AI in Digital Marketing

The Federal Trade Commission is sending 8,843 checks totaling more than $2 million to consumers who were harmed by a company that charged them money for “funding” to pay for expensive and often ineffective training programs, but instead opened multiple credit card accounts in their names. According to the FTC’s complaint , Seed Consulting, LLC (which also operated under the names Seed Capital and Foundation Funding) was pitched by training companies as a way to get “funding” to people who wanted to start a business or become a real estate investor. The complaint alleged that Seed didn’t actually provide any funds to consumers but instead charged them $3,000 or more to apply for numerous credit cards on their behalf, with total credit lines of more than $50,000, a practice known as “credit card stacking.” To obtain these credit lines, the suit alleges, Seed often inflated consumers’ annual incomes on credit card applications by approximately $100,000, telling consumers they could e...

The owner and operator of Inmate Magazine Service, a company that scammed prisoners and their families by charging them for magazine subscriptions that either showed up late or not at all, will be permanently banned from selling or marketing magazine subscriptions. Under the terms of a settlement with the Federal Trade Commission and the Florida Office of Attorney General, Roy Snowden, who owned and operated a number of businesses that operated as Inmate Magazine Service, will also be required to surrender the contents of multiple bank accounts. The FTC and Florida’s complaint against Snowden and his companies alleged that they marketed magazine subscriptions to consumers serving prison sentences, as well as their families, offering to send the magazines to the prisoners while they were incarcerated and promising the magazines would arrive within 120 days. In many cases, the magazines never arrived or were delivered far later than promised, with no notification to the consumers abou...

Defendants posed as police, attorneys to threaten consumers over fake debts An Atlanta-based debt collection company and its owners will be permanently banned from the debt collection industry under the terms of a settlement with the Federal Trade Commission. In its complaint against Critical Resolution Mediation, LLC , along with Brian Charles McKenzie and Tracy Dottrice Warren, the FTC alleged that the defendants and their agents threatened consumers with arrest and imprisonment and tried to collect debts that consumers did not actually owe. The FTC’s complaint alleged that Critical Resolution’s collectors regularly posed as law enforcement officers, attorneys, mediators, or process servers, lending credence to their threats about supposed unpaid debts. In many cases, the defendants were attempting to collect on so-called “phantom” debt—debts that either were never owed—or debts that were no longer owed. In addition to banning all of the defendants from the debt collection industry,...

Bad actors who prey on older Americans should be stopped in their tracks, and today, the Federal Trade Commission is testifying before the Senate Special Committee on Aging  on our work to protect older adults and ensure that these predators face consequences. Testifying on behalf of the Commission, the Director of the FTC’s Division of Marketing Practices, Lois C. Greisman, said that during 2020 older consumers filed 334,411 fraud reports in the Consumer Sentinel database, with reported losses of more than $600 million. Because the vast majority of frauds are not reported to the government, these numbers represent only a fraction of the older adults harmed by fraud. Romance scams; prize, sweepstakes and lottery scams; and business impersonator scams caused the highest aggregate reported losses to older adults, according to the testimony. Older adults submitted over 26,518 fraud reports related to COVID-19 in 2020 with $104 million in reported losses. The testimony reiterated the FTC’...

The Federal Trade Commission is sending refund checks totaling nearly $5 million to people who lost money to a cramming scheme that added charges to their home phone bills without their permission. The refunds stem from money the FTC collected from a group of defendants who admitted that they violated a 1999 FTC settlement order that prohibited them from unauthorized billing. For years, the defendants, Billing Services Group (BSG), operated as a phone billing aggregator, passing charges from third parties to telephone companies so that those charges could be placed on consumers’ landline telephone bills. The defendants admitted that they did not vet the charges before processing them and did not investigate consumer complaints about unauthorized charges. The FTC will be sending 86,752 checks averaging about $56 each. People who receive checks should deposit or cash them within 90 days, as indicated on the check. Recipients who have questions about their checks can call the refund...

Policy statement affirms that covered companies that hold fertility, heart health, glucose levels and other health data must notify consumers in the event of a breach The Federal Trade Commission today issued a policy statement affirming that health apps and connected devices that collect or use consumers’ health information must comply with the Health Breach Notification Rule, which requires that they notify consumers and others when their health data is breached. In a policy statement  adopted during an open meeting, the Commission noted that health apps, which can track everything from glucose levels for those with diabetes to heart health to fertility to sleep, increasingly collect sensitive and personal data from consumers These apps have a responsibility to ensure they secure the data they collect, which includes preventing unauthorized access to such information. As part of the American Recovery and Reinvestment Act of 2009, Congress included specific provisions to strengthen p...

The Federal Trade Commission and the Department of Justice’s Antitrust Division today issued a joint statement detailing antitrust guidance for businesses taking part in relief efforts and those involved in rebuilding communities affected by Hurricane Ida without violating the antitrust laws. “When a disaster like Hurricane Ida strikes, it’s unconscionable for any company to exploit the tragedy for their own financial gain,” said Holly Vedova, Acting Director of the FTC’s Bureau of Competition. “We’re committed to working with our partners to crack down on abusive and illegal practices and protecting the people affected by the disaster so they can focus on recovering.” “The Antitrust Division and its law enforcement partners will not tolerate businesses and individuals who prey upon hurricane victims or seek to corrupt relief efforts,” said Acting Assistant Attorney General Richard A. Powers of the Antitrust Division. “In the aftermath of Hurricane Ida, the division’s Procurement...

In joint action, the FDA also warns the companies they may be violating the law The Federal Trade Commission sent cease-and-desist letters to 10 companies suspected of advertising unproven treatments or cures for diabetes, ordering the companies to stop making unsubstantiated claims within 15 days or face potential legal action by the FTC. “Out-of-control insulin prices are driving Americans to turn to questionable products rather than proven treatments,” said Samuel Levine, Acting Director of the FTC’s Bureau of Consumer Protection. “The FTC and FDA are joining forces to call out 10 companies for selling supposed diabetes treatments that don’t appear to be supported by sound science.” The FTC demands were issued jointly with U.S. Food and Drug Administration (FDA) warning letters, in which the FDA warned the companies that their diabetes products are both unapproved and misbranded, in violation of the Federal Food, Drug, and Cosmetic Act (FD&C Act). The FTC’s cease and desist dem...

The Federal Trade Commission approved final rules that would bring several rules that implement parts of the Fair Credit Reporting Act (FCRA) in line with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). In separate notices, which will be published in the Federal Register shortly, the FTC approved largely technical changes that would clarify that five FCRA rules enforced by the FTC apply only to motor vehicle dealers. The Dodd-Frank Act, enacted in 2010, transferred rulemaking authority related to parts of the FCRA to the Consumer Financial Protection Bureau, narrowing the FTC’s FCRA rulemaking authority. The final revisions do not make substantive changes to the rules. The FTC sought comment on the proposed rule changes last year. The changes affect these rules: Address Discrepancy Rule , which outlines the obligations of users of consumer reports when they receive a notice of address discrepancy from a nationwide consumer reporting agency (CRA); Affil...