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FTC Enforcement Actions

The Federal Trade Commission (FTC) is a federal agency charged with preventing anticompetitive, deceptive, and unfair business practices. The FTC can bring enforcement actions under U.S. antitrust laws and to stop unfair, deceptive and fraudulent business practices. The FTC does not have any authority to pay financial rewards to whistleblowers; however, conduct that is regulated by the CFTC may also give rise to a claim under a different whistleblower reward program.

Below are summaries of recent FTC settlements or successful enforcement actions. If you believe you have information about fraud which could give rise to a claim under a whistleblower reward program, please contact us to speak with one of our experienced whistleblower attorneys.

October 18, 2018

The FTC has settled charges of deceptive health claims with a California doctor and his stem cell therapy clinic for a suspended $3.31 million. Dr. Bryn Jarald Henderson and his companies, Regenerative Medical Group and Telehealth Medical Group, had claimed they could treat a multitude of diseases, such as cerebral palsy, chronic kidney disease, heart disease, macular degeneration, multiple sclerosis, osteoarthritis, Parkinson's, strokes, traumatic brain injury, and even blindness through a procedure they called "amniotic stem cell therapy." Between 2014 and 2017, they offered therapy injections ranging from $5,000 to $15,000, earning at least $3.31 million in total. However, there is no evidence to show that the therapy works as claimed. Along with the suspended judgment (contingent on a fine of $525,000), Henderson and the clinic have also been asked to notify customers of the settlement. FTC

October 16, 2018

Cesare Alessandrini and his company, Forms Direct, Inc. (also known as American Immigration Center), have agreed to pay $2.2 million in restitution to customers defrauded by the company's deceptive websites, which used URLs and graphics that made them appear affiliated with U.S. Citizenship and Immigration Services (USCIS). After customers provided their personal information and paid between $120 to $300, many realized that they were not in fact on a government website, but rather the website of a form preparation service. As part of the settlement, Forms Direct has been ordered to clearly disclose its real identity to future customers, as well as inform them that they must submit their completed forms and fees separately to the government. FTC

October 16, 2018

A Texas-based background screening company, RealPage, has agreed to pay the FTC $3 million to settle charges that it violated the Fair Credit Reporting Act (FCRA). According to the FTC, from about 2012 to 2017, RealPage used overly broad criteria and did not do enough to filter out non-responsive hits that came up in criminal record searches, causing countless people to be wrongly associated with criminal records and possibly turned down for housing and other opportunities. FTC

September 27, 2018

Refund checks cut from the record amount of $505 Million will be mailed to consumers who were victims of an enormous payday lending scheme which was run by AMG Services, Inc., and CEO of AMG Services, Scott A. Tucker. Tucker’s attorney, Timothy Muir, was also involved. The refunds come out of the $1.3 billion civil court judgment and order against Tucker and his companies. They were found guilty of violating the FTC Act and the Truth in Lending Act for deceiving and taking advantage of millions of consumers from 1997 to 2013. They charged consumers exceedingly high interest rates and fees on short-term loans. Additionally, they worked out a scam to automatically withdraw interest payments from a consumer’s loan balance without touching the principal, leading to loan renewal on the next payday. In October, 2017, criminal convictions were obtained against Tucker by the U.S. Attorney’s Office for the Southern District of New York. He was sentenced in 2018 to 16 years and 8 months in prison. Tucker’s attorney was sentenced to seven years. The Federal Trade Commission and U.S. Department of Justice are working together to mail the 1,179, 803 refund checks across the country. DOJ; FTC  

September 17, 2018

A temporary restraining order has been issued by a federal court against two brothers, Steven and Kevin Shayan, and their four companies for allegedly using false marketing claims in online rental listings for low income housing, a violation of the FTC Act. Websites such as ApartmentHunterz.com and WeTakeSection8.com required housing hunters to pay weekly subscriptions of $14.99 or bimonthly subscriptions of $49 to access listings that were supposedly exclusive and up to date. On the contrary, many of the listings were no longer active or did not accept Section 8 housing vouchers. FTC

September 6, 2018

Two copycat military website operators—Sunkey Publishing, Inc. and Fanmail.com, LLC—have settled with the Federal Trade Commission (FTC) for violating the FTC Act and the FTC's Telemarketing Sales Rule (TSR). In addition to deceiving potential enlistees into providing personal information, the operators sold the information to schools as marketing leads, placed illegal telemarketing calls to people on the Do Not Call list, and gave potential enlistees the false impression that certain schools were endorsed by the military. As part of the settlement, they will turn over the websites and pay a suspended penalty of $12.1 million. FTC

July 11, 2017

Four paint companies have agreed to settle FTC charges that they deceptively promoted products as emission-free or containing zero volatile organic compounds, including during and immediately after application. Some promotions also made explicit safety claims regarding babies, children, pregnant women, and other sensitive populations. However, the FTC alleged, the companies had no evidence to support these claims. The four companies, Benjamin Moore & Co., Inc., ICP Construction Inc., YOLO Colorhouse, LLC, and Imperial Paints, LLC, have agreed to orders that would bar them from making unqualified emission-free and VOC-free claims unless, at all times during application and after, both content in and emissions from their paints are actually zero, or emissions are at “trace levels,” as defined in the orders. FTC

July 5, 2017

The FTC mailed 173,000 refund checks totaling more than $49 million to students in compensation for DeVry University’s allegedly misleading ads, which the Commission alleged deceived students about their likelihood of finding jobs in their field of study and the income level they could achieve upon graduation. According to the FTC’s complaint, DeVry deceptively claimed that 90 percent of its graduates actively seeking employment landed jobs in their field within six months of graduation and that graduates had 15 percent higher incomes one year after graduation on average than the graduates of all other colleges or universities. As part of the FTC’s $100 million settlement, the school agreed to pay $49.4 million to the FTC for partial refunds to some students and $50.6 million in debt relief. The debt forgiven included the full balance owed—$30.35 million—on all private unpaid student loans that DeVry issued to undergraduates between September 2008 and September 2015, and $20.25 million in student debts for items such as tuition, books and lab fees. FTC

June 23, 2017

The FTC has charged a North Carolina debt collection operation and its owner with taking money from consumers for fake debts they did not owe. The action is part of the FTC’s crackdown on “phantom” debt collection. According to the FTC, Anthony Swatsworth, ACDI Group LLC, and Solutions to Portfolios LLC bought phony payday loan debts – loans supposedly made by “500FastCash” – from SQ Capital through a debt broker, and continued to collect on those debts even after learning the debts were fake and receiving a full refund for their purchase. Almost immediately after ACDI started collecting on the loans, consumers complained and provided evidence that they had never taken out a 500FastCash loan. Other consumers complained that they did not have an outstanding balance. When the defendants reported the complaints to the broker, the broker returned the defendants’ money and told the defendants to stop collecting on the phony debts. Yet the defendants kept collecting from consumers for at least seven more months. FTC

June 14, 2017

Following a public comment period, the FTC has approved a final order settling charges that outpatient kidney dialysis chain DaVita, Inc.’s $358 million acquisition of competitor Renal Ventures Management LLC would have been anticompetitive. First announced in March 2017, the complaint alleged that the acquisition would lead to significant anticompetitive effects in five New Jersey markets (Brick, Clifton, Somerville, Succasunna, and Trenton), and in two Dallas-area markets (Denton and Frisco). The complaint alleged that without the competition in these markets, and with new entry unlikely to be timely or sufficient, the likely result would be reduced quality and higher prices for dialysis patients. DaVita agreed to divest the seven clinics to PDA-GMF Holdco, LLC, a joint venture between Physicians Dialysis and GMF Capital LLC. FTC
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