NJ DIVISION OF CONSUMER AFFAIRS ANNOUNCES SETTLEMENT WITH KMART

(The following is a reformatted version of a press release
issued by New Jersey Division of Consumer Affairs and received
via electronic mail. The release was confirmed by the sender.) 
January 11, 2013 
New Jersey Division of Consumer Affairs Announces Settlement
with Kmart, After 19 Stores Statewide Sold Expired Infant
Formula, Non-Prescription Medications 
NEWARK - Attorney General Jeffrey S. Chiesa and the New Jersey
Division of Consumer Affairs today announced a settlement with
Kmart in which the retail giant will pay $302,500, donate
$25,000 worth of infant formula to charity, pay for continued
unannounced state inspections, and implement meaningful remedial
measures to inspect its merchandise, after 19 Kmart stores in
New Jersey were found to have sold or offered for sale expired
infant formula and non-prescription medications. 
Inspections by Division of Consumer Affairs investigators found
a total of 257 packages of infant formula and/or non-prescription medications that were from 9 months to 29 months
past the expiration date,  but still available for purchase on
the shelves at the 19 stores.  Investigators purchased a total
of 68 expired items.  The stores are located in Atlantic,
Bergen, Burlington, Camden, Cape May, Essex, Gloucester, Mercer,
Monmouth, Morris, Ocean, Passaic, and Somerset counties; the
specific stores are identified in the attached Consent Order. 
New Jersey’s Consumer Fraud Act expressly prohibits the sale of
any infant formula or non-prescription drug subject to
expiration dating requirements by the U.S. Food and Drug
Administration, if the expiration date has passed. 
Under the settlement, Kmart will submit to several measures
intended to prevent its stores from again selling infant formula
or medication that has expired. 
Kmart will appoint two senior level management employees for 18
months to serve as compliance liaisons with the Division.  These
employees will conduct unannounced inspections of Kmart’s New
Jersey stores to identify expiring and expired products, and
review the stores’ compliance with Kmart’s policies regarding
the expiration dates of infant formula and non-prescription
medication.  At least 20 of Kmart’s New Jersey stores will be
inspected each quarter.  The compliance liaisons will then
submit quarterly reports to the Division of Consumer Affairs
that will include any findings or resolutions, and a full
explanation about any expired products that may be found on
store shelves.  They will also conduct scheduled conference
calls with representatives of the Division of Consumer Affairs.
At the end of the 18-month period they will submit a final
certified report that, among other things, will compile all
instances in which expired items were identified at the stores,
any actual or recommended changes to Kmart’s policies, and an
explanation of why such changes were or should be made.
Kmart will also maintain two “date code specialists” in each New
Jersey store, for at least the duration of the 18-month period.
Those employees will, among other things, inspect all date-coded
items on a written rotational calendar.  Any breaches they find
will be investigated by supervisory personnel within the store,
and reviewed by a compliance liaison. 
Pursuant to the settlement, Kmart will also provide funding for
random, unannounced inspections of its New Jersey stores by the
Division of Consumer Affairs, continuing for one year.  The
Division retains the authority to perform further unannounced
inspections as the Division determines necessary. 
“Our unannounced inspections revealed expired infant formula and
non-prescription medications at more than half of all Kmart
stores in New Jersey, including every region of our state.  Some
products were more than two years past the expiration date,”
Attorney General Chiesa said.  “This is unacceptable, and a
clear violation of our consumer protection laws.  This consent
order includes a plan by which we will continue to hold
accountable every Kmart store in New Jersey, monitor their
compliance, and demand results if any store is found to repeat
this mistake.” 
Also under the settlement, Kmart will pay a total of $302,500 to
the State, including $255,000 in civil penalties and the
remainder to reimburse the State’s attorneys’ fees and
investigative costs.  Kmart will also donate $25,000 worth of
infant formula, with at least 21 days remaining before its
expiration date, to one or more charities that provide direct
assistance to infants and their parents or legal guardians. 
“When parents buy infant formula and over-the-counter medication
for their children, they have the absolute right to receive
formula that has not expired, and fully lives up to its
advertised nutritional content.  When patients buy medication,
they expect that it has not expired, and will properly address
their symptoms without unduly posing a new health risk,” Eric T.
Kanefsky, Acting Director of the New Jersey Division of Consumer
Affairs, said.  “This is a no-brainer.  The fact that we found
this problem at Kmart stores throughout the state indicated a
systemic problem at Kmart that we have addressed through this
settlement.” 
The FDA recognizes infant formula as often being “the sole
source of nutrition by a vulnerable population during a critical
period of growth and development,” and requires that it have an
expiration date.  Infant formula consumed beyond its expiration
date increases the risk that it may not contain the nutrient
level required for proper infant development. 
Over-the-counter drugs have unique formulations that consist of
inactive and active ingredients geared to treat specific
diseases.  Medications consumed beyond the shelf life indicated
by manufacturers, may have undergone chemical changes, may be
less effective, and may pose potentially serious health
consequences.  The FDA mandates that all medication have
expiration dates to help ensure the sale and usage of medication
occurs within the drug’s shelf life. 
Deputy Attorneys General Patricia Schiripo and Alina Wells, of
the Division of Law, represented the State in this action.
Investigator Oscar Mejia in the Office of Consumer Protection
conducted the investigation. 
Consumers who believe they have been cheated or scammed by a
business, or suspect any other form of consumer abuse, can file
a complaint with the New Jersey Division of Consumer Affairs by
visiting its website or by calling 1-800-242-5846 (toll free
within New Jersey) or 973-504-6200. 
Follow the Division of Consumer Affairs on Facebook, and check
our online calendar of upcoming Consumer Outreach events. 
For Further Information Contact:
Jeff Lamm, (973) 504-6327
Neal Buccino, (973) 504-6327 
(bjh) NY 
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