Consumer Health Digest #13-20
Your Weekly Update of News and Reviews
May 23, 2013
Consumer Health Digest is a free weekly e-mail newsletter edited by Stephen Barrett, M.D., with help from William M. London, Ed.D., M.P.H. It summarizes scientific reports; legislative developments; enforcement actions; news reports; Web site evaluations; recommended and nonrecommended books; and other information relevant to consumer protection and consumer decision-making.
Large MLM company shut down. In January 2013, at the request of the Federal Trade Commission and the states of Illinois, Kentucky, and North Carolina, a federal court halted an alleged pyramid scheme operated by Paul C. Orberson, Thomas A. Mills, Fortune Hi-Tech Marketing Inc., FHTM Inc., Alan Clark Holdings LLC, FHTM Canada Inc., and Fortune Network Marketing (UK) Limited. Court documents allege:
- The operation affected more than 100,000 consumers throughout the United States and Canada.
- The defendants falsely claimed consumers would earn significant income for selling the products and services of companies such as Dish Network, Frontpoint Home Security, and various cell phone providers, and for selling FHTM's line of health and beauty products. However, more than 90% who bought in to FHTM lost their money.
- To participate in the scheme, consumers paid annual fees ranging from $100 to $300. To qualify for sales commissions and recruiting bonuses, they had to pay an extra $130 to $400 per month and agree to a continuity plan that billed them monthly for products. Those who signed up more consumers and maintained certain sales levels could earn promotions and greater compensation, but contrary to FHTM's claims, the complaint alleged, its compensation plan ensured that, at any given time, most participants would spend more money than they would earn.
- Recruits were told they could earn high commissions by selling products to people outside the operation, but instead only minimal compensation was paid for sales to non-participants, and few products were ever sold to anyone other than participants. The scheme provided much larger rewards for recruiting people than for selling products, and more than 85% of the money consumers made was for recruitment.
- To the extent that consumers could make any income, it was mainly for recruiting other consumers.
In addition to stopping the allegedly deceptive practices, the court froze the defendants' assets and appointed a temporary receiver over the corporations pending a trial. [FTC action leads court to halt alleged pyramid scheme: FHTM promoted itself as a path to financial independence, but most people made little or no money. FTC news release, Jan 25, 2013] Joseph M. Isaccs, who called media attention to the scheme and helped facilitate the government action, has posted an archive of relevant documents.
Pulitzer Prize awarded for fluoridation editorials. The Tampa Bay Times has won a Pulitzer Prize for a series of ten editorials that ran after the Pinellas County Commission moved to stop putting fluoride in the community's water supply. The paper's editors described what happened this way:
In October 2011, the Pinellas County Commission turned back the clock. The commission, pressured by antifluoride zealots and tea party conservatives, abruptly voted to stop adding fluoride to the drinking water. The commissioners ignored established science and the public health, and in January 2012 the Pinellas water system suddenly became one of the nation's largest without fluoridated water. More than 700,000 residents no longer benefited from what the Centers for Disease Control and Prevention calls one of the nation's greatest health care advances. Tampa Bay Times editorial board went on mission to correct this travesty. With original reporting and persuasive arguments, Tim Nickens and Dan Ruth educated readers and delivered a clarion call for action on behalf of those who need fluoridated water the most: the poor families and the children of Pinellas County.
These editorials produced profound results. In a rare occurrence, voters in November ousted two incumbent commissioners who had voted to stop adding fluoride in the water and replaced them with two candidates who pledged to add it back. In their first meetings after the election, the new commissioners fulfilled their pledge. Another incumbent who was not on the ballot also switched his vote and supported fluoride. A County Commission that had voted 4-3 a year ago to stop adding fluoride voted 6-1 to resume adding it to the drinking water in March 2013.
When fluoridation is under consideration, most media outlets assert that their role is to provide a forum for news and discussion and not to educate their audience. Some provide supportive commentary, but very few assume a proactive educational role or see any need to limit the flow of false information offered by fluoridation opponents.
Generic manufacturer hit for $500 million in penalties. In the largest drug safety settlement to date with a generic drug manufacturer, Ranbaxy USA Inc., a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories Limited, has pleaded guilty to felony charges relating to the manufacture and distribution of certain adulterated drugs made at two of its manufacturing facilities in India. The criminal plea encompassed three counts of violating the federal Food, Drug, and Cosmetic Act and four felony counts of knowingly making material false statements to the FDA. The company also agreed to pay a criminal fine of $130 million, forfeit an additional $20 million, and settle civil claims under the False Claims Act and related State laws for $350 million. In the agreements, the company admitted falsifying quality-control test reports on several of its drugs. Pharmwatch has posted details of the case and links to the court documents. The Fortune CNN Blog has published a gripping insider's account of Ranbaxy's wrongdoing. [Eban K. Dirty medicine: The epic inside story of long-term criminal fraud at Ranbaxy, the Indian drug company that makes generic Lipitor for millions of Americans. Fortune CNN Blog, May 15, 2013]
Chiropractor ordered to stop using quack chiropractic device. The California Board of Chiropractic Examiners has cited David Manago, D.C., for using a Sensometer to diagnose and treat patients. The board concluded that this constituted gross and repeated negligence and ordered him to pay $500 and stop using the device. The Sensometer was originally called the Toftness Radiation Detector. It is a hand-held instrument that supposedly focused low-level radiation emitted from the body that the chiropractor could detect while rubbing his fingers on the detection plate. Rubbing hard would produce "crackling" sounds that supposedly identifed areas of "nerve interference" (subluxations) treatable by very-low-force spinal "adjustments." In the early 1980s, after a lengthy campaign, the FDA obtained court orders banning sale of the device in interstate commerce and ordering the sellers to notify all buyers to return them. However, a few chiropractors continued to use the device and articles promoting it occasionally appear in chiropractic publications. [Barrett S. The Toftness Radiation Detector is a bogus device. Chirobase, May 20, 2013]
This page was posted on May 24, 2013.