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Rite Aid Confirms FTC Privacy Probe

October 16, 2002|From Bloomberg News

CAMP HILL, Pa. — Rite Aid Corp. confirmed Tuesday that it is being investigated by the Federal Trade Commission to determine whether the third-largest U.S. drugstore chain violates consumer privacy guidelines through its prescription refill reminder service.

The company hasn't been accused of any wrongdoing and is cooperating with the probe, Rite Aid said in a filing with the Securities and Exchange Commission.

"The FTC has asked for documents pertaining to refill reminders made to patients either by phone or by mail and for educational material related to drugs, including safety information," said Karen Rugen, a spokeswoman for Rite Aid, based in Camp Hill.

She also emphasized that the company is not accused of any wrongdoing and that it is fully cooperating with the FTC.

Florida regulators this year investigated rival drugstore chain Eckerd, which is owned by J.C. Penney Co., for similar reasons.

As in Rite Aid's case, regulators sought to determine whether Eckerd's customers were adequately informed that they were authorizing the release of information for marketing purposes when they signed prescription pickup logs and forms. That probe was settled in July.

FTC spokesman Mitch Katz confirmed that the agency was investigating Rite Aid. He declined to comment further.

In June, former Rite Aid Chief Executive Martin Grass and three other former top executives were indicted on criminal charges of accounting fraud.

Rite Aid ultimately agreed to concessions with the Securities and Exchange Commission and paid $200 million to settle shareholder lawsuits over the company's past accounting practices.

Rite Aid shares Tuesday fell 16 cents, or 7.6%, to $1.95 on the New York Stock Exchange.

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