FOR THE CONSUMER
The FTC's monthly newsletter for the Congressional community
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Volume 9 - Number 4
IN THIS ISSUE
IDENTITY THEFT. In one of the largest FTC-state coordinated settlements on record, LifeLock, Inc. has agreed to pay $11 million to the FTC and $1 million to 35 state attorneys general to settle charges that the company made false statements when promoting its identity theft protection services. Lifelock’s advertisements displayed its CEO’s Social Security number on the side of a truck and claimed that its $10-a-month service could prevent identity theft. The settlement bars deceptive claims by LifeLock and its principals. Read the press release.
CREDIT REPAIR. The FTC has settled its charges against promoters of credit and debt relief services, Sam Tarad Sky, Credit Restoration Brokers LLC, and Debt Negotiations Associates LLC. According to the FTC, Sky told his customers he would be able to remove negative information — judgments, foreclosures, tax liens, bankruptcies, repossessions and child support delinquencies — from their credit reports regardless of how old or accurate the information was, and charged them more than $2000. The judgments of $2.5 million are suspended because Sky and his affiliates are unable to pay, but they will have to pay immediately if they are found to have misrepresented their financial condition. Read the press release.
PROTECTING INFORMATION. Dave & Buster’s, Inc. has agreed to settle FTC charges that the company left patrons’ credit and debit card information vulnerable to hackers, resulting in several hundred thousand dollars in fraudulent charges. Dave & Buster’s operates 53 restaurant and entertainment complexes across the country under the names Dave & Buster’s, Dave & Buster’s Grand Sports Café and Jillian’s. The company will implement a comprehensive information security program. This is the FTC’s 27th case challenging faulty data security practices. Read the press release.
REFUNDS. The FTC has distributed more than 5,700 refund checks totaling some $3 million to customers of Roex, Inc., and its affiliates. Roex claimed their infrared sauna could treat cancer, and that their supplements could treat, reduce the risk of, or prevent various health conditions including cancer, HIV/AIDS, diabetes, strokes, heart attacks, Alzheimer’s disease, Parkinson’s disease, arthritis, multiple sclerosis and other autoimmune diseases, ulcers, herpes, asthma, and glaucoma. The Roex refund checks are valid for 60 days. For more information, the FTC is maintaining a Roex line at 1-877-571-8672. Read the press release.
DEBT COLLECTION. A nationwide debt collector has agreed to pay more than $1 million to settle FTC charges that it violated federal law by inaccurately reporting credit information and pressing people to pay debts they often did not owe. According to the FTC’s complaint, Credit Bureau Collection Services, and two of its officers, Larry Ebert and Brian Striker, illegally tried to collect invalid debts and reported them to the credit reporting agencies without noting that the supposed debtor disputed them. Read the press release.
CRAMMING. A U.S. district court judge has stopped the illegal practices of an Internet services company that crammed unauthorized charges onto the telephone bills of thousands of individuals and small businesses for services they never agreed to buy. According to the FTC, Inc21 and its affiliated companies sold Internet services, including website design services and hosting, Internet directory listings, search-engine advertising and Internet-based faxing. Read the press release.
MORE CONSUMER CHOICE. Transitions Optical Inc., the leading maker of treatments that darken eyeglass lenses exposed to sunlight, settled FTC charges that it illegally imposed exclusive dealing policies on its lens makers, retailers and wholesaler labs, and has agreed to stop using exclusive dealing contracts. According to the FTC, Transitions protected its monopoly position by closing off key distribution channels to rivals that led to higher prices, reduced innovation and fewer choices for consumers. Read the press release.
WALGREEN’S. Walgreens will pay nearly $6 million to settle FTC charges that the national pharmacy chain deceptively advertised “Wal-Born” — a line of dietary supplements similar to the Airborne cold-and-flu treatment — using baseless claims that the supplements could prevent colds, fight germs and boost the immune system. Read the press release.
FORECLOSURE RESCUE. Under the terms of settlements with the FTC and the states of California and Missouri, the operators of a mortgage foreclosure “rescue” company — U.S. Foreclosure Relief Corp., George Escalante, Cesar Lopez and Adrian Pomery — are banned from selling mortgage relief services. Read the press release.
TELEMARKETING. James Nicholson and the companies he controls have settled the FTC’s charges related to an advance-fee credit card scam and bogus advance-fee interest rate reduction/debt negotiation program. The order bans Nicholson from the telemarketing business. Read the press release.
ROBOCALL. The FTC’s settlement with Voice Touch, Inc., and its principal, James A. Dunne, requires them to pay approximately $655,000 in consumer redress and bans them from the telemarketing business. Voice Touch, a deceptive robocall operation, allegedly used millions of pre-recorded telemarketing messages to fraudulently pitch extended warranties to auto owners. Read the press release.
UNAUTHORIZED DEBITING. Tarzenea Dixon, the CEO of a payment processing company, is banned from the telemarketing business as part of a settlement resolving the FTC’s charges that the company illegally debited millions of dollars in bogus charges from peoples’ bank accounts. Read the press release.
TV ENERGY LABELS. The FTC has proposed requiring that EnergyGuide labels appear on televisions sold in the United States so shoppers will have more information about the energy use of different models. The FTC seeks comments on the need for these labels; how the energy use of televisions should be determined; the location, format and content of energy use disclosures; and the timing of the proposed labeling requirements. Read the press release.
COPPA. In light of rapidly evolving technology and changes in the way children use and access the Internet, the FTC seeks public comment on the costs and benefits of an FTC rule designed to protect children online. Read the press release.
U.S. House Committee on Financial Services
Subcommittee on Financial Institutions and Consumer Credit
The FTC testified about the steps the agency has taken to follow through on the FACT Act, legislation aimed at ensuring the accuracy of consumers’ credit reports, preventing identity theft and giving consumers a better understanding of the meaning of their credit scores. The FACT Act also directed the FTC to develop about 20 rules, guidelines, compliance forms and notices, and to conduct nine studies and issue reports to Congress.
SETTLING YOUR CREDIT CARD DEBTS. Lists options for help in managing credit card debt, including dealing with creditors, contacting a credit counselor, considering bankruptcy, and how to evaluate companies that promise to settle your debt.
Perhaps one of your constituents – or even a friend or relative – has gotten a call from someone claiming to be their grandchild. It may be an ordinary call — at least until the caller claims that he needs cash to fix a car, get out of jail or leave a foreign country. He begs the grandparent to wire money right away and to keep the request confidential.
Victims of this scam often don’t realize they’ve made a mistake until days later, when they speak to their grandchild who knows nothing about the phone call. By then, the money the grandparent wired is irretrievable. Scammers usually pressure people to wire money through commercial money transfer companies like Western Union and Money Gram because wiring money is the same as sending cash. The chances of recovery are slim to none.
The FTC says the number of complaints about this type of scam is on the rise. In some cases, the scammers know the names of family members and manage a deft impersonation. In others, they trick a grandparent into giving up a grandchild’s name. The callers often claim to be in another country and ask that the money be wired there. Sometimes, a third person gets in the act, pretending to be a police officer or bondsman to confirm the bogus story.
The FTC says that if someone gets a call from a family member asking them to wire money:
- Resist the pressure and the urge to act immediately.
- Try to verify the caller’s identity by asking personal questions a stranger couldn’t answer.
- Use a phone number you know to be genuine to call the person back. If you don’t have the phone number, get in touch with the person’s parent, spouse or another close family member to check out the story before you send any money, even if you’ve been told to keep the event a secret.
- If you can’t reach a family member and still aren’t sure what to do, call your local police on the non-emergency line. They can help you sort things out.
- No matter how dramatic the story, don’t wire money. Don’t send a check or money order by overnight delivery or courier, either. Con artists recommend these services so they can get your money before you realize you’ve been cheated.
- Report possible fraud at ftc.gov or by calling 1-877-FTC-HELP.
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