Debt Collection Companies Being Sued for Harrasment & Deceptive Tade Practices in Ohio, West Virginia, & New York

Ohio Attorney General filed a lawsuit Wednesday against a Cleveland debt collection agency
after getting calls from more than 200 Ohio residents complaining of threats, harassment and deception. Read the Ohio AG lawsuit here.

National Enterprise Systems of Solon, Ohio is accused of illegal collection practices.

The lawsuit was filed in the Cuyahoga County Court of Common Pleas.

According to the lawsuit, debt collectors with National Enterprise Systems of Solon used abusive language, failed to verify debts and made unauthorized withdrawals from consumer bank accounts in violation of state and federal law.

Officials in West Virginia have also filed a similar lawsuit against the firm. Read the WV complaint here.


New York Attorney General has shut down a New York collection operation that consisted of at least nine debt collection companies across Western New York, run by Buffalo resident Tobias Boyland.

According to hundreds of consumer complaints filed with law enforcement agencies across the country, Boyland's employees violated state and federal law by routinely posing as law enforcement officials, threatening to arrest consumers and throw them in jail unless they made arrangements to pay the company immediately.

The Attorney General filed suit against Central Resource Management, Final Claims Asset Locators, Final Control Asset Locators, Interchange Payment Solutions, Next Step Services, Portfolio Asset Assurance, Silverbay Services, and Teleport..

Read the NY Complain Here.


Read the article here: http://www.dispatch.com/live/content/business/stories/2009/07/22/Collection_agency_lawsuit.ART_ART_07-22-09_A6_8LEHS6P.html?sid=101

Tsunami Continues in Arbitration War--Congressman Rails against Arbitration Abuses

Bloomberg News (7/22, Van Voris, Rosenkrantz) reported, "A congressional staff investigation into the biggest U.S. consumer debt-collection arbitrator found 'deeply disturbing' abuses, U.S. Representative Dennis Kucinich said" yesterday at a hearing before a House subcommittee he chairs. "A report on the investigation, released yesterday, claims that the National Arbitration Forum, a Minnesota company that handled most consumer debt-collection arbitrations in the U.S., misled consumers and hid ties to debt-collection firms." Said Kucinich, "The debt collection industry and the alternative legal system that has been created around it can no longer be ignored by the federal government."
The Minneapolis Star Tribune (7/22) reported, "Minnesota Attorney General Lori Swanson backed federal legislation Wednesday that would protect consumers from 'fine print' arbitration contracts that forfeit their legal rights against creditors. 'Millions of Americans are giving away that right without even knowing it,' Swanson told a panel of the House Oversight and Government Reform Committee." Also appearing before the committee was Mike Kelly, CEO of Forthright, "which provides administrative services for the" NAF. Kelly "defended the company's work as a simple and cost-effective alternative to the courts, saying that without access to arbitration, consumers would be the losers."
The AP (7/22, Choi) reported that Kenneth Clayton of the American Bankers Association testified that "arbitration is a valuable way for consumers and businesses to resolve disputes in a very low cost and fair manner. Take it away and consumers will suffer." But "a study by Public Citizen found that credit card companies track arbitrators' rulings and do not enlist the arbitrators who rule against them."
Jones: "arbitration revolution" possible. In a blog at the Wall Street Journal (7/22), Ashby Jones wrote, "It's too soon to say, in all likelihood, but we could be in the early stages of an arbitration revolution."

AAA & NAF suspend arbitrations over consumer debt collections pending new guidelines

The Wall Street Journal (7/22, Sidel, Sharma) reports, "Two major arbitration firms are backing away from the business of resolving disputes between customers and their credit-card and cellphone companies, throwing into disarray a controversial system that prevents unhappy consumers from filing lawsuits. The American Arbitration Association said Tuesday it will stop participating in consumer-debt-collection disputes until new guidelines are established." The National Arbitration Forum, in a settlement with Minnesota Attorney General Lori Swanson, had earlier said "it would stop accepting new cases as of Friday. Their retreat has big implications for credit-card and cellphone companies, which generally require customers to agree to mandatory arbitration." Consumer advocates "have criticized the practice for years, saying consumers often don't realize they are waiving their right to sue when they sign contracts with the companies."

The Wall Street Journal (7/22, Kim) reports, "Consumer advocates say the development opens the door for customers to take their grievances to court instead of being forced to settle their disputes through the arbitration process. 'In the long run, I think this is the beginning of the end of forced arbitration in all consumer contracts, from credit cards, to nursing homes to cellphones,' said Ed Mierzwinski of U.S. PIRG, a consumer-advocacy group."

The San Francisco Chronicle (7/22, Abate) reports, "A congressional committee will hold hearings today at which NAF and its adversaries will argue about whether consumers are put at a disadvantage by the common practice of requiring that disputes be arbitrated rather than fought in court." Carol Kaplan, "a spokeswoman for the American Bankers Association, which represents many credit card issuers, said most consumer contracts are probably written in such a way that another arbitrator could be designated to replace National Arbitration Forum. But Paul Bland, a staff attorney with the advocacy group Public Justice, said NAF was the designated arbiter in so many consumer agreements, including cell phone contracts, that no other arbitration service is big enough to replace it."

Minnesota Attorney General Sues National Arbitration Forum for Fraud, Misrepresentation, Deceptive Trade Practices

Minnesota Attorney General Lori Swanson filed suit this week against the National Arbitration Forum of Minnesota, the nation's largest arbitration company for consumer credit disputes, accusing it of consumer fraud, false advertising and deceptive trade practices by "misrepresenting its independence" and hiding its "extensive ties" to the collection industry.

The Attorney General's lawsuit claims the National Arbitration Forum has ties to debt-collection law firms and works against consumers by virtue of having a mandatory arbitration clause set forth in a credit card, bank, or retail contracts. Hundreds of thousands of consumer disputes are resolved each year not by a judge or jury, but by a private arbitration system.

The Attorney General’s suit alleges that the National Arbitration Forum represented to consumers and the public that it is independent and neutral, operates like an impartial court system, and is not affiliated with and does not take sides between the parties.

The lawsuit alleges that the National Arbitration Forum, while holding itself out as impartial, works behind the scenes—alongside creditors and against the interests of ordinary consumers—to convince credit card companies and other creditors to insert arbitration provisions in their customer agreements and then appointing the Forum to decide the disputes.

The lawsuit alleges that the Forum pays commissions to executives whose job it is to convince creditors to put mandatory arbitration clauses in their customer agreements. The suit alleges that the Forum does this to generate arbitration filings in the Forum—and hence, revenue—for itself.

The lawsuit alleges that, despite telling consumers and the public that it is not affiliated or aligned with the collection industry, the Forum in fact has financial ties to the collection industry.

The lawsuit alleges that, beginning in 2006 and through 2007, Accretive—a family of New York private equity funds—engineered two transactions. In the first transaction, Accretive formed several equity funds under the name “Agora” (meaning “Forum” in Greek), which invested $42 million in the Forum.

In the second transaction, three of the country’s largest debt collection law firms—Mann Bracken of Georgia, Wolpoff & Abramson of Maryland, and Eskanos & Adler of California—merged into one large national law firm called Mann Bracken. Accretive then acquired the majority interest in a debt collection agency called Axiant, which acquired the collections operations of Mann Bracken. Through these transactions, Accretive took control of one of the country’s largest debt collection enterprises and became affiliated with the Forum, the country’s largest consumer collection arbitration company. The lawsuit alleges that Accretive principals remain actively involved with the Forum.

The lawsuit states that, in 2006, the Forum processed just over 214,000 consumer collection arbitration claims, of which 125,000, or nearly 60 percent, were filed by the above law firms.

Swanson said that the Forum was aware of the affiliation problem in 2006 when it negotiated its relationship with Accretive. She pointed to an email from an officer of the Forum to the hedge fund stating: “…we should certainly plan for unwinding any deal in the event shared ownership becomes an acute issue.”

We'll follow this interesting story.

View the complaint here:
http://capwiz.com/nacanet/attachments/MN_Complaint_Against_NAF.pdf

Sources:
MN Attorney General Press Release

http://www.politicsinminnesota.com/2009/jul14/3464/swanson-files-suit-against-national-arbitration-company

Business Week

FDA Eyes Acetaminophen & Evalutes Risks Assocaited With Its Use

The Food and Drug Administration is pondering what to do about the wildly popular painkiller in Tylenol, Excedrin, Nyquil, TheraFlu, Vicodin, Percocet and many other commonly used drugs to treat aches and pains and alleviate fevers.

Since all of these medicines have considerable amounts of acetaminophen in them, when you take them collectively, you're getting pretty close to the maximum daily allowance.

After a two day meeting, the FDA panel is calling for sweeping changes to review acetaminophen's safety since years of public education efforts have failed to alleviate the problem.

The FDA now recommends lowering the maximum amount allowed in over-the-counter medications from 4 grams to a lower, undisclosed amount. It also recommends adding a visible warning label on combination drugs that contain acetaminophen, and decreasing the dosage of Extra Strength Tylenol.

ACETAMINOPHEN DANGERS

Acetaminophen is generally very safe and effective, but in excess doses it can cause liver failure. And because acetaminophen is so common -- more than 24 billion doses were sold last year in the United States -- even rare side effects can add up to a lot of problems.

According to the FDA, from 1998 to 2003, acetaminophen was the main cause of acute liver failure in the United States.

According to a June 2006 report published in Pharmacoepidemiology and Drug Safety, between 1990 and 1998, each year there were an estimated 56,000 emergency room visits, 26,000 hospitalizations, and 458 deaths related to acetaminophen overdoses.

A 2007 report from the Centers for Disease Control and Prevention estimates that there are 1,600 cases of acute liver failure each year in the United States, and acetaminophen is the leading and most common cause of liver failure.

The drug is an ingredient in so many products that people often don't realize they are getting multiple doses that could exceed the safe levels. The panel even went as far as to narrowly recommend pulling Vicodin, Percocet and similar products that combine acetaminophen with powerful narcotics from the market altogether.

Now, while the FDA usually follows the advice of its advisory panels, it doesn't have to, and is unsure at this time what action they will take. The FDA panel was split about pulling drugs like Vicodin & Percocet since these drugs are important to so many millions of Americans.

More than 200 million doses of those drugs that combine acetaminophen with narcotics were sold last year in the United States, making them the most common prescribed class of drugs.

The agency could leave drugs like Vicodin and Percocet on the market with stronger, more prominent warning labels. They could also work out a compromise with the companies that make these products where they voluntarily reduce the dosages and take other steps to make them safer.

In the meantime, officials say consumers should pay careful attention to how much acetaminophen they are getting from various products to reduce the chances of suffering complications.

Sources:

Washington Post

WKBW - Buffalo

Examiner.com

FDA Eyes Lantus after European Studies Warn of Increased Cancer Risk

The FDA said it is reviewing the safety of Lantus, an artificial form of insulin which had sales of $3.45 billion in 2008, and is in talks with Sanofi about whether any additional studies need to be conducted to determine the drug's safety since it has a potential link to increased cancer risks.

Despite the concerns, the FDA said patients should continue taking Lantus, a diabetes drug, which is made by Sanofi-Aventis SA's (SNY).

The Paris based company said it is committed to working with the FDA to clarify the situation surrounding its artificial form of insulin, Lantus. A company spokesman said Sanofi stands behind the drug's safety.

Studies published Friday in Diabetologia, the journal of the European Association for the Study of Diabetes, showed a possible link between Lantus and cancer. The FDA criticized the studies in an early communication warning posted Wednesday on its Web site.

The agency said the duration of follow-up for patients in the studies was shorter than what is generally considered necessary to evaluate cancer risk from drug exposure.

"Further, inconsistencies in findings within and across individual studies raise concerns as to whether an association between the use of insulin glargine and cancer truly exists," the FDA said, using the scientific name for Lantus.

Europe's drug regulator is also reviewing the studies.

The London-based European Medicines Agency (EMEA) on Monday said the studies into the possible link between insulin analogues and the risk of developing cancer were worthy of more in-depth investigation. The European Union's drug regulator said its Committee for Medicinal Products for Human Use will now carry out a detailed assessment of them.

A co-author on one of the studies, Professor Edwin Gale of Bristol University in England, said the FDA is misinterpreting the point of the information.

"We don't believe that these studies show that insulin turns healthy cells into cancerous cells, which would take much longer to evaluate. But we do believe they are evidence that insulin makes cancers grow more quickly and that this can be evaluated within three years."

We'll be eying these reports for more follow ups.

Source

Florida appellate court upholds Florida Law regulating "generic drug swapping"

Today, a Florida state appellate court ruled that a Florida law banning the substitution of certain drugs must be followed, even if a generic version gets federal approval from the Food and Drug Administration.

A three-judge panel of the 1st District Court of Appeal unanimously said it would be unconstitutional for the Florida Legislature to give up its authority over generic swaps to the federal Food and Drug Administration.

The Florida law lists the drugs for which generics cannot be substituted. The appellate court ruled that the Legislature has to make any changes in that list.

The court sided with Abbott Laboratories, which appealed Administrative Law Judge Susan B. Harrell's decision to remove a thyroid drug, including its name-brand Synthroid, from the list.

"It upholds a fundamental right of patients to receive the medications that are prescribed and intended by their doctors," said Abbott spokesman Scott Stoffel in Chicago.

Abbott's drug is prescribed for patients whose thyroid glands don't make enough of a hormone that regulates energy and metabolism. Synthroid also is used to treat or prevent goiters - an enlargement of the thyroid gland - that can result from hormone imbalances, radiation treatment, cancer or surgery.

Harrell had ruled that a generic version made by Mylan Pharmaceuticals Inc. could be substituted because the FDA in 2007 had given it an A rating, which meant it was the therapeutic equivalent of Synthroid.

Harrell based her ruling on another provision of the law that removes a generic from the list if it gets an A rating in the FDA's "Orange Book."

District Judge William A. Van Nortwick wrote that Harrell should not have applied that provision to editions issued after the law was passed in 2001.

It's up to the Legislature to update the list each year based on revised versions of the Orange Book, though it isn't required to follow the FDA's guidance, Van Nortwick wrote.

Source: http://www.miamiherald.com/news/florida/AP/story/1108552.html

FDA: previous failures and potential powers

Although the Food and Drug Administration touts on its website its task is "protecting the public health by assuring the safety, efficacy and security of human and veterinary drugs, biological products, medical devices, our nation's food supply, cosmetics and products that emit radiation," the past few years have exposed an underfunded and understaffed organization that has been slow to react, or taken no protective action at all, in response to potential dangers.

Recent examples of contaminated food products, destructive dietary supplements and harmful homeopathic remedies and drugs have highlighted the need for a more proactive, tougher FDA regulatory agency.

The new FDA commissioner, Dr. Margaret A. Hamburg, is taking the lead in trying to facilitate a strengthened regulatory agency for American consumers. Until now, the FDA has been a more reactive agency with limited powers as shown in the past few years with normal household products on the market hurting Americans who purchase and use them.

Fortunately, Dr. Hamburg said that to oversee the increasing flood of imported foods, medical devices and drugs, the F.D.A. would have to create far more partnerships with foreign regulators. “Under my leadership, we’ll see a somewhat more aggressive posture with respect to enforcement,” she said. Unanimously confirmed by the Senate in May, praised by conservative Republicans and liberal Democrats alike, Dr. Hamburg maintains wide support among a diverse and often fractious set of industry, consumer and patient advocacy groups.

The FDA has already made strides, but I expect to see tougher regulations and restrictions on companies producing dietary supplements, homeopathic remedies, medical devices, pharmaceuticals, food, tobacco, and plastics. Currently, the FDA does not regulate dietary supplements or homeopathic remedies (highly diluted drugs made from natural ingredients), which are taken by more than half of Americans and have grown into an estimated $25 billion industry, causing consumers to be guinea pigs to companies’ recipes for healthier life. The sector remains one of the least regulated under current laws: the Dietary Supplement Health and Education Act of 1994 requires that the manufacturer of a dietary supplement, not the FDA, ensure its safety before it is marketed. The FDA is responsible only for taking action against any unsafe product after it's on the market.

U.S. District Court Judge Jack Weinstein in ruling on one Zyprexa case in 2008 said

"Compared to its peer agencies in other parts of the world, the FDA has arguably failed consumers and physicians by over-relying on pharmaceutical companies to provide supporting research for new drug application. The result of such claimed governmental failures arguably causes overuse and overpricing of pharmaceuticals, resulting in mass litigations such as this one for Zyprexa."

Let’s hope the new FDA Commissioner stands by her word and allows Americans to consume safer products, food, and medical devices.

Be Weary of Dietary Supplments; Report Adverse Events directly to the FDA

2 days after the FDA warned consumers about potential loss of smell and Matrixx defended its products calling the FDA warning a "surprise," its CEO revealed the company didn't turn over 800 complaints received from consumers about loss of sense of smell to the FDA.

No only was the company hiding critical information for the FDA to notify consumers, it was still reaping profits while it knew of the 800 complaints, compared to the 130 complaints that the FDA received that forced the product recall/withdrawal.

If you have experience an adverse event with a dietary supplements, homeopathic remedy or pharmaceutical, immediately let the FDA know in addition to the company.

Report adverse events to the FDA at this site: https://www.accessdata.fda.gov/scripts/medwatch/medwatch-online.htm


Read full article here: http://www.sltrib.com/business/ci_12624089?source=sphere_article

IRS provides words of caution

I read an interesting article that an IRS special agent wrote about prominent tax schemes and scams to avoid.

He explains tax evasion, money laundering, mortgage fraud, and investment fraud.

I have clients that have been scammed through illegal tax shelters under IRS code 412(i) and other clients who have had their identity stolen. My clients feel betrayed in addition to losing money and privacy. Be cautious and careful with who you do business with and don't ultimately rely on every word they tell you.

Words of wisdom:

• If someone says that they can help you earn extraordinary rates of return on your investment, make sure to get a second opinion from a legal, tax, or investment professional. It could be real fishy.

• If it sounds too good to be true, it is too good to be true.

These statements should be red flags to warn you of trickery and deceit.

In today's economy it is important to protect your self-interest and be vigilant in protecting the integrity of your personal financial affairs.


If you or a loved one has had your identify stolen or have been sold an illegal tax shelter, email me at ChrisH@pdkhlaw.com

Read the whole article here:
http://www.tidewaternews.com/news/2009/jun/17/words-caution-irs/

Calrcon Skin Product: Partial Recall and Warning

The Food and Drug Administration warned consumers Monday, June 8, 2009, not to use skin products made by Clarcon because of high levels of disease-causing bacteria found during a recent inspection. View the FDA press release here.

Clarcon Biological Chemistry Laboratory Inc. of Roy, Utah, issued a voluntary recall of some skin sanitizers and skin protectants marketed under several different brand names, the FDA said in a statement.


Consumers should not use any Clarcon products and should throw them away, the FDA said.

FDA said analysis of several samples of over-the-counter topical antimicrobial skin sanitizer and skin protectant products revealed high levels of various bacteria, including some associated with unsanitary conditions. Some of these bacteria can cause opportunistic infections of the skin and underlying tissues and could result in medical or surgical attention as well as permanent damage.

Examples of products that should be discarded include:

• Citrushield Lotion
  
• Dermasentials DermaBarrier
  
• Dermassentials by Clarcon
  
• Antimicrobial Hand Sanitizer
  
• Iron Fist Barrier Hand Treatment
  
• Skin Shield Restaurant
  
• Skin Shield Industrial
  
• Skin Shield Beauty Salon Lotion
  
• Total Skin Care Beauty
  
• Total Skin Care Work

Florida Department of Insurance Issues Show Cause Order Against Liberty National Life Insurance Company

On June 3rd, the Florida Department of Insurance issued an order for Liberty National Life Insurance Company to show cause why a final order suspending or revoking the Certificate of Authority currently held by Liberty National in the state of Florida should not be issued.


The Order arose out of a Market Conduct Examination which took place from June to November of 2008 at Liberty National offices in Birmingham, Alabama.

According to the Order, Liberty National was accused of unfair and deceptive conduct. Specifically, Liberty National is accused of discriminating against people solely because of the individuals national origin.

The order primarily involves individuals from Haiti who applied for insurance, but also addressed applications from individuals from Columbia, India, and Pakistan. The applications reviewed by investigators requested to know if the individual had lived in the United States for the last year. However, Liberty National had an underwriting policy that applicants born in certain countries would be rejected if they had resided in the United States for less than 10 years. This heightened underwriting standard applied to individuals from less developed countries. "This was in direct contrast to the written information provided to applicants as part of the application process that they must have resided in the U.S. for the past year to be eligible for life insurance coverage."


As a result, applicants were denied coverage based solely on their national origin.

Additionally, regulators determined that Liberty National represented a basis for denial as "information not received" which was a completely false and fabricated reason to cancel a policy when no actual reason existed. One underwriting file even contained a handwritten stating "Find a reason to cancel/decline. Info not received?"

For a complete copy of the report, contact Chris Hellums at Chrish@PDKHLaw.com

What is Zombie debt and how does it relate to Debt Collectors and their tactics

One of the things people who have been victims of identity theft report to me frequently is that they have done everything humanly possible to educate debt collectors that the debt is not theirs, yet they continue to harass them repeatedly. They also report that just when they think they have convinced them that the debt is not theirs, they change debt collection companies and it starts over again.

Why does this occur? This occurs because the debt continues to get sold. After some period of time, the original creditor (i.e. credit card company) sells the debt to an entity who purchases that debt for some percentage on the dollar. The age of the debt determines how much it sells for on the secondary market. Often the debt of any number of people is consolidated and sold in blocks.

Depending on the age of the debt, it is possible that it could be sold for pennies on the dollar. Extremely old debt is often referred to in the industry as Zombie debt. Like the name implies, it is debt that, despite the age, refuses to die. Much of this debt is debt that has been written off, discharged in bankruptcy, or resulted from identity theft.

Claims by consumers of illegal tactics by debt collectors have skyrocked. In 2008, consumers complained about debt collectors more than any other industry. The FTC recently issued a report saying that the debt collection system needs reform to insure that collectors are going after the right people for the right amounts of money.

To date, collectors are fighting state officials investigations into their actions.

Are Debt Collectors out of Control?

It all started with a call from a potential client. When the call started, I could tell it was going to be a long conversation. The call was from an elderly woman who sounded as if she was at her wits end. As she told her story, I realized that I had to see if I could help.

Her daughter had gotten into drugs and stolen her identity. She had taken out credit cards and incurred debt in her mother’s name. When her mother found out, she talked with her daughter and told her that there must be consequences for her actions. She contacted the police and filed a complaint against her daughter. This was a difficult decision as she loved her daughter and realized that her actions would effect her daughter’s life. However, she was even more concerned if she did not do something. Her daughter plead guilty and entered into a restitution agreement.

Image via Wikipedia

Shortly thereafter, the mother and true victim began getting calls and letters from debt collectors. She explained the situation to them. She provided them a copy of the complaint she filed. She provided them with a copy of the guilty plea. She even obtained a letter from the District Attorney who prosecuted her daughter describing what happened and stating that she was not now, or had she ever been, a participant in the fraud and in fact, was a victim.

These collectors did not care. Day and night they called. They called at home. They called at work. They even called at her husband’s work. They threatened to garnish her wages. They threatened to take her house. They threatened just about everything you could threaten.

She then went to an attorney. She paid him thousands of dollars to write letters to these people in hopes that would stop the harassment. Nothing seemed to work.

Somehow she found me late one afternoon. Up until this point in time, I had never handled a case like this one. I researched the issues and began looking at consumer sites such as budhibbs.com.

I filed suit against the various creditors and debt collectors.

After filing suit, I received the first of what has become common in these types of cases. The attorneys for the various entities call and say they cannot find my client’s account, their client has no record of any calls to my client. They would never call at work. My client must be mistaken. Fortunately, my client had kept recordings from her answering machine and had co-workers listen in on conversations. Ultimately, we settled with the debt companies and collectors. My client received economic compensation and on some level, felt vindicated.

Since that time, I have represented a number of client’s in these types of transactions.

I advise them all to do the following:

1. Document every conversation
2. Document any phone number which calls them
3. Retain all letters received from any bill collectors
4. Dispute all accounts with the various Credit Reporting Agencies
5. Obtain a police report
6. Send a letter, certified mail, to each creditor and debt collection company

I also tell my clients to be prepared to receive more harassing calls and letters stating that the creditor or debt collectors have completed their investigation and determined that they owe the debt.

To understand why this occurs, consumers need to know more about how the industry works. Stay tuned to future postings about how the industry operates, the tactics they use, and where to go for help.

Chris Hellums is the managing shareholder of Pittman Dutton Kirby & Hellums. He can be reached at CHRISH@PDKHLaw.com or toll free at 866-515-8880

Congress Must Act on Nutritional and Dietary Supplements

We must tighten laws on nutritional and dietary supplements. It is that simple. All day and all night we are barraged with commercials touting (and showing) the benefits of these products. And yes, from time to time, there are articles or exposés which reveal that the women in the ads have lost the weight not from taking the product, but either by gaining the weight on purpose, or comparing against pictures taken shortly after having a baby.

However, this is not enough to deter Americans quest for a bottle cure, and while spending some money on a product that simply does not work is acceptable to many, what most don’t realize are the real dangers of these types of products.

Many assume that manufactures cannot make the exaggerated claims on television unless they are true, or because the Food and Drug Administration regulates prescription drugs so heavily, that they regulate these as well. These assumptions are simply incorrect. The truth of the matter is that the exaggerated claims are made because there is so little regulation and because there is so much money to be made---$22 Billion-a-year. Yes, that is correct, Billion, not Million.

Image via Wikipedia

A 1994 law leaves this industry lightly regulated. Supplement manufacturers don't have to provide scientific proof of a product's purity, safety or effectiveness before they put it on the market. Instead, the FDA generally does not step in until after problems are reported.

The industry argues that the current regulation works well and that one bad apple is not representative of an industry whose manufactures, for the most part, go to great lengths to ensure they sell a safe, quality product.

The problem is that the Hydroxycut has become just another addition to a long list of dietary and nutritional supplements that were heavily hyped and then discovered after perhaps millions were sold, to pose significant and harmful risks.

Last year, Total Body Formula, was recalled after it was determined that it contained toxic amounts of Selenium---the same substance that killed polo horses in Florida. If selenium will kill horses, imagine what it would do to humans. StarCaps, a product used by overweight Minnesota Vikings Kevin and Pat Williams, was found late last year to contain an unlisted prescription diuretic that could increase users' risk of heat stroke and dehydration. In 2004, the FDA banned ephedrine diet aids after a major study linked the products' use to more than 16,000 adverse events, including cardiovascular problems.

Incredibly, Hydroxycut was marketed as a better alternative after the ephedrine ban. It’s name comes from hydroxycitric acid, which comes from a tropical fruit. Reportedly, Hydroxycut sold 9 million units last year. After 23 reported cases of serious health problems in people taking the product, including liver abnormalities, heart problems and possible kidney failure -- Hydroxycut's manufacturer agreed to recall at least 14 products late last week.

The time has long come for Congress to more strongly regulate dietary and nutritional supplements. Of course, once this occurs, we will only have to worry about altered data being sent to the F.D.A. and a revolving door of regulators moving on to work for the industry.








Chris Hellums is the managing partner of Pittman Dutton Kirby & Hellums and is currently co-lead counsel of the Executive Committee to the Personal Injury Plaintiff's Steering Committee for the Total Body Multi-District Litigation. He can be reached at ChrisH@PDKHLaw.com

Debt Settlement Companies Under Attack by Authorities

Debt settlement companies are for-profit companies that claim that they can eliminate consumers’ debts by negotiating settlements with creditors that are a fraction of the consumer’s outstanding debt. If you watch television these days, their advertisements show up as often as those for drug companies. Many of these companies accomplish very little for consumers while charging exorbitant fees and make empty promises that leave consumers in worse financial state then when they began.

These debt solution companies prey on desperation, offering false hope and no help, often driving these consumers even further into debt and ruining their credit.

Some debt solution companies advise consumers to do one of the following:

1. Stop paying debts

The Problem: this causes customers to face unforeseen late fees, additional interest, increased collections attempts, and even lawsuits by their creditors.

2. Stop paying debts and, instead, to place money into savings account so that enough money will accumulate to allow a settlement offer to be made to any creditors.

The Problem: The debt settlement companies’ saving plans are often extremely unrealistic, so that the promised negotiated settlements do not occur, but the debt settlement companies’ still take their fees.

Also, the debt settlement plans are generally premised on consumers aggregating savings, over one to three years, from which both the payment of the company’s fees and any negotiated settlement are to be made. Yet most consumers who are targeted by these companies are unable to meet the savings requirements because of their precarious financial situation.3. Ignore collection efforts or refer those efforts to the debt settlement company.

The Problem: it doesn’t work and consumers continue to find themselves subject to creditors’ collection efforts, including lawsuits, and consumers’ credit histories are further damaged when the consumers stop paying debts.

4. Seek additional sources of funds through means such as selling their blood plasma, mowing lawns, cutting down on car insurance and borrowing from their neighbors and church.

The Problem: Even for those consumers who can meet the requirements set out by a plan, their amount of aggregated savings is ordinarily insufficient to settle their debts. As a result, many consumers find themselves worse off financially because of these debt settlement plans.

I suspect that much litigation will arise against debt settlement companies who engage in this type of conduct.To read more about the actions being taken by the New York Attorney General, see here (http://www.oag.state.ny.us/media_center/2009/may/may19b_09.html)

Chris Hellums may be contacted at ChrisH@PDKHLAW.com

Debt Solutions companies under attack by authorities

Debt settlement companies are for-profit companies that claim that they can eliminate consumers’ debts by negotiating settlements with creditors that are a fraction of the consumer’s outstanding debt. If you watch television these days, their advertisements show up as often as those for drug companies. Many of these companies accomplish very little for consumers while charging exorbitant fees and make empty promises that leave consumers in worse financial state then when they began.

These debt solution companies prey on desperation, offering false hope and no help, often driving these consumers even further into debt and ruining their credit.

Some debt solution companies advise consumers to do one of the following:

1. Stop paying debts

The Problem: this causes customers to face unforeseen late fees, additional interest, increased collections attempts, and even lawsuits by their creditors.

2. Stop paying debts and, instead, to place money into savings account so that enough money will accumulate to allow a settlement offer to be made to any creditors.

The Problem: The debt settlement companies’ saving plans are often extremely unrealistic, so that the promised negotiated settlements do not occur, but the debt settlement companies’ still take their fees. Also, the debt settlement plans are generally premised on consumers aggregating savings, over one to three years, from which both the payment of the company’s fees and any negotiated settlement are to be made. Yet most consumers who are targeted by these companies are unable to meet the savings requirements because of their precarious financial situation.

3. Ignore collection efforts or refer those efforts to the debt settlement company.

The Problem: it doesn’t work and consumers continue to find themselves subject to creditors’ collection efforts, including lawsuits, and consumers’ credit histories are further damaged when the consumers stop paying debts.

4. Seek additional sources of funds through means such as selling their blood plasma, mowing lawns, cutting down on car insurance and borrowing from their neighbors and church.

The Problem: Even for those consumers who can meet the requirements set out by a plan, their amount of aggregated savings is ordinarily insufficient to settle their debts. As a result, many consumers find themselves worse off financially because of these debt settlement plans. I suspect that much litigation will arise against debt settlement companies who engage in this type of conduct.

To read more about the actions being taken by the New York Attorney General, see here (http://www.oag.state.ny.us/media_center/2009/may/may19b_09.html)

Chris Hellums may be contacted at ChrisH@PDKHLAW.com

What is going on with Juries these days?????

In the last 6 months, our firm has obtained four multi-million dollar verdicts? For years, the jury system has been under attack by surrogates of mega corporations who claim that the jury system is out of control. For years, those attacks have been successful and juries have been reluctant to punish corporate wrongdoing.

Those trends seem to be changing. Recently, our firm conducted a focus group in a very conservative area. We represent several small businesses in that area whose insurance carrier denied their storm damage claims and effectively put them out of business. We conducted the focus group to gauge their thoughts on many issues, including punitive damages. We selected a conservative cross section, which included insurance agents and business owners. The results were striking.

Small town America is angry with corporate America. Small town America says corporate America is getting a bail out and small town America is not only getting left out, but forced to pick up the tab. One member of the panel spoke from the heart. He said that in the past he was reluctant to award significant damages in a civil case for fear that the trickle-down effect would hurt his local community, but now he believes otherwise.

When we hear about the excesses of corporate pay, it is easy to see why small town America feels like they do today.

For more on excessive corporate pay and golden parachutes, see the attached article:

http://finance.yahoo.com/career-work/article/107075/golden-coffins-golden-offices-golden-retirement?mod=career-salary_negotiation

Chris Hellums can be reached at ChrisH@pd

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PDKH Lawyers obtain award for mother and daugher injured by drunk driver

PDKH attorneys Chris Hellums and David Hodge of Birmingham, along with Tom Denham of Moulton recently tried and received a verdict in the Circuit Court of Lawrence County in the amount of $2,075,000. The verdict consisted of $850,000 in compensatory damages and $1,225,000 in punitive damages.

PDKH represented a family from Lawrence County whose lives were forever altered when they were hit head-on collision by a drunk driver on July 18, 2006. The driver of the other vehicle crossed the center line and hit the Lawrence County residents head on. At trial, PDKH lawyers Chris Hellums and David Hodge were able to introduce into evidence that at approximately 9:40 am in the morning, the driver of the other vehicle was intoxicated at a level of almost four times the legal limit and that his vehicle had open containers and empty bottles in the front seat.

The force of the impact was so great that the client's vehicle traveled 39 feet in the opposite direction from which it was traveling and caught fire. Heroic fellow motorists were able to pull the mother and daughter from the burning vehicle as it exploded in flames. The mother suffered numerous physical injuries including two collapsed lungs, a broken collar bone and broken ribs, all of which required multiple surgeries, extensive hospitalization and painful physical therapy. The 16 year-old daughter suffered a broken back and a spinal cord injury that left her paralyzed. After months of surgeries and physical therapy, coupled with a strong will to overcome and prayers from others, the teen was able to take her first steps without the assistance of a wheel chair. Even though the teen will never live without pain, she continues to work hard and undergo physical therapy as she strives to wark normally again.

This case was tried by partners Chris Hellums and David Hodge. Chris Hellums can be reached at chrish@pdkhlaw.com and David Hodge can be reached at davidh@pdkhalw.com .

To read more:http://legacy.decaturdaily.com/decaturdaily/news/060719/wreck.shtml

http://legacy.decaturdaily.com/decaturdaily/news/060824/hurt.shtml

http://legacy.decaturdaily.com/decaturdaily/news/061010/morgan.shtml