The Whistleblower blog was started in 2008. Look for posts by these contributors: James Eli Shiffer, Jane Friedmann, Brandon Stahl, Eric Roper and Alejandra Matos. | Check out the Whistleblower archive.
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A California company claiming to have discovered a “diabetes breakthrough” was fined $2.2 million for making deceptive claims, the Federal Trade Commission announced last week.
A federal judge in the Northern District of California found Wellness Support Network Inc. made deceptive claims when marketing its “diabetic pack” and “insulin resistance pack” of dietary supplements.
The FTC said the company claimed the diabetic pack was a treatment for diabetes, and the insulin resistance pack was a way of preventing diabetes. But the two packs contained identical blends of vitamins, minerals and plan extracts, according to the FTC.
The case is part of the FTC’s ongoing efforts to stop companies from making unsupported claims that natural remedies can cure serious diseases.
By Alejandra Matos
A Wisconsin marketer was permanently banned from sending unsolicited text messages to consumers after he sent millions of texts to people promising free gift cards and electronics, the Federal Trade Commission announced last week.
Jason Q. Cruz of West Bend, Wis., allegedly sent the text messages promising free iPads or $1,000 gift cards from major retailers, the FTC said.
Those who clicked on the links were taken to a website that requested their personal information and required them to sign up for multiple “risky” trial offers for “questionable products and services” that cost money or included recurring monthly charges, the FTC said.
The FTC sued Cruz in March, and the ban on future texts settles that lawsuit.
The other day, one of my Star Tribune colleagues was pulling out of a parking space when a cyclist zoomed out of nowhere, hit his car and shattered his windshield. The next bombardment came through his mailbox, thanks to lawyers and chiropractors who wanted his business.
In less than three weeks, 14 solicitations arrived in the mail. A chiropractic clinic sent a gift certificate valued at $250 for a full chiropractic examination, any needed X-rays and a “doctor’s recommendation to get you well.”
It’s a legal way of drumming up business, and the professionals comb through public records to find people involved in accidents. But an insurance industry representative said these types of advertisements may lure people into clinics to exploit the state’s no-fault insurance benefits that often cover medical expenses for accident victims.
Last year, Minnesota lawmakers tightened the rules on these solicitations by forbidding medical professionals from advertising how much money an accident victim can gain under the no-fault system.
One of the mail solicitations appeared to violate the law. But the licensing board in charge of enforcing it, in this case the Minnesota Board of Chiropractic Examiners, isn’t doing so because of a pending lawsuit challenging the new restriction.
‘$20,000 in benefits for you!’
The solicitations came from chiropractic clinics and trial attorneys from all around the Twin Cities.
Attorneys mostly sent official-looking letters stating they can help get my colleague’s medical bills paid, in addition to fixing his car and even transporting him to and from a clinic. Paige Donnelly, a personal injury attorney in Minnesota and Wisconsin, sent a yellow trifold pamphlet explaining the benefits of no-fault policies.
Chiropractors sent glossy postcards, with photos of smiling doctors or a woman looking relaxed as she received a massage. They also sent “gift certificates,” valued from $145 to more than $400, for massages or consultations.
“Remember, the scariest thing is what cannot be seen,” one of them wrote. “You might seem fine now, but symptoms can come later.”
A yellow postcard with a free one-hour massage offer from ProSpine Health and Injury in Eden Prairie says “if you have been hurt, even just a little, from a recent accident, in practically all cases you are covered 100% under the Minnesota No Fault Act. Policy limits allow for at least $20,000 in benefits for you!”
Last year’s legislation banned medical professionals from making “any reference to the dollar amounts of the potential benefits” under no-fault insurance. Attorneys do not have the same restrictions as chiropractors and other medical professionals.
One of the bill’s sponsors, Rep. Jim Abeler, R-Anoka and a chiropractor, said ProSpine is “clearly violating the law.”
ProSpine did not return phone calls seeking comment.
Another sponsor, Sen. Paul Gazelka, R-Nisswa, said he wants to limit the solicitations because “that’s where the abuse of no-fault tends to come out of,” he said.
The Insurance Federation of Minnesota, a trade group, said some solicitations may be helpful in educating people about the benefits they can receive from no-fault, but he said these types of practices can also “breed fraud,” and may mislead those involved in a car accident to believe they are entitled to cash payoffs.
“That’s not money going to you. It goes to the doctors or attorneys,” said Mark Kulda, spokesman for the Insurance Federation of Minnesota. “That’s the kind of language that starts to cross the line.”Board told not to enforce law
The Minnesota Board of Chiropractic Examiners is tasked with enforcing the advertising law for chiropractors. Dr. Larry Spicer, the board director, said he does not have any open complaints on advertising practices. He said that Attorney General Lori Swanson’s office has advised the board not to enforce the law at this time because of pending litigation.
After the amendments were passed last year, 1-800-411-PAIN and its executives sued the board to prevent the law’s implementation. A federal judge in December said the board can enforce the law, but 1-800-411-PAIN appealed that ruling.
Despite the attorney general’s advice, Spicer said the board’s website clearly states that chiropractors should be obeying it.
“Doctors of chiropractic are advised to be aware of the conditions of this statute, and comply accordingly with all advertising requirements, including these,” the website says.
Spicer would not comment on ProSpine’s advertisement.
My colleague, by the way, wasn’t injured.
If you’ve been in a car wreck in Minnesota, Whistleblower wants to hear about your experience with no-fault insurance. Send an e-mail to email@example.com or call me at the number below.
Alejandra Matos • 612-673-4028
Last week I tried to reach Jennifer Carr, owner of Distinctive Cleaning, after Zerorez filed a lawsuit against her company. I didn't hear back from Carr in time for Sunday's column.
On Tuesday Carr said the Zerorez lawsuit against her company is simply an attempt to knock out the competition. Carr said Zerorez is going after a local family-owned company because “we can do a very similar job and it’s a threat to them.”
The lawsuit claims Distinctive Cleaning bought up Google search terms to trick customers looking for Zerorez and told customers that they used “exactly the same” cleaning process as Zerorez.
Carr said they use a “very similar” process as Zerorez and have a right to advertise that their business leaves no residue on customers’ carpets. She said company representatives always tell customers they are from Distinctive Cleaning.
Carr would not say that the company bought a “zerorez” Google AdWord, but said “if in the past we did use the trademark term ‘zerorez,’ it is not a search term that we currently put in there.”
“When we received the first cease-and-desist letter, I contact our Google AdWords manager, and she made sure that those words were out,” Carr said. Carr said the battle over the AdWords has already cost her company $20,000 in legal fees.
Zerorez owner Michael Kaplan responded to Carr's statements saying: "There is a great deal of trust involved in the relationships we foster everyday. To respect and protect this trust we found it necessary to pursue legal action only after multiple requests for Distinctive Cleaning to stop their deceptive practices were ignored."
A California man has been banned from selling work-at-home opportunities after he misled his customers or didn’t give them any information at all, the Federal Trade Commission announced Monday.
Christopher A. Sterling, doing business as sterlingvisa.com, rebatedataprocessor.com and creditcardworker.com is also banned from selling other business opportunities covered by the FTC's Business Opportunity Rule.
Sterling falsely claimed that by paying him at least $50, a customer could make $75,600 per year processing as few as 15 applications daily for rebates or credit cards, according to an FTC complaint.
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