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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.
  • 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.
  • 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.
  • 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.

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.

February 5, 2105

A group of Utah-based defendants led by Philip J. Danielson and his company, Danielson Law Group, settled FTC charges that they broke the law by conning consumers into paying hefty fees for worthless mortgage relief services. The five proposed orders settling the FTC’s charges ban the defendants from offering mortgage assistance relief services and from participating in the debt relief industry. According to the FTC, defendants lured consumers into paying $500 to $3,900 by falsely promising that attorneys would negotiate loan modifications that would substantially reduce the consumers’ mortgage payments. The complaint also alleged that the defendants used the name Danielson Law Group and other attorney or law firm names to look like they had lawyers all over the country, even though many consumers never met or spoke to an attorney. FTC

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
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