FTC Enforcement

March 3, 2016

A Utah man and three companies he controls have agreed to settle FTC charges that they assisted a deceptive work-at-home scheme that the FTC charged, in February 2014, with conning millions of dollars from consumers. The scheme, which did business as Coaching Department and Apply Knowledge, among other names, falsely promised consumers they could earn thousands of dollars a month by purchasing business coaching services. Under the settlement order, Ken Sonnenberg, Apply Knowledge LLC, eVertex Solutions LLC, and Supplier Source LLC are prohibited from making claims, or assisting others in making claims, about likely earnings without reliable, written substantiation. The order imposes a $500,000 judgement against the companies. FTC

February 24, 2016

The FTC has charged a debt relief operation with falsely representing to financially distressed homeowners and student loan borrowers that it would help get their mortgages and student loans modified. According to the FTC’s complaint, Good EBusiness LLC, using the name The AAP Firm, and Tobias West deceptively marketed home loan modification services and illegally charged an advance fee of between $1,000 to $5,000. The agency alleges that the defendants falsely claim that they can lower consumers’ monthly mortgage payments, often quoting a specific amount, and reduce their mortgage interest rates, usually within a few months, and falsely promise full refunds if they fail. FTC

February 19, 2016

The FTC has charged online distance education school Stratford Career Institute with misleading consumers about its high school equivalency program that the agency alleges failed to meet the basic requirements set by most states. In its complaint, the FTC alleges that Stratford’s extensive advertising for its high school program included multiple references to a “high school diploma” leading to an increase in earning potential, access to better jobs and promotions, and the ability to apply for higher education. The FTC’s complaint alleges that Stratford’s high school program fell short of its promises, meaning thousands of students nationwide paid as much as $989 for a diploma that could not meet their educational or career needs. FTC

February 11, 2016

The FTC has charged two separate office supply operations with targeting non-profit organizations and small businesses, such as child care centers, educational institutions, churches, and hospitals, and tricking them into paying for overpriced office and cleaning supplies they never ordered. In the California case, Telestar Consulting Inc., also doing business as Kleritec and United Business Supply, and Karl Wesley Angel, allegedly used a variety of tactics to persuade consumers to pay for unordered merchandise. The defendants in the Maryland case are American Industrial Enterprises LLC, Easton Chemical Supply Inc., Lighting X-Change Company LLC, LMS Lighting & Maintenance Solutions LLC, Werner International Enterprises Inc., Benjamin Cox, Vincent Stapleton and John Tharrington. The complaint also names a relief defendant, TBC Companies Inc., that profited from the scheme. FTC

February 5, 2016

Two Maine-based marketers of weight-loss supplements and their owners will surrender substantial personal and business assets and will be prohibited from making deceptive claims about health products and engaging in deceptive marketing practices under a settlement reached with the FTC and the State of Maine’s Office of the Attorney General. The agencies’ joint complaint charges Anthony Dill, his wife Staci Dill, and their two companies, Direct Alternatives and Original Organics LLC, with violating the FTC Act and Maine consumer protection laws in connection with their promotion and sale of weight loss supplements AF Plus and Final Trim. In total, the defendants sold more than $16 million worth of the two products over the past four years. The companies have ceased all sales. FTC

February 2, 2016

The FTC filed suit against Chemence, Inc., an Ohio corporation, alleging that the company is deceiving consumers by making Made in USA claims for their strong, fast-acting glues such as Kwik Frame, Kwik Fix, and Krylex, which are produced using a significant amount of imported chemicals. “For many shoppers, a claim that a product is made in the USA is a big selling point,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Companies should not overstate the amount of U.S. content their products actually contain.” FTC

January 28, 2016

General Motors Company, Jim Koons Management and Lithia Motors Inc. have agreed to settle separate FTC administrative complaint allegations that each touted how rigorously they inspect their cars, yet failed to disclose that some of the used cars they were selling were subject to unrepaired safety recalls. Jim Koons Management, which has 15 dealerships in the Mid-Atlantic region, and Oregon-based Lithia Motors Inc., which has more than 100 stores in the West and Midwest, are two of the nation’s largest used car dealers. FTC

January 27, 2016

The FTC has filed suit against the operators of DeVry University, alleging that DeVry’s advertisements deceived consumers about the likelihood that students would find jobs in their fields of study, and would earn more than those graduating with bachelor’s degrees from other colleges or universities. “Millions of Americans look to higher education for training that will lead to meaningful employment and good pay,” said FTC Chairwoman Edith Ramirez. “Educational institutions like DeVry owe prospective students the truth about their graduates’ success finding employment in their field of study and the income they can earn.” FTC

January 9, 2016

The FTC and New York State Attorney General have charged the marketers of the dietary supplement Prevagen with making false and unsubstantiated claims that the product improves memory, provides cognitive benefits, and is “clinically shown” to work. The extensive national advertising campaign for Prevagen, including TV spots on national broadcast and cable networks such as CNN, Fox News, and NBC, featured charts depicting rapid and dramatic improvement in memory for users of the product. The FTC alleges that the defendants enticed consumers to spend anywhere from $24 to $68 for bottles of 30 supplement pills by touting the product’s active ingredient – a protein derived from jellyfish – to improve memory and reduce memory problems associated with aging. In fact, the complaint alleges, the marketers relied on a study that failed to show that Prevagen works better than a placebo on any measure of cognitive function. FTC

January 8, 2016

After a public comment period, the FTC approved a final order resolving the Commission’s complaint against Craig Brittain, alleging he used deception to acquire and post intimate images of women, then referred them to another website he controlled, where they were told they could have the pictures removed if they paid hundreds of dollars. Under the terms of the settlement, Brittain is required to permanently delete all of the images and other personal information he received during the time he operated the site. He will also be prohibited from publicly sharing intimate videos or photographs of people without their affirmative express consent, as well as being prohibited from misrepresenting how he will use any personal information he collects online. FTC