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