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Other Federal Enforcement Actions

					
Numerous federal agencies have authority to institute enforcement proceedings against wrongdoers.  These agencies include:


    

  • The Department of the Treasury and its divisions including the Financial Crimes Enforcement Network (FINCEN), which is responsible for safeguarding the U.S. financial system from illicit use and money laundering including through enforcement of the Bank Secrecy Act, and the Office of Foreign Assets Control (OFAC), which enforces economic and trade sanctions. Whistleblowers with knowledge of violations of the Bank Secrecy Act can submit a claim under the Anti-Money Laundering Whistleblower Program.  Violations of other laws enforced by the Department of Treasury may give rise to claims under different whistleblower reward programs.
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  • The Federal Trade Commission (FTC), which is 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 FTC may also give rise to a claim under a different whistleblower reward program.
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  • The Consumer Financial Protection Bureau (CFPB), created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which regulates the offering and provision of consumer financial products or services under the federal consumer financial laws, and has the authority to bring enforcement actions against financial service providers. While the CFPB accepts tips from whistleblowers, and applicable laws offer whistleblowers protection from retaliation, there is currently no provision for CFPB whistleblowers to receive financial rewards. However, conduct that is regulated by the CFPB may also give rise to a claim under a different whistleblower reward program.
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  • The Environmental Protection Agency, which enforces federal environmental laws and regulations. The EPA does not currently have any authority to pay financial rewards to whistleblowers; however, conduct that is regulated by the EPA may also give rise to a claim under a different whistleblower reward program, and a number of federal environmental laws protect government or private employees reporting environmental violations under the statutes from retaliation.
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Below are summaries of recent settlements and successful enforcement actions involving these agencies. 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.

				

			

			
						
					
			

	
		
		

			

				
				
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 28, 2015

				 The CFPB filed a proposed consent order in the Northern District of Georgia that would require Frederick J. Hanna & Associates and its principal partners to pay $3.1 million to the Bureau’s Civil Penalty Fund and bar them from illegal debt-collection practices. The CFPB’s complaint charges the firm with intimidating consumers with deceptive court filings and introducing faulty or unsubstantiated evidence in court. CFPB				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
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				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
													  Money Laundering, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 17, 2015

				 The CFPB took separate actions against T3Leads and Eric V. Sancho, who operated Lead Publisher, for reselling sensitive personal data to lenders and debt collectors, allegedly exposing millions of consumers to harassment and deceit. CFPB				 			
	
		
		
	


 			




	
		
		

			

				
				
December 17, 2015

				 The CFPB ordered CarHop, one of the country’s biggest “buy-here, pay-here” auto dealers, and its affiliated financing company, Universal Acceptance Corporation, to cease their illegal activities and pay a $6,465,000 civil penalty for providing damaging, inaccurate consumer information to credit reporting companies. CFPB				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
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 16, 2015

				 The CFPB ordered EZCORP, Inc., a small-dollar lender, to refund $7.5 million to 93,000 consumers, pay $3 million in penalties, and stop collection of remaining payday and installment loan debts owed by roughly 130,000 consumers for illegal debt collection practices. The CFPB found that EZCORP collected debts from consumers through unlawful in-person collection visits at their homes or workplaces, risked exposing consumers’ debts to third parties, falsely threatened consumers with litigation for non-payment of debts, and unfairly made multiple electronic withdrawal attempts from consumer accounts, causing mounting bank fees. CFPB				 					 

						
Tagged in:
													  Financial and Investment Fraud, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
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 7, 2015

				 The CFPB filed a proposed consent order that would require EOS CCA, a Massachusetts debt collection firm, to overhaul its debt collection practices, refund at least $743,000 to consumers, and pay a $1.85 million civil money penalty for (1) reporting and collecting on old cellphone debt that consumers disputed and EOS CCA did not verify and (2) providing inaccurate information to credit reporting companies about the debt and failing to correct reported information that it had determined was inaccurate. CFPB				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			




	
		
		

			

				
				
December 3, 2015

				 The CFPB ordered a nationwide credit reporting company, Clarity Services, Inc., to pay an $8 million penalty, halt its illegal practices, and improve the way it investigates consumer disputes and obtains, sells, and resells consumer credit reports. The company had illegally obtained consumer credit reports and failed to appropriately investigate consumer disputes. CFPB				 					 

						
Tagged in:
													  Misrepresentations, 
												
						

					
	
							
	
		
		
	


 			


											

						

								

									
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