Author Archive

Wells Fargo Mortgage Fine: Largest Ever & No Wrongdoing

July 29th, 2011. By Hunter West

Well, it’s a big one.

Wells Fargo—the fourth largest bank in the country in terms of assets—was assessed the largest fine ever issued by the US Federal Reserve (The Fed) for allegedly pushing borrowers into more expensive mortgages, and in so doing helping to foster the sub-prime mortgage mess.

These were borrowers with good credit and cash flow, and could have easily qualified for conventional mortgages at prime, according to a report yesterday in CNN Money.

Instead, they were allegedly nudged into mortgage products that would have proved more expensive in the end. Wells Fargo Financial, a subsidiary that closed last year, was also accused of pushing through loan applications that would otherwise not have qualified due to income restrictions. It is alleged that the income information was ‘doctored.’

We say ‘alleged,’ because even though Wells Fargo agreed to pay the largest fine ever handed out by The Fed—$85 million—the banking juggernaut was not required to admit to any wrongdoing.

In fact, Wells Fargo explained in a statement that the alleged wrongdoing occurred at the hands of a few ne’er do well former employees, and that such conduct is not within the mandate or policy of Wells Fargo.

That’s like parents claiming they are not responsible for the actions of their children.

Come on…

And what does that say about ethics in the banking industry?

I was doing a story on personal finance some years ago and a banking executive was very frank in her assessment of the lengths some banks will go to get loans on the books—in other words, generate business for the bank.

To paraphrase:

“If you come in looking to borrow, say, $15,000 to buy a new truck and the loans officer realizes that you have the cash flow that would accommodate $25,000—you’re going to be pushed to borrow that $25,000. It will be a polite push. But it will be a firm push, and a push just the same. All you want is fifteen grand.

“But the bank seems to know what’s better for you, than you do.”

That interview took place around 1991 or so—20 years ago.

So look what that policy got us into (and I’m not picking on Wells Fargo here, this applies to everyone…)

It was the banks that helped fuel the sub-prime mortgage meltdown by pushing people into more expensive mortgages beyond their comfort zones (or their financial contingencies). It was the banks or their agents that allegedly doctored income statements. The stories of individuals who qualified for a mortgage without the capacity to confirm their income at all are legend, and the stuff of modern financial folklore.

The bank is supposed to say, ‘whoa…wait a minute…you may not be in a position to afford that truck, or that big house. C’mon now, take a good hard look at your finances. You have to dial your expectations back a notch.’

But no. The opposite proved true. Or, at least in one case, the opposite is alleged to have proven true. Wells Fargo will pay $85 million in fines, plus compensate up to 10,000 borrowers to the tune of between $1,000 and $20,000 apiece.

They can afford it. Earlier this week Wells Fargo reported $3.9 billion in net income for Q2 from revenues totaling in excess of $20 billion.

An $85 million fine? Millions more to compensate victims?

That’s nuthin’…

What’s something, is that they didn’t have to admit they (allegedly) screwed up…

Tags: Sub-prime Mortgage, Subprime Mortgage, US Federal Reserve, Wells Fargo
Posted in Consumer Fraud, Financial | 84561 Comment »2011-07-29+13%3A29%3A22Hunter+West

Government Audit of FDA Food Oversight Not Pretty

July 26th, 2011. By Hunter West

The Obama Administration has tried to beef up the FDA (US Food and Drug Administration). Give it more authority, and more autonomy.

But it’s too little, too late. And the law that the President signed in January, giving the FDA the power to mandate food recalls (it didn’t in the past???) has yet to be implemented and can’t be enforced until they figure out how.

Sorry, but I always thought the FDA was the prescription drug police, the overseer of our food chain and the watchdog over medical devices. Cross that watchdog and look out. Pushing the envelope and dissing the regulator might get you a warning if you’re lucky. Chances are, if you’re a pharmaceutical company, or a food supplier and you screw up—you WILL find yourself in the FDA slammer.

In our dreams…

It comes as no surprise that a recent government review of serious food recalls reveals that the FDA is dropping the ball on its responsibility for protecting the nation’s food supply.

And in so doing, protecting us.

According to a CNN report last week, the Department of Health and Human Safety Services (HHS) reviewed 17 Read the rest of this entry »

Tags: FDA, FDA Authority, FDA Recall, food safety, Government FDA Audit
Posted in Drugs/Medical, Food Illness | 8262No Comments »2011-07-26+13%3A08%3A33Hunter+West

Should Surgeons be Trusted after All-Nighters?

July 25th, 2011. By Hunter West

Say your doctor was on call all night the night before your scheduled 6 a.m. surgery. Would you still want to go under the knife?

It has long been debated that the effects of sleep deprivation can be just as harmful—and just as much an impairment—as that delivered from alcohol, or drugs. Bottom line: when we’re tired, we screw up.

You run off the road while driving, your reflexes are slower. Worse, when you try to counter the fog in your brain and the yawn on your face with copious amounts of caffeine or other stimulants, you have reflexes unsupported by studied thought—a pure reactive state, with little depth or substance from a sleep-deprived brain straining to carry on with the aid of chemicals in the place of rest.

So why is there not more dialog on this with regard to the medical profession and medical errors?

Recently, the Canadian Medical Association Journal (CMAJ) published an editorial on the sleepy doctor syndrome. Not only did the CMAJ target the problem at the doctor and hospital level, it also called upon legislators to develop national standards in the regulated health care industry to protect patients from sleepy docs.

There is valid reason for this concern.

Beyond the temptation for some doctors to wear sleep deprivation as a badge of honor—or hospitals having to make do with fewer staff amidst the realities of a health care system under siege and shrinking health care dollars—are studies that paint an alarming picture of both where we are, and where we’re headed.

According to a story in the Montreal Gazette (5/25/11), studies have shown a near doubling in the rate of complications when surgeons operate with fewer than six hours of sleep—usually following a night on call.

Those complications have been found to include injuries to organs (a slip of the scalpel), and massive hemorrhaging. Such events can put a patient’s life in immediate danger, or affect their health over the long term.

The doctor, in contrast, goes home to a pillow and beyond feeling regret for the error, is not required to live with the consequences of that error for a lifetime. Unless, of course, a medical malpractice lawsuit is filed.

Mistakes happen, and to err is human nature. But in publishing its editorial, the CMAJ suggested that an already serious problem is about to get worse given the increasing complexities of the health care field. “Unprecedented” demands are placed on a doctor’s physical and cognitive health, as a result.

“Those of us who remain overconfident that we can continue to perform our duties properly with inadequate sleep should imagine the reaction if we were made to seek informed consent from each of our patients to accept treatment under these conditions,” state the authors, adding that working while sleep deprived is neither “normal nor acceptable.”

The authors also point out that—in Canada at least—limits on how long a resident, intern or medical student can go without sleep are not extended to practicing doctors, who often work without supervision and are often older and thus even more susceptible to the effects of lack of sleep.

Such situations are ripe for malpractice lawsuits—and doctors, together with the hospitals that employ them, need to be cognizant of that fact. Errors are unavoidable—but they can me managed and mitigated.

There are already efforts underway in other areas of the health care system. Increasing the use of checks and balances—akin to the checklist in the airline cockpit—helps ensure that the surgeon is operating on the correct patient and is performing the correct procedure in, or on the requisite are of the patient’s body.

Similar-looking labels on drug containers are being changed to avoid confusion in the pharmacy. Lawsuits, together with media scrutiny and public outrage, have helped to motivate the powers that be into action.

What of sleepy docs? Will a spate of lawsuits prompt the health care industry to action beyond mere debate? Lawsuits might be business for the lawyers, and monetary settlements necessary for the affected plaintiffs. But most would prefer to have been spared amputation of the wrong leg, or a scalpel nick that brought on a lifetime of pain or complication, all because the doctor yawned at the wrong time, or wasn’t in total control of his movements just because he was so bloody tired.

Maybe you can collect garbage on a few hours sleep. But I, for one, don’t want anyone going near me with a knife if they might be tired and sleep deprived.

Don’t be a hero. Sign out, go to bed, and let someone else do it. And somebody, somewhere needs to come up with a system that guarantees that.

Tags: Canadian Medical Association Journal, CMAJ, doctor error, Hospital Error, medical malpractice, tired doctors
Posted in Drugs/Medical, Personal Injury | 80021 Comment »2011-07-25+14%3A40%3A10Hunter+West

Medtronic Under Fire with Questions of Financial Conflict

July 7th, 2011. By Hunter West

A blockbuster investigation by some print media outlets has spurred a US Senate Finance committee to start beating the bushes once again around the medical devices industry.

There are many questions:

How safe are the products that wind up in your body?

What do the manufacturers know about potential safety issues, but aren’t telling?

Why is it okay for a doctor or surgeon to be paid by a medical device manufacturer? And can you really trust what a doctor [who is paid by the device maker] says about that device?

Do you feel like a guinea pig?

It was revealed yesterday through a series of articles published by the Milwaukee Journal Sentinel and MedPage Today that there is some controversy surrounding Medtronic Infuse, a popular bioagent known as bone morphogenetic protein-2, designed to foster bone growth required for spinal fusions.

Infuse was approved by the US Food and Drug Administration (FDA) in 2002 and doctors love it. It’s easy to work with. And you don’t have to harvest a patient’s own bone from elsewhere, in order to accomplish the surgery. You have to love something that allows a surgery to proceed faster, and more easily.

But here’s the rub—and the reason for the Senate Committee investigation. It seems that a cadre of surgeons around the country were paid by the device manufacturer, Medtronic. Those same surgeons with financial ties to Medtronic were involved both in the clinical trials for Infuse, Read the rest of this entry »

Tags: Infuse, Medtronic
Posted in Defective Products, Drugs/Medical | 81321 Comment »2011-07-07+17%3A57%3A09Hunter+West

Distracted Driver Alert: Keep your Hands off My Ford Touch

June 13th, 2011. By Hunter West

The distracted driver is becoming just as serious a problem as drunk driving used to be before society woke up, looked in the rear view mirror and saw themselves as the pariahs they had become. People still drive drunk—or tired, which is almost as bad—but the penalties for a DUI have increased and there is no longer any tolerance for it.

Distracted driving is the new battleground. The other day near where I live an 18-year-old plowed head-on into a transport truck with his small car. He didn’t stand a chance; the tragedy is that he had been texting while driving. His phone records indicate he had sent a text to a friend just seconds before his promising life came to a tragic end, in an instant.

So why, are manufacturers putting more distracting technology in their vehicles? Because the other guy is, and they want to out-tech to compete? Are drivers asking for this stuff?

Has everybody gone nuts?

Consumer Reports magazine is a bastion of common sense. No ties to lobbyists or manufacturers, funded privately through subscriptions with no bias, with independent testing facilities and protocols second to none. When Consumer Reports likes, or dislikes something, there is significant weight to that recommendation or rejection.

So it is telling that Consumer Reports no longer recommends the Ford Edge Sport.

Why? Because the 2011 model has too much damned technology on board, available to the driver in the cockpit. Specifically, the issue is the MyFord Touch system.

Witness a recent summation of the system by a reviewer in The New York Times:

“Ford has added an 8-inch LCD touch screen in the center of the dash that now coordinates not only entertainment functions, like the radio, satellite radio and MP3 playback, but also phone calls, the navigation system and the climate control, as well as settings for, among many others, the traction and cruise controls.”

In other words, way too much stuff to fiddle with. Consumer Reports has come down hard on it, and cited the system as one of the reasons why the vehicle had low test scores.

There is no question that the technology is amazing. It’s just out of place. And the addition of a touch screen to the dashboard of the 2011 Ford Edge had engineers at Ford balking, arguing that it could be considered a source of driver distraction.

But Ford went ahead with it anyway, assuming presumably that such technology would make boffo TV ads. And it does. The system sounds mighty impressive.

But it’s misplaced in a car, accessible to the driver.

Here’s reviewer John R. Quain again, writing May 27^th in The New York Times:

“While [the screen] has some benefits, like a crystal-clear view from the rear-facing camera, it lacks tactile feedback. So when you reach down to tap on a music selection you must take your eyes off the road or you’ll touch the incorrect tiny button…”

He also noted that the screen is about four or five inches too low, forcing the driver to look down and to the right when accessing the screen.

Which means, the driver is taking his eyes off the road—just for an instant.

That’s how long the 18 year-old took his eyes off the road to hit ‘send’ on his smartphone, a microsecond before his car slammed head-on into the transport truck.

Ford may have a techno-marvel on its hands. However, I have to disagree that the cockpit is the proper place for it. And if a family member of mine were ever to be hurt or maimed by a distracted 2011 Ford Edge driver due to the complexity and availability of the MyFord Touch system, I would make damn sure that the manufacturer that built the silly system into the car in the first place, was one of the primary defendants of my car accident lawsuit.

Tags: Car Technology, Dashboard Computer, Distracted Driver, LED Dashboard, My Ford Touch, MyFord Touch
Posted in Accidents, Automotive | 8000No Comments »2011-06-13+14%3A38%3A55Hunter+West