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Skechers Lawsuit on Shape Ups Agrees to Refund $50 million to Settlement on False Advertising

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Skechers Refund

Skechers has agreed to pay $50 million to settle false advertising allegations about it’s Resistance Runner, Toners and Tone-up shoes by the Federal Trade Commission and the attorneys general of 44 states as well as the District of Columbia.

Advertisements from Skechers told consumers that they could “Get in Shape without Setting Foot in a Gym.”

Skechers Lawsuit

David Vladeck, director of the FTC’s Bureau of Consumer Protection said in in a press release, “Skechers’ unfounded claims went beyond stronger and more toned muscles. The company even made claims about weight loss and cardiovascular health. Unfortunately, for the millions of people who bought Skechers toning shoes, the only thing that got a workout was their wallet.” He adds that the FTC wants advertisers to shape up. “The FTC’s message, for Skechers and other national advertisers, is to shape up your substantiation or tone down your claims.”

Most of the Skechers settlement money will be used to give refunds to consumers who paid $60 to $100 a pair for the Skechers Resistance Runner, Toners and Tone-up shoes.

On Wednesday, Skechers denied the federal government’s allegations and said the company had settled to “avoid protracted legal proceedings” and to save future legal costs.

Skechers will continue to make and sell the toning shoes. In a press release Michael Greenberg, president of Skechers said, “The Company fully stands behind its toning shoe products and technology and is permitted under the settlement to continue to advertise that wearing rocker-bottom shoes like Shape-ups can lead to increased leg muscle activation, increased calorie burn, improved posture and reduced back pain.”David Weinberg, the Skechers Chief Financial Officer said in a press release, “While we vigorously deny the allegations made in these legal proceedings and looked forward to vindicating these claims in court, Skechers could not ignore the exorbitant cost and endless distraction of several years spent defending multiple lawsuits in multiple courts across the country. This settlement will dispose once and for all of the regulatory and class action proceedings. While we believe we could have prevailed in each of these cases, to do so would have imposed an unreasonable burden on the Company regardless of the outcome.”

According to The Associated Press, Skechers will pay twice as much as Reebok International Ltd. to resolve similar FTC claims. Reebok agreed in September to pay $25 million to settle allegations that it falsely claimed its toning shoes strengthened muscles.

Find out more about applying for a refund at www.ftc.gov/skechers.

Skechers Lawsuit on Shape Ups

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  1. Pat Medford

    May 29, 2012 at 3:45 pm

    Middle of both feet hurt from shoes. Here sets a pair of new shoes.

  2. Denice Winchel

    May 25, 2012 at 12:35 pm

    I purchased 4 pair in total. Now 1 year and a half later I suffer daily from walking at all. My right knee started bothering me 1st and then my ankle and hip. Becuse of the muscle imbalance I cant wear flats or even walk bare foot because its too painful.

  3. maddie

    May 21, 2012 at 7:52 pm

    i thought i was loosing weight since i started using it.Then few months after, i can’t seem to wear anything that is flat because my feet, specially my heel hurts so bad after walking a short distance, almost a year later, my right hip started hurting , so i stopped wearing my shape ups, the pain went away for a while but my feet and my heels still can’t tolerate wearing something flat.

  4. Maritza Mayorga

    May 21, 2012 at 5:21 pm

    The shoes are a disaster!! My back hurts!!!! Bad choice!!!! INstead of losing weight i gained weight thinking i can lose it with these shoes!!!

  5. Maritza Mayorga

    May 21, 2012 at 5:21 pm

    The shoes are a disaster!! My back hurts!!!! Bad choice!!!! INstead of losing weight i gained weight thinking i can lose it with these shoes!!!

  6. Karen

    May 21, 2012 at 9:29 am

    Every since I have had my shape-ups; I have only gained lower back pain and swollen legs and feet. I wore them to school (6mo) thinking they would help me lose weight and strengthen my back and stomach muscles because that is what the product claims to do.
    I am a medical assistant not a doctor but I will say this… I Never saw vericose veins in my legs until I started wearing those shoes. My legs and feet did not swell and feel tired until I wore the shoes. I don’t wear them anymore.. I will add that $120.00 (on sale I might add) is still too much for this product.

  7. Connie Glinsmann

    May 19, 2012 at 6:52 am

    I wear my Sketchers at work for 8 hours and walk 9 miles in them. I work on slippery floors and feel safe. I lost 65 pounds last year and dearly LOVE the shoes. They are the most comfortable shoes I’ve EVER worn~! I wasted $450 at the foot doctor. He did me NO GOOD. When I put on the Sketcher’s Shape Ups…..I instantly had my ankles, knees, hips and back feel so much BETTER~!!!! How anyone could sue against these shoes BLOWS MY MND. Sketcher’s Shape Ups are the BEST SHOES I’ve EVER WORN. I LOVE THEM SINCERELY!!!!!

  8. CHRISTY PORTER

    May 17, 2012 at 11:10 am

    I have a pair of sketchers shape up shoes and can only wear them for about an hour before my back is killing me.

    • Maritza Mayorga

      May 21, 2012 at 5:18 pm

      same here i thought, but now my back is killing me, my feet get cramps, & i gained weight.

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2.2 Million More Patient-Victims Of AMCA Data Breach Came Forward

Clinical Pathology Laboratories blamed AMCA for not providing them enough information back in June.

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Photo: Thirteen Of Clubs Follow | Flickr | CC BY-SA 2.0

A month after the medical collection portal owned by the American Medical Collection Agency (AMCA) fell victim to a data breach that has affected more than 20 million of their users from different blood testing laboratories and medical institutions around the country, a new AMCA partner lab came forward and said that their clients were also affected by the data breach.

According to Clinical Pathology Laboratories (CPL), 2.2 million clients may have had their names, addresses, phone numbers, dates of birth, dates of service, balance information, and treatment provider information stolen from the previously reported data breach involving AMCA.

Last month, data were stolen from users of the AMCA payment portal that was used to pay for laboratory fees by more than 20 million victims. These data include their names, phone numbers, dates of birth, home addresses, social security numbers, credit card numbers, and other bank details.

The list of impacted testing laboratories includes Quest Diagnostics (11.9 million patients), LabCorp (7.7 million patients), BioReference Laboratories (Opko Health subsidiary, 422,600 patients), Carecentrix (500,000 patients), and Sunrise Laboratories (undisclosed number of patients).

This time, Clinical Pathology Laboratories (CPL) says that an additional 2.2 million victims of the data breach come from their client list, and another 34,500 patients had their credit card or banking information compromised.

The company blamed the late announcement from CPL to AMCA for not providing them with enough information regarding the breach when it was first disclosed in June.

“At the time of AMCA’s initial notification, AMCA did not provide CPL with enough information for CPL to identify potentially affected patients or confirm the nature of patient information potentially involved in the incident, and CPL’s investigation is on-going,” said the company in a statement.

As of today, it is still unclear whether AMCA nor its partner companies have reached out to their clients to personally notify them about the data breach. Back in June, AMCA first disclosed that only 200,000 clients had their data compromised. However, reports from its partners have confirmed that the victim tally reaches 20 million.

AMCA and partners were slapped with lawsuits

AMCA, Quest, and LabCorp in June were slapped with at least 19 lawsuits concerning the data leak. More than 19 class-suite actions have been filed against the three companies for their involvement in the breach and their inability to fulfill the promise of protecting their clients’ sensitive information.

According to one of the lawyers in one of the lawsuits hurdled against the involved companies, healthcare providers are one of the most susceptible entities, but they have lackluster data protection systems.

“Healthcare companies are especially susceptible to data breaches not only because they aggregate a tremendous amount of important and sensitive data, but also because they tend to be less focused on cybersecurity protection than other industries,” said John Yanchunis of Morgan and Morgan, one of the firms who filed lawsuits against Quest Diagnostics.

Yanchunis said that these companies “know [that] they are at an increased risk and yet have not taken the proper steps to protect their patients’ data.”

AMCA filed for bankruptcy

Amid the data breach that centers the American Medical Collection Agency, the company has filed for bankruptcy and laid off more than 70% of its workforce, as cost in mitigating the impacts of the leak has to lead the company to lose a massive amount of money.

According to the company, the data breach “resulted in enormous expenses that were beyond the ability of the Debtor to bear.”

“Almost immediately upon learning of the breach, LabCorp unqualifiedly and indefinitely terminated its relationship with the Debtor,” the filing reads.

“Soon after, Quest Diagnostics, Conduent, Inc., and CareCentrix, Inc. which together with LabCorp were the Debtor’s four largest clients, stopped sending new work to the Debtor, and all terminated or substantially curtailed their business relationships with the Debtor.”

Cybersecurity experts have estimated that the company most likely to spend at least $400,000 for cyber forensics alone. Add to that the cost of IT support, severe restrictions that were put in place to protect AMCA’s network from further intrusion, looming court cases, and the loss of valuable business partners; it is most likely that the company was driven to the abyss of bankruptcy by the data breach.

Of course, to cut cost, AMCA has also laid off employees and only retained those who are significant in the legal battles it faces, including the lawsuits and its request for bankruptcy. AMCA’s current employee count is down from 113 to 25, which practically cut of 78% of its human resources. Fuchs has asked the court to consider a motion which will ensure the firm’s remaining staff will be paid during the process.

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Treasury Chief Says Crypto Is A “National Security Risk”

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Secretary of the Treasury Steven Mnuchin | 7/25/17 (Official White House Photo by Ricky Harris)

A new jab was thrown against Bitcoin and cryptocurrencies from the US government after statements from the U.S. Treasury Secretary branded the industry as a “national security threat.”

Facebook’s announcement of Libra has brought crypto and blockchain technology in the center stage, as governments around the world have heightened their scrutiny on the alternative financial system that the industry is offering.

Government executives and high ranking officials have raised concerns on the volatility of the technology, and how it is being used by malicious actors to facilitate illegal transactions such as money laundering and illegal drugs.

Now, US Treasury Secretary Steven Mnuchin chimed in the conversation and echoed earlier apprehensions versus Bitcoin and cryptocurrencies. The Secretary warns that Bitcoin, as well as, Facebook’s plans for Libra, pose a “national security issue” for the United States.

“This is indeed a national security issue,” Mnuchin told reporters at a press conference yesterday. “Cryptocurrencies such as bitcoin have been exploited to support billions of dollars of illicit activity like cyber crime, tax evasion, extortion, ransomware, illicit drugs, and human trafficking,” adding that Facebook’s Libra “could be misused by money launderers and terrorist financiers.”

Mnuchin echoed other politicians stance on Facebook’s Libra venture and said that he was “not comfortable” by the idea of it.

Trump vs. Crypto

In a series of tweets on last week, the POTUS said that he is not a “fan” of cryptocurrencies, asserted that America has only one currency, criticized bitcoin, as well as told Facebook that they need a banking charter if they want to launch their newly announced crypto-based money called Libra.

Trump said cryptocurrencies are not money, and “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

“If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations,” said the president.

Related: Trump Vs. Crypto: Dollar Is The Only Currency Of The USA

According to the President, the dollar is the only currency in America, and Libra, among other cryptocurrencies, are not “real money.”

“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!” Trump said in a tweet.

Trump’s anti-crypto stand was agreed upon by Mnuchin saying that “the president does have concerns as it relates to bitcoin and cryptocurrencies—those are legitimate concerns that we have been working on for a long period of time.”

Democrats vs. Crypto

Joining Trump’s army against cryptocurrencies and Facebook’s Libra plans are Democrats from the Senate who recently circulated a draft proposal that bans big tech companies from issuing digital money.

The bill, which was bluntly named as “Keep Big Tech Out Of Finance Act,” circulates among Democrats majority that leads the U.S. House Financial Services Committee, proves that the US government is not joking about its position against Libra and other similar ventures in the future.

Read More: Democrats Move To Ban Big Techs From Issuing Digital Money

According to the proposed bill, no tech company should be allowed to issue any form of financial services. “A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as a medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System,” reads a copy of the bill obtained by Z6Mag.

Furthermore, while the bill does not specify any company, it clearly refers to Facebook, and it’s planned blockchain-based currency, Libra. The “large platform utility” is defined as a technology company with “[an] annual global revenue of $25,000,000,000 or more” and one that is “predominately engaged in the business of offering to the public an online marketplace, an exchange, or a platform for connecting third parties.” This definition seems to be crafted to include Facebook rather than exclude other companies.

It is also worth noting that the proposed legislation also prohibits “large platform utilities” from affiliation with “persons who are a financial institution.” This further includes Facebook’s proactive workaround against possible future laws that may prohibit them from owning Libra.

Nonetheless, the bill is still in its earliest phase yet, and many could happen to move forward. For it to become a law, it still has to withstand the possible opposition by Republicans in both the House and the Senate.

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Senator To Facebook’s Libra: ‘Can People Trust You?’

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Photo: BTC Keychain | Flickr | CC BY 2.0

When it comes to Facebook’s Libra, the US government has made one thing clear: they don’t trust the tech giant and its plan to release an alternative financial system based on the highly debated blockchain technology.

In a Senate hearing today, a Facebook executive was grilled by lawmakers in the Senate Banking Committee over the plan to issue its digital currency and its possible effect on the global banking and financial ecosystem.

Facebook announced a month ago that it would roll out a new form of digital money, called Libra, which the tech superpower claims to be a stable coin. Unlike its predecessor, Bitcoin, the Silicon Valley giant claims that Libra is a cryptocurrency backed by real-world money and government certificates, and is also supported by a group of corporations such as Mastercard, Paypal, and VISA.

Libra is set to be available for circulation early next year, but a few weeks following Facebook’s announcement, staunch government opposition has proved difficult for Libra to push through with its most ambitious plan.

“Facebook has said ‘just trust us’” Senator Sherrod Brown, Democrat of Ohio, said at the hearing. “And every time Americans trust you, they seem to get burned.”

Many governments around the world have echoed concerns on how Facebook will handle such an ambitious feat. Many claims that because of the company’s reputation in data security, it is hard to trust Facebook in handling people’s money.

“Trust is primordial”

“Do you really think people should trust Facebook with their hard-earned money?” Senator Brown asked Facebook’s exec, David Marcus.

As a response, Marcus said that the company would do its best to protect people’s money, as well as, prevent fraud and other illegal activities that malicious actors may carry out using Facebook’s Libra.

One of the significant critiques against Facebook’s digital money comes from the fact that cryptocurrencies are not well regulated and criminal element can leverage the technology and use Libra for money laundering and other forms of illegal payments.

“We’ve made mistakes in the past,” Mr. Marcus said. “We have been working, and are working hard to get better.”

“Trust is primordial,” he added.

Keep Big Tech Out Of Finance Act

The Senate hearing comes a day after a copy of a draft proposal in the Senate penned by Democrat senators surfaced that practically bans major tech companies from issuing digital currencies.

Read: [Breaking] Democrats Move To Ban Big Techs From Issuing Digital Money

A new draft proposal for the bill, bluntly named as “Keep Big Tech Out Of Finance Act,” that circulates among Democrats majority that leads the U.S. House Financial Services Committee, proves that the US government is serious about its position against Libra and other similar ventures in the future.

According to the proposed bill, no tech company should be allowed to issue any form of financial services. “A large platform utility may not establish, maintain, or operate a digital asset that is intended to be widely used as a medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System,” reads a copy of the bill obtained by Z6Mag.

Global fiscal and legislative resistance vs. Libra

Furthermore, while the bill does not specify any company, it clearly refers to Facebook, and it’s planned blockchain-based currency, Libra. The “large platform utility” is defined as a technology company with “[an] annual global revenue of $25,000,000,000 or more” and one that is “predominately engaged in the business of offering to the public an online marketplace, an exchange, or a platform for connecting third parties.” This definition seems to be crafted to include Facebook rather than exclude other companies.

It is also worth noting that the proposed legislation also prohibits “large platform utilities” from affiliation with “persons who are a financial institution.” This further includes Facebook’s proactive workaround against possible future laws that may prohibit them from owning Libra.

European officials have also expressed concern regarding Libra, citing that the system, if widely adopted, could shake the global economy and rival national banks. French Finance Minister Bruno Le Maire sent a letter to officials from the G7 and International Monetary Fund calling for a group to examine Libra’s impact on the global financial system. Le Maire said that Libra must not become a “sovereign currency,” while a German politician noted Facebook’s potential to become a “shadow bank” to the global financial system.

Aside from European officials, Japanese lawmakers are also investigating the possible impact of Facebook’s Libra in global banking and financial systems ahead of the G-7 Meeting of the country’s finance ministry to be held in France this week.

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