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Federal Trade Commission - Protecting America's Consumers

D&B deceived businesses about value of products and failed to correct errors on business credit reports, complaint alleges

To settle Federal Trade Commission charges that it engaged in deceptive and unfair practices, Dun & Bradstreet (D&B) has agreed to an order requiring substantial changes in the firm’s operations that will benefit small- and mid-sized businesses. Under the proposed order, D&B will also provide refunds to certain businesses that purchased the company’s products in the belief that using the products would improve their business credit scores and ratings.

D&B is a leading provider of business credit reports, which can impact firms’ ability to build relationships with vendors and other counterparties. But many businesses have complained of errors in these reports that have cost them time, expense, and opportunities. As detailed in the FTC’s administrative complaint, D&B failed to give these businesses a clear, consistent, and reliable process to get these errors fixed. Moreover, D&B profited from businesses’ pain by selling them a line of products that purported to help them improve their reports. In fact, for many businesses, these benefits proved illusory, while the costs were all too real.

“A faulty D&B credit report can be a huge burden on a small business, raising costs and choking off opportunities,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This order arms businesses with new tools to ensure a fair shake, stops D&B from profiting illegally from businesses’ pain, and returns funds to firms that got fleeced.”

D&B credit reports, ratings, and scores, the complaint notes, are often key factors in whether and on what terms businesses will extend credit or award contracts to other businesses. This means that the contents of D&B reports can be vitally important to many small and mid-sized businesses. In many cases, however, the reports contain incorrect information, including items as fundamental as a business’s name or address.

Often, when a business would question or try to correct an inaccuracy in its report, D&B pitched a suite of services under the name CreditBuilder costing hundreds or thousands of dollars each year. According to the FTC’s complaint, D&B claimed that its CreditBuilder products allowed the business to have its payment history added to its credit report, which would improve the business’s scores and ratings.

According to the FTC’s complaint, though, the company regularly failed to deliver on its promises about CreditBuilder. While D&B’s salespeople pitched CreditBuilder by promising businesses that the product would make it easy for them to add payment history information to their credit reports, thousands of CreditBuilder subscribers could not get any such information added to their reports at all. In fact, the complaint alleges, D&B refused CreditBuilder subscribers’ submissions more often than it accepted them.  

The FTC’s complaint also alleges that D&B’s telemarketers deceptively pitched CreditBuilder to new businesses and to businesses unfamiliar with D&B by falsely claiming that the business had to purchase CreditBuilder so that D&B could conduct a background check and provide the business with a complete credit report.

In addition, according to the complaint, D&B did not clearly tell businesses that CreditBuilder subscriptions automatically renewed each year, nor did it properly disclose other renewal practices that led to ever-increasing costs for its customers.

Under the terms of a proposed settlement order, D&B would be required to make numerous changes to its processes that will help ensure that D&B responds promptly and fully to businesses’ complaints about incorrect information in their D&B reports. Among the notable changes:

  • When a business informs D&B of incorrect information in its report, D&B will be required to either delete the disputed information or perform a reinvestigation of the information to confirm its accuracy. If the reinvestigation finds the disputed information to be inaccurate, or if it cannot verify payment experience information, D&B must delete the information and must also ensure that it is not readded to the report at a later date.
  • D&B has to comply with specific periods of time within which to promptly investigate and correct errors. The time allowed depends on the complexity of the investigation.
  • D&B will be required to inform businesses of the results of their investigations and provide businesses with free access to the information as revised. 

The settlement also provides that D&B must make clear disclosures to companies to which it is selling CreditBuilder about the rate at which D&B accepts subscribers’ requests to add payment history information. D&B would also have to make up-front disclosures about ways that D&B limits its role in helping them add such information. These provisions will help prospective customers make informed choices when deciding whether to subscribe to D&B’s CreditBuilder products. 

The settlement would also require D&B to provide refunds to many businesses that first purchased CreditBuilder products between April, 2015 and May, 2020, as well as providing opportunities for many current customers to cancel their services and obtain refunds if they so choose.  

In addition, the settlement would put restrictions on D&B’s ability to automatically renew CreditBuilder subscriptions, requiring disclosures and prohibiting D&B from using automatic renewal to switch a subscriber into a more expensive product that the subscriber did not order. The settlement would also prohibit D&B from misrepresenting to current or potential customers any material fact about the price or features of any product.

The FTC is committed to taking action to halt abuses aimed at small businesses and other organizations. In a recent case against Richmond Capital, the agency took action against two defendants behind a small business financing scheme by banning them from the merchant cash advance and debt collection industries and ordering them to provide funds for redress.

The Commission vote to issue the administrative complaint and to accept the consent agreement was 4-0. The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment for 30 days from publication in the Federal Register, after which the Commission will decide whether to make the proposed consent order final. 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 $46,517.

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:
Dana C. Barragate
FTC East Central Region
216-263-3402
Author: jmayfield
Posted: January 13, 2022, 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, January 20, 2022. The open meeting will commence at 1pm ET and will begin with time for members of the public to address the Commission.

The following items will be on the tentative agenda for the January 20 Commission meeting:

Business Before the Commission

Staff Presentation on Identity Theft and Available Resources for Consumers: Staff will present on the identity theft program, recent trends consumers have reported, and the resources available at IdentityTheft.gov and RobodeIdentidad.gov. The presentation will also highlight the upcoming initiatives during Identity Theft Awareness Week

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 January 20 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 Tuesday, January 18, 2022, 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 January 20, 2022 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, 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

Author: bjames@ftc.gov
Posted: January 13, 2022, 12:00 pm

ITMedia will face restrictions on sale and use of consumer data as a result of FTC lawsuit

A lead generation company that collected sensitive information from millions of consumers under the guise of connecting them with lenders will pay $1.5 million in civil penalties and face restrictions on their operations as a result of a Federal Trade Commission lawsuit.

The FTC’s complaint alleges that since at least 2012, ITMedia Solutions LLC, a number of affiliate companies, and their owners and officers have operated hundreds of websites that were designed to entice consumers into sharing their most sensitive financial information—including their Social Security numbers and bank account information. The defendants sold that information to marketing companies and others without regard for how the information would be used, according to the complaint.

“ITMedia tricked millions of people into giving up sensitive financial information and then sold it to companies that were not making loans,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The company’s extraction and misuse of this data broke the law in several ways.”

The suit alleges that the defendants -- who have used cashadvance.com, personalloans.com, badcreditloans.com and websites with similar names -- promised consumers that their information would be shared with “... our network of trusted lenders...” or would “... only be shared with qualified lenders.” Some sites promised that loans were available for people with bad credit histories without credit score requirements.

In its complaint, the FTC alleges that 84 percent of the loan applications collected through these websites since January 2016 were not sold to lenders, but instead disseminated to an array of marketers, debt relief and credit repair sellers, and companies that would resell consumers’ information without regard for how the information would be used. According to the complaint, in many instances, ITMedia was not even aware of the purpose for which a company was buying consumers’ data, or at times even the physical location of the company.

ITMedia sold consumers’ information to a group of companies that were sued by the FTC last year for marketing payday loan products that overcharged consumers by tens of millions of dollars.

The complaint notes that the harm to consumers from ITMedia’s “indiscriminate” selling of consumer data was substantial, putting them at risk for identity theft and scams.

In addition to misleading consumers and selling their data without permission, the complaint alleges that ITMedia violated the Fair Credit Reporting Act (FCRA) by unlawfully obtaining and reselling the credit scores of consumers who submitted information. The FCRA limits the purposes for which businesses can obtain credit scores and using scores to market leads is not a permissible purpose.

The defendants agreed to settle the FTC charges against them and, in addition to the civil penalty, the proposed settlement order will prohibit the defendants from making misleading statements to consumers, including about how their personal information will be used. The order will also prohibit the defendants from selling consumers’ personal information outside of a limited set of circumstances, and the order requires them to screen the recipients of that information.

The complaint alleges that ITMedia Solutions LLC and a number of related companies, along with Michael Ambrose, Daniel Negari, Jason Ramin, Grant Carpenter, Anisha Hancock, and Sione Kaufusi violated the FTC Act and FCRA.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 4-0. Commissioner Christine S. Wilson issued a concurring statement. The FTC filed the complaint and final order/injunction in the U.S. District Court for the Central District of California.

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:
Michael Tankersley
Bureau of Consumer Protection
202-326-2991
Author: jmayfield
Posted: January 7, 2022, 12:00 pm

The Federal Trade Commission has adjusted the maximum civil penalty dollar amounts for violations of 16 provisions of law the agency enforces, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

The Act directs agencies to implement annual inflation adjustments based on a prescribed formula. The new maximum civil penalty amounts will take effect once they are published in the Federal Register.

The maximum civil penalty amount has increased from $43,792 to $46,517 for violations of Sections 5(l), 5(m)(1)(A), and 5(m)(1)(B) of the FTC Act, 7A(g)(l) of the Clayton Act and Section 525(b) of the Energy Policy and Conservation Act. It has increased from $576 to $612 for violations of Section 10 of the FTC Act. The maximum civil penalty amount has increased from $1,246,249 to $1,323,791 for violations of Section 814(a) of the Energy Independence and Security Act of 2007. The maximum civil penalty amounts for other law violations within the agency’s jurisdiction are listed in the Federal Register notice.

The Commission voted 4-0 to publish the Federal Register notice amending Commission Rule 1.98.

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: January 6, 2022, 12:00 pm

In FY 2021, the FTC received more than five million complaints and 2.8 million new numbers were added to the DNC Registry

The Federal Trade Commission issued its biennial report to Congress on the National Do Not Call (DNC) Registry. The new report details the number of consumers – now totaling more than 244 million – who have placed their telephone numbers on the Registry over the past two years. It also states the FTC received more than five million Do Not Call complaints in fiscal year (FY) 2021, with people overwhelmingly reporting these violations came via robocalls, as opposed to live telemarketing.

Imposter scam and warranty protection scam calls led list of commonly reported call topics in FY 2021, followed by calls related to reducing debt and medical needs and prescriptions. Since the pandemic began, the FTC has received more than 18,000 COVID-related Do Not Call complaints, according to the report. In response to the consistently high number of complaints from the public about impersonator scams, the FTC recently launched a rulemaking initiative to combat business and government impersonation fraud.

The report notes that the DNC Registry exists to provide consumers with a choice regarding whether or not to receive telemarketing calls. Accordingly, it is important that the FTC continue to work alongside the Federal Communications Commission to ensure that the Registry is effective and accessible for both consumers and telemarketers. As new technology provides new challenges, both agencies actively seek to address and confront them by, among other things, encouraging private industry, other government agencies, academia, and other interested parties to create and develop new strategies to help consumers avoid unwanted telemarketing calls.

The report also includes the number of entities paying fees to access the Registry and the amount of the fees; the impact on the Registry of the five-year re-registration requirement (which was subsequently rescinded), new telecommunications technology, and number portability and abandoned telephone numbers; and the impact of the established business relationship exception on businesses and consumers. The final section includes updates on recent DNC-related enforcement actions, including recent cases against VoIP service providers, Globex Telecom, Inc., and Alcazar Networks, Inc.

Biennial Report Data

The DNC Registry currently has 244.3 million active registrations, an increase of more than 2.8 million from the previous fiscal year. According to the report, during FY 2021, 2,000 businesses and other entities paid nearly $13 million to access the Registry. More than 12,000 entities subscribed to access the Registry, including 9,595 who registered for five or fewer area codes free of charge, and 512 entities (such as charitable organizations) claimed “exempt organization” status and received free access to the Registry.

In FY 2020, 1,952 entities paid Registry access fees totaling nearly $12.5 million. That year, 10,420 entities subscribed to Registry, including those who registered to access five or fewer area codes at no charge, and 556 entities claimed “exempt organization” status and accessed the Registry without paying a fee.

The Commission also publishes an annual Do Not Call Registry Data Book that provides substantial detail on registration numbers and other statistical information about the Registry. Similar information is also available the FTC’s Tableau public page, which is updated regularly and allows users to interact with the data to drill down to state or county data.

The Commission vote approving the report and its submission 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


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

Staff Contact:
Ami Dziekan
Bureau of Consumer Protection
202-326-2648
Author: mkatz
Posted: January 5, 2022, 12:00 pm

Settlement order permanently bans defendants from merchant cash advance and debt collection

Two of the defendants behind an alleged small business financing scheme, RAM Capital Funding, LLC and its owner Tzvi Reich, will be permanently banned from the merchant cash advance and debt collection industries, and required to pay $675,000 to settle Federal Trade Commission charges that they used deceptive and illegal means to seize assets from small businesses, non-profits, and religious organizations.

“Today’s order makes clear that preying on small businesses will come with a heavy price,” said Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection. “These defendants have been banned from the merchant cash advance business, and we intend to hold their co-defendants similarly accountable.”

Merchant cash advances are a type of alternative small business financing. Generally speaking, merchant cash advance companies provide funds to businesses in exchange for a percentage of the businesses’ revenue. Typically, a merchant cash advance company will make daily withdrawals from the business’s bank account until the obligation has been met. 

As detailed in the February 2020 FTC staff perspective on the “Strictly Business” forum, however, some merchant cash advance providers engage in aggressive, and potentially misleading, marketing practices and use potentially abusive collection tactics.

The FTC alleged that since 2015, the defendants deceived small businesses and other organizations in violation of the FTC Act and the Gramm-Leach-Bliley Act by requiring personal guarantees and upfront fees from consumers after representing they wouldn’t make these demands, providing less funding to consumers than promised, and by debiting more from consumers’ bank accounts than they said they would.  

The agency also alleged that the defendants made unauthorized withdrawals from consumers’ accounts and used unfair collection practices, including sometimes threatening physical violence. In addition, the FTC alleged that the defendants illegally weaponized “confessions of judgment,” contractual terms that allowed defendants to pursue customers’ personal assets in court and obtain uncontested judgments against them.  

As part of the settlement, the defendants are being ordered to vacate any judgments against their former customers and to release any liens against their customers’ property. The proposed order would also ban these defendants from making these and similar misrepresentations, and from further violations of the Gramm-Leach-Bliley Act.

The Commission’s case against the other defendants, RCG Advances, LLC, Robert Giardina, and Jonathan Braun, is ongoing, and the proposed order requires settling defendants RAM Capital Funding and Reich to cooperate with the FTC.

The Commission vote approving the stipulated final order was 4-0. The FTC filed the proposed order in the U.S. District Court for the Southern District of New York.

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

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

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

Author: jhenderson2
Posted: January 5, 2022, 12:00 pm

The Federal Trade Commission has given final approval to a settlement with a mortgage industry data analytics firm that will require the company to bolster its data security protections and oversight of its vendors to ensure third-party providers are also complying with those safeguards.

In a complaint first announced in December 2020, the FTC alleged that Texas-based Ascension Data & Analytics, LLC violated the Gramm-Leach Bliley Act’s Safeguards Rule, which requires financial institutions to develop, implement, and maintain a comprehensive information security program and ensure third-party vendors are capable of implementing and maintaining appropriate safeguards for customer information. The FTC alleged that Ascension failed to do this.

The FTC alleged that a vendor Ascension hired to perform text recognition scanning on mortgage documents stored the contents of the documents—which included names, dates of birth, Social Security numbers and other personal information—on a cloud-based server in plain text, without any protections to block unauthorized access, such as requiring a password. As a result, the server with the mortgage information was accessed dozens of times.

After receiving one comment on the settlement, which also was announced in December 2020, the Commission voted 2-1-1 to finalize the settlement and to send a response to the commenter.

Chair Lina M. Khan did not participate. Commissioner Rebecca Kelly Slaughter voted no and issued a dissenting 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


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

Author: bjames@ftc.gov
Posted: December 22, 2021, 12:00 pm

The Federal Trade Commission has finalized an order banning a stalkerware provider and its CEO from the surveillance business to settle allegations the company secretly harvested and shared data on people’s physical movements, phone use, and online activities.

In a complaint first announced in September 2021, the FTC alleged that Support King, LLC, which did business as SpyFone.com, and its CEO Scott Zuckerman sold stalkerware apps that allowed purchasers to surreptitiously monitor photos, text messages, web histories, GPS locations, and other personal information on the phone on which the app was installed without the device owner’s knowledge.

In addition to the ban on offering, promoting, selling, or advertising any surveillance app, service, or business, the order also requires Support King and Zuckerman to delete any information illegally collected from their stalkerware apps. It also orders them to notify owners of devices on which SpyFone’s apps were installed that their devices might have been monitored and the devices might not be secure.

After receiving seven substantive comments on the settlement, the Commission voted 4-0 to finalize the settlement and send responses to the commenters.

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

Author: sfelder
Posted: December 21, 2021, 12:00 pm

Argues that Bank of America seeks to strip protections from customers

The Federal Trade Commission joined the Consumer Financial Protection Bureau, the U.S. Department of Justice and the Board of the Federal Reserve in an amicus brief filed with the United States Court of Appeals for the Seventh Circuit in the case John Fralish v. Bank of America. The brief urges the court to adopt a reading of the Equal Credit Reporting Act, which the Commission enforces through Section 5 of the FTC Act, that reflects statutory text, history, and purpose.

The joint brief argues that the term “applicant” as used in the Equal Credit Opportunity Act is best read to protect existing holders of credit as well as persons who have sought but not yet been granted credit from unlawful discrimination. Bank of America, by contrast, would limit such protections just to persons not yet granted credit. The Commission joined the CFPB in addressing the definition of “applicant” in an amicus brief filed jointly with the CFPB a year ago, but the earlier case settled. In this new brief, the agencies have another opportunity to for a federal appellate court to adopt the correct interpretation of “applicant.”

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.

CONTACT INFORMATION


Media Contact:
Office of Public Affairs

Author: sfelder
Posted: December 17, 2021, 12:00 pm

FTC, DOJ alleged MyLife deceived consumers with misleading “teaser background reports,” and about its billing and marketing practices

MyLife.com, Inc. and its CEO, Jeffrey Tinsley, have been banned from engaging in deceptive negative option marketing and will pay $21 million following allegations that they tricked consumers with “teaser background reports” and trapped them in difficult-to-cancel subscription programs. According to a complaint filed in July 2020 by the Department of Justice on behalf of the Federal Trade Commission, MyLife.com and Jeffrey Tinsley claimed that the company’s background reports on particular individuals may contain arrest, criminal, and sexual offender records—even when they did not include such information—to try to trick consumers into signing up for auto-renewing, premium subscriptions.

The complaint alleged that, in many instances, consumers who searched the MyLife.com website for an individual’s background report were shown search results that imply, often falsely, that the subject of a search may have records of criminal or sexual offenses—records that can be viewed only by purchasing a MyLife subscription. The complaint alleged that MyLife’s misleading statements led some consumers to believe they or other individuals had arrest or criminal records when they did not, or when they only had minor traffic citations.

The complaint alleged that MyLife operated as a consumer reporting agency and violated the Fair Credit Reporting Act (FCRA) by, among other things, failing to maintain reasonable procedures to verify how its reports would be used, to ensure the information was accurate, and to make sure that the information it sold would be used only for legally permissible purposes. The complaint also alleged that MyLife’s misleading billing practices violated the Restore Online Shoppers’ Confidence Act by, for example, failing to clearly disclose upfront charges, or that consumers’ subscription would automatically renew. MyLife also violated the Telemarketing Sales Rule by misrepresenting its refund and cancellation policies, the complaint alleged.

“MyLife lured consumers into hard-to-cancel negative option subscriptions by preying on fears that MyLife’s reports would harm their reputations or ability to find jobs or housing,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “These extortionary tactics broke the law, and MyLife and its CEO have been banned from negative option marketing and ordered to clean up their practices.”

“The Department of Justice and the FTC work hard to protect consumers from deceptive sales practices like those at issue here,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “This is a win for consumers, who should not be subjected to misleading statements and marketing tactics.”

As part of the settlement, Tinsley and MyLife agreed to separate judgments totaling $33.9 million. Tinsley will pay a total of $5 million and MyLife will pay a partially suspended judgment of $16 million due to the company’s inability to pay the full amount. The money will be used to provide refunds to consumers. MyLife will be required to pay the full remaining amount of the judgment if the company is found to have misrepresented its finances.

Importantly, Tinsley and MyLife are also permanently banned from offering any product with a negative option feature and engaging in the types of deceptive conduct outlined in the complaint including implying that someone who has received a traffic violation has a criminal record. In addition, MyLife also is required to implement a monitoring program to ensure the company is complying with the FCRA.

The Department of Justice filed the stipulated order in the U.S. District Court for the Central District of California, Western Division. The Court approved the order on December 15, 2021.

NOTE: 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


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

Staff Contacts:
Jamie Hine
Bureau of Consumer Protection
202-326-2188

Whitney Moore
Bureau of Consumer Protection
202-326-2645
Author: jhenderson2
Posted: December 16, 2021, 12:00 pm

Reported losses jump as government and business impersonators capitalize on COVID-19 confusion and concern to bilk consumers out of billions

The Federal Trade Commission launched a rulemaking today aimed at combatting government and business impersonation fraud, a pernicious and prevalent problem that has grown worse during the pandemic. Impersonators use all methods of communication to trick their targets into trusting that they are the government or an established business and then trade on this trust to steal their identity or money.

The COVID-19 pandemic has spurred a sharp spike in impersonation fraud, as scammers capitalize on confusion and concerns around shifts in the economy stemming from the pandemic. Incorporating new data from the Social Security Administration, reported costs have increased an alarming 85 percent year-over year, with $2 billion in total losses between October 2020 and September 2021. Notably, since the pandemic began, COVID-specific scam reports have included 12,491 complaints of government impersonation and 8,794 complaints of business impersonation.

“It is reprehensible that scammers are preying on people during this pandemic by pretending to be someone they can trust,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The sharp spike in impersonation scams has cost our country billions and undermined response and relief efforts. The FTC is prepared to use every tool in our toolbox to deter government and business impersonation fraud, penalize wrongdoers, and return money to those harmed.”

Government and business impersonators can take many forms, posing as, for example, a lottery official, a government official or employee, or a representative from a well-known business or charity. Impersonators may also use implicit representations, such as misleading domain names and URLs and “spoofed” contact information, to create an overall net impression of legitimacy.  These scammers are fishing for information they can use to commit identity theft or seek monetary payment, often requesting funds via wire transfer, gift cards, or increasingly cryptocurrency.

Government impersonators typically assert an air of authority to stage their scam. These impersonators sometimes threaten their target with severe consequences such as a discontinuation of benefits, enforcement of tax liability, and even arrest or prosecution. Government impersonators have also been known to deceive consumers into paying for services that would otherwise be free, or to lure them with promises of government grants, prizes, or loan forgiveness.

Business impersonators typically get consumers’ attention with emails, telephone calls or text messages about suspicious activity on consumers’ accounts or computers or supposed good news about a refund or prize in hopes of gaining trust and receiving personal information. The harm is substantial, as people who lose money on the leading business impersonator scams report an individual median loss of $1,000.

In the Advance Notice of Proposed Rulemaking (ANPR), the FTC is seeking comment from the public on a wide range of questions about these schemes. The ANPR outlines the extensive data the Commission has collected related to these types of impersonation scams, drawn largely from the FTC’s Consumer Sentinel Network database of fraud reports, and its law enforcement experience in this area.

The FTC has brought numerous cases against government and business impersonation schemes through the years under its existing authorities, but the ANPR notes that the Commission’s authority to seek consumer redress or civil penalties in these cases is currently very limited. The provisions related to impersonation under the Telemarketing Sales Rule and Mortgage Assistance Relief Services Rule cover only specific sectors or methods of scams.  

This is the first rulemaking initiated under the Commission’s streamlined rulemaking procedures. A potential rule resulting from the ANPR could allow the FTC to seek strong relief for consumers across a broad array of government and business impersonation cases, which is especially important following the Supreme Court’s ruling in AMG Capital Management LLC v. FTC. If, after reviewing the public comments in response to the ANPR, the Commission decides to proceed with proposing such a trade regulation rule, its next step would be to issue a notice of proposed rulemaking.

The Commission vote to approve the Federal Register notice announcing the ANPR was 4-0. Chair Lina M. Khan issued a statement and Commissioner Christine S. Wilson released her remarks. The notice will be published in the Federal Register soon. Instructions for filing comments appear in the notice. Comments must be received 60 days from the publication date of the Notice.

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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Contact For Consumers:

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

Author: jmayfield
Posted: December 16, 2021, 12:00 pm

FTC also alleged that company collected geolocation data from users who opted out of being tracked

California-based online advertising platform OpenX Technologies, Inc. will be required to pay $2 million to settle Federal Trade Commission allegations that the company collected personal information from children under 13 without parental consent, a direct violation of a federal children’s privacy protection law. The FTC also alleged that despite offering an opt-out option, OpenX collected geolocation information from users who specifically asked not to be tracked.

In a complaint filed by the Department of Justice on behalf of the FTC, the Commission alleged that OpenX, which operates a real-time bidding platform that monetizes websites and mobile apps by selling ad space, failed to comply with the FTC’s Children’s Online Privacy Protection Act Rule (COPPA Rule), which requires that websites, apps, and online services that are child-directed or knowingly collect personal information from children notify parents and get their consent before collecting, using or disclosing personal information from children under 13.

“OpenX secretly collected location data and opened the door to privacy violations on a massive scale, including against children,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Digital advertising gatekeepers may operate behind the scenes, but they are not above the law.”

The FTC’s investigation found that OpenX reviewed hundreds of child-directed apps with terms that identified the intended audience as “for toddlers,” “for kids,” “kids games,” or “preschool learning,” and included age ratings for the apps indicating they were directed to children under 13. These apps and their data were not flagged as child-directed and participated in the OpenX ad exchange, according to the FTC. Because OpenX had knowledge that apps in the ad exchange were child-directed and that the company was collecting personal information from children under 13, the FTC alleged that it had violated the COPPA Rule. OpenX passed this personal data to third parties that used it to target ads to users of the child-directed apps.

In addition to violating the FTC’s COPPA Rule, OpenX violated the FTC Act by falsely claiming that the company did not collect geolocation from users who opted out of such data collection, according to the complaint. In fact, the FTC alleged, OpenX did continue to collect geolocation data from some Android mobile phone users even after they specifically chose not to have such location tracking data collected.

In addition to the $2 million settlement, the order requires OpenX to delete all ad request data it collected to serve targeted ads and implement a comprehensive privacy program to ensure it complies with COPPA and stops collection and retention of personal data of children under 13. This includes requiring the company to re-review apps on a periodic basis to identify additional child-directed apps and ban them from the company’s ad exchange. It also requires the company to keep track of which apps and websites have been banned or removed from its exchange.

The Commission vote to authorize the staff to refer the complaint to the DOJ and to approve the stipulated final order was 4-0. Commissioner Noah Joshua Phillips issued a separate statement. The DOJ filed the complaint and final order on behalf of the Commission in the U.S. District Court for the Central District of California, Western Division.

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.

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Media Contact:
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202-326-2924

Staff Contacts:
Sarah Choi
Bureau of Consumer Protection
202-326-2212

Kevin Moriarty
Bureau of Consumer Protection
202-326-2949
Author: jhenderson2
Posted: December 15, 2021, 12:00 pm

Defendants threatened consumers with lawsuits and arrest while trying to collect non-existent debts

A group of phantom debt collectors will be permanently banned from the debt collection industry and required to surrender the contents of numerous bank and investment accounts under the terms of a settlement with the Federal Trade Commission.

The FTC’s complaint against South Carolina-based National Landmark Logistics, filed in July 2020, alleged that the defendants in the case used robocalls to leave deceptive messages claiming consumers faced imminent legal action—lawsuits or even arrest—for unpaid debts.

When consumers returned the calls, the defendants falsely claimed to be from a mediation or law firm, again threatened legal action, and used consumers’ personal information to convince consumers the threats were real. The defendants turned around and pocketed the money, despite the fact that in many instances, consumers did not owe the debt being collected on or the defendants had no right to collect it.

Under the terms of the settlement, National Landmark Logistics, LLC; National Landmark Service of United Recovery, LLC; Silverlake Landmark Recovery Group, LLC; and Jean Cellent will be permanently banned from debt collection of any kind. They will also be banned from buying or selling debt, and from making any misrepresentations to consumers about any goods or services—including from claiming that they are lawyers or represent a law firm.

The settlement also includes a monetary judgment of $12,098,760, which is partially suspended due to an inability to pay. In addition, the defendants will be required to surrender the contents of numerous bank and investment accounts, as well as the title to property located in Philadelphia and a Mercedes SL 550 or the cash value of those assets.

If the defendants are found to have misrepresented their financial status, the full amount of the monetary judgment would become immediately due.

The FTC previously announced settlements with other defendants in the case in March, 2021.

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 District of South Carolina.

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

Contact For Consumers:

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

Author: jmayfield
Posted: December 13, 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, December 16, 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 December 16 Commission meeting:

Business Before the Commission

Advance Notice of Proposed Rulemaking to Combat Government and Business Impersonation Fraud: Staff will provide a presentation and the Commission will vote on an Advance Notice of Proposed Rulemaking to address rampant government and business impersonation fraud. Government and business impersonation scams are a leading source of consumer complaints and the largest source of total reported consumer financial losses – and have gotten worse during the pandemic.

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 December 16 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, December 13, 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 December 16, 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.

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Author: jhenderson2
Posted: December 9, 2021, 12:00 pm

Additional funds are result of case against payment processor that facilitated scheme

The Federal Trade Commission is returning an additional $25 million to consumers who lost money to a business coaching scheme that used the names Coaching Department and Apply Knowledge, among others. These refunds are the result of the FTC’s settlements with the scheme’s ringleaders, the companies through which the scheme operated, and a payment processor who helped facilitate the scheme.

According to the FTC, the defendants conned millions of dollars from consumers by falsely telling them they could earn thousands of dollars a month by purchasing their business coaching services and establishing an Internet business. The complaint alleges that consumers who bought into the scheme lost thousands—sometimes tens of thousands—of dollars each, most of it by racking up huge credit card debt at the defendants’ urging.

The funds for this distribution come from the FTC’s case against First Data Merchant Services, LLC (First Data), one of several companies that processed credit card payments for the defendants in this case. According to the FTC, First Data allegedly ignored repeated warnings from employees, banks, and others that they were processing payments for companies that were breaking the law. First Data agreed to pay $40 million to settle the FTC’s charges, which has also been used to provide refunds to consumers in the FTC’s cases against Lift International and E.M. Systems and Services.

In this distribution, 10,749 consumers will receive checks from the FTC totaling more than $25.6 million. Prior refund distributions in this case totaled more than $2 million.

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, Analytics, LLC, at 844-982-1005. 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 recently the United States Supreme Court ruled 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 and to 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

Contact For Consumers:
Analytics, LLC
Refund Administrator
844-982-1005

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

Author: jmayfield
Posted: December 8, 2021, 12:00 pm

$148 million reported lost in first nine months of 2021, more than all of 2020

A new Federal Trade Commission data spotlight shows that in the first nine months of 2021, consumers reported losing $148 million in scams where gift cards were used as the form of payment. That amount is more than was reported in all of 2020. 

Nearly 40,000 consumers reported using gift cards to pay a scammer in that time frame, according to the spotlight, which draws from fraud reports submitted to the FTC by consumers. Most often, consumers reported paying scammers who were impersonating large companies or government agencies.

One new development noted in the spotlight is the emergence of Target gift cards as the most popular choice for scammers in the reports received by the FTC. Target gift cards accounted for about $35 million in payments to scammers, more than twice as much as any other brand of gift cards. The median amount lost when consumers paid with Target gift cards, $2,500, was higher than any other brand of card, with nearly a third reporting losses of $5,000 or more.

Scammers also instructed consumers to purchase gift cards—regardless of the brand of card—from a Target store more often than any other location, according to the spotlight.

Since 2018, both the numbers of consumers filing reports in which gift cards were the form of payment to scammers and the amount they have reported lost have increased steadily. The spotlight also notes that consumers’ median reported loss to scammers when they pay with gift cards has increased from $700 to $1000.

The FTC has resources for consumers, including information on how to contact gift card companies to try to stop payments to scammers at ftc.gov/giftcards. The agency also has information for gift card retailers, including materials that can be posted in stores and used to train employees at ftc.gov/StopGiftCardScams.

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: December 8, 2021, 12:00 pm

Argues Franchise Rule cannot be used to avoid state-imposed labor protections

The Federal Trade Commission filed an amicus brief with the Supreme Judicial Court for the Commonwealth of Massachusetts advising the court that the FTC’s Franchise Rule does not address and cannot be used to determine whether franchisees governed by the FTC rule are employees under state law. The Commission took no position on how the state law applies. The case is Patel, et al. v. 7-Eleven, Inc.

The FTC’s brief argues that the Franchise Rule requires franchisors to make specified disclosures to franchisees but does not address whether a franchisee is an employee or an independent contractor under Massachusetts law and does not preempt state law. 7-Eleven therefore may not rely on the Rule to govern its status as an employer under state law.

The Commission voted 3-1 to file the amicus brief with Commissioner Noah J. Phillips dissenting.

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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Author: bjames@ftc.gov
Posted: December 6, 2021, 12:00 pm

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.

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Media Contact:
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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.

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Media Contact:
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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.

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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.

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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.

CONTACT INFORMATION


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

Author: mkatz
Posted: October 28, 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.

CONTACT INFORMATION


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

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

 

The FTC’s Blog on Privacy & Identity

Business Blog Posts

By Lesley Fair

Small businesses, the FTC is on your side. According to a proposed FTC settlement with Dun & Bradstreet, D&B took big bucks from small businesses with the promise to improve their credit reports, but the primary business that benefited from D&B’s pricey services was Dun & Bradstreet itself.

Read more >
Author: Lesley Fair<br />
Posted: January 13, 2022, 4:47 pm
By Lesley Fair

As a certain elusive children’s videogame character will attest, precise geolocation can be highly sensitive information. According to a settlement the FTC just announced with OpenX Technologies, Inc. – a real-time bidding platform that enables targeted advertising on websites and apps – OpenX deceived people about their right to opt out of the collection of precise location data.

Read more >
Author: Lesley Fair<br />
Posted: December 15, 2021, 9:24 pm
By Maria Mayo, Acting Associate Director, FTC Division of Consumer Response and Operations

Gift cards may be at the top of your holiday gift giving list. But there’s another list that gift cards top, and it’s decidedly less festive.

Read more >
Author: Maria Mayo, Acting Associate Director, FTC Division of Consumer Response and Operations<br />
Posted: December 8, 2021, 2:56 pm
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.

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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.

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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

 

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