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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.

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

June 6, 2017

As the result of Do Not Call (DNC) litigation brought by the U.S. Department of Justice on behalf of the FTC, as well as the states of California, Illinois, North Carolina, and Ohio, a federal court in Illinois has ordered penalties totaling $280 million and strong injunctive relief against Englewood, Colorado-based satellite television provider Dish Network. The U.S. District Court for the Central District of Illinois found Dish liable for millions of calls that violated the FTC’s Telemarketing Sales Rule (TSR) — including DNC, entity-specific, and abandoned-call violations — the Telephone Consumer Protection Act (TCPA), and state law. The civil penalty award includes $168 million for the federal government, which is a record in a DNC case. The remainder of the civil penalty was awarded to the states. FTC

June 1, 2017

A Federal court has granted a request from the FTC and the State of Georgia to permanently bar the deceptive business practices of an electronics buyback company that misled consumers about the amount of money it would pay them for selling their used smartphones, tablets and other devices. The court also ordered the company’s owner to pay more than $42 million. In granting the request for default judgement, the court agreed with the allegations in the FTC’s complaint that Laptop & Desktop Repair, LLC and its owner Vadim Olegovich Kruchinin earned millions by promising to buy back consumers’ used electronic devices for much more money than the defendants actually provided. After consumers provided basic information on the company’s website about the type and condition of the electronic device they wanted to sell, the defendants would provide consumers with a quote for the amount a seller would receive for the device. Yet once consumers sent in their devices to the defendants, the defendants dropped their offer price to as little as 3 percent to 10 percent of the original quote. FTC

May 31, 2017

Two brothers have agreed to settle FTC charges that in marketing and selling their trampolines, they deceived consumers by directing them to review websites that claimed to be independent but were not, and by failing to disclose that one of the brothers posted online product endorsements without disclosing his financial interest in the sale of the products. Under an administrative consent order announced today, Son “Sonny” Le and Bao “Bobby” Le are barred from engaging in such deceptive behavior in the future and must clearly and conspicuously disclose any material connections between a reviewer or endorser and the product being reviewed. According to the FTC’s complaint, working together and using several fictitious business names, the Les marketed and sold Infinity and Olympus Pro brand trampolines on several websites. These sales websites prominently featured logos from supposedly independent review entities, including “Trampoline Safety of America,” the “Bureau of Trampoline Review,” and “Top Trampoline Review.” FTC
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