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The FTC Updates

For the FTC’s Paper, “Data Brokers: A Call for Transparency and Accontability”, May 2014, just click on Data Brokers

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Federal Trade Commission - Protecting America's Consumers

The Federal Trade Commission is sending 71,899 checks totaling more than $1.8 million to consumers, including many older Americans, tricked into paying for supposedly free in-home medical alert devices. The money comes from a settlement with New York-based Lifewatch, Inc.

TheFTC’s complaint, filed jointly with the Florida Attorney General’s Office, alleged that the defendants bombarded consumers with at least a billion unsolicited robocalls to pitch supposedly “free” medical alert systems. These pre-recorded messages claimed that Lifewatch’s medical alert system was endorsed or recommended by reputable organizations like the American Heart Association. The company’s telemarketers often told consumers that a medical alert system had been purchased for them, and they could receive it “at no cost whatsoever.” Consumers eventually learned that they were responsible for monthly monitoring fees and that it was difficult to cancel without paying a penalty.

In addition to imposing the monetary penalty to provide consumer refunds, the order settling the FTC’s charges bans the Lifewatch defendants from telemarketing and prohibits them from misrepresenting the terms associated with the sale of any product or service.

The FTC is returning $1,808,260 to defrauded consumers. All checks are for $25.15, and will expire in 90 days, as indicated on the check. Recipients who have questions about their refund can call the administrator, Analytics, LLC, at 1-866-484-1466. The FTC never requires people to pay money or provide account information to cash a refund check.

In 2020, FTC actions led to more than $483 million in refunds to consumers across the country, but the United States Supreme Court ruled earlier this year that the FTC lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The Commission has urged Congress to restore the FTC’s ability to get money back for consumers.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:
Analytics, LLC, Refund Administrator
1-866-484-1466

Media Contact:
Office of Public Affairs
202-326-2161

Author: mkatz
Posted: December 1, 2021, 12:00 pm

The Federal Trade Commission has announced an agenda for its upcoming virtual workshop regarding competition in labor markets.

First announced on Oct. 27, 2021, “Making Competition Work: Promoting Competition in Labor Markets,” will take place from 10 a.m. to 3:30 p.m. on December 6, and from 10:20 a.m. to 4:45 p.m. on December 7, and will be webcast live on the FTC’s website.

Over the two days, a series of panels, presentations, and remarks will address competition issues affecting labor markets and the welfare of workers, including: labor monopsony; the increased use of restrictive contractual clauses in labor agreements, including non-competes and non-disclosure agreements; information sharing and benchmarking activity among competing employers; the role of other federal agencies in ensuring fair competition in labor markets; and the relationship between antitrust law and collective bargaining efforts in the “gig economy.” Panelists will be invited to discuss potential steps antitrust enforcers can take to better target enforcement resources, improve public guidance, and pursue a “whole of government” approach to ensuring fair competition for workers and consumers by leveraging interagency resources.

In addition to the live webcast, a recording of the workshop will be available on the Antitrust Division’s website and the FTC’s website. In addition to the agenda, a list of speakers, and instructions for accessing the webcast will be available on the event page. The FTC and the DOJ Antitrust Division invite comments from the public on the topics covered by this workshop. Interested parties may submit public comments online through Dec. 20, 2021, at Regulations.gov.

The Federal Trade Commission develops policy initiatives on issues that affect competition, consumers, and the U.S. economy. For the latest news and resources, follow the FTC on social media, and subscribe to press releases.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs
202-326-3707

Staff Contact:
Sarah Mackey
Office of Policy Planning
202-326-3254
Author: elordan
Posted: December 1, 2021, 12:00 pm

Consumers report most unwanted calls from imposter government agencies or businesses, followed by calls about warranties and protection plans

Today, the Federal Trade Commission released the National Do Not Call Registry Data Book for Fiscal Year 2021. The FTC’s National Do Not Call (DNC) Registry lets consumers add their phone number and choose not to receive most legal telemarketing calls. In the last fiscal year, nearly three million people signed up with the DNC Registry, bringing the total close to 245 million phone numbers.

Now in its thirteenth year of publication, the Data Book also provides the most recent fiscal year information available on robocall complaints, the types of calls consumers reported to the FTC, and a complete state-by-state analysis. According to the Data Book, complaints about imposter calls again topped the list, with almost 594,000 received during the fiscal year ending on September 30, 2021, including both live calls and robocalls. In such calls, imposters falsely pose as government representatives, such as the Social Security Administration or the IRS, legitimate business entities, or as people affiliated with them.Explore Data with the FTC: Find out about Do Not Call complaints and registrations

FY 2021 Registration and Complaint Data

According to the Data Book, at the end of FY 2021, the DNC Registry contained 244.3 million actively registered phone numbers, up from 241.5 million at the end of FY 2020. The number of consumer complaints about unwanted telemarketing calls increased, from nearly four million in FY 2020 to over five million in FY 2021. Of those complaints, 68 percent concerned robocalls and 22 percent were about live telemarketing.

In FY 2021, the Commission received 3.4 million complaints about robocalls, up from 2.8 million in FY 2020. The FY 2021 total is in line with previous years, following FY 2020’s significant decline. For every month in the fiscal year, robocalls—defined under FTC regulations as calls delivering a prerecorded message—made up the majority of consumer complaints about DNC violations, with the most -- 347,000 -- coming in March of this year.

FY 2021 Data Highlights

Again this year, imposters were the topic of the robocalls consumers reported the most, with more than 496,000 complaints received. Warranties and protection plans comprised the second-most commonly reported topic, with consumers filing more than 412,000 robocall complaints. Calls about supposed debt-reduction made up the third-most commonly reported topic, followed by complaints about medical and prescription issues, and computers and technical support.

Registration and Complaint Data by State

With respect to state data, New Hampshire continues to top the nation in active DNC registrations per capita (94,642). The states reporting the most complaints per 100,000 population changed in FY 2021: the top five states were Maryland (2,028 per 100K population), Delaware (1,982 per 100K population), Arizona (1,945 per 100K population), Colorado (1,943 per 100K population), and Virginia (1,939 per 100K population).

Underlying Data Availability

The underlying data in the report is publicly available at: https://www.ftc.gov/reports/national-do-not-call-registry-data-book-fiscal-year-2021.

Information for Consumers

Information for consumers about the DNC Registry, company-specific DNC requests, and telemarketer caller ID requirements can be found on the FTC’s website, and consumers can sign up for the DNC Registry for free. Other information about robocalls and what consumers can do about them is also available. To report unwanted telemarketing calls, consumers can file a complaint at www.donotcall.gov or call 1-888-382-1222.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs
202-326-2161

Staff Contact:
Amy Hebert
Bureau of Consumer Protection
202-326-2660
Author: mkatz
Posted: November 23, 2021, 12:00 pm

Federal Trade Commission Chair Lina M. Khan announced several new additions to the FTC’s Office of Policy Planning. Olivier Sylvain, Meredith Whittaker, Amba Kak, and Sarah Myers West will be working with the agency’s Chief Technology Officer and technologists as part of an informal AI Strategy Group and in partnership with policy experts across the agency to provide insight and advice on emerging technology issues. John Kwoka will be working with competition economists and attorneys on an updated approach to merger review policies.

“At this critical time for the agency, I’m thrilled to welcome to the FTC several new additions: Amba Kak, John Kwoka, Sarah Myers West, Olivier Sylvain, and Meredith Whittaker,” said Chair Lina M. Khan. “Tackling unlawful conduct requires that we ensure our law enforcement and policy work are keeping pace with new market realities. These leaders in tech and economic policy will work alongside experts within the FTC and my office to help us realize that goal.”

Olivier Sylvain will serve as Senior Advisor on Technology to the Chair. Sylvain joins the FTC from Fordham University where he has served as Professor of Law. An expert on Section 230 of the Communications Decency Act, his areas of scholarship include administrative law, information law, U.S. data protection and privacy law, and other information-economy related matters. At Fordham, he has been the Director of the McGannon Center for Communications Research, the Academic Director of the Center for Law and Information Policy, and a research affiliate at the Center on Race, Law, and Justice. Sylvain was also a Karpatkin Fellow in the National Legal Office of the American Civil Liberties Union and a litigation associate at Jenner & Block, LLC. He is a graduate of Williams College, holds a JD from the Georgetown University Law Center, and earned a Ph.D. from Columbia University.

John Kwoka will serve as Chief Economist to the Chair. John joins us from Northeastern University where he is the Neal F. Finnegan Distinguished Professor of Economics. Kwoka has published widely, with his recent scholarship focusing on ways to update and strengthen merger policy and other aspects of antitrust. Kwoka has previously taught at the University of North Carolina at Chapel Hill and George Washington University, and has had visiting positions at Northwestern University and Harvard University. He has lectured and consulted widely in the areas of industrial and competition policy and has published more than 85 research and policy papers on economic issues. Kwoka has previously served at the Federal Trade Commission, the Antitrust Division of the Justice Department, and the Federal Communications Commission. He holds a Ph.D. in Economics, University of Pennsylvania, and an A.B. in Economics from Brown University.

Meredith Whittaker will serve as Senior Advisor on Artificial Intelligence to the Chair. Whittaker joins the FTC from NYU’s Tandon School of Engineering where she has served as Faculty Director of the AI Now Institute and the Minderoo Research Professor. Her work has focused on critically examining the intersection of technology and policy, including the political economy of artificial intelligence and companies that develop and profit from it. She founded Google’s Open Research Group, and co-founded M-Lab, a globally distributed network measurement platform that provides the world’s largest source of open data on internet performance. She has over 15 years of experience in tech, and has advised the White House, the Federal Communications Commission, the City of New York, and many other governments on artificial intelligence and related issues. She holds an A.B. in Rhetoric and English Literature from Berkeley.

Amba Kak will serve as a Senior Advisor on Artificial Intelligence. Kak joins the FTC from NYU’s Tandon School of Engineering where she has served as the Director of Global Policy at the AI Now Institute. Having worked in multiple jurisdictions, Amba brings comparative global expertise to policy issues. Her recent research has focused on algorithmic accountability and biometric regulation. Previously, she was the Global Policy Advisor at Mozilla where she helped develop the organization’s policy positions on network neutrality and data privacy regulation, among others. Amba has a Master’s in Law (BCL) and an MSc in the Social Science of the Internet from the University of Oxford, which she attended as a Rhodes Scholar.

Sarah Myers West will serve as an Advisor on Artificial Intelligence. Myers West joins the FTC from NYU’s Tandon School of Engineering where she has served as Research Scholar at the AI Now Institute. Her research examines the intersection of technology, labor, and platform accountability, as well as the history and political economy of the tech industry. She has testified before the NYC City Council and has been invited to present her research at venues such as the National Science Policy Network, Internet Governance Forum, and National Human Genome Research Institute, among others. Myers West received her doctoral degree from the Annenberg School for Communication and Journalism at the University of Southern California and holds Master’s Degrees in Communication and Public Diplomacy.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). For the latest news and resources, follow the FTC on social media, subscribe to press releases and read our blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs

Author: mkatz
Posted: November 19, 2021, 12:00 pm

FTC policy statement aimed at holding corporations and their executives accountable for crimes the agency uncovers

The Federal Trade Commission today voted to expand its criminal referral program as part of its work to stop and deter corporate crime. While the FTC’s authority is limited to civil enforcement, the policy statement adopted at today’s open meeting will enhance the agency’s efforts to combat the criminal misconduct the FTC uncovers in consumer protection and antitrust investigations. The new measures outlined in the policy statement will ensure that cases are promptly referred to local, state, federal and international criminal law enforcement agencies so that corporations and their executives are held accountable for criminal behavior.

“At a time when major corporate lawbreakers can treat civil fines as a cost of doing business, government authorities must ensure that criminal conduct is followed by criminal punishment,” said Chair Lina M. Khan. “Today the FTC is redoubling its commitment and improving its processes to expeditiously refer criminal behavior to criminal authorities, promoting accountability and deterrence.”

Consumer protection misconduct and antitrust violations such as price-fixing, bid-rigging, market allocation deals and other related conduct cause great harm to the American public, leading to significant financial losses and warranting both civil and criminal enforcement efforts. The new policy statement outlines several ways the agency plans to improve its cooperation with its criminal law enforcement partners to stop and deter consumer protection and competition criminal violations, including by:

  • publicly reporting on the FTC’s criminal referral efforts on a regular basis to strengthen public understanding of this important work and highlight criminal prosecutions;
  • developing guidelines to ensure criminal law violations — particularly by major corporations and their executives — are identified by staff and promptly referred to criminal law enforcement agencies; and
  • convening regular meetings with federal, state, and local criminal authorities to facilitate the coordination that will enable the appropriate law enforcement partners to take up cases referred by the FTC and develop best practices to enhance this coordination.

This approach builds on the agency’s ongoing partnerships with criminal authorities to rein in misconduct. Notable consumer protection cases that the FTC worked on with criminal enforcers at the Department of Justice (DOJ) include the money transfer service Western Union. The FTC and the Department of Justice jointly brought civil and criminal charges against Western Union alleging consumer fraud, aiding and abetting wire fraud, and failure to have an effective anti-money laundering program. In 2017, Western Union entered a global settlement that included a $586 million judgment and a permanent injunction. DOJ has also charged a top former Uber executive with obstruction of justice for allegedly hiding a data breach from FTC staff during an FTC investigation into Uber’s data security practices. 

Notable recent cases on the competition side in which the FTC collaborated with federal law enforcement include Reckitt Benckiser Group and Indivior. The FTC charged that the companies used a deceptive scheme to thwart lower-priced generic competition to their branded opioid addiction treatment, Suboxone. The DOJ’s criminal case, involving closely related conduct, ultimately resulted in a $1.4 billion settlement with Reckitt, guilty pleas from two former Indivior executives and an Indivior subsidiary, and a civil settlement with Indivior. In another case, Bristol-Myers Squibb (BMS), DOJ filed criminal charges against BMS and one of its executives, charging them with perjury for making false statements to the FTC in an investigation the agency was conducting.

The Commission voted 4-0 to approve the statement during a virtual open Commission meeting.

Chair Khan as well as Commissioners Rebecca Kelly Slaughter and Christine S. Wilson issued separate statements.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). For the latest news and resources, follow the FTC on social media, subscribe to press releases and read our blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs
202-326-2924

Author: jhenderson2
Posted: November 18, 2021, 12:00 pm

The Federal Trade Commission has released a preliminary draft Strategic Plan for Fiscal Years 2022 to 2026 for public review and comment.

Every four years, government agencies are required to submit an updated strategic plan that presents strategic goals and objectives for the next five years and describes how the agency will measure success in these areas. The FTC’s last updated strategic plan was prepared in FY 2018, and the current draft tracks closely to that iteration. The FTC welcomes feedback on how the draft plan could be adjusted to reflect the agency’s reinvigorated approach to addressing harms to American consumers, workers, and honest businesses.

Public comments on the draft plan may be submitted until November 30, 2021.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). For the latest news and resources, follow the FTC on social media, subscribe to press releases and read our blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs

Staff Contact:
Chris Bryan
Financial Management Office
202-326-2005
Author: mkatz
Posted: November 12, 2021, 12:00 pm

Today, Federal Trade Commission Chair Lina M. Khan announced that an open meeting of the Commission will be held virtually on Thursday, November 18, 2021. The open meeting will begin at 1pm ET and will be preceded by a time for members of the public to address the Commission.

The following items will be on the tentative agenda for the November 18 Commission meeting:

Business Before the Commission

Presentation on Criminal Referrals and Partnerships and Motion to Issue Commission Statement: Staff will report on the status of criminal referrals by the Bureaus of Competition and Consumer Protection that have resulted in criminal enforcement action by federal and state legal authorities. The Commission will vote on whether to issue a statement outlining the agency’s commitment to continuing to refer potential criminal violations and opportunities for strengthening this work.

6(b) Study on Supply Chain Disruptions: The Commission will vote on whether to issue Orders to large retailers and consumer goods suppliers to study the impact on competition of ongoing supply chain disruptions and gather information from other suppliers and retailers on this issue. The study will focus on why these disruptions occur, whether they are leading to specific bottlenecks, shortages, anticompetitive practices, or contributing to rising consumer prices.

At the start of the meeting, Chair Khan will offer brief remarks and will then invite members of the public to share feedback on the Commission’s work generally and bring relevant matters to the Commission’s attention. Members of the public must sign up for an opportunity to address the Commission virtually at the November 18 event. Each commenter will be allowed to speak for no more than two minutes. Anyone who cannot participate during the event may submit written comments or a link to a prerecorded video through a webform.  Speaker registration and comment submission will be available through Monday, November 15, 2021, 8pm ET.

The FTC’s public meeting agendas will be posted on the Commission’s website at least seven days prior to the Commission’s next monthly meeting. A link to the event will be available on November 18, 2021 shortly before the meeting starts via FTC.gov. The event will be recorded, and the webcast and any related comments will be available on the Commission’s website after the meeting.  The Commission retains discretion to make public comments available following the event on ftc.gov. Due to challenges related to the ongoing COVID-19 public health crisis, open meetings will be held virtually until further notice.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). For the latest news and resources, follow the FTC on social media, subscribe to press releases and read our blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs

Author: jhenderson2
Posted: November 10, 2021, 12:00 pm

Company processed millions in consumer payments for a bogus student debt relief scheme

The Federal Trade Commission obtained an order permanently banning a payment processor that facilitated a fraudulent student loan debt relief scheme from processing debt relief payments.  The order also requires the company and its owner to surrender $500,000 to the FTC for consumer redress.

The FTC’s complaint against Automatic Funds Transfer Services, Inc. (AFTS) and its owner, Eric Johnson, alleges that AFTS processed at least $31 million in consumer payments for a fraudulent student loan debt relief scheme sued by the FTC in 2019. The debt relief scheme used numerous names, including The Student Loan Group (SLG).

“Firms that facilitate fraud—especially against struggling student borrowers—need to pay a price,” said Samuel Levine, Director of the FTC’s Consumer Protection Bureau. “Many of these firms may operate in the background, but they’re very much in our sights.”

AFTS and Johnson processed payments from tens of thousands of consumers deceived by SLG into paying illegal upfront fees with false promises to lower the consumers’ monthly student loan payments. The complaint cites correspondence showing that AFTS and Johnson were aware of numerous issues with the scheme.

The FTC alleges that the company and Johnson received complaints from, among others, consumers and banks; were aware that SLG had high return rates and was collecting illegal upfront fees from consumers; and knew that SLG kept changing company and brand names to, among other reasons, mitigate negative publicity. Despite numerous warning signs, AFTS and Johnson continued processing consumer payments for SLG right until the scheme was ultimately shut down following an enforcement action by the FTC.

The settlement permanently prohibits AFTS and Johnson from processing payments for debt relief or student loan companies. They will also be prohibited from processing payments indirectly for any merchant that does not have a signed contract with AFTS, and will be required to apply enhanced screening and monitoring of certain high risk clients to ensure such clients are not operating illegally.

The settlement includes a monetary judgment of $27,584,969, which is largely suspended due to an inability to pay. AFTS and Johnson will be required to surrender $500,000 to the FTC, and if they are found to have misrepresented their financial status, the full amount of the judgment would be immediately due.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 4-0. The FTC filed the complaint and final order in the U.S. District Court for the District of Columbia.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:

Media Contact:
Office of Public Affairs
202-326-2656

Staff Contact:
Russell Deitch
Bureau of Consumer Protection
202-326-2585
Author: jmayfield
Posted: November 8, 2021, 12:00 pm

The Federal Trade Commission is sending nearly $60 million to more than 140,000 Amazon drivers. The funds will serve as reimbursement for tips that Amazon allegedly illegally withheld from drivers between 2016 and 2019.

Explore Data with the FTC: Learn more about FTC refunds to consumersIn 2021, the FTC brought a suit against Amazon and its subsidiary, Amazon Logistics, alleging that the company failed to fully pay tips that drivers in its Amazon Flex program had earned. Amazon Flex drivers deliver goods and groceries ordered through programs like Prime Now and AmazonFresh. The complaint alleged that the company secretly kept drivers’ tips over a two-and-a-half year period and only stopped the practice after becoming aware of the FTC’s investigation in 2019.

Amazon agreed to settle the case and surrender all the money it withheld from its drivers. The settlement also prohibits Amazon from misrepresenting any driver’s likely income or rate of pay, how much of their tips will be paid to them, as well as whether the amount paid by a customer is a tip. Amazon also will be prohibited from making any changes to how a driver’s tips are used as compensation without the driver’s express informed consent.

The FTC will be sending 139,507 checks and 1,621 PayPal payments to Amazon Flex drivers. Drivers who had more than $5 withheld by Amazon will receive the full amount of their withheld tips. The highest amount going to a single Amazon Flex driver is more than $28,000, while the average amount is $422.

People who receive checks should deposit or cash them before January 7, 2022, as indicated on the check. Recipients who have questions about their checks should call the refund administrator, Rust Consulting, at 1-800-654-8874. The FTC never requires people to pay money or provide account information to cash a refund check.

Drivers whose payments total more than $600—19,980 drivers in total—will receive an IRS Form 1099 with their payment and should report this income on their tax return.

The FTC’s interactive dashboards for refund data provide a state-by-state breakdown of FTC refunds. In 2020, FTC actions led to more than $483 million in refunds to consumers across the country, but the United States Supreme Court ruled earlier this year that the FTC lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The Commission has urged Congress to restore the FTC’s ability to get money back for consumers.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:
Rust Consulting
Refund Administrator
1-800-654-8874

Media Contacts:
Office of Public Affairs
202-326-2656


Author: jhenderson2
Posted: November 2, 2021, 12:00 pm

The Federal Trade Commission is sending 34,893 checks and PayPal refunds totaling more than $2 million to consumers who lost money through a deceptive direct mail publications scheme. Agora Financial, LLC, NewMarket Health, and other related defendants tricked consumers into buying pamphlets, newsletters, and other publications through false promises and deceptive marketing.  The refunds will provide full compensation for consumers who bought certain health- and finance-related publications sold by the defendants.

According to an October 2019 FTC complaint, the Agora defendants primarily targeted its publications, including The Doctor’s Guide to Reversing Diabetes in 28 Days, at older consumers nationwide. Agora falsely marketed The Doctor’s Guide as a simple and scientifically proven protocol that can permanently cure type 2 diabetes in 28 days, without any changes in diet or exercise.

The FTC also alleged that the Agora defendants deceptively marketed Congress’ Secret $1.17 Trillion Giveaway, falsely promising that the book would show consumers how to claim hundreds to thousands of dollars to which they are entitled in “Congressional Checks” or “Republican Checks.”

The FTC is using the money it recovered from Agora Financial and related defendants to provide consumer refunds totaling $2,052,868, via paper checks and PayPal. People who receive refund checks should deposit or cash them within 90 days, as indicated on the check. PayPal refunds will be available for 30 days after they are issued. Recipients who have questions about their refund can call the administrator, Ankura Consulting Group, LLC, at 1-833-460-2437. The FTC never requires people to pay money or provide account information to cash a refund check.

In 2020, FTC actions led to more than $483 million in refunds to consumers across the country, but the United States Supreme Court ruled earlier this year that the FTC lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The Commission has urged Congress to restore the FTC’s ability to get money back for consumers.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:
Ankura Consulting Group, LLC
Refund Administrator
1-833-460-2437

Media Contact:
Office of Public Affairs
202-326-2161

Author: mkatz
Posted: November 2, 2021, 12:00 pm

Agency seeks monetary penalties from Xlear, Inc. under COVID-19 authority

The Federal Trade Commission sued Xlear, Inc., a Utah-based company, for violating the COVID-19 Consumer Protection Act, alleging that it falsely pitched its saline nasal sprays as an effective way to prevent and treat COVID-19.

In its lawsuit against Xlear, Inc. and its owner, the FTC is asking a federal court to impose monetary penalties on the defendants and bar them from continuing to make such false and unsupported claims. The complaint was filed by the Department of Justice on the FTC’s behalf.

“Companies can’t make unsupported health claims, no matter what form a product takes or what it supposedly prevents or treats,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “That’s the lesson of this case and many others like it, and it’s why people should continue to rely on medical professionals over ads.”

Xlear, Inc. sells products including nasal sprays, dental care products, and sweeteners. The company’s nasal sprays marketed under the Xlear Sinus Care brand contain, among other things, xylitol and grapefruit seed extract. Xlear sells these sprays on Amazon.com and through retailers like Rite-Aid, CVS, Walgreens, and Target.

According to the complaint, since at least March 2020, Xlear and its founder and president, Nathan Jones, have promoted Xlear nasal sprays by falsely claiming they provide four hours of protection against infection from the coronavirus and therefore are “a simple, safe, and cheap option that could be an effective solution to the pandemic.” The defendants have made these and similar allegedly false and unsubstantiated claims on websites, Facebook, Instagram, and YouTube, and through appearances on podcasts and sponsored spots on local television news.

In reality, the company has conducted no clinical trials to support its COVID-related claims and its advertising grossly misrepresented the purported findings and relevance of several scientific studies, according to the FTC. The agency’s staff sent Xlear and Jones a warning letter in July 2020. The defendants promised to remove the claims from their website and other platforms, but then continued making them, according to the complaint.

The Commission vote to refer the civil penalty complaint to the DOJ for filing was 4-0-1, with Chair Lina M. Khan not participating. The DOJ filed the complaint in the U.S. District Court for District of Utah.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs
202-326-2161

Staff Contact:
Keith Fentonmiller
Bureau of Consumer Protection
202-326-2775
Author: bjames@ftc.gov
Posted: October 28, 2021, 12:00 pm

Agency policy statement puts companies on notice that sign-ups must be clear, consensual, and easy to cancel

This release was updated at October 29, 2021 10:00AM to correct an earlier error.

The Federal Trade Commission issued a new enforcement policy statement warning companies against deploying illegal dark patterns that trick or trap consumers into subscription services. The agency is ramping up its enforcement in response to a rising number of complaints about the financial harms caused by deceptive sign up tactics, including unauthorized charges or ongoing billing that is impossible cancel.

The FTC’s policy statement puts companies on notice that they will face legal action if their sign-up process fails to provide clear, up-front information, obtain consumers’ informed consent, and make cancellation easy.

“Today’s enforcement policy statement makes clear that tricking consumers into signing up for subscription programs or trapping them when they try to cancel is against the law,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Firms that deploy dark patterns and other dirty tricks should take notice.”

This policy statement builds on the many enforcement actions taken by the FTC and other law enforcement agencies against illegal subscription tricks and traps sometimes used by unscrupulous sellers in automatic renewal subscriptions, continuity plans, free-to-pay or free-to-pay conversions, and pre-notification plans.

The FTC has brought cases challenging a variety of illegal subscription practices. It has sued companies that hid important payment information, or even the fact that consumers would be charged at all, behind hyperlinks, hover-overs or in inconspicuous places or buried on pages beyond the initial offer page. It has sued companies that made consumers wait on hold or listen to lengthy ads before they could cancel. It has sued companies that converted free trials to paid subscriptions before the free trial ended. And, recently, the FTC sued a company that failed to disclose that widely advertised, material benefits of the subscription were no longer available.

Under the enforcement policy statement issued today, businesses must follow three key requirements or be subject to law enforcement action, including potential civil penalties:

  • Disclose clearly and conspicuously all material terms of the product or service, including how much it costs, deadlines by which the consumer must act to stop further charges, the amount and frequency of such charges, how to cancel, and information about the product or service itself that is needed to stop consumers from being deceived about the characteristics of the product or service. The statement provides detail on what clear and conspicuous means, particularly noting that the information must be provided upfront when the consumer first sees the offer and generally as prominent as the deal offer itself.
  • Obtain the consumer’s express informed consent before charging them for a product or services. This includes obtaining the consumer’s acceptance of the negative option feature separately from other portions of the entire transaction, not including information that interferes with, detracts from, contradicts, or otherwise undermines the consumer’s ability to provide their express informed consent.
  • Provide easy and simple cancellation to the consumer. Marketers should provide cancellation mechanisms that are at least as easy to use as the method the consumer used to buy the product or service in the first place.

The Commission vote approving the issuance of the enforcement policy statement was 3-1, with Commissioner Christine S. Wilson voting no and issuing a dissenting statement. Commissioner Noah Joshua Phillips also issued a separate concurring statement.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

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Media Contact:
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202-326-2161

Author: mkatz
Posted: October 28, 2021, 12:00 pm

The Federal Trade Commission and the Department of Justice Antitrust Division will host a virtual workshop on Dec. 6 and 7 to discuss efforts to promote competitive labor markets and worker mobility. 

“Making Competition Work: Promoting Competition in Labor Markets,” will bring together lawyers, economists, academics, policy experts, labor groups, and workers, and will explore recent developments at the intersection of antitrust and labor, as well as implications for efforts to protect and empower workers through competition enforcement and rulemaking.  

Over the two days, a series of panels, presentations, and remarks will address competition issues affecting labor markets and the welfare of workers, including: labor monopsony; the increased use of restrictive contractual clauses in labor agreements, including non-competes and non-disclosure agreements; information sharing and benchmarking activity among competing employers; the role of other federal agencies in ensuring fair competition in labor markets; and the relationship between antitrust law and collective bargaining efforts in the “gig economy.”  Panelists will be invited to discuss potential steps antitrust enforcers can take to better target enforcement resources, improve public guidance, and pursue a “whole of government” approach to ensuring fair competition for workers and consumers by leveraging interagency resources.

The FTC and the DOJ Antitrust Division invite comments from the public on the topics covered by this workshop. Interested parties may submit public comments online now through Dec. 20, 2021, at Regulations.gov.

We are also soliciting public comment videos on topics related to the workshop. If you would like to submit a video comment, please send it to ATR.LaborWorkshop@usdoj.gov. All videos should be 1 minute or less. Videos must be received by 5 p.m. ET, Friday, November 19, 2021.

The workshop will be held virtually and webcast on the FTC’s website.  A recording of the workshop will be available on the Antitrust Division’s website and the FTC’s website. An agenda, list of speakers, and instructions for accessing the webcast will be available in the near future on the event page.

The Federal Trade Commission develops policy initiatives on issues that affect competition, consumers, and the U.S. economy. For the latest news and resources, follow the FTC on social media, and subscribe to press releases.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs
202-326-3707

Staff Contact:
Sarah Mackey
Office of Policy Planning
202-326-3254
Author: elordan
Posted: October 27, 2021, 12:00 pm

Agency updates Safeguards Rule to better protect the American public from breaches and cyberattacks that lead to identity theft and other financial losses

The Federal Trade Commission today announced a newly updated rule that strengthens the data security safeguards that financial institutions are required to put in place to protect their customers’ financial information. In recent years, widespread data breaches and cyberattacks have resulted in significant harms to consumers, including monetary loss, identity theft, and other forms of financial distress. The FTC’s updated Safeguards Rule requires non-banking financial institutions, such as mortgage brokers, motor vehicle dealers, and payday lenders, to develop, implement, and maintain a comprehensive security system to keep their customers’ information safe.

“Financial institutions and other entities that collect sensitive consumer data have a responsibility to protect it,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The updates adopted by the Commission to the Safeguards Rule detail common-sense steps that these institutions must implement to protect consumer data from cyberattacks and other threats.”

The changes adopted by the Commission to the Safeguards Rule include more specific criteria for what safeguards financial institutions must implement as part of their information security program such as limiting who can access consumer data and using encryption to secure the data. Under the updated Safeguards Rule, institutions must also explain their information sharing practices, specifically the administrative, technical, and physical safeguards the financial institutions use to access, collect, distribute, process, protect, store, use, transmit, dispose of, or otherwise handle customers’ secure information. In addition, financial institutions will be required to designate a single qualified individual to oversee their information security program and report periodically to an organization’s board of directors, or a senior officer in charge of information security.

The Safeguards Rule was mandated by Congress under the 1999 Gramm-Leach-Bliley Act. Today’s updates are the result of years of public input. In 2019, the FTC sought comment on proposed changes to the Safeguards Rule and, in 2020 held a public workshop on the Safeguards Rule.

In addition to the updates, the FTC is seeking comment on whether to make an additional change to the Safeguards Rule to require financial institutions to report certain data breaches and other security events to the Commission. The FTC is issuing a supplemental notice of proposed rulemaking, which will be published in the Federal Register shortly. The public will have 60 days after the notice is published in the Federal Register to submit a comment.

Today, the FTC also announced it adopted largely technical changes to its authority under a separate Gramm-Leach Bliley Act rule, which requires financial institutions to inform customers about their information-sharing practices and allow customers to opt out of having their information shared with certain third parties. These changes align the rule with changes made under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Under Dodd-Frank, Congress narrowed the FTC’s jurisdiction under that rule to only apply to motor vehicle dealers.

The Commission voted 5-0 to publish the final revisions to update the FTC’s jurisdiction under Dodd-Frank and the supplemental notice of proposed rulemaking to the Safeguards Rule in the Federal Register. The Commission voted 3-2 to publish the revisions to the Safeguards Rule in the Federal Register. Commissioners Noah Joshua Phillips and Christine S. Wilson voted no and issued a joint dissenting statement. Chair Lina M. Khan and Rebecca Kelly Slaughter issued a separate joint statement.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

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Media Contact:
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202-326-2924

Staff Contact:
David Lincicum
Bureau of Consumer Protection
202-326-2773
Author: jhenderson2
Posted: October 27, 2021, 12:00 pm

First-ever reporting on flavored products finds menthol makes up more than half of smokeless tobacco sales

The number of cigarettes that the largest cigarette companies in the United States sold to wholesalers and retailers nationwide increased from 202.9 billion in 2019 to 203.7 billion in 2020, according to the most recent Federal Trade Commission Cigarette Report. This represents the first time annual cigarette sales have increased in 20 years.

According to the 2020 Smokeless Tobacco Report, smokeless tobacco sales increased from 126.0 million pounds in 2019 to 126.9 million pounds in 2020. The revenue from those sales rose from $4.53 billion in 2019 to $4.82 billion in 2020. For the first time, the Commission is reporting sales of nicotine lozenges or nicotine pouches not containing tobacco. In 2020, the companies sold 140.7 million units of such products in the United States, for $420.5 million.

The amount spent on cigarette advertising and promotion increased from $7.62 billion in 2019 to $7.84 billion in 2020. Price discounts paid to cigarette retailers ($6.07 billion) and wholesalers ($876 million) were the two largest expenditure categories in 2020. Combined spending on price discounts accounted for 88.5 percent of industry spending.

Spending on advertising and promotion by the major manufacturers of smokeless tobacco products in the U.S. decreased from $576.1 million in 2019 to $567.3 million in 2020. As with cigarettes, price discounts made up the two largest spending categories, with $296.6 million paid to retailers and $83.5 million paid to wholesalers. Combined spending on price discounts totaled $380.1 million – or 67.4 percent of all spending in 2020, up from the $376.0 million spent in 2019.

For the first time, the 2020 data include information on the flavors of the companies’ smokeless tobacco products. Menthol flavored smokeless tobacco products comprised more than half of all sales revenues (54.5 percent); tobacco flavored products (that is, no added flavor) comprised 43.4 percent; and fruit flavored smokeless tobacco products comprised 2.5 percent.

The Commission has issued the Cigarette Report periodically since 1967 and the Smokeless Tobacco Report periodically since 1987. Given the concerning trends highlighted in this report, including the first increase in cigarette sales in two decades, the Commission will continue to expand its approach in reporting shifts in the tobacco industry. The FTC also will use the newly captured data regarding smokeless tobacco products to align the Commission’s enforcement efforts with the emergent realities in the tobacco industry.

The Commission vote to issue the reports was 5-0. 

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:
Michael Ostheimer
Bureau of Consumer Protection
202-326-2699

Media Contact:
Office of Public Affairs
202-326-2161

Author: mkatz
Posted: October 26, 2021, 12:00 pm

Notice of Penalty Offenses can trigger large civil penalties for companies from multi-level marketers to providers of “gig” work

The Federal Trade Commission is putting more than 1,100 businesses that pitch money-making ventures on notice that if they deceive or mislead consumers about potential earnings, the FTC won’t hesitate to use its authority to target them with large civil penalties.

As the pandemic has left many people in dire financial straits, money-making pitches have proliferated and gained special attention. From multi-level marketing companies offering the dream of owning a business, to investment “coaches” with promises of secrets on how to beat the odds, to ubiquitous “gigs” that pitch a steady second income, Americans are bombarded by offers that often prove to be less than advertised.

As a result, the FTC is deploying its Penalty Offense Authority to remind businesses of the law and deter them from breaking it. By sending a Notice of Penalty Offenses to more than 1,100 companies, the agency is placing them on notice they could incur significant civil penalties—up to $43,792 per violation—if they or their representatives make claims about money-making opportunities that run counter to prior FTC administrative cases.

“Preying on consumers and workers with bogus promises of big earnings should never be profitable,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s announcement helps ensure that companies that cheat struggling Americans will pay a heavy price.”

The Notice of Penalty Offenses allows the agency to seek civil penalties against a company that engages in conduct that it knows is unlawful, and that has been found unlawful in a previous FTC administrative order, other than a consent order.

The Notice sent to the companies outlines a number of practices that the FTC determined to be unfair or deceptive in prior administrative cases. Broadly, the cases found that it was unlawful to make false, misleading, or deceptive representations concerning the profits or earnings that may be anticipated by a participant in a money-making opportunity. This includes, for example, representations that participants will make a profit, or that represented profits are typical. The Notice also describes other practices that the FTC has determined to be unfair or deceptive, such as falsely telling consumers they do not need experience to earn income or that they must act immediately to participate.

Companies receiving the Notice also received a copy of the recently issued Notice of Penalty Offenses concerning endorsements and testimonials, as companies frequently use testimonials to advertise money-making opportunities. Together, the notices make clear that it is illegal to use testimonials to mislead consumers about the rewards of participating in a money-making opportunity.

The notices are being sent to a broad array of businesses that cover a wide range of money-making opportunities, including multi-level marketing, “gig” employers, investment and business coaching, franchises, business opportunities, and others. A recipient’s presence on this list does not in any way suggest that it has engaged in deceptive or unfair conduct. A full list of the businesses receiving the Notice from the FTC is available on the FTC’s website.

The Commission vote to authorize the Notice and its distribution was 5-0.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:

Media Contact:
Office of Public Affairs
202-326-2656

Staff Contacts:
Andrew Hudson
Bureau of Consumer Protection
202-326-2213

Melissa Dickey
Bureau of Consumer Protection
202-326-2662
Author: jmayfield
Posted: October 26, 2021, 12:00 pm

Settlement extends millions in loan forgiveness to additional consumers who paid for investment “training” programs

The funder and servicer of the payment plans used by consumers to pay for expensive and often ineffective investment “trainings” from Online Trading Academy (OTA) will be required to offer debt forgiveness to consumers under a proposed settlement with the Federal Trade Commission.

Universal Guardian Acceptance, LLC (UGA) and Universal Account Servicing, LLC (UAS), have agreed to settle Federal Trade Commission charges that they facilitated consumers’ payments to OTA, when they knew or should have known that OTA was deceiving consumers.

“These defendants helped Online Trading Academy run its investment training scheme for years, ignoring clear signs that they were profiting off the backs of defrauded consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Companies that facilitate payments can’t turn a blind eye when their clients are defrauding consumers.”

In February 2020, the FTC brought a lawsuit alleging that OTA had deceived consumers with false and unsupported claims that purchasers of its investment training were likely to generate significant income. OTA charged consumers tens of thousands of dollars for its training and offered financing to enable consumers to pay OTA, in the form of short-term, high-interest retail installment contracts. UAS underwrote and serviced the contracts, and UGA provided funding for OTA’s operations by agreeing to purchase substantial quantities of the contracts in advance.

In its complaint against UGA and UAS, the FTC alleges that they facilitated OTA’s deceptive scheme by underwriting, funding, and servicing OTA’s retail installment contracts. The FTC alleges that the companies ignored red flags that OTA was engaged in deception, including consumer complaints, a high cancellation rate, and the fact that the vast majority of purchasers were not paying off their debt within the six month no-interest grace period included in the contracts.

The FTC settled with OTA in September 2020. As part of that settlement, OTA offered debt forgiveness to consumers who owed OTA money on their retail installment contracts.

Under the proposed settlement announced today, UGA is required to offer debt forgiveness to OTA purchasers whose debt is held by UGA. These consumers were not eligible for debt relief under FTC’s September 2020 settlement with OTA because their debt was not held by OTA. UGA is required to give these consumers notice of the offer of debt forgiveness and consumers will have 45 days to request forgiveness from UGA.

The proposed settlement also requires UGA and UAS to exercise adequate due diligence when screening potential clients, closely monitor clients that claim consumers can make money using their products or services, and to investigate consumer complaints.

The Commission vote approving the complaint and stipulated final order was 4-0. The FTC filed the proposed order in the U.S. District Court for the Central District of California.

NOTE: Stipulated final orders or injunctions have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:

Media Contact:
Office of Public Affairs
202-326-2656

Staff Contacts:
Andrew Hudson
Bureau of Consumer Protection
202-326-2213

Suzanne Barth
Bureau of Consumer Protection
202-326-3317
Author: jmayfield
Posted: October 21, 2021, 12:00 pm

Report finds many ISPs use web browsing data and group consumers using sensitive characteristics such as race and sexual orientation

Many internet service providers (ISPs) collect and share far more data about their customers than many consumers may expect—including access to all of their Internet traffic and real-time location data—while failing to offer consumers meaningful choices about how this data can be used, according to an FTC staff report on ISPs’ data collection and use practices.

The staff report, which details the expanding scope and some troubling aspects of some ISP data collection practices, stems from  orders the FTC issued in 2019 using its authority under 6(b) of the FTC Act to six internet service providers, which make up about 98 percent of the mobile Internet market:

  • AT&T Mobility LLC;
  • Cellco Partnership, which does business as Verizon Wireless;
  • Charter Communications Operating LLC;
  • Comcast Cable Communications, which does business as Xfinity;
  • T-Mobile US Inc.; and
  • Google Fiber Inc.

The FTC also issued orders to three advertising entities affiliated with these ISPs: AT&T’s Appnexus Inc., rebranded as Xandr; Verizon’s Verizon Online LLC; and Oath Americas Inc., rebranded as Verizon Media. The FTC sought information on their data collection and use practices, as well as any tools provided to consumers to control these practices.  

As noted in the report, these companies have evolved into technology giants who offer not just internet services but also provide a range of other services including voice, content, smart devices, advertising, and analytics—which has increased the volume of information they are capable of collecting about their customers. The report identified several troubling data collection practices among several of the ISPs, including that they combine data across product lines; combine personal, app usage, and web browsing data to target ads; place consumers into sensitive categories such as by race and sexual orientation; and share real-time location data with third-parties.

At the same time, the report found the privacy protections many of the companies offer raised several concerns. Even though several of the ISPs promise not to sell consumers personal data, they allow it to be used, transferred, and monetized by others and hide disclosures about such practices in fine print of their privacy policies. For example, several news outlets noted that subscribers’ real-time location data shared with third-party customers was being accessed by car salesmen, property managers, bail bondsmen, bounty hunters, and others without reasonable protections or consumers’ knowledge and consent, according to the report.

Many of the ISPs also claim to offer consumers choices about how their data is used and allow them to access such data. The FTC found, however, that many of these companies often make it difficult for consumers to exercise such choices and sometimes even nudge them to share even more information. In addition, while several of the ISPs promise to only keep the data for as long as needed for business purposes, the definition of what constitutes a “business purpose” varies widely among the companies.

The report concludes that many of the ISPs’ data collection and use practices mirror problems identified in other industries and underscore the importance of restricting data collection and use.

The Commission voted 4-0 to approve and issue the report. Staff presented findings from the report at today’s open virtual Commission meeting.  Chair Lina M. Khan issued a separate statement on the report.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs
202-326-2924

Staff Contact:
Andrea Arias
Bureau of Consumer Protection
202-326-2715
Author: jhenderson2
Posted: October 21, 2021, 12:00 pm

84,847 consumers nationwide will receive checks

The Federal Trade Commission is sending refund payments totaling more than $1.1 million to consumers who bought three supplements deceptively marketed as treatments for pain and other health conditions related to aging.

According to an FTC complaint filed in April 2020, the marketers of Neurocet, Regenify, and Resetigen-D deceptively promoted their products using false or unsubstantiated claims that the supplements could stop pain and treat age-related ailments. The pitches were made primarily through direct mail campaigns.

The final order settling the FTC’s complaint bars the defendants—five related companies called Mile High Madison Group, Inc., Nordic Clinical, Inc., Encore Plus Solutions, Inc., Le Groupe Mile High Madison, Inc., and Clinique Nordique, Inc. and their principals, Vittorio DiCriscio and Vito Proietti—from making any claims about the health benefits of their products unless they are true and supported by scientific evidence. It also requires them to pay for the consumer refunds announced today.

Nearly 85,000 people are receiving payments. Consumers who have questions about their refunds should call Rust Consulting Inc., the administrator for this case, at 1-866-216-0252.

The FTC’s interactive dashboards for refund data provide a state-by-state breakdown of FTC refunds. In 2020, FTC actions led to more than $483 million in refunds to consumers across the country, but the United States Supreme Court ruled earlier this year that the FTC lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The Commission has urged Congress to restore the FTC’s ability to get money back for consumers.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs
202-326-2161

Author: mkatz
Posted: October 20, 2021, 12:00 pm

Report notes jump in online shopping fraud reports since start of COVID-19 pandemic

The Federal Trade Commission has issued its latest report to Congress on protecting older adults, which highlights updated findings from the Commission’s fraud reports showing trends in how older adults report being affected by fraud.

The report, Protecting Older Consumers, 2020-2021, A Report of the Federal Trade Commission, also includes information on the FTC’s efforts to protect older consumers through law enforcement actions and outreach and education programs. This year’s report calls particular attention to the Commission’s work to combat scams related to the COVID-19 pandemic.

Reports of online shopping fraud increased sharply among adults aged 60 and higher in the second quarter of 2020 as online marketers failed to deliver masks and other scarce items needed during the COVID-19 pandemic. The most frequent type of fraud reported by older adults was online shopping scams. Overall, reports of losses to online shopping fraud by older adults more than doubled in 2020, and the numbers continued to be far higher than pre-pandemic levels in the first half of 2021.

As in prior years, the analysis of fraud reports received by the FTC in 2020 showed that adults aged 60 and higher are substantially less likely to report losing money to fraud than adults aged 20-59. When they do report losing money, though, they tend to report losing substantially more than younger adults. Consumers 80 and older reported losing a median of $1,300 to fraud, while those in their seventies reported a median loss of $650, and those in their sixties reported a median loss of $449.

The analysis included in the report to Congress also found that adults older than 60 were nearly five times as likely as adults aged 20 to 59 to report losing money to a tech support scam. Older adults were nearly three times more likely to report a loss to a prize, lottery or sweepstakes scam, and more than twice as likely to report losing money to a friend or family impersonator scam.

In addition, the report notes that older adults reported losing about $139 million to romance scams – the highest total reported loss of any scam category, and a sharp increase from $84 million in 2019.

The report also focuses on key enforcement actions the FTC has taken to protect older consumers, including against investment schemes, a credit card stacking operation, an indoor TV antenna scam, and numerous cases against scammers making false health claims, including many related to the COVID-19 pandemic. The report highlights a number of ongoing law enforcement partnerships in which the FTC works with other federal agencies, along with state and local authorities, to take actions to protect older consumers.

Finally, the report details the FTC’s outreach and education efforts through such programs as the Pass it On campaign, which focuses on providing fraud prevention resources to older adults so they can help protect their communities by sharing the information and materials with family and friends.

The Commission vote authorizing the report to Congress was 4-0.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:

Media Contact:
Office of Public Affairs
202-326-2656

Author: jmayfield
Posted: October 18, 2021, 12:00 pm

Operators allegedly deceived families of incarcerated individuals with false claims of unlimited minutes for prison and jail calls

The Federal Trade Commission has halted a scheme that deceived friends and family of incarcerated people with false promises of unlimited minutes for inmate calling plans that, in reality, did not provide a single minute of talk time. As part of a settlement with the FTC, the scheme’s operators are prohibited from making deceptive claims and consumers must be notified about the unlawful conduct.

In its first case involving inmate calling plans, the FTC alleged that the operators of the scheme preyed on inmates’ families and friends who rely on phone calls to stay in touch with their incarcerated loved ones—particularly during the COVID-19 pandemic when in-person visitations were suspended. 

In its complaint filed in October 2020, the FTC alleged that Marc and Courtney Grisham and their companies Disruption Theory LLC and Emergent Technologies LLC, doing business as inmatecall.com and inmatecallsolutions.com, advertised and marketed the unlimited minutes calling plans that they never provided. They also posed as companies authorized to provide calling services to prisons and jails to bolster the credibility of their false claim.

As part of a settlement with the FTC, Marc Grisham is prohibited from making similar claims in the future and must notify past and future customers about his unlawful conduct. Marc Grisham must post a notice on any current and future consumer-facing websites notifying customers that he was sued for false advertising, and that his inmate calling plans did not eliminate required per-minute call charges or replace approved call providers.

A federal court also issued a default judgment against Courtney Grisham, Disruption Theory, and Emergent Technologies on September 1, 2021, which permanently bans them from offering inmate calling services.

The Commission vote approving the stipulated final order was 5-0. The FTC filed the proposed order in the U.S. District Court for the Northern District of California. The order was approved by a federal judge on October 14, 2021.

NOTE: Stipulated final orders or injunctions, etc. have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs
202-326-2924

Staff Contact:
Diana Chang
Western Region, San Francisco
415-848-5100
Author: jhenderson2
Posted: October 15, 2021, 12:00 pm

Report shows disproportionate impact of some scams and consumer problems on communities of color, highlights agency responses

New research in a staff report from the Federal Trade Commission shows a number of key differences in the way that fraud and other consumer problems affect communities of color, from the types of problems reported to the methods used to pay scammers.

The new report, “Serving Communities of Color,” highlights the FTC’s law enforcement and outreach work addressing consumer protection issues facing these communities in addition to the newly published research.

Communities of Color Report

“Our mission is to protect every American consumer from fraud and other consumer problems, and to do so, it is vital that we build our understanding of how communities of color are affected by these issues,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “While we’ve taken strong steps to fight the issues that disproportionately affect people in these communities, there is more work to do, and we’re committed to doing it.”

One of the studies in the report examines differences in reports received by the FTC from consumers who live in majority Black and Latino communities compared to those who live in majority White communities.

It found that when people reported losing money, those living in majority Black and Latino communities more often reported paying in ways that have few, if any, fraud protections ― for example, cash, cryptocurrency, money orders, and debit cards. Those living in majority White communities, by contrast, filed the largest share of their reports about paying with credit cards, which offer more robust fraud protection.

The research also found that there were notable differences in the types of problems people living in majority Black and Latino communities reported to the FTC, with larger shares of reports about issues with car buying, banks and lenders, credit issues, and debt collection than were found in majority White communities.

Another study in the report analyzed information gleaned from a number of FTC cases, which showed that in cases involving payday loan applications, student debt relief programs, and certain business opportunities, the largest number of affected consumers resided in predominantly Black communities.

In addition to the new research, the report also provides a summary of more than 25 cases brought by the FTC in the last five years where the unlawful conduct either targeted or disproportionately affected communities of color. The report also shared information about the agency’s ongoing outreach program to communities of color, including events, local and national partnerships and an array of videos and publications designed to provide information that is relevant and timely.

The report follows on a 2016 report to Congress, “Combating Fraud in African-American and Latino Communities: The FTC’s Comprehensive Strategic Plan.”

The Commission vote authorizing staff to issue the new report was 4-0-1, with Commissioner Chopra recorded as not participating.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:
FTC Consumer Response Center
877-382-4357

Media Contact:
Office of Public Affairs
202-326-2656

Author: jmayfield
Posted: October 15, 2021, 12:00 pm

Federal Trade Commission Chair Lina M. Khan issued a joint statement with Rohit Chopra, Director of the Consumer Financial Protection Bureau, on an amicus brief the two agencies and the North Carolina Department of Justice filed with the U.S. Court of Appeals for the Fourth Circuit urging the court to overturn a lower court decision in Henderson v. The Source for Public Data, L.P.

In their statement, Chair Khan and Director Chopra argued that the lower court’s decision in Henderson would undermine the Fair Credit Reporting Act (FCRA) by granting immunity to consumer reporting agencies under Section 230 of the Communications Decency Act.

The Commission voted 4-0 to file the amicus brief.

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). For the latest news and resources, follow the FTC on social media, subscribe to press releases and read our blogs.

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Media Contact:
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202-326-2924

Author: jhenderson2
Posted: October 14, 2021, 12:00 pm

Today, Federal Trade Commission Chair Lina M. Khan announced that an open meeting of the Commission will be held virtually on Thursday, October 21, 2021. The open meeting will begin at 1 pm ET and will be followed by a time for members of the public to address the Commission.

The following item will be on the tentative agenda for the October 21 Commission meeting:

Business Before the Commission

Presentation on the Privacy Practices of Six Major Internet Service Providers: Staff will present some findings from evidence gathered pursuant to the 2019 6(b) orders issued to six Internet service providers and three of their advertising affiliates. The public release of the report is subject to commission vote.

After the Commission meeting has concluded, Chair Khan will offer brief remarks and will then invite members of the public to share feedback on the Commission’s work generally and bring relevant matters to the Commission’s attention. Members of the public must sign up for an opportunity to address the Commission virtually at the October 21 event. Each commenter will be allowed to speak for no more than two minutes. Anyone who cannot participate during the event may submit written comments or a link to a prerecorded video through a webform.  Speaker registration and comment submission will be available through Monday, October 18, 2021, 8pm ET.

The FTC’s public meeting agendas will be posted on the Commission’s website at least seven days prior to the Commission’s next monthly meeting. A link to the event will be available beginning on October 21, 2021 at 9 am ET via FTC.gov. The event will be recorded, and the webcast and any related comments will be available on the Commission’s website after the meeting.  The Commission retains discretion to make public comments available following the event on ftc.gov. Due to challenges related to the ongoing COVID-19 public health crisis, open meetings will be held virtually until further notice.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs

Author: bacree
Posted: October 14, 2021, 12:00 pm

Notice of Penalty Offenses can trigger steep penalties for recipients who use endorsements to deceive consumers

The Federal Trade Commission is blanketing industry with a clear message that, if they use endorsements to deceive consumers, the FTC will be ready to hold them responsible with every tool at its disposal.

The rise of social media has blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements across the marketplace. Fake online reviews and other deceptive endorsements often tout products throughout the online world. Consequently, the FTC is now using its Penalty Offense Authority to remind advertisers of the law and deter them from breaking it. By sending a Notice of Penalty Offenses to more than 700 companies, the agency is placing them on notice they could incur significant civil penalties—up to $43,792 per violation—if they use endorsements in ways that run counter to prior FTC administrative cases.

“Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Advertisers will pay a price if they engage in these deceptive practices.”

The Notice of Penalty Offenses allows the agency to seek civil penalties against a company that engages in conduct that it knows has been found unlawful in a previous FTC administrative order, other than a consent order.

The Notice sent to the companies outlines a number of practices that the FTC determined to be unfair or deceptive in prior administrative cases. These include, but are not limited to: falsely claiming an endorsement by a third party; misrepresenting whether an endorser is an actual, current, or  recent user; using an endorsement to make deceptive performance claims; failing to disclose an unexpected material connection with an endorser; and misrepresenting that the experience of endorsers represents consumers’ typical or ordinary experience.

Companies receiving the notice represent an array of large companies, top advertisers, leading retailers, top consumer product companies, and major advertising agencies. A full list of the businesses receiving the Notice from the FTC is available on the FTC’s website. A recipient’s presence on this list does not in any way suggest that it has engaged in deceptive or unfair conduct.

In addition to the Notice, the FTC has created multiple resources for business to ensure that they are following the law when using endorsements to advertise their products and services, which can be found on the FTC’s website.

The Commission vote to authorize the Notice and its distribution was 5-0.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:
FTC Consumer Response Center
877-382-4357

Media Contact:
Office of Public Affairs
202-326-2656

Staff Contacts:
Michael Ostheimer
Bureau of Consumer Protection
202-326-2699

Michael Atleson
Bureau of Consumer Protection
202-326-2962
Author: jmayfield
Posted: October 13, 2021, 12:00 pm

The Federal Trade Commission is sending 31,075 checks to people who were deceived by Elite IT Partners Inc. into paying for costly and unnecessary computer repair services.

In a complaint filed 2019, the FTC alleged that Elite IT used Internet ads to target consumers looking for help recovering their email passwords. Consumers who responded to Elite’s ads were encouraged to provide their names, email addresses, and phone numbers. Elite’s telemarketers then reached out to consumers—often pretending to be associated with well-known companies like Microsoft and Yahoo!—and pressured consumers to provide access to their computers. The telemarketers ran bogus “diagnostic” tests, claimed consumers’ computers and personal information were in imminent danger, and convinced many consumers to pay large sums for immediate cleaning of their computers, antivirus software, and ongoing technical support services. The FTC alleged that the scheme affected tens of thousands of consumers. Explore Data with the FTC: Learn more about FTC refunds to consumers

The FTC is using the money it recovered from Elite IT and its President and CEO, James Martinos, as part of a settlement announced in December 2019 to provide refunds totaling nearly $300,000. People who receive refund checks should deposit or cash them within 90 days, as indicated on the check. Recipients who have questions about their checks can call the refund administrator, Analytics, at 1-866-974-1467. The FTC never requires people to pay money or provide account information to cash a refund check.

The FTC’s interactive dashboards for refund data provide a state-by-state breakdown of FTC refunds. In 2020, FTC actions led to more than $483 million in refunds to consumers across the country, but the United States Supreme Court ruled earlier this year that the FTC lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The Commission has urged Congress to restore the FTC’s ability to get money back for consumers.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:
Analytics
Refund Administrator
1-866-974-1467

Media Contact:
Office of Public Affairs
202-326-2924

Author: jhenderson2
Posted: October 12, 2021, 12:00 pm

Mattress company will pay $753,000 and cease Made in USA fraud

Resident Home LLC and owner Ran Reske, will pay $753,000 to settle FTC charges that they made false, misleading, or unsupported advertising claims that their imported DreamCloud mattresses were made from 100% USA-made materials.

Resident Home LLC is the parent of Nectar Brand LLC (better known as Nectar Sleep), a company that had previously agreed to a 2018 FTC administrative order resolving allegations that it falsely advertised imported mattresses as “Assembled in USA.” Following the 2018 order, Reske, under penalty of perjury, stated that Resident had never made U.S.-origin claims about its DreamCloud mattress. This proved to be untrue. The proposed order entered into today incorporates the terms of the 2018 order, orders the payment of $753,000, and expands the application of the 2018 order to all the entities under the control of Reske.

“Baseless claims that products are made in the USA hurt not only consumers but also honest businesses that build their products here,” said Samuel Levine, Director of the Bureau of Consumer Protection. “Unfortunately, we see too many repeat offenders like Resident Home, but thanks to the FTC’s recently finalized Made in USA Labeling Rule, companies that abuse these labels will face civil penalties in addition to other relief. We will not hesitate to seek strong penalties against Made in USA fraud.”

In the company’s promotional material, Resident Home LLC and Reske claimed that their DreamCloud mattresses were “proudly made with 100 percent USA-made premium quality materials.” But, according to the complaint, these repeat claims were false or misleading, and violated the FTC Act. The FTC says all DreamCloud mattresses are finished overseas and, in some cases, are wholly imported or use significant imported materials.

Under the terms of the proposed order, Resident Home LLC and Reske are prohibited from making several claims that deceive consumers and harm law-abiding businesses whose sales were siphoned because of this behavior. The order specifically covers unqualified U.S.-origin claims (claims made with no limitations) for any product – unless they can show that: the product’s final assembly, final processing, and all significant processing takes place in the United States; and all or virtually all ingredients or components of the product are made and sourced in the United States.

The order also governs any qualified Made in USA claims (claims that include explanatory information). For qualified claims, Resident Home LLC and Reske must include a clear disclosure about the extent to which the product contains foreign parts, ingredients, components, or processing. If they want to say a product is assembled in the United States, they must ensure that it is last substantially transformed in the United States, that its principal assembly takes place in the United States, and that United States assembly operations are substantial. Finally, the order requires Resident Home LLC and Reske to notify affected consumers about the FTC’s order and submit compliance reports.

The FTC’s Enforcement Policy Statement on U.S. Origin Claims offers guidance on making Made in USA claims. The Made in USA Labeling Rule went into effect on August 13, 2021. Companies that violate the Rule from that date forward may be subject to civil penalties.

The Commission vote to issue the complaint and accept the proposed consent order for public comment was 3-2, with the majority issuing a statement, Commissioner Rohit Chopra issuing a concurring statement, and Commissioners Noah Joshua Phillips and Christine S. Wilson issuing a joint dissenting statement. The FTC will publish a description of it in the Federal Register. Instructions for filing comments appear in the published notice. Comments must be received within 30 days of publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.          

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $43,792.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs
202-326-3707

Staff Contact:
Julia Solomon Ensor
Bureau of Consumer Protection
202-326-2377
Author: bjames@ftc.gov
Posted: October 8, 2021, 12:00 pm

The Federal Trade Commission is returning $772,512 to consumers who were targeted by a debt collector who unlawfully brokered and collected fake debts that the consumers did not owe.

According to the complaint filed by the FTC and the New York Attorney General, Hylan Asset Management, LLC, and its owners, Andrew Shaevel and Jon E. Purizhansky, bought, placed for collection, and sold lists of phantom debts, including debts that were fake or imposed on consumers without their knowledge or consent.

Hylan referred the fake debts to several collection agencies, including Worldwide Processing Group, LLC, which then illegally collected on them. Hylan continued to buy the portfolios and distribute them to third parties for collection even though it was repeatedly notified that consumers did not owe many of the debts, the FTC alleged.

The defendants agreed to settle the case in 2019. As part of the settlement, they agreed to be banned permanently from the debt collection industry and surrendered funds to the FTC. The agency is using that money to send checks averaging $539 to 1,432 consumers.

People who receive checks should deposit or cash them within 90 days, as indicated on the check. Recipients who have questions about their checks should call the refund administrator, JND Legal Administration at 1-888-691-3554. The FTC never requires people to pay money or provide account information to cash a refund check.

The FTC’s interactive dashboards for refund data provide a state-by-state breakdown of FTC refunds. In 2020, FTC actions led to more than $483 million in refunds to consumers across the country, but the United States Supreme Court ruled earlier this year that the FTC lacks authority under Section 13(b) to seek monetary relief in federal court going forward. The Commission has urged Congressto restore the FTC’s ability to get money back for consumers.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:
Refund Administrator
888-691-3554

Media Contact:
Office of Public Affairs
202-326-2656

Author: jmayfield
Posted: October 7, 2021, 12:00 pm

Following a public comment period, the Federal Trade Commission has approved a Federal Register notice (FRN) announcing final amendments to the agency’s Energy Labeling Rule (Rule). The amendments update the comparability ranges and sample labels for central air conditioning (AC) units.

The Rule, issued in 1979 under the Energy Policy and Conservation Act, requires energy labeling for major home appliances and other consumer products to help consumers compare the energy usage and costs of competing models. The Rule requires manufacturers to attach yellow EnergyGuide labels to many of the products it covers and prohibits retailers from removing or altering these labels.

The Commission vote authorizing publication of the Federal Register notice announcing the updated comparability ranges and sample labels for central AC units was 4-1, with Commissioner Christine S. Wilson voting no and issuing a separate statement.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION

Contact For Consumers:
Hampton Newsome
Bureau of Consumer Protection
202-326-2889

Media Contact:
Office of Public Affairs
202-326-2161

Author: mkatz
Posted: October 6, 2021, 12:00 pm

Commission resurrects use of legal tool to trigger steep penalties against lawbreaking colleges

The Federal Trade Commission put 70 for-profit higher education institutions on notice that the agency is cracking down on any false promises they make about their graduates’ job and earnings prospects and other outcomes and will hit violators with significant financial penalties.

The Commission is resurrecting its Penalty Offense Authority, found in Section 5 of the FTC Act, to ensure that bad actors pay a price when they break the law. By sending a Notice of Penalty Offenses to the institutions, which represent the largest for-profit colleges and vocational schools across the country, the companies operating these colleges will be on notice that they could incur significant sanctions for engaging in certain unlawful practices. The notice outlines a number of practices that the FTC has previously found to be unfair or deceptive, and notes that these practices could lead to civil penalties of up to $43,792 per violation.

“For too long, unscrupulous for-profit schools have preyed on students with impunity, facing no penalties when they defraud their students and drive them into debt,” said FTC Chair Lina M. Khan. “The FTC is resurrecting a dormant authority to deter wrongdoing and hold accountable bad actors who abuse students and taxpayers. Working closely with our state and federal partners, we’ll be monitoring this market carefully.”

This broad-based initiative to deter for-profit college fraud marks the agency’s first use of its Penalty Offense Authority to protect students and their families. The Notice of Penalty Offenses allows the agency to seek civil penalties against a company that engages in conduct that it knows has been found unlawful in a previous FTC administrative order, other than a consent order.

Many of the practices outlined in the Notice relate to claims made by institutions about the career outcomes of their graduates, including whether a particular career field is in demand, the percentage of graduates who get jobs in their chosen field, whether the institution can help a graduate get a job, the amount of money a graduate can expect to earn and other related practices. Complaints to the FTC around education-related issues surged roughly 70 percent between 2018 and 2020, and the Commission is committed to rooting out practices that harm students and their families.

The Notice cites a number of administrative cases brought by the FTC against for-profit institutions in which the Commission found practices like those outlined in the Notice unlawful.

A full list of the institutions that received the Notice from the FTC is available on the FTC’s website.  A school’s presence on this list does not reflect any assessment as to whether they have engaged in deceptive or unfair conduct.

The Commission vote to authorize the Notice and its distribution was 5-0.

The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at ReportFraud.ftc.gov. Get consumer advice at consumer.ftc.gov. Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs
202-326-2656

Staff Contact:
Wendy Miller
Bureau of Consumer Protection
202-326-2571
Author: jmayfield
Posted: October 6, 2021, 12:00 pm

 

The FTC’s Blog on Privacy & Identity

Business Blog Posts

By Lesley Fair

As the holidays – and the end of the tax year – draw near, people are likely to approach small business owners with requests for charitable contributions. But scammers are hard at work with their own holiday rush. To protect your business from fraud and to amplify the impact of your donations on the charities that matter to you, these simple steps can help ensure that Giving Tuesday isn’t followed by Regretful Wednesday.

Read more >
Author: Lesley Fair<br />
Posted: December 3, 2021, 7:08 pm
By Samuel Levine, Director, FTC Bureau of Consumer Protection

With more than a century of consumer protection experience under our belt, we at the FTC know that hard times for American families can be boom times for scammers. Today’s COVID-19 pandemic is the latest crisis creating fertile ground for fraud – and scammers today have a new and powerful weapon: social media platforms. These platforms generally earn their revenue by targeting users with advertising. The more time we spend on platforms consuming content and revealing valuable personal information, the more that platforms profit by having information to target ads.

Read more >
Author: Samuel Levine, Director, FTC Bureau of Consumer Protection<br />
Posted: November 18, 2021, 8:26 pm
By Carol Kando-Pineda

November 11th is Veterans Day, a time to honor the nation’s former military personnel. Every year more than 180,000 servicemembers leave the military to join the ranks of the nation’s 18 million veterans. When the troops transition back to civilian life, launching their next career — whether that means starting their own business or finding a job — is one of the first tasks at hand.

Read more >
Author: Carol Kando-Pineda<br />
Posted: November 9, 2021, 4:08 pm
By Lesley Fair

If recent headlines about ransomware attacks on companies have you worried, your concerns are well-founded. Earlier this year, the Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency – you may know them as CISA – issued a Fact Sheet on Rising Ransomware Threat to Operational Technology Assets. The computer criminals who traffic in ransomware try to exploit vulnerabilities in technology and soft spots in human nature.

Read more >
Author: Lesley Fair<br />
Posted: November 5, 2021, 4:04 pm
By Lesley Fair

The FTC just sent almost $60 million in checks and PayPal payments to eligible drivers who had their tips illegally taken by Amazon. Our advice to Amazon Flex drivers: Watch your mailbox for a check. Our advice to companies that hire gig workers: Watch what you say to workers and customers – and live up to your claims.

Read more >
Author: Lesley Fair<br />
Posted: November 2, 2021, 4:04 pm
By Lesley Fair

If businesses make coronavirus prevention or treatment claims for their products, it’s time to get up to speed on the COVID-19 Consumer Protection Act.

Read more >
Author: Lesley Fair<br />
Posted: October 28, 2021, 7:09 pm
By Lesley Fair

Money-making claims have been around for as long as there’s been money. They show up in promotions for gig work, multilevel marketing, “be your own boss” seminars, and work-from-home offers. But when tried-and-true tactics turn into tried-and untrue, the FTC has a long history of challenging deceptive claims related to money-making opportunities. Those misrepresentations are the subject of the FTC’s latest use of its penalty offense authority.

Read more >
Author: Lesley Fair<br />
Posted: October 26, 2021, 5:49 pm
By Lesley Fair

The FTC just released a report based on data received from major players in the mobile Internet market and A Look at What ISPs Know About You: Examining the Privacy Practices of Six Major Internet Service Providers is an eye opener.

Read more >
Author: Lesley Fair<br />
Posted: October 21, 2021, 7:45 pm
By by Maria Mayo, Acting Associate Director, Division of Consumer Response and Operations, FTC Bureau of Consumer Protection

The FTC has been warning consumers for years about impersonation scams – calls that falsely claim to come from the IRS, the Social Security Administration, or other offices or businesses. The messages try to coerce people into making immediate payments or turning over sensitive personal information.

Read more >
Author: by Maria Mayo, Acting Associate Director, Division of Consumer Response and Operations, FTC Bureau of Consumer Protection<br />
Posted: October 20, 2021, 2:06 pm
By Lesley Fair

Employing every available means to protect consumers from deceptive and misleading practices, the FTC recently announced the revitalized use of its statutory Penalty Offense Authority. More than 700 businesses – top consumer products companies, leading retailers and retail platforms, major ad agencies, and other names you know – are recipients of the latest Notice of Penalty Offenses aimed at curbing illegal practices in the use of endorsements and testimonials.

Read more >
Author: Lesley Fair<br />
Posted: October 13, 2021, 5:53 pm

 

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