THANKS, L.A. WEIGHT LOSS! Identity Thieves Catch a Break
July 30, 2008 by Sean Kelly
Filed under Business
(FranchisePick.Com) Related posts:
IS PURE WEIGHT LOSS VIOLATING HIPAA PRIVACY LAWS? (Part 1)
IS PURE WEIGHT LOSS VIOLATING HIPAA PRIVACY LAWS? (Part 2)
Pure Weight Loss Members Ask: Where Are My Confidential Records?
LA Weight Loss Tosses Client Files in Dumpster
The tough economy has put a strain on all small business owners, identity thieves notwithstanding.
Luckily, they’ve caught two breaks this year. The first was when the 400+ Unit Pure Weight Loss (formerly LA Weight Loss) chain closed its doors in January. While Pure Weight Loss left thousands of customers and employees stranded without the services and products they paid for, and without the paychecks they were due, identity thieves were most appreciative of the chain’s thoughtfulness.
There were widespread reports of confidential member records, containing HIPAA protected medical records, personal data and financial information, either abandoned in or behind closed centers or tossed in dumpsters. Identity thieves probably though this was a once-in-a-lifetime opportunity.
It turns out there’s ANOTHER L.A. Weight Loss chain that loves identity thieves just as much. History seems to be repeating itself as L.A. Weight Loss centers are reportedly closing… and following in their predecessor’s crack security protocols.
According to Weight Loss watchdog site Dear Vahan (named affectionately for Pure’s CEO Vahan Karian, currently being sued by the PA Attorney General) in a post entitled LA Weight Loss Tosses Client Files in Dumpster, two recently closed L.A. Weight Loss franchises closed abruptly, leaving their members stranded without their prepaid services or their prepaid products.
They did, however, have the thoughtfulness to leave their confidential records for them… conveniently located in their unlocked dumpster.
On behalf of identity thieves everywhere: Thanks, L.A. Weight Loss!
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This does not surprise me at all. LAWL has always been unprofessionally run. They were lucky to have powerful advertising that drove people into the centers. I was an corporate trainer for them and we never discussed health, well being or weight loss. Just sales, sales, sales. However, they are not under HIPPA since they are not a medical practice. The do not do medical records–They are strictly weight loss which is not goverend by medical practice acts.
Thanks for posting!
However, they are not under HIPPA since they are not a medical practice. The do not do medical records–They are strictly weight loss which is not goverend by medical practice acts.
Someone had mentioned that because there were blood tests involved, they could be under HIPAA. I have no idea what’s in LAWL client files.
Though reports of credit card #s and personal info is troubling enough.
Remember though, PHI or Portable Health Information is not something that only medical facilities are legally bound to protect. Any entity who possesses such information is bound to protect that info under HIPAA. In addition, there are other privacy laws such as FACTA that deal with protecting ANY personal information…even names, addresses and email addresses.
Paul:
Can you explain what constitutes PHI? Or give the gist of FACTA?
LAWL employees/members: What information do they keep in your files?
Sean:
What is Protected Health Information (PHI)?
Under HIPAA, PHI is confidential, personal, identifiable health information about individuals that is created or received by a health plan, provider, or health care clearinghouse and is transmitted or maintained in any form. “Identifiable” means that a person reading this information could reasonably use it to identify an individual.
Following are some (but not all) of the elements that make a piece of health-related information into PHI:
name
address
e-mail address
birth date (except year)
Social Security number
employee number
claim number
health plan beneficiary number
PHI includes written documents, electronic files, and verbal information. (Even information from an informal conversation can be considered PHI.) Examples of PHI include completed health care claim forms, detailed claim reports, explanations of benefits (EOB), and notes documenting discussions with plan participants.
FACTA-The Fair and Accurate Credit Transactions Act (FACTA) is a consumer rights bill that became effective June 1st, 2005. All companies in the United States are affected by this legislative act. FACTA was designed to lower the risk of identity theft and consumer fraud. It enforces the proper destruction of consumer information, such as name, address, SSN, credit information. Also included in this bill is the necessity to destroy data *compiled* from this information. “Any person who maintains or otherwise possesses consumer information, or any compilation of consumer information, derived from consumer reports for a business purpose” in electronic or paper form must “take reasonable measures to protect against unauthorized access or use of the information in connection with its disposal.” – or to “properly dispose of such information or compilation”.
FACTA basically requires that all businesses – regardless of size and industry – properly protect and dispose of the personal information they collect about their customers and employees.
I hope this helps.
That’s great, Paul. Thanks.
I’m sure ex-employees – and even clients – can say what’s included in LA Weight Loss files… which I suspect meet both HIPPA and FACTA criteria. The reports found in dumpsters reportedly included social security numbers, names, addresses and even credit card numbers.
When Pure Weight Loss closed more than 400 stores, they simply told their neglected and bitter employees to box it all up and send it back. The employees – who had just been abruptly fired before Christmas – some of whom never got their final paychecks – were every bit as diligent returning those records as you’d expect them to be.