consumer fraud

Contributed by KCR Partner, Stuart Talley

For most of our clients, the decision to undergo an initial hip replacement surgery was difficult.  Now they are being told that there is something wrong with their hip and that another painful and risky surgery may be necessary.  Our clients are confused, concerned, and justifiably angry.  Unfortunately, the spin from DePuy has only added to their confusion and anxiety.  No one is telling these people what exactly is wrong with their recalled hips, what the long term health consequences of having one may be, or what the chances are they will have to have the hip replaced.

Since we’ve been bombarded with questions on this topic, we posted detailed answers to some of the most frequently asked hip recall questions at our website.  Hopefully this will help curb the massive wave of confusion and concern people are experiencing due to this major hip implant recall.

Many people think that if they are not experiencing problems with their recalled hip, there is nothing they need to do.  Unfortunately, this is not true.  The law requires people to file a lawsuit within a certain period of time once they “suspect” there may be a problem with their hip.  In some states, this statute of limitations period can be as little as one year.  Therefore, if a person waits until something goes wrong with their artificial hip, it may be too late to file a lawsuit, since everyone who has a recalled hip was recently notified that their hip was the subject of a recall.  There is no doubt that DePuy is relying on this misperception to limit its liability.

Our product liability and personal injury lawyers have successfully fought against Johnson & Johnson and their subsidiaries for years, so we are well aware of the tactics they employ to minimize the financial repercussions that occur due to faulty products.  One such tactic is requesting medical records of a patient.  Once they receive the information, they attempt to make the case that any problems the patient may be experiencing with the faulty device are not their responsibility.  This can impact the way the patient’s doctor views their situation, and adversely affect their case down the road.

It’s important to remember that in 2007, DePuy was indicted by federal authorities for paying millions of dollars in kickbacks to surgeons who used their products.  During a major recall such as this, suspicion of DePuy’s motives are certainly justified.


Yesterday a Senate committee convened to discuss investigations the U.S. Government Accountability Office conducted on 15 for-profit colleges. As we’ve reported in previous posts, a growing number of schools have been engaging in deceptive marketing and fraudulent financial aid practices. The U.S. GAO report undergirds our own findings that the schools exploit prospective students’ economic hardship and federal funding, while lying to students about their accreditation and job placement opportunities to boost their bottom lines.

According to Senator Michael Enzi (R-WY), “It is crystal clear that some programs at for-profit schools are misleading students and possibly defrauding taxpayers out of millions of dollars in student aid funds.”

As federal funding for financial aid is expected to total $145 billion this year alone, this is a potentially huge problem.  Are we moving from one predatory lending scheme to another?  It may seem overly sensational to compare our problems with subprime mortgage lending to the student loan industry, but talk to former students struggling to pay off their student loan debts while barely finding a job in their field.  You may feel a sense of déjà vu creep in while tent city images return to your memory bank of televised tragedy.  Students who had to take more than one loan find that most of their loans cannot be consolidated, and when extreme hardship forces them into bankruptcy, they often cannot be released from student loan debt.

According to the Bankruptcy Law Network, a blog about bankruptcy news:

The big difference between student loans and unwieldy home loans is the inability of most borrowers to rid themselves of the resulting debt. Federal student loans can follow the borrower to the grave. They have no statute of limitations and can be collected from the estate of the borrower even after death.

Statistics analyzed in 2003 by the Department of Education state that an average of 1 in every 3 students defaults his or her student loan.  Now add into the equation how many for-profit schools encourage prospective students to lie on  financial aid forms so that they can attend their non-accredited or sub-standard program that does not lead to the job opportunities they claim, and a bigger, and more frightening, picture emerges. 

Director of policy and research for the National Association of College Admissions Counseling, David Hawkins, testified at today’s hearing. “In an unregulated environment,” he stated, “the potential for misrepresentation and outright fraud is a clear and present threat, which can result in harm to students and, in the case of federal aid and loans, to the taxpayer.”

We should encourage our lawmakers to crack down on these unscrupulous institutions and add consumer protections to student loans.  And meanwhile, let’s spread the word to as many people as we can so others don’t fall into the cycle of student loan debt and pervasive joblessness.

To learn more about how to avoid deceptive recruiting tactics read our previous post “Tips to Avoid Trade School Fraud,” and follow our Fight Trade School Scams Facebook Page to contribute to the conversation.

For additional media coverage on this topic, see: For-Profit Colleges Caught on Video Encouraging Financial Aid Fraud

Consumer Affairs: For-Profit Schools get More Scrutiny

NPR: For-Profit Colleges Encouraged Fraud, Used Deceptive Marketing, GAO Reports

Bloomberg: Harkin Seeks Data on For-Profit Schools After Hearing

New York Times Education Blog:  Commentary:  A Plea to Add Consumer Protections to Student Loans

For more information about the student loan industry, visit