Companies & Sectors
JP Morgan to pay $100 mn to settle case
JP Morgan Chase & Co., the largest bank in the US, will pay $100 million to settle a lawsuit over using illegal methods to collect debts from more than 125,000 credit card holders in southern California and elsewhere.
 
The largest US bank by assets will pay an estimated $10 million to consumers in California as part of a previously announced $50 million national agreement, and will pay another $50 million in penalties to the state to settle the 2013 lawsuit, which was filed in a court in Los Angeles, Xinhua reported.
 
"We are pleased to resolve these legacy issues with the California Attorney General and we are working to complete our remediation of affected card customers," Suzanne Alexander, a bank spokeswoman, said.
 
The settlement specifically addresses debt collection wrongdoing that includes collecting incorrect amounts, selling bad credit card debt, and running a debt collection mill that involved illegally "robo-signing" thousands of court documents and improperly obtaining default judgments against military service members, state Attorney General Kamala Harris said.
 
The settlement includes reimbursing military members in cases where the company improperly obtained default judgments.
 
The judgment, which is subject to court approval, includes terms that fundamentally change Chase's credit card debt-collection practices to prevent similar misconduct in the future, Harris said.
 
Between 2009 and 2013, Chase filed more than 125,000 credit card collection lawsuits against California consumers relying on illegally robo-signed sworn documents and provided an additional 30,000 robo-signed sworn statements in support of lawsuits filed against California consumers by third-party debt-collectors, according to court documents.
 
Chase also made systematic calculation errors regarding the amounts owed, and sold "zombie debts" to third-party debt-collectors that included accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectable, Harris said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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A bird's eye view of computer assisted surgery
Like many people, I have always been squeamish about entering a prison or a hospital. When Dr Mahendra Bhandari, Director Robotic Research and Education, Vattikuti Urology Institute at Michigan-based Henry Ford Hospital, suggested that I watch a computer assisted surgery using a Surgical Robot (SR) as part of my recent assignment with Vattikuti Foundation, I put up a brave face to be inside an Operation Theatre (OT).
 
Wearing a blue scrub - a sterile gown - a face mask, and a cap on the head and slipper covers, I was happy that I walked into the OT, as opposed to being wheeled into one on a stretcher, in a 1,000-bed hospital in a South Indian city.
 
As I entered the OT, a clinical specialist Robin Verma reassured me that this being a minimally invasive surgery I would not see blood or hear groans of a patient who had just undergone a surgery. Robotic surgery, he said, has overcome the difficulties of blood loss, pain, post-operative infection and long hospital stays faced by patients undergoing open surgeries.
 
A daunting da Vinci Surgical Robot, neatly laid out instruments, even as an eight-member team of surgeons, anaesthetists, nurses and technicians, in their green or blue scrubs, geared up for a Robotic Surgery (RS). I was told that RS assures a healthier post-operative life for someone suffering from life threatening conditions in the digestive, respiratory, urinary, reproductive and other vital body systems.
 
New York's Memorial Sloan Kettering Hospital's Director, Minimal Access and Robotic Surgery Program, Dr Mario Leitao Jr., is by the side of a middle aged patient to be operated for hysterectomy (removal of uterus with cancerous tissue).
 
A gynaecology cancer surgeon from the local hospital is leading the Indian team. The gynaecologist has already got prior experience having trained in RS at the US-based training centre of SR maker Intuitive Inc. facility and has conducted over 100 robotic surgeries. Together she and the team of anaesthetists had gone over the patient's medical condition and discussed the reports with Dr Mario when the patient was admitted the previous evening.
 
All robotic surgeons, I learn, attend the mandatory training and conduct surgeries under the proctorship of senior surgeons. Since the da Vinci Surgical Robot has a 'driving school car equivalent controls' with the trainer holding the master controls, the patient is at no risk.
 
Post-anaesthesia administration, a small abdominal area is used for making 10-12 millimetre incisions using Trocars, four in number. The incisions allow four arms of the SR slide through four separate cannula. A da Vinci Surgical Robot, roughly of the dimensions of a traditional X-Ray machine, has four arms that can move literally in any direction. Each arm, covered with loose plastic material, keeps the robot sterile for subsequent procedures.
 
While the OT was well lit, I found the absence of a light-head, over the patient that one usually sees in surgery scenes in movies, a bit odd. I learnt that one arm carries two miniature cameras whose 3-dimensional output is displayed on a console a few feet away. The camera arm also has strong lights to illuminate the inside of the area to be operated. This console serves as surgeon's operating table from where he manoeuvres various surgical instruments with two joystick like controls.
 
The cameras, I learn, are powerful enough to give vivid images that can be blown up 10 times to provide greater precision during procedures. The 3-D view is much more accurate and gives a clearer view than you get while watching a 3-D movie on a screen 200 feet away because the object as seen on a SR console is extremely close to the eyes. This, I learn, is possible because the image on the two ocular pieces is delivered by two separate cameras.
 
The other arms of the robot that slip through the hole are equipped with versatile surgical instruments. The instruments are designed to provide movement that is far superior to a human hand and can moderate movements of even a shaking hand. I could see how thin layers of cancerous tissue are separated, blood vessels are cauterised, to avoid blood loss, and joined back. The fourth arm serves as an assistant's arm for traction and counter traction.
 
An identical view of the inside of the operating area is displayed on a large screen for the OT doctors, nursing staff and technicians to see and assist the surgeon. The staff, I could notice, was well trained and able to almost predict the next need of the robotic surgeon. More actions are triggered by eye movements of the surgeon than the spoken word.
 
The endo-wrist movement gives surgical instruments seven degrees of freedom to give a range of motion greater than the human hand. A technician explains seven degrees of freedom as: Imagine your having to tighten a nut at the bottom of the car from inside the bonnet, without raising the car on a mast. A surgical robot allows you to do that inside a human body.
 
Robotic surgery overcomes these difficulties by bringing in three-dimensional (3D) vision, which provides depth perception. Intuitive movement of the instruments makes procedures like suturing akin to the way it is done in an open surgery. And additionally, the surgeon is able to use three instruments simultaneously, which makes this the most versatile and least time consuming form of surgery today.
 
Robotic surgery, Dr Bhandari stresses, is all about better vision, precision and control, all designed to help a surgeon deliver better patient outcomes.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

 

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The Direct Selling Association on Pyramid Schemes: Truth and Truthiness
Dr Vander Nat and Dr Keep set the record straight & discuss how recent DSA report mainly appeals to truthiness, takes novel stand on key diagnostic for a pyramid scheme and runs contrary to recent case law
 
This is a guest blog by Peter Vander Nat, Ph D, and William Keep, Ph D. Dr Vander Nat is a former senior economist with the FTC who has testified in numerous federal pyramid scheme cases. Dr Keep is the Dean of the School of Business at The College of New Jersey (TCNJ) and an expert on pyramid schemes. Together Drs Vander Nat and Keep authored two seminal works analyzing the MLM industry
 
Public statements presented as true, though without supporting logic or evidence, if repeated frequently and with enough gravitas may eventually be accepted as true. To capture this type of phenomenon, a new word has been added to our lexicon, “truthiness.” Truthiness does not necessarily indicate a false statement, though a false statement authoritatively asserted as though it were true does qualify.
 
Below we test our understanding of truthiness with regard to a recent report commissioned by the Direct Selling Association (DSA) and other assorted DSA public statements. Curiously, the authors of the DSA report are antitrust experts, who have neither published any scholarly works concerning multilevel marketing companies (MLMs), nor acted as pyramid scheme experts in a court of law. Perhaps it is due to this lack of expertise and experience that their report mainly appeals to truthiness.
 
As for truth, it is certainly true that much effort, time and many words went into criticizing a paper* that we wrote thirteen years ago. But it must be pointed out at the start that the model we developed as a scholarly work has never been used in a court of law to determine whether or not a company is operating a pyramid scheme, and it was never proposed that it could function in that way. This is so because each pyramid case presents a unique set of available data, and the analysis in each case must address how the company functions in practice. Unfortunately, the authors of the DSA report did not appreciate these relevant points. If they had, their report could have been cut in half, and perhaps more.
 
The DSA report grants at the start that we are recognized experts in the field of distinguishing a legitimate business enterprise from a pyramid scheme. But it omits the recognition that, in the 15 pyramid scheme cases in which Dr. Vander Nat was appointed the government’s expert – each time submitting an economic analysis to the court — no court has ever rejected his conclusion that the organization is/was a pyramid scheme. That is to say, the vast majority of arguments made in the DSA report are old news, having been considered and either rejected or ignored in numerous courts of law.
 
Unencumbered by this precedent, the DSA report takes a novel stand and boldly declares (literally puts in bold), “[t]he key diagnostic for a pyramid scheme is whether the transactions defining the commercial enterprise yield incremental value to society,” — a claim that is firmly rejected by eminent scholarship in law and economics (see Posner below). Here is a respectful word of advice to DSA members: although you might like what this report has to say, if ever an MLM company is in court defending itself against pyramid scheme allegations, waxing poetic about the firm’s value to society won’t help; far better to focus on retail sales.
 
We further highlight that the 2014 BurnLounge decision, which is used as the basis for the DSA’s critique of our work, does not invalidate our emphasis on retail sales, whether in the 2002 paper or in specific court testimony (below). By presenting a few selective portions of the BurnLounge ruling and ignoring the fully articulated basis for the ruling that BurnLounge was a pyramid scheme, the DSA report dismisses our emphasis on retail sales as “a premise that cannot be sustained.” Actually, we show the opposite. Not only can it be sustained, an emphasis on retail sales is being sustained by the appellate decision itself (2014) and in a recent federal court injunction against Vemma (2015).
 
A Sampling of Truthiness in the DSA Report and Public DSA Statements
 
As to the report’s purported “key diagnostic:”
 
  1. This assertion (quoted earlier), conveying a concomitant need for cost/benefit analysis regarding a pyramid scheme, is a striking example of ignorance for known principles in economics and law. A pyramid scheme is inherently fraudulent (every court has said so), and is properly analyzed under the established maxim that deception/fraud carries no social benefit. As explained by Judge Posner in his Economic Analysis of Law (2nd ed. P.81), “The question of affirmative misrepresentations in consumer transactions is straightforward: the costs of making and of unmasking the misrepresentation represent a deadweight social loss,” and later continues with “Misrepresentation involves costs to both sellers and buyers that yield no social gain.” 
  2. The FTC follows the same principle and never offers extrinsic evidence by way of cost/benefit analysis in prosecuting deception. Ironically, based on the DSA report, the FTC must be missing the “key diagnostic for a pyramid scheme.” 
  3. Instead, the agency affirms (FTC Policy Statement on Deception; 1983) that extrinsic evidence in cases of deception “can consist of expert opinion, consumer testimony (particularly in cases involving oral representations), copy tests, surveys, or any other reliable evidence of consumer interpretation.”
 
In sympathy with the DSA report, Mr. Mariano, President of the DSA declared: “The legal analysis should be: is the product being used by real consumers?” Whether the consumer is a distributor is immaterial, he says.
 
  1. What about the following? Courts have ruled that whether product purchasers are primarily business participants versus consumers is an important part of pyramid determination, with numerous courts finding MLM companies to be pyramid schemes with negligible sales beyond what their distributor-recruits purchase, and with documented harm to tens of thousands of victims. MLM companies continue to face pyramid scheme charges.
 
“Even if one were to accept the faulty premise that case law trumps economics when it comes to performing economic analysis, recent developments have… Continue Reading…
 
 

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