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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.

March 27, 2019

Office Depot and its affiliated software tech support provider, Support.com, Inc. have agreed to pay $35 million to settle FTC charges of deceiving customers for over a decade in order to sell unnecessary computer repair services. The companies allegedly used a free software called PC Health Check to scan computers for security threats and maintenance needed. However, PC Health Check was programed to display a recommendation for service if the customer had answered yes to one of four questions regarding perceived computer issues. FTC

March 7, 2019

In the largest forfeiture ever obtained in a sweepstakes scam, the FTC and State of Missouri have settled with three men and corporations under their control for a record $30 million, with a suspended monetary judgment of $114 million. Kevin Brandes, William Graham, Charles Floyd Anderson were charged with sending millions of deceptive mailers primarily to elderly recipients. The mailers falsely informed recipients that they were eligible to win as much as $2 million, but failed to disclose the total fees recipients would have to pay to play. In addition to relinquishing $30 million, the three men have also been permanently banned from the business, and a court appointed receiver has been tasked with dissolving the companies. FTC

February 27, 2019

In the largest civil penalty ever obtained by the FTC in a privacy case for children under the age of 13, lip-synch video sharing app Musical.ly, now known as TikTok, has agreed to pay $5.7 million for violating the Children's Online Privacy Protection Act (COPPA). According to the FTC, during the registration process, the app collected personal information from its largely underage users—including full name, contact information, and location—without parental approval. It further refused to delete personal information requested by parents, even though its privacy setting defaulted to public, which allowed unscrupulous adults to view personal information, follow, and send direct messages to underage users within a 50-mile radius of their location. As part of the settlement, Musical.ly must remove all videos made by children under the age of 13. FTC

February 19, 2019

Teva Pharmaceuticals Ltd. has reached a settlement agreement with the Federal Trade Commission resolving three separate antitrust lawsuits.  As part of the settlement, Teva agrees not to engage in so-called reverse-payment settlement agreements that can impede consumer access to generic drugs.  In such “pay-for-delay” settlements, the drug company patent-holder pays the generic drug manufacturer allegedly infringing its patent in exchange for the alleged infringer being in position to be awarded a six-month exclusive right to market the generic drug.  The settlement still requires court approval.  FTC

December 14, 2018

A debt-relief telemarketing operator has been permanently banned from both industries and ordered to pay over $23 million to the FTC and State of Florida for violating the Federal Trade Commission Act, Telemarketing Sales Rule, and Florida Deceptive and Unfair Trade Practices Act. Under the guise of multiple shell companies, Kevin Guice and his associates sold fraudulent debt relief services to more than 10,000 unsuspecting consumers, often by calling phone numbers on the FTC's National Do Not Call Registry. In one scheme, telemarketers falsely claimed to be able to substantially and permanently lower credit card interest rates in exchange for an upfront fee of between $500 to $5,000. In another scheme, telemarketers again falsely claimed to be able to access non-existent government funds to pay off credit card debt in exchange for another upfront fee of between $2,500 to $26,000. Proceeds from the $23 million judgment will be used to pay restitution to consumers harmed by these fraudulent schemes. FTC; FL AG

November 8, 2018

For its continued failure to prevent fraudulent money transfers, MoneyGram International Inc. (MoneyGram) agreed to pay $125 million to settle allegations it violated a 2009 order with the FTC and a 2012 deferred prosecution agreement with the DOJ. Both the 2009 order and 2012 agreement had required the global money transfer business to implement certain fraud prevention measures. Instead, even though some of its locations had reached fraud rates of as high as 50%, MoneyGram allegedly failed to take action, including failing to suspend or terminate locations or employees with high fraud rates, and failing to block individuals that it should have known were committing fraud. The new settlement expands the 2009 order and 2012 agreement to apply worldwide and requires additional fraud prevention measures. DOJ; FTC; USAO MDPA

October 29, 2018

The FTC has settled with an online student loan refinancer, SoFi Lending Corps, for allegedly misrepresenting the amount that student loan borrowers could save by refinancing with their company, sometimes by double the actual amount. In calculating the savings, SoFi allegedly excluded certain borrowers and failed to disclose or disclose clearly the fact that it had made those exclusions, a violation of the FTC Act. It will face civil penalties if it violates the finalized settlement order. FTC

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
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