FTC Enforcement

January 5, 2016

The creators and marketers of the Lumosity “brain training” program have agreed to settle FTC charges alleging that they deceived consumers with unfounded claims that Lumosity games can help users perform better at work and in school, and reduce or delay cognitive impairment associated with age and other serious health conditions. As part of the settlement, Lumos Labs, the company behind Lumosity, will pay $2 million in redress and will notify subscribers of the FTC action and provide them with an easy way to cancel their auto-renewal to avoid future billing. FTC

December 22, 2015

Participants in an alleged credit card “laundering” scheme have agreed to settle FTC charges that they illegally helped provide access to payment networks, thereby enabling scammers to place bogus charges on consumers’ credit cards. According to the FTC’s complaint, PayBasics, Todd Hatch and Jimmy Shin helped the defendants behind the Tax Club fraud to open and maintain merchant accounts used to process credit card payments for sales made by a number of different third-party scammers. The defendants in the Tax Club work at home scheme settled FTC charges last year. FTC

December 17, 2015

LifeLock will pay $100 million to settle FTC contempt charges that it violated the terms of a 2010 federal court order that requires the company to secure consumers’ personal information and prohibits the company from deceptive advertising. This is the largest monetary award obtained by the Commission in an order enforcement action. FTC

December 9, 2015

The FTC announced complaints and proposed court orders barring four national retailers from mislabeling and advertising rayon textiles as made of “bamboo,” and requiring them to pay civil penalties totaling $1.3 million. Under the court orders settling the FTC’s charges, Bed Bath & Beyond Inc. will pay $500,000; Nordstrom, Inc. will pay $360,000; J.C. Penney Company, Inc. will pay $290,000; and Backcountry.com LLC will pay $150,000 for allegedly violating the FTC Act and the agency’s Textile Rules. FTC

December 1, 2015

Athletic apparel company Tommie Copper, Inc. and its founder have agreed to pay $1.35 million to settle FTC charges that they deceptively advertised the company’s copper-infused compression clothing would relieve severe and chronic pain and inflammation caused by arthritis and other diseases. Tommie Copper’s proposed settlement with the FTC also requires the company and its founder and chairman Thomas Kallish to have competent and reliable scientific evidence before making future claims about pain relief, disease treatment, or health benefits. FTC

November 13, 2015

A federal court granted a request by the FTC to shut down a tech support scam that allegedly bilked consumers out of more than $17 million by pretending to represent Microsoft, Apple and other major tech companies. According to a complaint filed by the FTC, the Commonwealth of Pennsylvania Office of Attorney General and State of Connecticut Office of Attorney General, the defendants in the case used internet advertisements and popups that appeared to be from well-known technology companies to lure consumers into calling them. FTC

November 11, 2015

The FTC filed a lawsuit in federal court to stop a dietary supplement marketer from making misleading claims that its product can help treat and even cure people who are addicted to opiates, including prescription pain medications and illegal drugs such as heroin. According to the FTC’s complaint against Sunrise Nutraceuticals, LLC, the company, based in Boca Raton, Florida, deceptively claims that its dietary supplement Elimidrol, a “proprietary blend” of herbs and other compounds, alleviates opiate withdrawal symptoms and increases a user’s likelihood of overcoming opiate addiction. FTC

November 2, 2015

Following a public comment period, the FTC has approved a final consent order with Nice-Pak Products, Inc., requiring it to stop advertising moist toilet tissue and cloth as flushable or safe for sewer or septic systems unless it can substantiate those claims. FTC

October 26, 2015

The operators of an advance fee recovery scheme that falsely claimed it could recover money for consumers that they had lost to telemarketing scams will be banned from selling recovery services, and from telemarketing, under a court order. The court order resolves a 2014 FTC complaint that charged Consumer Collection Advocates and Michael Robert Ettus with illegally collecting money from consumers, many of them elderly people harmed by timeshare resale and precious metal investment frauds. FTC

October 20, 2015

The operators of an alleged tech support scam, Pairsys, Inc., agreed to settle FTC charges that they tricked consumers into paying millions of dollars for technical support services they did not need and software that was otherwise free. Under the settlement, the company and its owners, Tiya Bhattachara and Uttam Saha, are required to turn over multiple real estate properties as well as the contents of numerous bank accounts, and to give up the leases on two luxury cars. FTC