Showing posts from November, 2020

FTC Stops Debt Collector’s Alleged “Debt Parking” Scheme, Requires it to Delete Debts it Placed on Consumers’ Credit Reports

Agency complaint alleges company collected millions in fake debts by placing bogus information on consumer credit reports The Federal Trade Commission has taken action   against a debt collection company that allegedly placed bogus or highly questionable debts onto consumers’ credit reports to coerce them to pay the debts. Under a settlement with the FTC, the company, Midwest Recovery Systems (Midwest Recovery), is prohibited from the practice, known as “debt parking,” and required to delete the debts it previously reported to credit reporting agencies. The FTC alleged   that Midwest Recovery collected more than $24 million from consumers on such debts, largely by debt parking. Also known as “passive debt collection,” debt parking can result in a consumer only finding out that a purported debt exists when his or her credit report is accessed in connection with buying a car or home, opening a credit card, or seeking employment. While the debts may not be valid, consumers can feel press

FTC Approves Administrative Complaint Against Supplement Marketer Health Research Laboratories, LLC

The Federal Trade Commission has approved a Part 3 administrative complaint against dietary supplement marketer Health Research Laboratories, LLC (HRL), its owner and officer Kramer Duhon, and Whole Body Supplements, LLC (WBS) for making unsubstantiated claims that their supplements—The Ultimate Heart Formula (UHF), BG18, and Black Garlic Botanicals—prevent or treat cardiovascular and other diseases, and that their supplement Neupathic cures, mitigates, or treats diabetic neuropathy. In December 2019, FTC staff and the State of Maine filed a contempt motion against HRL , Duhon, and WBS in federal district court for violating a January 2018 stipulated final order . According to the contempt motion , after agreeing to the 2018 order prohibiting unsubstantiated health claims, the defendants violated its terms by making unsubstantiated claims about UHF, BG18, Black Garlic Botanicals, and Neupathic. Earlier this year, a court issued an order denying the FTC’s contempt motion. Staff then

Student Loan Debt Relief Scammer Brandon Frere Agrees to Settle FTC Charges

Student loan debt relief scammer Brandon Frere and his companies, including Ameritech Financial, have entered into an agreement with the Federal Trade Commission to settle  charges they misled approximately 40,000 consumers about lowering their student loan debt. According to the FTC’s 2018 complaint , Brandon Frere and his companies sent personalized mail to consumers that falsely claimed they were eligible for federal programs that would permanently reduce their monthly debt payments to a fixed low amount or result in total loan forgiveness. The FTC alleged that Frere and his companies charged up to $800 in illegal up-front fees to enroll consumers in a federal loan assistance program. They also charged consumers $100-$1,200 advance fee for enrollment in a “financial education” program, followed by ongoing $49-$99 monthly membership fees for the life of the loan, which typically is 10-25 years. The order bans Frere and his companies from providing debt relief services and prohibits

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FTC Alleges Mobile Banking App Misled Users About Access to Their Funds, Failed to Deliver on Promised High Interest Rates

The Federal Trade Commission sued the operators of a mobile banking app, alleging that they falsely promised users high interest rates on their accounts and “24/7” access to their funds. In a complaint  filed in federal court, the FTC alleges that Beam Financial Inc. and its founder and CEO Yinan Du, also known as Aaron Du, promised users of their free mobile banking app that they could make transfers out of their accounts and would receive their requested funds within three to five business days. Instead, some users waited weeks or even months to receive their money despite repeated complaints to Beam, while others said they never received their money, according to the complaint. "Beam Financial promised convenient 24/7 access to savings, but then people had to wait weeks or months to get their money," said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. Many consumers said Beam’s failure to provide their requested funds caused real financial harm, partic

FTC Warns Frank Financial Aid to Stop Potentially Misleading Marketing Directed to Students Seeking Coronavirus Financial Relief

The Federal Trade Commission has sent a warning letter  to a company that markets financial aid prep assistance to post-secondary students, notifying the company that it could potentially be misleading consumers about access to a coronavirus relief program. The letter to the operators of Frank Financial Aid (Frank) highlights the company’s claims that it gives students “everything you need” to apply for emergency grants available under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and that there are four identified eligibility criteria for the emergency relief. In fact, as the FTC’s letter notes, Frank’s purported assistance to students consists primarily of providing a form letter that may lack the information a student would need to apply for one of the grants from his or her school. The CARES Act program for students is administered by individual colleges and universities, and each has its own unique application process and grant eligibility criteria. The FTC’s le

FTC Sends Letters Warning 20 More Marketers to Stop Making Unsupported Claims That Their Products and Therapies Can Effectively Prevent or Treat COVID-19

Commission has sent similar letters to more than 330 other sellers and marketers nationwide The Federal Trade Commission announced it has sent letters warning 20 more marketers nationwide to stop making unsubstantiated claims that their products and therapies can prevent or treat COVID-19, the disease caused by the novel coronavirus. This is the ninth set of warning letters the FTC has announced as part of its ongoing efforts to protect consumers from health-related COVID-19 scams. In all, the Commission has sent similar letters to more than 330 companies and individuals . Some of the letters announced today target products and “treatments” the FTC has warned companies about previously, including intravenous (IV) Vitamin C infusions, ozone therapy, and supplements. Others challenge claims that more obscure products and therapies can prevent or treat COVID-19. For example, in this round of mailings, warning letters went to companies claiming that everything from copper water bottles to

FTC Sends Nearly $1.5 Million to Victims of Bronx Honda’s Illegal Financing and Sales Practices

The Federal Trade Commission is sending refunds totaling nearly $1.5 million to individuals who were affected by allegedly unlawful financing and sales practices by Bronx Honda. According to the FTC, Bronx Honda and its general manager told sales employees to charge higher financing markups and fees to African-American and Hispanic customers. The defendants told employees that these groups should be targeted due to their limited education, and not to attempt the same practices with non-Hispanic white consumers. The FTC further alleged that Bronx Honda failed to honor advertised sale prices, changed the sales price on paperwork in the middle of the sale without telling the consumer, double-charged consumers for taxes and fees, and misrepresented to consumers that they were required to pay extra reconditioning and warranty fees to purchase “certified” vehicles. The FTC is providing refunds, averaging about $371 each, to 3,977 victims of Bronx Honda’s practices. Those who receive

FTC Requires Zoom to Enhance its Security Practices as Part of Settlement

Commission alleged that the company deceived users about the level of security for Zoom meeting platform and unfairly undermined a browser security feature Note: The FTC will host a conference call TODAY for media at Noon ET. Participants will include Director of the FTC’s Bureau of Consumer Protection Andrew Smith and Maneesha Mithal, Associate Director of the FTC’s Division of Privacy and Identity Protection. The Call-in number is 844-291-6360 and the access code is 389969. Call-in lines, which are for media only, will open 15 minutes prior to the start of the call. The Federal Trade Commission today announced a settlement  with Zoom Video Communications, Inc. that will require the company to implement a robust information security program to settle allegations that the video conferencing provider engaged in a series of deceptive and unfair practices that undermined the security of its users. Zoom has agreed to a requirement to establish and implement a comprehensive security prog

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FTC Approves Final Consent Agreement with Sunday Riley Modern Skincare, LLC

Following a public comment period, the Federal Trade Commission has approved a final consent agreement settling charges that Sunday Riley Modern Skincare, LLC (Sunday Riley Skincare) and its CEO, Sunday Riley, misled consumers by posting fake reviews of the company’s products online, at the CEO’s direction, and by failing to disclose that the reviewers were company employees. Sunday Riley Skincare sells a range of cosmetic products at various retailers, including Sephora, a multinational chain of personal care and beauty stores, and on the website. Sephora allows consumers to leave customer reviews of products sold on its website, providing a forum for sharing authentic feedback about the products it sells. According to the agency’s October 2019 complaint , between November 2015 and August 2017, Sunday Riley Skincare managers, including Ms. Riley, posted reviews of their branded products on the Sephora site using fake accounts created to hide their identities, and requeste

Court Issues Order Halting Operators of Fake Websites Claiming to Sell Clorox and Lysol Products

FTC complaint alleges defendants take advantage of consumers’ COVID-19 fears At the Federal Trade Commission’s request, a federal court in Ohio has issued a temporary restraining order against 25 counterfeit websites that allegedly have been playing on consumers’ COVID-19 pandemic fears to trick them into paying for Clorox and Lysol products that the defendants never deliver. According to the FTC’s complaint , since at least July 2020, during the COVID-19 pandemic, the defendants’ counterfeit websites have been aimed at consumers urgently seeking cleaning and disinfecting products, and designed to look like genuine sellers offering Clorox and Lysol products. The FTC complaint alleges that none of the defendants’ websites are owned by, affiliated with, or authorized by the companies that make Clorox and Lysol, and that none of the consumers who paid for cleaning and disinfecting products ever received what they ordered online. “The FTC is working hard to stop fraudsters who try

FTC Sends Refunds to Victims of Deceptive Money-Making Schemes Involving Cryptocurrencies

The Federal Trade Commission is sending PayPal payments totaling more than $470,000 to people who lost money to deceptive chain referral schemes involving cryptocurrencies . According to the FTC , the defendants promoted Bitcoin Funding Team and My7Network, which falsely promised that participants could earn large amounts of money by paying cryptocurrency such as Bitcoin or Litecoin to enroll in the schemes. However, Bitcoin Funding Team and My7Network were chain referral schemes that depended on the recruitment of new people to make money. In fact, most participants failed to recoup their initial investments. As part of the settlement , the FTC will send 7,964 refunds through PayPal beginning on November 5, 2020. The average refund is approximately $59. Recipients who receive a refund via PayPal will have 30 days to accept the payment. The FTC never requires people to pay money to get a refund payment. For more details about the PayPal payment process, please read the related

FTC Releases Agenda for Franchise Rule Virtual Workshop

The Federal Trade Commission has released the agenda   for the Franchise Rule virtual workshop on November 10. The event will explore a number of issues related to the Franchise Rule, and the comments received in response to the FTC’s request for comment about the Rule last year. The Rule is designed to ensure that consumers who are considering buying a franchise have key information they need to weigh the risks and benefits of that potential investment. Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, will give introductory remarks to kick off the event and will be followed by Congressman Kevin Hern of Oklahoma, who will give an opening address.  The three panel discussion will focus on representations that franchisors make about financial performance, the use of disclaimers, and the format of the disclosure document required by the Rule. The workshop will take place online from 1 p.m. ET to 4:30 p.m. ET. A link to view the event will be posted on the event page p