This post appears courtesy of the Consumer Protection Branch of the Civil Division at the Department of Justice.

The holiday season is now upon us and consumers are beginning to turn their focus towards the timeless ritual of exchanging gifts.  Although this may be the most wonderful time of the year—especially for those young children eagerly anticipating a present or two— consumers may not realize that sometimes even the most innocuous gift may pose a hazard far worse than any lump of coal.

According to statistics from the U.S. Consumer Product Safety Commission, (CPSC), an estimated 262,300 toy-related injuries merited a trip to the emergency room in 2011.  The vast majority of these injuries—seventy-four percent—involved children under the age of fifteen.  In addition, the CPSC, working with U.S. Customs and Border Protection, seized record amounts of unsafe products at U.S ports in fiscal year 2012; more than two million units of toys and children’s products either posed safety hazards to U.S consumers or failed to meet federal safety standards.

Before you mutter, “Bah! Humbug!” you should know that one can go a long way towards safeguarding young recipients of holiday generosity by reading and following the CPSC’s tips and publications available at http://www.cpsc.gov/.  Browsing the CPSC’s website while you are nestled snugly in bed, or near a (safely-maintained) fireplace, will reveal what you need to know about voluntary and mandatory safety standards, product bans and recalls (Yes, the CPSC does keep a list, and they do check it twice), and potential product hazards, such as those detailed in the CPSC’s Four Keys to Holiday Safety: 

• For children under the age of three, avoid toys with small parts, which can cause choking.
• Select toys to suit the age, abilities, skills and interest level of the intended child.
• For children under the age of eight, avoid toys with sharp edges and electric toys with heating parts.
• Look for labels with age and safety advice.

In addition to information provided by the CPSC directly, consumers can also read reports written by other consumers involving harm or a risk of harm related to the use of a consumer product via the CPSC’s searchable online database, http://SaferProducts.gov.  And if you, or someone you know, experience harm or a risk of harm related to the use of a consumer product, you can submit a report to the CPSC’s database as well.  If published, the CPSC, the public, and product manufacturers will have the opportunity to read your report online. 

As a final reassurance that you can safely enjoy this holiday season, the Department of Justice’s Consumer Protection Branch routinely assists the CPSC in its enforcement work by initiating civil or criminal litigation when retailers or manufacturers distribute goods that fail to comply with pertinent standards or labeling requirements or fail to report to the CPSC when they learn of a defect or product safety hazard.

Just remember that if you are well-informed about the types of gifts, toys, and consumer products you are giving, as well as who should and should not receive them, you are bound to have a very happy, enjoyable, and safe holiday season!

Four years removed from one of the greatest economic crises in history, consumers are still reeling from the aftereffects.  So, many consumers, feeling the crunch of growing credit card debt, are seeking help from companies holding themselves out as debt relief providers.  And getting nothing in return.

These companies generally offer to settle a consumer’s debt with creditors for substantially less than the debt’s principal through monthly payments that the company holds in escrow.  Unfortunately, many of these companies not only fail to fulfill their promises to consumers, but fail to offer any services at all. Companies charge large upfront fees, or multiple hidden fees.  Often, a substantial portion of a consumer’s monthly payment goes to the company’s fees, with little to nothing offered toward reducing the debt’s principal.

 The Department of Justice Consumer Protection Branch, in collaboration with its investigative partners, is working to prosecute such companies.  But we need your help.  So, if you are contemplating debt relief services, the following tips may help you avoid scams:

• Fraudulent debt relief companies will often make claims of being able to negotiate a one-time settlement with creditors that will reduce a consumer’s principal by fifty percent or more.  The Consumer Federation of America, an association of non-profit consumer organizations, warns that such a promise is a virtual impossibility.
• If you have trouble making credit card payments, immediately call the creditor to work out a payment plan.  If that is unsuccessful, a non-profit credit counseling service may be able to help you.  These services may charge a small fee, but the cost will be substantially less than using a debt relief company.  An excellent resource for locating a local credit counseling service is the National Foundation for Credit Counseling, at www.nfcc.org.
• If a company offers a “one size fits all” solution, what they are really offering is a “no size fits anyone” problem.  Legitimate credit counseling services tailor a consolidation plan to each consumer’s individual needs.
• Do not be afraid to ask questions.  Demand that the company disclose set-up and maintenance fees, and that these fees be set in writing.  According to the Consumer Federation of America, consumers should not pay more than $50 for the set-up fee and $25 for monthly maintenance of the account.
• Do not rely on the company’s website.  Conduct your own searches of the company – the Better Business Bureau and state consumer protection agencies are excellent resources.

For more information on debt relief scams, see the Federal Trade Commission’s website.  Additional information on legitimate debt relief services can be found on the Consumer Federation of America’s website (PDF).

The following post appears courtesy of the Consumer Protection Branch of the Civil Division.

The pitch is simple.  You receive a call from a foreign lottery announcing that you have won money, a car and other prizes.  The caller tells you that you entered a contest: a form you submitted in the mail, or on the Internet, or while shopping.  You have won, but you must pay taxes, insurance and other up-front fees in order to get your prize into the United States.  Despite several payments totaling thousands of dollars, you never receive the prizes promised to you.

According to the U.S. Postal Inspection Service, Americans have lost $42 million to fraudulent foreign lotteries and sweepstakes.  The majority of victims are elderly.  In addition to losing their life savings, victims are duped into giving fraudsters their Social Security numbers and financial accounts.  Fraudsters convince victims to send money quickly, and they warn victims not to discuss their winnings with family, friends or professional advisors.

The Department of Justice Consumer Protection Branch is working with its investigative partners to prosecute lottery fraudsters.  This effort has identified common signs of lottery fraud that you can use to protect yourself and loved ones.

• You should not have to pay fees or taxes in advance to receive lottery or sweepstakes winnings.  Beware of checks or wire transfers sent to you by the lottery.  The fraudsters will tell you to cash these payments and forward the money, but after you have sent this money, the payment you originally received will bounce.
• Lottery fraudsters use technology to mask their telephone number.  Your caller-ID may identify a call as coming from the United States that is actually coming from a foreign country.
• Lottery fraudsters impersonate officials from federal agencies in order to convince victims that the scam is legitimate.  The United States government does not participate in the distribution of prize money from lotteries and sweepstakes. 
• You should never give your Social Security number, bank account number or any other personal identifying information to these callers.  Fraudsters promise to use this information to pay the “fees” for your prize, or they offer to pay off your debts.  In reality, they use this information to steal your identity and your money.
• Lottery fraudsters are particularly successful with victims who live alone or suffer cognitive impairment.  Fraudsters befriend victims to create trust and to convince victims to hide the payments from family members.    

Additional information on this scam is provided by the U.S. Postal Inspection service at www.deliveringtrust.com, and by the Federal Trade Commission at www.ftc.gov/bcp/edu/microsites/phonefraud/sweepstakes.shtml.

The following post appears courtesy of the Consumer Protection Branch of the Civil Division

The dietary supplement industry has grown exponentially in recent decades, expanding from a niche health market into a major industry offering purported solutions for all types of ailments. 

In 1994, Congress struck a balance between the dietary supplement industry and the public interest by enacting a law that generally treated dietary supplements as food rather than medicine. That means, for example, dietary supplements are generally not required to go through pre-market approval like pharmaceuticals.   

In 2007, the Food and Drug Administration (FDA) recognized that stronger regulations for the manufacturing of dietary supplements were needed.  Important new requirements have been introduced, in an effort to ensure that dietary supplements contain what they claim to contain.

In the last few years, the Consumer Protection Branch of the Civil Division, the FDA, and the Federal Trade Commission have collaborated in a number of actions designed to protect consumers.   When its inspections reveal serious deficiencies in a dietary supplement firm’s labeling, manufacturing, or advertising, the FDA typically sends the firm a warning letter giving the firm a certain amount of time to rectify the violations, and may work with the firm to recall products with potential risks.  You can find out about these actions and protect yourself by signing up for FDA recall alerts and by checking the FDA and FTC websites for warning letters issued to firms whose dietary supplements you may have purchased. 

If the firm does not remedy the violations, the matter may be referred to the Justice Department for civil or criminal prosecution.  In one recent case, the Consumer Protection Branch filed a civil suit against a Paterson, NJ-based supplement maker that had a serious rodent infestation, manufacturing problems that resulted in allergen cross-contamination, and various labeling errors.  One of the firm’s products—which had been labeled to be dairy-free but in fact contained milk—even caused a life-threatening anaphylactic reaction in a consumer with a severe milk allergy. 

Flouting a court-ordered shut down, the manufacturers simply opened up shop in a new location.  Ultimately, the Justice Department secured a criminal conviction and the firm was ordered to pay $1 million in fines.  Perhaps more significantly, the three principals of the firm were given lengthy prison terms: 40 months for the president and 34 months for the production and quality assurance managers. 

Violations in the dietary supplement industry will not be tolerated.  Consumers turn to these products for their health and sense of well-being.  Consumers rely on the labels of dietary supplements to tell them about the effectiveness of the supplements and the allergens in the product.  Consumers should be able to trust that the companies that produce dietary supplements make sure their products are free from harmful impurities and manufactured under sanitary conditions.

For more information, visit the FDA website and sign up for recall alerts.

The following post appears courtesy of the Civil Division’s Consumer Protection Branch.

The distressed condition of the national housing market, paired with high unemployment, has created a fertile environment for unscrupulous fraudsters seeking to take advantage of desperate homeowners.  Many homeowners who turn to loan modification or foreclosure “rescue” companies for help ultimately find that they have been scammed.  An emerging trend in recent months involves mortgage assistance relief scams.  These scams target homeowners with promises to save them from foreclosure, get them a reverse mortgage, or lower their mortgage payments—in exchange for an advance or monthly fee.  Sadly, many of these homeowners never get the relief they have been promised. 

These scams use a variety of simple tactics to identify their financially-distressed victims.  Some scammers locate distressed borrowers from published foreclosure notices or other publicly-available sources; while others rely on mass-marketing techniques such as flyers, radio, television and Internet advertising to lure in distressed borrowers.  Still others deceptively suggest an affiliation with a government agency to quickly earn the trust of unwitting victims.        

Because this fraud is so insidious, and preys on individuals who are at their most vulnerable point, the Consumer Protection Branch in the Justice Department’s Civil Division is committed to prosecuting these criminals and bringing justice to their victims.  But individuals are really on the front line in the battle against mortgage fraud.  Information is power, and you can protect yourself from mortgage fraud by keeping the following tips in mind:

• Be wary of those that contact you through advertising such as flyers, radio/television or the Internet with promises to modify the terms of your mortgage; if their promises seem too good to be true, they usually are.
• Be suspicious of loan modification services that require signing a contract or paying an up-front or monthly fee.  Advance fees are generally prohibited by law.  Loan counseling and modification services are generally provided free from your lender and/or a Department of Housing and Urban Development (HUD) counseling center.  Contact HUD’s toll-free 24 hour hotline at 888-995-HOPE (4673) to immediately speak to an expert advisor in more than 160 languages. 
• Never transfer title of your property, make mortgage payments to someone other than your lender, or stop making mortgage payments altogether — these are guaranteed ways to put your financial investment at risk.
• Carefully inspect the names, seals, logos and representations made by mortgage rescue companies.  They may be deliberately designed to deceive borrowers into believing an affiliation with a government agency exists.  The purpose of this is to trick borrowers into believing they are entitled to the benefit of a government program rather than committing to a loan that must be repaid.  A government agency will never require advance fees, or guarantee a specific result. 
• Some scammers pushing reverse mortgage loans are in fact trying to unload other financial products on borrowers.  Be careful to avoid brokers that want you to obtain a loan in order to buy other products such as long-term care insurance, annuities, or other investments.

And, if you believe you may have been the victim of mortgage fraud, visit www.Stopfraud.gov for more information.

The following post appears courtesy of Stuart F. Delery, the Acting Assistant Attorney General for the Justice Department’s Civil Division.

If you are like most people, you probably think intellectual property (IP) is an abstract business or legal concept that does not affect you. But if you are one of the estimated 36 million Americans — and growing — who purchase medication through online pharmacies, IP may be protecting you from unknowingly gambling with your own health.

Online pharmacies are prolific. And appealing. For the many Americans who do not have health insurance or cannot afford certain medications, the Web seems to offer a cheaper alternative. Many of these sites are designed to appear legitimate, often featuring a picture of smiling pharmacist in a white lab coat or claiming to be based in Canada.

But these sites often are not what they seem. Neither are the drugs they sell.

The World Health Organization estimates that more than half of drugs sold online are counterfeit. This means that these drugs are designed and packaged to look exactly like medicine you know and trust — medicine which required years of research and development, went through a stringent approval process, and was manufactured by trained professionals. These counterfeit drugs lack those safeguards; they aren’t made in quality-controlled laboratories, but in hidden rooms with unsanitary conditions. In order to replicate the look of legitimate drugs, they bear shockingly sophisticated labels and packaging, down to the serial numbers on blister packs and holograms. If that seems like a lot of trouble to go through, one need only look at the revenue for counterfeit pharmaceuticals worldwide to understand why — fake drugs raked in an estimated $75 billion last year.

All of us are looking for quality medicines at a better price. But these counterfeit pharmaceutical websites are run by criminals who trade on your trust of approved medicines and the quality assurances you have come to expect from them.

Take the case of Hazim Gaber, who ran an online pharmacy selling a highly-sought after cancer drug, DCA. Or so his customers thought. The pills these cancer patients received in the mail contained nothing more than starch, dextrin and lactose. For good measure, each shipment included a fraudulent certificate of analysis from a fictitious laboratory.

The medicine Gaber sold was useless. But, more often, counterfeit medications are actually harmful. More typical of a hardware store than a pharmacy, these products often include chemicals you might not even want in your house, let alone your body — toxins like rat poison, highway paint, floor wax, and boric acid. As just one example, customers have received ‘Xanax’ pills containing a substance used to manufacture sheetrock.

IP protections are a critical tool in protecting Americans from this threat. IP is not simply about downloading music or billion dollar fights over microchips. It is about making sure what you buy is actually what it claims to be.

That is why the Department of Justice is working hard to fight these criminal counterfeiters. Established by Attorney General Holder, our department-wide IP Task Force is working to combat the growing number of IP crimes, strengthening IP protections through heightened civil and criminal enforcement, greater coordination with state and local law enforcement and, because we know we cannot fight this within our borders alone, increased focus on international enforcement efforts. As part of that initiative, within the Civil Division, we have formed a team of attorneys dedicated to handling counterfeit pharmaceutical cases, particularly those trafficked over the Internet. Working with U.S. Attorneys’ Offices, the Department of Homeland Security, the FBI, and many other partners, we are succeeding in safeguarding IP rights and protecting consumers’ safety.

And, thanks to the Department’s efforts, criminals like Gaber are off the Internet and behind bars.

Most importantly, we are working to educate consumers about how they can protect themselves. A recent study showed that fewer than 11% of online pharmacy sites ask for a prescription. Before you purchase any medicines online, make sure the site (1) requires a prescription; (2) provides its name and address; and (3) has a licensed pharmacist you can actually speak to. And if you suspect an online pharmacy is selling counterfeit medicine, report it here.

With your help, we can keep patients safe, protect legitimate businesses, and keep products like rat poison and highway paint where they belong – far away from our medicine cabinets.

You can learn more about this Administration’s efforts to inform the public about intellectual property crime at www.ncpc.org/getreal.