer reports.
The order requires ChoicePoint to establish, implement, and maintain a comprehensive information security program designed to protect the security, confidentiality, and integrity of the personal information it collects from or about consumers. It also requires ChoicePoint to obtain, every two years for the next 20 years, an audit from a qualified, independent, third-party professional to ensure that its security program meets the standards of the order. ChoicePoint will be subject to standard record-keeping and reporting provisions to allow the FTC to monitor compliance. Finally, the settlement bars future violations of the FCRA and the FTC Act.
After a serious data breach last year that prompted U.S. Senate scrutiny and international media attention, data broker ChoicePoint has settled charges with the U.S. Federal Trade Commision, resulting in a hit to earnings for the publicly traded company.
According to the FTC, ChoicePoint acknowledged that the personal financial records of more than 163,000 consumers in its database had been compromised and will pay $10 million in civil penalties and $5 million in consumer redress to settle Federal Trade Commission charges that its security and record-handling procedures violated consumers’ privacy rights and federal laws. The settlement requires ChoicePoint to implement new procedures to ensure that it provides consumer reports only to legitimate businesses for lawful purposes, to establish and maintain a comprehensive information security program, and to obtain audits by an independent third-party security professional every other year until 2026.
“The message to ChoicePoint and others should be clear: Consumers’ private data must be protected from thieves,” said Deborah Platt Majoras, Chairman of the FTC. “Data security is critical to consumers, and protecting it is a priority for the FTC, as it should be to every business in America.”
ChoicePoint is a publicly traded company based in suburban Atlanta. It obtains and sells to more than 50,000 businesses the personal information of consumers, including their names, Social Security numbers, birth dates, employment information, and credit histories.
The FTC alleges that ChoicePoint did not have reasonable procedures to screen prospective subscribers, and turned over consumers’ sensitive personal information to subscribers whose applications raised obvious “red flags.” Indeed, the FTC alleges that ChoicePoint approved as customers individuals who lied about their credentials and used commercial mail drops as business addresses. In addition, ChoicePoint applicants reportedly used fax machines at public commercial locations to send multiple applications for purportedly separate companies.
According to the FTC, ChoicePoint failed to tighten its application approval procedures or monitor subscribers even after receiving subpoenas from law enforcement authorities alerting it to fraudulent activity going back to 2001.
The FTC charged that ChoicePoint violated the Fair Credit Reporting Act (FCRA) by furnishing consumer reports – credit histories – to subscribers who did not have a permissible purpose to obtain them, and by failing to maintain reasonable procedures to verify both their identities and how they intended to use the information.
The agency also charged that ChoicePoint violated the FTC Act by making false and misleading statements about its privacy policies. Choicepoint had publicized privacy principles that address the confidentiality and security of personal information it collects and maintains with statements such as, “ChoicePoint allows access to your consumer reports only by those authorized under the FCRA . . . ” and “Every ChoicePoint customer must successfully complete a rigorous credentialing process. ChoicePoint does not distribute information to the general public and monitors the use of its public record information to ensure appropriate use.”
The stipulated final judgment and order requires ChoicePoint to pay $10 million in civil penalties – the largest civil penalty in FTC history – and to provide $5 million for consumer redress. It bars the company from furnishing consumer reports to people who do not have a permissible purpose to receive them and requires the company to establish and maintain reasonable procedures to ensure that consumer reports are provided only to those with a permissible purpose. ChoicePoint is required to verify the identity of businesses that apply to receive consumer reports, including making site visits to certain business premises and auditing subscribers’ use of consumer reports.
The order requires ChoicePoint to establish, implement, and maintain a comprehensive information security program designed to protect the security, confidentiality, and integrity of the personal information it collects from or about consumers. It also requires ChoicePoint to obtain, every two years for the next 20 years, an audit from a qualified, independent, third-party professional to ensure that its security program meets the standards of the order. ChoicePoint will be subject to standard record-keeping and reporting provisions to allow the FTC to monitor compliance. Finally, the settlement bars future violations of the FCRA and the FTC Act.
Thursday, January 26, 2006
FDIC Debuts Online Video About Identity Theft
The Federal Deposit Insurance Corporation (FDIC) has released an on-line multimedia education tool that consumers can use to learn how to better protect their computers and themselves from identity thieves. The presentation also features actions consumers can take if their personal information has been compromised.
Identity theft continues to be one of the fastest growing crimes in the United States, and has ranked as one of the top consumer concerns for the past several years. Identity theft is evolving in more complicated ways that make it harder for consumers to protect themselves, and easier for criminals to set up virtual storefronts on the Internet to sell confidential personal information.
Some of the steps outlined in the presentation that consumers can take to help safeguard their computers and their personal information from identity theft are:
The Federal Deposit Insurance Corporation (FDIC) has released an on-line multimedia education tool that consumers can use to learn how to better protect their computers and themselves from identity thieves. The presentation also features actions consumers can take if their personal information has been compromised.
Identity theft continues to be one of the fastest growing crimes in the United States, and has ranked as one of the top consumer concerns for the past several years. Identity theft is evolving in more complicated ways that make it harder for consumers to protect themselves, and easier for criminals to set up virtual storefronts on the Internet to sell confidential personal information.
Some of the steps outlined in the presentation that consumers can take to help safeguard their computers and their personal information from identity theft are:
- never provide personal information in response to an unsolicited telephone or Internet request
- never provide a password over the phone or in response to an unsolicited Internet request
- review account statements regularly to ensure all charges and transactions are correct
- use a firewall and anti-virus and spyware protection software.
- contact the fraud department at one of the three major credit bureaus and ask that a fraud alert be placed in their file at all three companies
- review their credit reports periodically and carefully and look for inconsistencies or red flags such as accounts they didn't open
- debts they can't explain or inquiries from companies they haven't contacted, contact the companies where the fraudulent activity occurred, and follow up any telephone calls in writing
- file a police report with local police or the police department in the community where the crime took place and keep a copy of the report
- file a complaint with the Federal Trade Commission.
Wednesday, January 25, 2006
Advocates Threaten Viacom and Kelloggs Over Junk Food Ads
Parents and advocacy groups last week announced their intent to file suit against Viacom and Kellogg to stop them from marketing junk food to young children. The plaintiffs contend that these two companies are directly harming kids’ health since the overwhelming majority of food products they market to children are high in sugar, saturated and trans fat, or salt, or almost devoid of nutrients. They will ask a Massachusetts court to enjoin the companies from marketing junk foods to audiences where 15 percent or more of the audience is under age eight, and to cease marketing junk foods through web sites, toy giveaways, contests, and other techniques aimed at that age group.
The plaintiffs are the Center for Science in the Public Interest (CSPI), the Boston-basedCampaign for a Commercial-Free Childhood, and two Massachusetts parents, Sherri Carlson ofWakefield and Andrew Leong of Brookline. Their announcement comes six weeks after a landmarkreport from the Institute of Medicine concluded that food advertising aimed at kids gets them to prefer— and request—foods high in calories and low in nutrients.
“Nickelodeon and Kellogg engage in business practices that literally sicken our children,” saidCSPI executive director Michael F. Jacobson. “Their marketing tactics are designed to convince kids that everything they hear from their parents about food is wrong. It’s a multimedia brainwashing and reeducation campaign—and a disease-promoting one at that. And parents are fed up.”
Massachusetts’ consumer protection law requires 30 days’ notice of such a lawsuit, which theplaintiffs served on the defendants today. “As a parent, I do my best to get my kids to eat healthy foods,” said Sherri Carlson, a plaintiff and mother of three. “But then they turn on Nickelodeon and see all those enticing junk-food ads. Adding insult to injury, we enter the grocery store and see our beloved Nick characters plastered on all those junky snacks and cereals. This irresponsible marketing to young children undermines my efforts as a parent and must be stopped.”
This past fall, CSPI analyzed food advertising on Nickelodeon’s televised programming and inNickelodeon magazine and marketing on food packaging that bears Nickelodeon characters. CSPI also analyzed Kellogg’s Saturday-morning television advertisements, ads in kid-targeted magazines, onpackage marketing, and other media. Nickelodeon’s programming is aimed at kids aged 2 to 11, according to company documents, and the Nick Jr. block of programming is aimed at kids aged 2 to 5. Of 168 ads for food that appeared on Nickelodeon during CSPI’s review, 88 percent were for foods of poor nutritional quality. The September and October issues of Nickelodeon magazine contained seven full-page food ads, all of which were for junk foods. Of 15 foods bearing Nickelodeon characters at a Washington, DC, supermarket, 60 percent were junk foods, including Fairly Odd Parents Orange & Creme Miniatures Kit Kat bars and SpongeBob SquarePants Wild Bubble Berry Pop-Tarts.
CSPI also reviewed 27.5 hours of Saturday-morning programming to analyze Kelloggmarketing. CSPI found 54 Kellogg ads, 98 percent of which were for nutritionally poor foods. (Another Kellogg ad, for Apple Jacks cereal, had previously come under fire from CSPI for disparaging apples, of all things.) Of 80 Kellogg foods found in the supermarket with kid-friendly on-package marketing, 84 percent were for nutritionally poor foods. CSPI found 21 kid-friendly web sites for Kellogg products, all of which highlighted junk foods. And of 92 child-oriented branded items Kellogg had for sale on the web, 82 percent had a logo or mascot from a junk-food brand.
“The thrust of Nickelodeon’s and Kellogg’s likely defense will be to blame parents, since, after all, parents ultimately are responsible for their kids’ diets,” said CSPI litigation director Steve Gardner, lead counsel for the plaintiffs. “But then again, Kellogg and Nick aren’t directing their marketing messages at parents; they’re going right behind parents’ backs. Parents are ultimately responsible for making sure their young kids don’t get hit by cars. But if someone’s recklessly driving around your neighborhood at 80 miles an hour, you’re going to want to stop them.”
In 1977 CSPI and Action for Children’s Television first petitioned the Federal TradeCommission (FTC) to curb junk-food advertising aimed at children. The commission staff beganproposing remedies, including one that would have banned all advertising to children, since it found that any ads aimed at young children were inherently unfair and deceptive. Broadcasters, food makers, and other companies quickly prevailed upon their congressional allies to quash the FTC’s nascent effort.
Now, a self-regulatory body, the Children’s Advertising Review Unit (CARU), sets voluntary technical guidelines for advertising to kids and adjudicates disputes. One former broadcasting executive, Lisa Flythe, who served as director of commercial clearances for MTV Networks and vetted ads on Nickelodeon, says CARU lacks teeth. “There are no real penalties for running afoul of CARU’s guidelines, and most of their guidelines are very general,” said Flythe. “Besides, CARU does not arbitrate what foods are appropriate to market to children."One company, Kraft, has set nutritional guidelines for the foods it markets to children, and doesnot advertise to children under six.
Although Nickelodeon has engaged in public relations activities on the issue of childhood nutrition, notably a promise to make SpongeBob and other characters available to marketers of some healthful foods, it hasn’t set minimum nutrition thresholds for the foods its characters plug or that run on its station. Certainly most of the Kellogg’s products that feature SpongeBob are of poor nutritional quality.
“For over thirty years, public health advocates have urged companies to stop marketing junkfood to children,” said Susan Linn, co-founder of the Campaign for a Commercial-Free Childhood.“Even as rates of childhood obesity have soared, neither Viacom nor Kellogg has listened. We can no longer stand by as our children’s health is sacrificed for corporate profits.”
The Massachusetts statute the plaintiffs are suing under provides for damages of $25 perviolation of unfair or deceptive advertising. In this case, a violation would be occur each time that aMassachusetts child sees an ad for a junk food on Nickelodeon, sees a Kellogg junk-food ad on that or another network, or sees Kellogg junk-food packaging that bears SpongeBob SquarePants, Dora the Explorer, or other cartoon characters. If the companies go to trial and are found liable, the verdict could be in the billions of dollars, but CSPI’s attorneys say the plaintiffs would settle for a commitment from the companies to change their marketing practices.
“In any other sphere of American life it would be considered creepy and predatory for adults topropose commercial transactions to toddlers and young children,” said Jacobson. “Yet companies like Kellogg, Nickelodeon, and others have been doing it with impunity, and government has done nothing for decades. This litigation is truly a last resort—and vitally important to children’s health.”
Parents and advocacy groups last week announced their intent to file suit against Viacom and Kellogg to stop them from marketing junk food to young children. The plaintiffs contend that these two companies are directly harming kids’ health since the overwhelming majority of food products they market to children are high in sugar, saturated and trans fat, or salt, or almost devoid of nutrients. They will ask a Massachusetts court to enjoin the companies from marketing junk foods to audiences where 15 percent or more of the audience is under age eight, and to cease marketing junk foods through web sites, toy giveaways, contests, and other techniques aimed at that age group.
The plaintiffs are the Center for Science in the Public Interest (CSPI), the Boston-basedCampaign for a Commercial-Free Childhood, and two Massachusetts parents, Sherri Carlson ofWakefield and Andrew Leong of Brookline. Their announcement comes six weeks after a landmarkreport from the Institute of Medicine concluded that food advertising aimed at kids gets them to prefer— and request—foods high in calories and low in nutrients.
“Nickelodeon and Kellogg engage in business practices that literally sicken our children,” saidCSPI executive director Michael F. Jacobson. “Their marketing tactics are designed to convince kids that everything they hear from their parents about food is wrong. It’s a multimedia brainwashing and reeducation campaign—and a disease-promoting one at that. And parents are fed up.”
Massachusetts’ consumer protection law requires 30 days’ notice of such a lawsuit, which theplaintiffs served on the defendants today. “As a parent, I do my best to get my kids to eat healthy foods,” said Sherri Carlson, a plaintiff and mother of three. “But then they turn on Nickelodeon and see all those enticing junk-food ads. Adding insult to injury, we enter the grocery store and see our beloved Nick characters plastered on all those junky snacks and cereals. This irresponsible marketing to young children undermines my efforts as a parent and must be stopped.”
This past fall, CSPI analyzed food advertising on Nickelodeon’s televised programming and inNickelodeon magazine and marketing on food packaging that bears Nickelodeon characters. CSPI also analyzed Kellogg’s Saturday-morning television advertisements, ads in kid-targeted magazines, onpackage marketing, and other media. Nickelodeon’s programming is aimed at kids aged 2 to 11, according to company documents, and the Nick Jr. block of programming is aimed at kids aged 2 to 5. Of 168 ads for food that appeared on Nickelodeon during CSPI’s review, 88 percent were for foods of poor nutritional quality. The September and October issues of Nickelodeon magazine contained seven full-page food ads, all of which were for junk foods. Of 15 foods bearing Nickelodeon characters at a Washington, DC, supermarket, 60 percent were junk foods, including Fairly Odd Parents Orange & Creme Miniatures Kit Kat bars and SpongeBob SquarePants Wild Bubble Berry Pop-Tarts.
CSPI also reviewed 27.5 hours of Saturday-morning programming to analyze Kelloggmarketing. CSPI found 54 Kellogg ads, 98 percent of which were for nutritionally poor foods. (Another Kellogg ad, for Apple Jacks cereal, had previously come under fire from CSPI for disparaging apples, of all things.) Of 80 Kellogg foods found in the supermarket with kid-friendly on-package marketing, 84 percent were for nutritionally poor foods. CSPI found 21 kid-friendly web sites for Kellogg products, all of which highlighted junk foods. And of 92 child-oriented branded items Kellogg had for sale on the web, 82 percent had a logo or mascot from a junk-food brand.
“The thrust of Nickelodeon’s and Kellogg’s likely defense will be to blame parents, since, after all, parents ultimately are responsible for their kids’ diets,” said CSPI litigation director Steve Gardner, lead counsel for the plaintiffs. “But then again, Kellogg and Nick aren’t directing their marketing messages at parents; they’re going right behind parents’ backs. Parents are ultimately responsible for making sure their young kids don’t get hit by cars. But if someone’s recklessly driving around your neighborhood at 80 miles an hour, you’re going to want to stop them.”
In 1977 CSPI and Action for Children’s Television first petitioned the Federal TradeCommission (FTC) to curb junk-food advertising aimed at children. The commission staff beganproposing remedies, including one that would have banned all advertising to children, since it found that any ads aimed at young children were inherently unfair and deceptive. Broadcasters, food makers, and other companies quickly prevailed upon their congressional allies to quash the FTC’s nascent effort.
Now, a self-regulatory body, the Children’s Advertising Review Unit (CARU), sets voluntary technical guidelines for advertising to kids and adjudicates disputes. One former broadcasting executive, Lisa Flythe, who served as director of commercial clearances for MTV Networks and vetted ads on Nickelodeon, says CARU lacks teeth. “There are no real penalties for running afoul of CARU’s guidelines, and most of their guidelines are very general,” said Flythe. “Besides, CARU does not arbitrate what foods are appropriate to market to children."One company, Kraft, has set nutritional guidelines for the foods it markets to children, and doesnot advertise to children under six.
Although Nickelodeon has engaged in public relations activities on the issue of childhood nutrition, notably a promise to make SpongeBob and other characters available to marketers of some healthful foods, it hasn’t set minimum nutrition thresholds for the foods its characters plug or that run on its station. Certainly most of the Kellogg’s products that feature SpongeBob are of poor nutritional quality.
“For over thirty years, public health advocates have urged companies to stop marketing junkfood to children,” said Susan Linn, co-founder of the Campaign for a Commercial-Free Childhood.“Even as rates of childhood obesity have soared, neither Viacom nor Kellogg has listened. We can no longer stand by as our children’s health is sacrificed for corporate profits.”
The Massachusetts statute the plaintiffs are suing under provides for damages of $25 perviolation of unfair or deceptive advertising. In this case, a violation would be occur each time that aMassachusetts child sees an ad for a junk food on Nickelodeon, sees a Kellogg junk-food ad on that or another network, or sees Kellogg junk-food packaging that bears SpongeBob SquarePants, Dora the Explorer, or other cartoon characters. If the companies go to trial and are found liable, the verdict could be in the billions of dollars, but CSPI’s attorneys say the plaintiffs would settle for a commitment from the companies to change their marketing practices.
“In any other sphere of American life it would be considered creepy and predatory for adults topropose commercial transactions to toddlers and young children,” said Jacobson. “Yet companies like Kellogg, Nickelodeon, and others have been doing it with impunity, and government has done nothing for decades. This litigation is truly a last resort—and vitally important to children’s health.”
Tuesday, January 24, 2006
T Mobile Wireless Cited As Top Company For Third Straight Time
Wireless users who have problems or issues with service need to contact their current provider more often than in the past in order to resolve the inquiry, according to the J.D. Power and Associates 2006 Wireless Customer Care Performance StudySM – Volume 1 released today.
The study, in its fourth year, now provides a detailed report card on a semi-annual basis of wireless provider customer care performance based on customer experiences with three point-of-contact methods: telephone with a service representative and/or automated response system (ARS); walk-in at a retail store; and online Internet connection. Within each contact method, processing issues such as problem resolution efficiency and hold-time duration are also measured.
The study finds that wireless customers contact their provider an average of 1.94 times by phone to resolve an issue or problem—the highest level since measurement began in 2000. Since that time, the average problem resolution frequency (PRF) rate has steadily climbed.
In 2000, the average PRF rate was 1.36—a yearly increase of 14 percent. The main factors contributing to this increase in resolution frequency are not only the rise of new wireless services and products that are available, but also the complexity of using those products. Now customers can capture still pictures or video, download ring tones, play MP3 files, and even watch TV clips. This, in turn, puts pressure on the carrier’s service representative to understand the issue or problem and try and get the inquiry resolved in a timely manner.
“As more wireless companies encourage customers to try new services, it’s becomes more difficult for the customer service representatives to be fully trained and kept apprised on the latest products being introduced. The downside is the carrier runs the risk of decreasing customer satisfaction and losing customers to other carriers,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates.
“Since future switching levels are three times as high among customers who need to re-contact the carrier two or more times to get the inquiry resolved, the challenge for wireless providers is to provide contact channels that can offer an informative and efficient experience for their customers.”
For the third consecutive reporting period, T-Mobile ranks highest among the five largest wireless service providers in creating a positive experience for customers who contact their providers for service or assistance. With an index score of 108, T-Mobile performs particularly well across all factors, especially among the contact channels of customer service representatives, ARS and walk-in retail experience. ALLTEL and Verizon Wireless follow T-Mobile in the rankings in a tie, performing significantly above the industry average (104).
The study also finds several key wireless customer care patterns:
More than one-half (52%) of wireless users have contacted the customer service department for assistance within the past year, a slight decrease from 2005 (54%).
Among those who contact their carriers, 71 percent do so via telephone and 25 percent through their carrier’s retail stores. E-mail/Internet contacts account for only 4 percent.
The average initial reported hold time on calls to the customer service department is 3.57 minutes—an increase from 3.44 in 2005. In comparison, it takes, on average, more than 9 minutes before speaking to a representative at a retail store.
More than four in 10 users (42%) contact their carrier with a service inquiry that is billing related, one-half of which are due to incorrect charges. An additional one-third of all customer care inquiries are call quality related.
The 2006 Wireless Customer Care Performance Study-Volume 1 is based on responses from more than 11,490 wireless users who contacted customer care within the past year. The results are from the past two reporting waves, conducted in July and October 2005. The 2006 Volume 2 report will be issued in July 2006.
Wireless users who have problems or issues with service need to contact their current provider more often than in the past in order to resolve the inquiry, according to the J.D. Power and Associates 2006 Wireless Customer Care Performance StudySM – Volume 1 released today.
The study, in its fourth year, now provides a detailed report card on a semi-annual basis of wireless provider customer care performance based on customer experiences with three point-of-contact methods: telephone with a service representative and/or automated response system (ARS); walk-in at a retail store; and online Internet connection. Within each contact method, processing issues such as problem resolution efficiency and hold-time duration are also measured.
The study finds that wireless customers contact their provider an average of 1.94 times by phone to resolve an issue or problem—the highest level since measurement began in 2000. Since that time, the average problem resolution frequency (PRF) rate has steadily climbed.
In 2000, the average PRF rate was 1.36—a yearly increase of 14 percent. The main factors contributing to this increase in resolution frequency are not only the rise of new wireless services and products that are available, but also the complexity of using those products. Now customers can capture still pictures or video, download ring tones, play MP3 files, and even watch TV clips. This, in turn, puts pressure on the carrier’s service representative to understand the issue or problem and try and get the inquiry resolved in a timely manner.
“As more wireless companies encourage customers to try new services, it’s becomes more difficult for the customer service representatives to be fully trained and kept apprised on the latest products being introduced. The downside is the carrier runs the risk of decreasing customer satisfaction and losing customers to other carriers,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates.
“Since future switching levels are three times as high among customers who need to re-contact the carrier two or more times to get the inquiry resolved, the challenge for wireless providers is to provide contact channels that can offer an informative and efficient experience for their customers.”
For the third consecutive reporting period, T-Mobile ranks highest among the five largest wireless service providers in creating a positive experience for customers who contact their providers for service or assistance. With an index score of 108, T-Mobile performs particularly well across all factors, especially among the contact channels of customer service representatives, ARS and walk-in retail experience. ALLTEL and Verizon Wireless follow T-Mobile in the rankings in a tie, performing significantly above the industry average (104).
The study also finds several key wireless customer care patterns:
More than one-half (52%) of wireless users have contacted the customer service department for assistance within the past year, a slight decrease from 2005 (54%).
Among those who contact their carriers, 71 percent do so via telephone and 25 percent through their carrier’s retail stores. E-mail/Internet contacts account for only 4 percent.
The average initial reported hold time on calls to the customer service department is 3.57 minutes—an increase from 3.44 in 2005. In comparison, it takes, on average, more than 9 minutes before speaking to a representative at a retail store.
More than four in 10 users (42%) contact their carrier with a service inquiry that is billing related, one-half of which are due to incorrect charges. An additional one-third of all customer care inquiries are call quality related.
The 2006 Wireless Customer Care Performance Study-Volume 1 is based on responses from more than 11,490 wireless users who contacted customer care within the past year. The results are from the past two reporting waves, conducted in July and October 2005. The 2006 Volume 2 report will be issued in July 2006.
Monday, January 23, 2006
Commercial Alert Launches Drug Ad Web Site
Today, Commercial Alert launched the website StopDrugAds.org (http://www.stopdrugads.org/), devoted to ending direct-to-consumer prescription drug advertising in the United States. The purpose of the website is to educate the public about the dangers of prescription drug advertising, and to mobilize thousands of Americans to voice their opposition to the ads.
The U.S. Food and Drug Administration is accepting public comment on DTC prescription drug advertising until February 28th. The stopdrugads.org website says that is not the proper role of drug executives to tell Americans what drugs to buy, and it encourages visitors to send comments to the FDA in opposition to DTC drug advertising.
“In effect, drug companies are practicing medicine without a license, and that should be illegal,” said Gary Ruskin, executive director of Commercial Alert. “We’ve got to halt prescription drug advertising before the next Vioxx tragedy happens.”
On October 27th, Commercial Alert released a statement from 211 professors from U.S. medical schools that “direct-to-consumer marketing of prescription drugs should be prohibited.” The statement’s endorsers include prominent medical school professors from Harvard, Johns Hopkins, University of Pennsylvania, Columbia, Stanford, Yale, Duke, University of California, San Francisco and other top medical schools, along with two former editors-in-chief of the New England Journal of Medicine.
The American public has little trust for the pharmaceutical industry, and believes it should be more closely regulated. According to a Harris Poll in November, only 9% of American adults believe that the pharmaceutical industry is “generally honest and trustworthy.” Fifty-one percent believe that the pharmaceutical industry “should be more regulated by the government.”
Today, Commercial Alert launched the website StopDrugAds.org (http://www.stopdrugads.org/), devoted to ending direct-to-consumer prescription drug advertising in the United States. The purpose of the website is to educate the public about the dangers of prescription drug advertising, and to mobilize thousands of Americans to voice their opposition to the ads.
The U.S. Food and Drug Administration is accepting public comment on DTC prescription drug advertising until February 28th. The stopdrugads.org website says that is not the proper role of drug executives to tell Americans what drugs to buy, and it encourages visitors to send comments to the FDA in opposition to DTC drug advertising.
“In effect, drug companies are practicing medicine without a license, and that should be illegal,” said Gary Ruskin, executive director of Commercial Alert. “We’ve got to halt prescription drug advertising before the next Vioxx tragedy happens.”
On October 27th, Commercial Alert released a statement from 211 professors from U.S. medical schools that “direct-to-consumer marketing of prescription drugs should be prohibited.” The statement’s endorsers include prominent medical school professors from Harvard, Johns Hopkins, University of Pennsylvania, Columbia, Stanford, Yale, Duke, University of California, San Francisco and other top medical schools, along with two former editors-in-chief of the New England Journal of Medicine.
The American public has little trust for the pharmaceutical industry, and believes it should be more closely regulated. According to a Harris Poll in November, only 9% of American adults believe that the pharmaceutical industry is “generally honest and trustworthy.” Fifty-one percent believe that the pharmaceutical industry “should be more regulated by the government.”
Saturday, January 21, 2006
FCC Probing Sale of Cell Phone Data
Reacting to reports that private wireless and wireline phone records, including phone numbers dialed, calls received, and even the location of wireless callers, are available for sale, Commissioner Michael J. Copps issued a statement this week.
“The reported abuses highlight the critical need to protect Americans’ personal and private information. Few rights are so fundamental as the right to privacy in our daily lives, yet few are under such constant attack. Americans deserve the security of knowing that their private phone records are not for sale," Copps said.
The Electronic Privacy Information Center (EPIC) filed a petition about this issue to the FCC in July 2005 with an update by letter in August. Commissioner Copps mentioned EPIC's petition in his own statement and said, "The FCC must ensure that it is doing everything it can to prevent illegal theft of Americans’ phone records."
Thursday, January 19, 2006
Musical Toy Chairs Recalled; Could Strangle Young Children
More than 600,000 "musical toy chairs" made by Fisher-Price have been recalled because a child can become lodged between the seatback and side table of the chair, possibly leading to their strangulation.
The recalled Laugh & Learn Musical Learning Chair is a plastic infant toy that measures about 17 inches high. It plays music and teaches children numbers and letters. It also features a blue chair with four green plastic legs and a side table with a purple base and white top. The table holds a clock, book, and a lamp. Smiley faces are displayed on the lamp and seat back. “Fisher-Price” is written on the front of the chair. The packaging states that the toy is intended for children 12 months through 36 months of age. The model numbers are H4609, H7167 through H7173, H8157, H8998, and J0272 through J0275 can be found on the underside of the seat of the chair.
The Consumer Product Safety Commission urges consumers to take the recalled musical chair away from children immediately and contact Fisher-Price toll-free at (866) 552-3914 anytime.
More than 600,000 "musical toy chairs" made by Fisher-Price have been recalled because a child can become lodged between the seatback and side table of the chair, possibly leading to their strangulation. The recalled Laugh & Learn Musical Learning Chair is a plastic infant toy that measures about 17 inches high. It plays music and teaches children numbers and letters. It also features a blue chair with four green plastic legs and a side table with a purple base and white top. The table holds a clock, book, and a lamp. Smiley faces are displayed on the lamp and seat back. “Fisher-Price” is written on the front of the chair. The packaging states that the toy is intended for children 12 months through 36 months of age. The model numbers are H4609, H7167 through H7173, H8157, H8998, and J0272 through J0275 can be found on the underside of the seat of the chair.
The Consumer Product Safety Commission urges consumers to take the recalled musical chair away from children immediately and contact Fisher-Price toll-free at (866) 552-3914 anytime.
January Is National Radon Month
January is Radon Action Month. Because families spend more time indoors during the winter months, January is a good time to test for this radioactive, invisible, and odorless gas.
According to EPA estimates, 21,000 lung cancer deaths every year are radon-related and about 2,900 of these deaths occur among people who have never smoked. Exposure to radon is the second leading cause of lung cancer in the U.S. and it is the number one cause of lung cancer among non-smokers.
Radon comes from the natural breakdown of uranium in soil, rock and water. It is harmless when dispersed into outdoor air. But when it becomes trapped inside buildings, it can be harmful at elevated levels. It typically moves up through the ground to the air in your home through cracks and other holes in the foundation. This means any home can have a radon problem, whether it is new or old, well-sealed or drafty, with or without basements.
Radon test kits are easy to use and inexpensive. They are available at any hardware store or home improvement center. For best results, EPA recommends that the radon test be conducted in the lowest livable level of the home, such as the basement, during the colder months of the year. Tests can also be taken during other times of the year if windows and doors have been closed for 12 hours prior to testing.
EPA recommends that houses with radon levels of four picocuries or more of radon should be vented to prevent accumulation of the gas indoors. A variety of methods can be used to reduce radon in homes. Sealing cracks and other openings in the foundation is a basic part of most approaches to radon reduction. EPA does not recommend the use of sealing alone to limit radon entry. Sealing alone has not been shown to lower radon levels significantly or consistently.
In most cases, a system with a vent pipe and fan is used to reduce radon. These “sub-slab depressurization” systems do not require major changes to your home. They prevent radon gas from entering the home from below the concrete floor and from outside the foundation.
The cost of making repairs depends on how your home was built and the extent of the radon problems. Most homes can be fixed for about the same cost as other common home repairs like painting or having a new hot water heater installed. The average price for a contractor ranges from $500 and $2,500.
To learn more about how to receive a discounted radon home test kit or for more information about radon, and how to contact your state radon office or call 1-800-SOS-Radon
January is Radon Action Month. Because families spend more time indoors during the winter months, January is a good time to test for this radioactive, invisible, and odorless gas.
According to EPA estimates, 21,000 lung cancer deaths every year are radon-related and about 2,900 of these deaths occur among people who have never smoked. Exposure to radon is the second leading cause of lung cancer in the U.S. and it is the number one cause of lung cancer among non-smokers.
Radon comes from the natural breakdown of uranium in soil, rock and water. It is harmless when dispersed into outdoor air. But when it becomes trapped inside buildings, it can be harmful at elevated levels. It typically moves up through the ground to the air in your home through cracks and other holes in the foundation. This means any home can have a radon problem, whether it is new or old, well-sealed or drafty, with or without basements.
Radon test kits are easy to use and inexpensive. They are available at any hardware store or home improvement center. For best results, EPA recommends that the radon test be conducted in the lowest livable level of the home, such as the basement, during the colder months of the year. Tests can also be taken during other times of the year if windows and doors have been closed for 12 hours prior to testing.
EPA recommends that houses with radon levels of four picocuries or more of radon should be vented to prevent accumulation of the gas indoors. A variety of methods can be used to reduce radon in homes. Sealing cracks and other openings in the foundation is a basic part of most approaches to radon reduction. EPA does not recommend the use of sealing alone to limit radon entry. Sealing alone has not been shown to lower radon levels significantly or consistently.
In most cases, a system with a vent pipe and fan is used to reduce radon. These “sub-slab depressurization” systems do not require major changes to your home. They prevent radon gas from entering the home from below the concrete floor and from outside the foundation.
The cost of making repairs depends on how your home was built and the extent of the radon problems. Most homes can be fixed for about the same cost as other common home repairs like painting or having a new hot water heater installed. The average price for a contractor ranges from $500 and $2,500.
To learn more about how to receive a discounted radon home test kit or for more information about radon, and how to contact your state radon office or call 1-800-SOS-Radon
Tuesday, January 17, 2006
E-Passports Testing In San Francisco
A live test of e-Passports, that contain contactless chips with biographic and biometric information and the readers that are capable of reading these e-Passports, begins January 15, 2006 at Terminal G at San Francisco International Airport (SFO). This test is a collaborative effort between the United States, Australia, New Zealand and Singapore that will run through April 15, 2006.
“This test provides an important opportunity to work with our international partners to further the Department of Homeland Security’s efforts to put in place an e-Passport reader solution by the fall of this year,” said Jim Williams, director of US VISIT, a Department of Homeland Security (DHS) program.
Participants include citizens of Australia and New Zealand who have been issued the new e-Passports, Singapore Airlines crew and officials holding trial e-Passports and U.S. diplomatic and official e-Passport holders.
The test will assess the operational impact of using new equipment and software to read and verify the information embedded in the e Passports. Participants will present their e-Passports when arriving in the United States at SFO, at Changi Airport in Singapore or at Sydney Airport in Australia.
The e-Passport contains the holder’s biographic information and a biometric identifier, in this case a digital photograph, embedded in a contactless chip set in the passport. The inspection process for those participating does not change.
The e-Passports being tested are enabled with a security feature known as Basic Access Control (BAC), which helps prevent the unauthorized reading, or “skimming,” of information from e Passports.
This is the second live test conducted between the United States, Australia and New Zealand. The goal of the live test is to gather information that can support countries around the world in their development and implementation of e-Passports that comply with International Civil Aviation Organization (ICAO) standards. It will also provide valuable information on the capability of the reader technology.
“The results of the previous test, held at Los Angeles International Airport (LAX) and Sydney Airport, indicated that further testing would be beneficial to our development of a fully operational system,” Williams said. “So we will conduct further testing to allow for the evaluation of new technologies.”
Biometrics included in a contactless chip provides a further means by which the identity of visitors may be verified, thus preventing entry by imposters and the use of fraudulent documents. Biometrics provide border officials with a critical tool in making admissibility decisions, thus enhancing homeland security.
A live test of e-Passports, that contain contactless chips with biographic and biometric information and the readers that are capable of reading these e-Passports, begins January 15, 2006 at Terminal G at San Francisco International Airport (SFO). This test is a collaborative effort between the United States, Australia, New Zealand and Singapore that will run through April 15, 2006.
“This test provides an important opportunity to work with our international partners to further the Department of Homeland Security’s efforts to put in place an e-Passport reader solution by the fall of this year,” said Jim Williams, director of US VISIT, a Department of Homeland Security (DHS) program.
Participants include citizens of Australia and New Zealand who have been issued the new e-Passports, Singapore Airlines crew and officials holding trial e-Passports and U.S. diplomatic and official e-Passport holders.
The test will assess the operational impact of using new equipment and software to read and verify the information embedded in the e Passports. Participants will present their e-Passports when arriving in the United States at SFO, at Changi Airport in Singapore or at Sydney Airport in Australia.
The e-Passport contains the holder’s biographic information and a biometric identifier, in this case a digital photograph, embedded in a contactless chip set in the passport. The inspection process for those participating does not change.
The e-Passports being tested are enabled with a security feature known as Basic Access Control (BAC), which helps prevent the unauthorized reading, or “skimming,” of information from e Passports.
This is the second live test conducted between the United States, Australia and New Zealand. The goal of the live test is to gather information that can support countries around the world in their development and implementation of e-Passports that comply with International Civil Aviation Organization (ICAO) standards. It will also provide valuable information on the capability of the reader technology.
“The results of the previous test, held at Los Angeles International Airport (LAX) and Sydney Airport, indicated that further testing would be beneficial to our development of a fully operational system,” Williams said. “So we will conduct further testing to allow for the evaluation of new technologies.”
Biometrics included in a contactless chip provides a further means by which the identity of visitors may be verified, thus preventing entry by imposters and the use of fraudulent documents. Biometrics provide border officials with a critical tool in making admissibility decisions, thus enhancing homeland security.
Monday, January 16, 2006
AARP Head Criticizes Medicare Drug Plan
AARP CEO Bill Novelli issued the following statement on the Medicare prescription drug plan implementation:
Clearly, there are problems with the implementation of the new Medicare prescription drug plan. We take these problems very seriously.
The bottom line is that some people are not getting the drugs they need. This is unacceptable. If an individual has proof of eligibility, there is absolutely no reason they should pay more than required or leave a pharmacy empty-handed.
We must all do what it takes to solve the problem.
AARP is in constant contact with Medicare administrators, plan providers, pharmacies and others. Our own endorsed plan is working to resolve problems and improve customer experience. AARP is also working to inform members and the public to bring any and all enrollment documentation, government-issued Medicare card and photo identification to the pharmacy. If individuals are having trouble at one pharmacy we are recommending they try another, given that some pharmacies are handling filling prescriptions differently.
With the Medicare prescription drug program, millions of Americans now have the opportunity to access affordable prescription drugs. Providing a prescription drug benefit is the most significant change to Medicare in its 40 year history. More than one million prescriptions are being filled every day and people are realizing savings.
AARP CEO Bill Novelli issued the following statement on the Medicare prescription drug plan implementation:
Clearly, there are problems with the implementation of the new Medicare prescription drug plan. We take these problems very seriously.
The bottom line is that some people are not getting the drugs they need. This is unacceptable. If an individual has proof of eligibility, there is absolutely no reason they should pay more than required or leave a pharmacy empty-handed.
We must all do what it takes to solve the problem.
AARP is in constant contact with Medicare administrators, plan providers, pharmacies and others. Our own endorsed plan is working to resolve problems and improve customer experience. AARP is also working to inform members and the public to bring any and all enrollment documentation, government-issued Medicare card and photo identification to the pharmacy. If individuals are having trouble at one pharmacy we are recommending they try another, given that some pharmacies are handling filling prescriptions differently.
With the Medicare prescription drug program, millions of Americans now have the opportunity to access affordable prescription drugs. Providing a prescription drug benefit is the most significant change to Medicare in its 40 year history. More than one million prescriptions are being filled every day and people are realizing savings.
Friday, January 13, 2006
Government Warns Consumers Aboug Brazilian Diet Pills
The U.S. Food and Drug Administration (FDA) is warning consumers not to use two unapproved drug products that are being marketed as dietary supplements for weight loss. Emagrece Sim Dietary Supplement, also known as the Brazilian Diet Pill and Herbathin Dietary Supplement may contain several active ingredients, including controlled substances, found in prescription drugs that could lead to serious side effects or injury.
Both products are made in Brazil by Fitoterapicos (also spelled Fytoterapicos) and Phytotherm Sim. FDA has increased its efforts to prevent the importation of these products by issuing an alert to its field personnel. Import Alerts are used to advise FDA field personnel about certain imported products that should not enter the United States.
Consumers are advised not to use the Emagrece Sim and Herbathin products and to return them to the suppliers. There may be other manufacturers or suppliers of imported Emagrece Sim and Herbathin, and consumers should exercise caution in using any of these imported products.
"There are dangers to consumers who purchase diet pills that contain drugs of unknown origin and quality," said Dr. Steven Galson, Director of FDA’s Center for Drug Evaluation and Research. "These products are not approved by FDA and if people experience side effects, it is difficult to trace problems and for physicians to treat them."
Emagrece Sim and Herbathin are labeled as "dietary supplements", but they contain prescription drugs, including several controlled substances that, if not used properly as prescribed by a physician, can be harmful. They contain chlordiazepoxide HCl (the active ingredient in Librium), and fluoxetine HCl (the active ingredient in Prozac). Chlordiazepoxide HCl (Librium) is used to relieve anxiety and to control the symptoms of alcohol withdrawal. It may be habit forming, and can cause drowsiness and dizziness and impair the ability to drive. Fluoxetine HCl (Prozac) is an anti-depressant medication used to treat obsessive-compulsive disorder, panic disorder, and bulimia. It has been linked to several serious drug interactions and certain serious adverse events, including suicidal thinking and behaviors in pediatric patients, anxiety and insomnia, and abnormal bleeding. These drugs should only be taken by patients who are under the supervision of a health care provider.
Emagrece Sim and Herbathin were also found to contain Fenproporex, a stimulant that is not approved for marketing in the United States. Fenproporex is converted in the body to amphetamine, and as a result has been noted to show up in urinalysis as a positive test for amphetamines.
Emagrece Sim and Herbathin are sold in packages containing one bottle of Formula 1 capsules and one bottle of Formula 2 capsules. Both products are available in five levels (Levels 1-5), and the product labels instruct consumers to begin with Level 1 and continue to the higher levels until they lose the desired amount of weight. Emagrece Sim also has a "Weight Stabilizer" package containing Formula 1 and Formula 2 capsules, to be used after the desired weight loss has been achieved.
The products are offered for sale on the Internet. They are also imported and distributed by Emagrece Sim Laboratories, Inc., Miami, FL., and Herbathin, Inc. (dba EMIEX Corp), Miami, Florida. FDA is aware of commercial imports of these products and individuals importing them for personal use.
FDA urges consumers, health care providers, and caregivers to cease using and dispose of these products and report any adverse events related to these products to MedWatch, the FDA's voluntary reporting program at 1-800-FDA-1088; by FAX at 1-800-FDA-0178; by mail to MedWatch, Food and Drug Administration, 5600 Fishers Lane, Rockville, MD, 20857-9787; or online at www.fda.gov/medwatch/report.htm.
The U.S. Food and Drug Administration (FDA) is warning consumers not to use two unapproved drug products that are being marketed as dietary supplements for weight loss. Emagrece Sim Dietary Supplement, also known as the Brazilian Diet Pill and Herbathin Dietary Supplement may contain several active ingredients, including controlled substances, found in prescription drugs that could lead to serious side effects or injury.
Both products are made in Brazil by Fitoterapicos (also spelled Fytoterapicos) and Phytotherm Sim. FDA has increased its efforts to prevent the importation of these products by issuing an alert to its field personnel. Import Alerts are used to advise FDA field personnel about certain imported products that should not enter the United States.
Consumers are advised not to use the Emagrece Sim and Herbathin products and to return them to the suppliers. There may be other manufacturers or suppliers of imported Emagrece Sim and Herbathin, and consumers should exercise caution in using any of these imported products.
"There are dangers to consumers who purchase diet pills that contain drugs of unknown origin and quality," said Dr. Steven Galson, Director of FDA’s Center for Drug Evaluation and Research. "These products are not approved by FDA and if people experience side effects, it is difficult to trace problems and for physicians to treat them."
Emagrece Sim and Herbathin are labeled as "dietary supplements", but they contain prescription drugs, including several controlled substances that, if not used properly as prescribed by a physician, can be harmful. They contain chlordiazepoxide HCl (the active ingredient in Librium), and fluoxetine HCl (the active ingredient in Prozac). Chlordiazepoxide HCl (Librium) is used to relieve anxiety and to control the symptoms of alcohol withdrawal. It may be habit forming, and can cause drowsiness and dizziness and impair the ability to drive. Fluoxetine HCl (Prozac) is an anti-depressant medication used to treat obsessive-compulsive disorder, panic disorder, and bulimia. It has been linked to several serious drug interactions and certain serious adverse events, including suicidal thinking and behaviors in pediatric patients, anxiety and insomnia, and abnormal bleeding. These drugs should only be taken by patients who are under the supervision of a health care provider.
Emagrece Sim and Herbathin were also found to contain Fenproporex, a stimulant that is not approved for marketing in the United States. Fenproporex is converted in the body to amphetamine, and as a result has been noted to show up in urinalysis as a positive test for amphetamines.
Emagrece Sim and Herbathin are sold in packages containing one bottle of Formula 1 capsules and one bottle of Formula 2 capsules. Both products are available in five levels (Levels 1-5), and the product labels instruct consumers to begin with Level 1 and continue to the higher levels until they lose the desired amount of weight. Emagrece Sim also has a "Weight Stabilizer" package containing Formula 1 and Formula 2 capsules, to be used after the desired weight loss has been achieved.
The products are offered for sale on the Internet. They are also imported and distributed by Emagrece Sim Laboratories, Inc., Miami, FL., and Herbathin, Inc. (dba EMIEX Corp), Miami, Florida. FDA is aware of commercial imports of these products and individuals importing them for personal use.
FDA urges consumers, health care providers, and caregivers to cease using and dispose of these products and report any adverse events related to these products to MedWatch, the FDA's voluntary reporting program at 1-800-FDA-1088; by FAX at 1-800-FDA-0178; by mail to MedWatch, Food and Drug Administration, 5600 Fishers Lane, Rockville, MD, 20857-9787; or online at www.fda.gov/medwatch/report.htm.
Thursday, January 12, 2006
Consumer Groups Call For Access To Illinois Accident Data
A growing coalition of community and business groups and elected officials announced today the launch of the Illinois Used Car Buyers Right-to-Know Campaign, a major effort to protectIllinois used car buyers. Each year, more than 700,000 vehicles are involved in police-reported accidents on Illinois roads. The Illinois Department ofTransportation (IDOT) collects an electronic record of these accidents and the damage the vehicles involved sustain, but this information is never disclosed to Illinois consumers.
The Used Car Buyers Right-to-Know Bill (SB 1839), sponsored by SenatorJames Meeks (D-15) and Senator Kirk Dillard (R-24), would require the IDOT to make police-reported auto accident history records available to consumers,without releasing personal information.
"People have a right to know all the facts before they buy a used car and this bill is an important step in providing that information," said Attorney General Lisa Madigan. "We know that accidents can affect how a car runs and its safety. Access to the information provided by this bill will help consumers to make decisions based on facts, not hidden histories." Joining Attorney General Madigan in support of the initiative are Secretary of State Jesse White and a bi-partisan group of state legislators.
"We all benefit from being informed. Undisclosed accidents put everyone at risk," said Senator Meeks. "There is no reason Illinois should continue to shy away from this basic public safety issue. It's really very simple. Let's keep our families safe and pass this bill."
Valuable information comes from police reports that record the damage from vehicle accidents. The reports may indicate, for example, if the airbag deployed, if the vehicle hit a deer, or if it was towed or driven away among other observations collected at the scene.
Armed with this information, along with mechanical inspections, consumers can protect themselves and make better decisions about the cars they purchase,something community leaders say is critical to people's self-sufficiency.
"When low-income car buyers get ripped off, it has serious economic impact on their families," said Nina Harris, President and CEO of the Springfield Urban League. "We have an opportunity to help prevent that from happening with this bill. It only makes sense that we should be able to find out if the carwe have saved long and hard for has hidden damage that could end up hurtingus. After all, information is power."
Illinois voters overwhelmingly support the proposed bill. A recent statewide poll shows that more than 9 out of 10 Illinois voters believe used car buyers should have access to state reports on whether or not a car has been in an accident.
"Just as consumers wouldn't want to unknowingly buy a flood damaged car from Hurricane Katrina, consumers need to know the accident history of used cars," said Senator Dillard. "Often people find out too late what really happened in a car's past. Dealers get taken at trade-in; unscrupulous sellers rip off consumers. It's time for used car buyers and sellers to have access to police-reported accident information for their own peace of mind.
Added Juan Rangel, CEO of United Neighborhood Organization (UNO), "We shouldn't be asked to settle for less when our family's safety is at stake. After all, we depend on our cars to get us to work, to get our kids to school,and to run errands on a daily basis. There is no reason Illinois should continue to shy away from this basic safety issue."
A growing coalition of community and business groups and elected officials announced today the launch of the Illinois Used Car Buyers Right-to-Know Campaign, a major effort to protectIllinois used car buyers. Each year, more than 700,000 vehicles are involved in police-reported accidents on Illinois roads. The Illinois Department ofTransportation (IDOT) collects an electronic record of these accidents and the damage the vehicles involved sustain, but this information is never disclosed to Illinois consumers.
The Used Car Buyers Right-to-Know Bill (SB 1839), sponsored by SenatorJames Meeks (D-15) and Senator Kirk Dillard (R-24), would require the IDOT to make police-reported auto accident history records available to consumers,without releasing personal information.
"People have a right to know all the facts before they buy a used car and this bill is an important step in providing that information," said Attorney General Lisa Madigan. "We know that accidents can affect how a car runs and its safety. Access to the information provided by this bill will help consumers to make decisions based on facts, not hidden histories." Joining Attorney General Madigan in support of the initiative are Secretary of State Jesse White and a bi-partisan group of state legislators.
"We all benefit from being informed. Undisclosed accidents put everyone at risk," said Senator Meeks. "There is no reason Illinois should continue to shy away from this basic public safety issue. It's really very simple. Let's keep our families safe and pass this bill."
Valuable information comes from police reports that record the damage from vehicle accidents. The reports may indicate, for example, if the airbag deployed, if the vehicle hit a deer, or if it was towed or driven away among other observations collected at the scene.
Armed with this information, along with mechanical inspections, consumers can protect themselves and make better decisions about the cars they purchase,something community leaders say is critical to people's self-sufficiency.
"When low-income car buyers get ripped off, it has serious economic impact on their families," said Nina Harris, President and CEO of the Springfield Urban League. "We have an opportunity to help prevent that from happening with this bill. It only makes sense that we should be able to find out if the carwe have saved long and hard for has hidden damage that could end up hurtingus. After all, information is power."
Illinois voters overwhelmingly support the proposed bill. A recent statewide poll shows that more than 9 out of 10 Illinois voters believe used car buyers should have access to state reports on whether or not a car has been in an accident.
"Just as consumers wouldn't want to unknowingly buy a flood damaged car from Hurricane Katrina, consumers need to know the accident history of used cars," said Senator Dillard. "Often people find out too late what really happened in a car's past. Dealers get taken at trade-in; unscrupulous sellers rip off consumers. It's time for used car buyers and sellers to have access to police-reported accident information for their own peace of mind.
Added Juan Rangel, CEO of United Neighborhood Organization (UNO), "We shouldn't be asked to settle for less when our family's safety is at stake. After all, we depend on our cars to get us to work, to get our kids to school,and to run errands on a daily basis. There is no reason Illinois should continue to shy away from this basic safety issue."
Wednesday, January 11, 2006
Fuel Houses On 20,000 Home Generators Recalled
The U.S. Consumer Product Safety Commission today announced a voluntary recall of the 12” Braided Flex Fuel Hose sold with certain Guardian® Home Standby Air-Cooled Generators. Twenty thousand of these units have been sold.
The fuel hoses can leak if bent in an unreasonable fashion during installation or upon completion of installation. If an ignition source is present, a fire or explosion can occur. The agency stressed that Generac, the manufacturer has received no reports of fuel hose leaks, injuries or property damage.
The recalled 12 inch braided flex fuel hoses are used with Guardian® Home Standby Air-Cooled Generators with serial numbers 3789827 and below. The generators are about 4 feet by 2 feet by 2½ feet, tan in color, and have identification decal tags displaying the serial number. The decal tag is affixed to the black divider plate that separates the engine from the control panel and can be found by lifting the top/lid of the metal enclosure. The fuel hose came supplied with the generator kits and connects the fuel supply to the generator. The hose is 12 inches long and covered with braided steel.
They were sold at Independent and national dealers between March 2001 and September 2003 for about $1500 to $2500.
Consumers should stop using the generator if the fuel hose is bent or if the ferrules (connectors) are cracked, split or damaged in any way. Consumers with a bent hose or damaged connector should contact Generac Power Systems or a Generac authorized service dealer, to arrange for a free inspection and replacement of the flex fuel hose by calling Generac Power Systems at (800) 949-7440 between 8 a.m. and 5 p.m. CT Monday through Friday.
The U.S. Consumer Product Safety Commission today announced a voluntary recall of the 12” Braided Flex Fuel Hose sold with certain Guardian® Home Standby Air-Cooled Generators. Twenty thousand of these units have been sold.
The fuel hoses can leak if bent in an unreasonable fashion during installation or upon completion of installation. If an ignition source is present, a fire or explosion can occur. The agency stressed that Generac, the manufacturer has received no reports of fuel hose leaks, injuries or property damage.
The recalled 12 inch braided flex fuel hoses are used with Guardian® Home Standby Air-Cooled Generators with serial numbers 3789827 and below. The generators are about 4 feet by 2 feet by 2½ feet, tan in color, and have identification decal tags displaying the serial number. The decal tag is affixed to the black divider plate that separates the engine from the control panel and can be found by lifting the top/lid of the metal enclosure. The fuel hose came supplied with the generator kits and connects the fuel supply to the generator. The hose is 12 inches long and covered with braided steel.
They were sold at Independent and national dealers between March 2001 and September 2003 for about $1500 to $2500.
Consumers should stop using the generator if the fuel hose is bent or if the ferrules (connectors) are cracked, split or damaged in any way. Consumers with a bent hose or damaged connector should contact Generac Power Systems or a Generac authorized service dealer, to arrange for a free inspection and replacement of the flex fuel hose by calling Generac Power Systems at (800) 949-7440 between 8 a.m. and 5 p.m. CT Monday through Friday.
Tuesday, January 10, 2006
IRS Advocate Calls For Simpler Taxes, 66% of Frozen Refunds Held In Error
National Taxpayer Advocate Nina E. Olson today released a report to Congress that urges Congress to enact fundamental tax simplification.
“Our tax code has grown so complex that it creates opportunities for taxpayers to make inadvertent mistakes as well as to game the system,” Olson writes. “As taxpayers become confused and make mistakes, or deliberately ‘push the envelope,’ the IRS understandably responds with increased enforcement actions. The exploitation of ‘loopholes’ leads to calls for new legislation to crack down on abuses, which in turn makes the tax law more complex. Thus begins an endless cycle – complexity drives inadvertent error and fraud, which drive increased enforcement or new legislation, which drives additional complexity. In short, complexity begets more complexity. This cycle can only be broken by true tax simplification, followed by ongoing legislative and administrative discipline to avoid ‘complexity creep.’”
Olson states that the tax code should be revised to incorporate six core principles:
It should not “entrap” taxpayers.
It should be simple enough so that taxpayers can prepare their own returns without professional help, simple enough so that taxpayers can compute their tax liabilities on a single form, and simple enough so that IRS telephone assistors can fully and accurately answer taxpayers’ questions.
It should be written in a way that anticipates the largest areas of noncompliance and minimizes the opportunities for such noncompliance.
It should provide some choices, but not too many choices.
It should not necessarily avoid refundable credits but, if it includes them, it should design them in a way that is administrable.
It should require a periodic review of its provisions – in short, a sanity check.
The report also makes legislative recommendations to reduce noncompliance in the “cash economy”; to simplify the Code’s family-status provisions; to revamp the rules governing joint-and-several liability on joint returns as well as community property in the collection of tax; to require brokers to track and report cost basis for stocks and mutual funds to both investors and the IRS; to lessen the burdens of tracking the cost basis of stocks and mutual funds if the current-law step-up in basis on death is eliminated as scheduled in 2010; and to restructure and reform the Code’s collection due process (CDP) provisions.
By statute, the National Taxpayer Advocate is required to identify at least 20 of the most serious problems encountered by taxpayers. In this year’s report, Olson identifies trends in taxpayer service as the #1 most serious problem. While expressing support for a strong IRS enforcement presence, Olson expresses concern that the IRS is expanding enforcement at the expense of taxpayer service. The report states that the IRS has eliminated TeleFile, significantly reduced the number of returns IRS personnel prepare for taxpayers who seek IRS assistance, reduced the percentage of taxpayer calls IRS telephone assisters answer as compared with FY 2004, and substantially reduced its taxpayer education function for small businesses.
“Significantly, these actions are taking place without any empirical evidence that the reductions will not harm taxpayers and not result in decreased compliance,” Olson writes. “Although the IRS maintains that it is difficult to measure the impact of high quality taxpayer service on compliance, the National Taxpayer Advocate finds that position unpersuasive. Too much is at stake not to conduct the appropriate research and develop cutting-edge strategies that will provide world-class taxpayer service.” The report makes recommendations about how to approach and conduct such research.
The report cites Criminal Investigation (CI) refund freezes as the #2 most serious problem facing taxpayers. The report states that CI places “freezes” on hundreds of thousands of refunds each year due to a suspicion of fraud and then makes a “determination” whether the returns are, in fact, fraudulent without notifying taxpayers that their refund claims are under review or giving them an opportunity to present evidence supporting their positions.
In FY 2004, more than 28,000 taxpayers whose refunds had been frozen sought assistance from the Taxpayer Advocate Service (TAS). The TAS research function studied a statistically representative sample of these cases and found that, with TAS assistance, taxpayers ultimately received the full amount of the refund they had claimed in 66 percent of the frozen-refund cases and a portion of the refund they had claimed in an additional 14 percent of the cases. Olson urges the IRS to implement procedures to notify taxpayers promptly that their refunds have been frozen, provide taxpayers with an opportunity to submit supporting documentation, and bring cases to a quicker resolution. The TAS research study is published as Volume II of the report.
Among other problems the report identifies are the need for IRS to develop a comprehensive strategy to address noncompliance in the “cash economy,” the adequacy of training for private debt collection employees as the IRS rolls out its Private Debt Collection (PDC) initiative in 2006, and delays and related problems in examining returns that claim the earned income tax credit (EITC).
National Taxpayer Advocate Nina E. Olson today released a report to Congress that urges Congress to enact fundamental tax simplification.
“Our tax code has grown so complex that it creates opportunities for taxpayers to make inadvertent mistakes as well as to game the system,” Olson writes. “As taxpayers become confused and make mistakes, or deliberately ‘push the envelope,’ the IRS understandably responds with increased enforcement actions. The exploitation of ‘loopholes’ leads to calls for new legislation to crack down on abuses, which in turn makes the tax law more complex. Thus begins an endless cycle – complexity drives inadvertent error and fraud, which drive increased enforcement or new legislation, which drives additional complexity. In short, complexity begets more complexity. This cycle can only be broken by true tax simplification, followed by ongoing legislative and administrative discipline to avoid ‘complexity creep.’”
Olson states that the tax code should be revised to incorporate six core principles:
It should not “entrap” taxpayers.
It should be simple enough so that taxpayers can prepare their own returns without professional help, simple enough so that taxpayers can compute their tax liabilities on a single form, and simple enough so that IRS telephone assistors can fully and accurately answer taxpayers’ questions.
It should be written in a way that anticipates the largest areas of noncompliance and minimizes the opportunities for such noncompliance.
It should provide some choices, but not too many choices.
It should not necessarily avoid refundable credits but, if it includes them, it should design them in a way that is administrable.
It should require a periodic review of its provisions – in short, a sanity check.
The report also makes legislative recommendations to reduce noncompliance in the “cash economy”; to simplify the Code’s family-status provisions; to revamp the rules governing joint-and-several liability on joint returns as well as community property in the collection of tax; to require brokers to track and report cost basis for stocks and mutual funds to both investors and the IRS; to lessen the burdens of tracking the cost basis of stocks and mutual funds if the current-law step-up in basis on death is eliminated as scheduled in 2010; and to restructure and reform the Code’s collection due process (CDP) provisions.
By statute, the National Taxpayer Advocate is required to identify at least 20 of the most serious problems encountered by taxpayers. In this year’s report, Olson identifies trends in taxpayer service as the #1 most serious problem. While expressing support for a strong IRS enforcement presence, Olson expresses concern that the IRS is expanding enforcement at the expense of taxpayer service. The report states that the IRS has eliminated TeleFile, significantly reduced the number of returns IRS personnel prepare for taxpayers who seek IRS assistance, reduced the percentage of taxpayer calls IRS telephone assisters answer as compared with FY 2004, and substantially reduced its taxpayer education function for small businesses.
“Significantly, these actions are taking place without any empirical evidence that the reductions will not harm taxpayers and not result in decreased compliance,” Olson writes. “Although the IRS maintains that it is difficult to measure the impact of high quality taxpayer service on compliance, the National Taxpayer Advocate finds that position unpersuasive. Too much is at stake not to conduct the appropriate research and develop cutting-edge strategies that will provide world-class taxpayer service.” The report makes recommendations about how to approach and conduct such research.
The report cites Criminal Investigation (CI) refund freezes as the #2 most serious problem facing taxpayers. The report states that CI places “freezes” on hundreds of thousands of refunds each year due to a suspicion of fraud and then makes a “determination” whether the returns are, in fact, fraudulent without notifying taxpayers that their refund claims are under review or giving them an opportunity to present evidence supporting their positions.
In FY 2004, more than 28,000 taxpayers whose refunds had been frozen sought assistance from the Taxpayer Advocate Service (TAS). The TAS research function studied a statistically representative sample of these cases and found that, with TAS assistance, taxpayers ultimately received the full amount of the refund they had claimed in 66 percent of the frozen-refund cases and a portion of the refund they had claimed in an additional 14 percent of the cases. Olson urges the IRS to implement procedures to notify taxpayers promptly that their refunds have been frozen, provide taxpayers with an opportunity to submit supporting documentation, and bring cases to a quicker resolution. The TAS research study is published as Volume II of the report.
Among other problems the report identifies are the need for IRS to develop a comprehensive strategy to address noncompliance in the “cash economy,” the adequacy of training for private debt collection employees as the IRS rolls out its Private Debt Collection (PDC) initiative in 2006, and delays and related problems in examining returns that claim the earned income tax credit (EITC).
Monday, January 09, 2006
Pukke Settles With FTC, Permanently Banned From Credit Counseling and Telemarketing
Former Ameridebt leader Andris Pukke settled with the Federal Trade Commission today to end the government's actions against him since the government agency shuttered the company last year.
The agreement, if approved by a federal court in Maryland, would require Pukke to give up virtually all of his assets for a consumer redress program for victims of the deception, a fund that ultimately could total as much as $35 million.
The agreement also bars Pukke permanently from engaging in credit counseling, debt management, and credit education activities, prohibits him from violating the Telemarketing Sales Rule, and prohibits him from engaging in other conduct in connection with telemarketing.
A receiver, appointed by the court in April 2005, to identify and maintain Pukke’s assets, has collected property worth millions of dollars, and the order authorizes him to continue hisefforts to locate additional assets. Any amounts the receiver collects, up to $35 million, would go into the redress fund under the settlement. If the receiver collects assets worth more than $35 million, the excess would go into the bankruptcy estate that was created when Pukke filed for bankruptcy last July.
Former Ameridebt leader Andris Pukke settled with the Federal Trade Commission today to end the government's actions against him since the government agency shuttered the company last year.
The agreement, if approved by a federal court in Maryland, would require Pukke to give up virtually all of his assets for a consumer redress program for victims of the deception, a fund that ultimately could total as much as $35 million.
The agreement also bars Pukke permanently from engaging in credit counseling, debt management, and credit education activities, prohibits him from violating the Telemarketing Sales Rule, and prohibits him from engaging in other conduct in connection with telemarketing.
A receiver, appointed by the court in April 2005, to identify and maintain Pukke’s assets, has collected property worth millions of dollars, and the order authorizes him to continue hisefforts to locate additional assets. Any amounts the receiver collects, up to $35 million, would go into the redress fund under the settlement. If the receiver collects assets worth more than $35 million, the excess would go into the bankruptcy estate that was created when Pukke filed for bankruptcy last July.
Wednesday, January 04, 2006
FDA Investigating Pet Food
The Food and Drug Administration (FDA) is conducting an investigation into the deaths and illnesses of dogs that consumed pet food contaminated with a potent toxin called aflatoxin. To date, FDA is aware of 23 dogs that have died and another 18 dogs that have become ill. The pet food is made by Diamond Pet Food at its Gaston, South Carolina facility.
Customers who have purchased the recalled Diamond Pet Food manufactured in the South Carolina plant should immediately stop using it and return any remaining product to their retailer.
Aflatoxin comes from a fungus found on corn and other crops and can cause severe liver damage in pets. Consumers are urged to contact their veterinarian if their pets exhibit any of the following symptoms which may indicate aflatoxin consumption:
FDA is continuing to investigate the situation and is working closely with the state feed regulatory agencies in the affected states.
The Food and Drug Administration (FDA) is conducting an investigation into the deaths and illnesses of dogs that consumed pet food contaminated with a potent toxin called aflatoxin. To date, FDA is aware of 23 dogs that have died and another 18 dogs that have become ill. The pet food is made by Diamond Pet Food at its Gaston, South Carolina facility.
Customers who have purchased the recalled Diamond Pet Food manufactured in the South Carolina plant should immediately stop using it and return any remaining product to their retailer.
Aflatoxin comes from a fungus found on corn and other crops and can cause severe liver damage in pets. Consumers are urged to contact their veterinarian if their pets exhibit any of the following symptoms which may indicate aflatoxin consumption:
- Sluggishness
- Loss of appetite
- Jaundice (yellow whites of the eyes, gums, belly)
- Severe, persistent vomiting combined with bloody diarrhea
- Fever
FDA is continuing to investigate the situation and is working closely with the state feed regulatory agencies in the affected states.
- Gaston Facility Products Removed From Sale
Diamond Low Fat Dog Food - Diamond Hi-Energy Dog Food
- Diamond Maintenance Dog Food
- Diamond Performance Dog Food
- Diamond Premium Adult Dog Food
- Diamond Puppy Food
- Diamond Maintenance Cat Food
- Diamond Professional Cat Food
- Country Value Puppy
- Country Value Adult Dog
- Country Value High Energy Dog
- Country Value Adult Cat Food
- Professional Chicken & Rice Senior Dog Food
- Professional Reduced Fat Chicken & Rice Dog Food
- Professional Adult Dog Food
- Professional Large-Breed Puppy Food
- Professional Puppy Food
- Professional Reduced Fat Cat Food
- Professional Adult Cat Food
Tuesday, January 03, 2006
Independence Air (flyi.com) To Halt Flights In Two Days
Officials at Independence Air scrambled over the holiday weekend and into the New Year, fielding calls from concerned travelers who were startled to find that the struggling carrier's long rumored bankruptcy was imminent.
"While we’ve been clear in reminding everyone that this was a possibility, we remained optimistic that there would be a way to avoid reaching this juncture. To date there has not been a firm offer put forward that meets the financial criteria necessary to continue operations as is. Therefore, we are voluntarily discontinuing scheduled service as of Thursday evening," said Indpendence Air Chairman Kerry Skeen.
The company is frantically trying to rebook travelers, either to come home earlier or on other carriers. According to a 2002 "guidance" statement issued by the Department of Transpation, "passengers holding valid paper or electronic tickets from insolvent or bankrupt carriers for a particular route are entitled at minimum to transportation on a space-available basis on any airline currently serving that route. Airlines may recover costs of providing the transportation such as the direct cost of rewriting a ticket and meal costs."
Independence, which was formed from what was once known as Atlantic Coast Airways, had been a United regional partner in its former incarnation. In past years (and event past weeks), the airline has spurned offers from United and Mesa Airlines among others to be acquired. Industry experts anticipate that most of the airline will be liquidated although some portion of the airline may exist in bankruptcy protection with minimal assets and eventually become a minor regional carrier again?
The bad news for consumers: Areas heavily served by Independence, especially at its home hub of Washington Dulles (IAD) , will likely suffer price increases due to the reduced competition.
Officials at Independence Air scrambled over the holiday weekend and into the New Year, fielding calls from concerned travelers who were startled to find that the struggling carrier's long rumored bankruptcy was imminent.
"While we’ve been clear in reminding everyone that this was a possibility, we remained optimistic that there would be a way to avoid reaching this juncture. To date there has not been a firm offer put forward that meets the financial criteria necessary to continue operations as is. Therefore, we are voluntarily discontinuing scheduled service as of Thursday evening," said Indpendence Air Chairman Kerry Skeen.
The company is frantically trying to rebook travelers, either to come home earlier or on other carriers. According to a 2002 "guidance" statement issued by the Department of Transpation, "passengers holding valid paper or electronic tickets from insolvent or bankrupt carriers for a particular route are entitled at minimum to transportation on a space-available basis on any airline currently serving that route. Airlines may recover costs of providing the transportation such as the direct cost of rewriting a ticket and meal costs."
Independence, which was formed from what was once known as Atlantic Coast Airways, had been a United regional partner in its former incarnation. In past years (and event past weeks), the airline has spurned offers from United and Mesa Airlines among others to be acquired. Industry experts anticipate that most of the airline will be liquidated although some portion of the airline may exist in bankruptcy protection with minimal assets and eventually become a minor regional carrier again?
The bad news for consumers: Areas heavily served by Independence, especially at its home hub of Washington Dulles (IAD) , will likely suffer price increases due to the reduced competition.
