FTC Enforcement

January 30, 2015

The FTC reached settlements with First American Title Lending and Finance Select, two car title lenders, that will require them to stop their use of deceptive advertising to market title loans. The FTC charged that the companies advertised, both online and in print, zero percent interest rates for a 30-day car title loan without disclosing important loan conditions or the increased finance charge imposed after the introductory period ended. “This type of loan is risky for consumers because if they fail to pay, they could lose their car – an asset many of them can’t live without,” said Jessica Rich, director, FTC’s Bureau of Consumer Protection. “Without proper disclosures, consumers can’t know what they’re getting, so when we see deceptive marketing of these loans we’re going to take action to stop it.” FTC

January 28, 2015

TracFone, the largest prepaid mobile provider in the U.S., has agreed to pay $40 million to the FTC to settle charges that it deceived millions of consumers with hollow promises of “unlimited” data service. The FTC’s complaint alleges TracFone advertised prepaid monthly mobile plans for about $45 per month with “unlimited” data under various brands, including Straight Talk, Net10, Simple Mobile, and Telcel America. But despite emphasizing unlimited data in its advertisements, TracFone drastically slowed or cut off consumers’ mobile data after they used more than certain fixed limits in a 30-day period. FTC

January 26, 2015

Lindsey Duncan, Pure Health LLC, and Genesis Today, Inc. have agreed to settle FTC charges that they deceptively touted the supposed weight-loss benefits of green coffee bean extract through a campaign that included appearances on The Dr. Oz Show, The View, and other television programs. Under the settlement, the defendants are barred from making deceptive claims about the health benefits or efficacy of any dietary supplement or drug product, and will pay $9 million for consumer redress. “Lindsey Duncan and his companies made millions by falsely claiming that green coffee bean supplements cause significant and rapid weight loss,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “This case shows that the Federal Trade Commission will continue to fight deceptive marketers’ attempts to prey on consumers trying to improve their health.” FTC

January 20, 2015

Focus Education, a Texas company that makes a computer game, Jungle Rangers, settled FTC charges that require them to stop making unsubstantiated claims that the game permanently improves children’s focus, memory, attention, behavior, and school performance, including for children with attention deficit hyperactivity disorder (ADHD). “This case is the most recent example of the FTC’s efforts to ensure that advertisements for cognitive products, especially those marketed for children, are true and supported by evidence,” said Jessica Rich, Director of the Bureau of Consumer Protection. “Many parents are interested in products that can improve their children’s focus, behavior, and grades, but companies must back up their brain training claims with reliable science.” FTC

January 16, 2015

Two payday lending companies, AMG Services, Inc. and MNE Services, Inc., have settled FTC charges that they violated the law by charging consumers undisclosed and inflated fees. Under the proposed settlement the companies will pay $21 million – the largest FTC recovery in a payday lending case – and will waive another $285 million in charges that were assessed but not collected. The FTC noted that “the settlement requires these companies to turn over millions of dollars that they took from financially-distressed consumers, and waive hundreds of millions in other charges.” FTC

January 6, 2015

The FTC has approved a final amendment to its Cooling-Off Rule that increases the exclusionary limit for certain “door-to-door” sales. The Cooling-Off Rule previously provided that it is unfair and deceptive for sellers engaged in “door-to-door” sales valued at more than $25 to fail to provide consumers with disclosures regarding their right to cancel the sales contract within three business days of the transaction. Under the final rule, the revised definition of “door-to-door sales” distinguishes between sales at a buyer’s residence and those at other locations. The revised definition retains coverage for sales made at a buyer’s residence that have a purchase price of $25 or more, and it increases the purchase price to $130 or more for all other covered sales at temporary locations. FTC

December 31, 2014

The FTC has approved a final order settling charges that Snapchat deceived consumers with promises about the disappearing nature of messages sent through the service. According to the FTC’s complaint, Snapchat also deceived consumers over the amount of personal data it collected and the security measures taken to protect that data from misuse and unauthorized disclosure. The settlement prohibits Snapchat from misrepresenting the extent to which it maintains the privacy, security, or confidentiality of users’ information. In addition, the company will be required to implement a comprehensive privacy program that will be monitored by an independent privacy professional for the next 20 years. FTC

December 23, 2014

The FTC charges data broker LeapLab with selling the sensitive personal information of hundreds of thousands of consumers – including Social Security and bank account numbers – to scammers who allegedly debited millions from their accounts. According to the FTC’s complaint, the company bought payday loan applications of financially strapped consumers, and then sold that information to marketers whom it knew had no legitimate need for it. At least one of those marketers, Ideal Financial Solutions – a defendant in another FTC case – allegedly used the information to withdraw millions of dollars from consumers’ accounts without their authorization. FTC

December 22, 2014

The FTC charged Your Yellow Book Inc., Brandie Michelle Law, Dustin Robert Law, and their father, Robert Ray Law with defrauding small businesses and nonprofits by charging them for online business directory listings they had not ordered or received – their deceptive tactics included unsolicited telemarketing calls and bogus invoices with the walking fingers image often associated with local yellow page directories. Defendants are banned from telemarketing, and they will pay $1.7 million to reimburse consumers who lost money to the scam. FTC

December 11, 2014

A federal court has entered orders against 22 mortgage company defendants who offered financially strapped consumers fake home-loan modification services that the FTC claims violated the FTC Act and the Mortgage Assistance Relief Services Rule. The FTC alleged the defendants operated as two loan modification enterprises, each of which falsely claimed it would provide legal help to save consumers’ homes from foreclosure and lower their mortgage payments. The enterprises then charged up-front fees of between $2,500 and $3,500, but delivered little or no help, deepening the consumers’ financial distress. The orders impose monetary judgments in varying amounts to remedy the almost $51 million of consumer injury from the defendants’ activities and collectively ban the defendants from advertising, promoting, or selling unsecured debt relief products and services; misrepresenting any material facts related to financial products or services; misrepresenting material facts related to any other types of services; and benefiting from any consumer information they collected through the scheme. FTC