Consumer Protection and Legal Actions

The Federal Trade Commission (FTC) has opened an investigation into manufacturers of infant formula to determine if the various companies engaged in collusion on their bids for state contracts, in violation of antitrust laws.

Companies bid against one another to win contracts to supply food for the Women, Infants and Children program, which includes infant formula. The FTC says any collusion on bids would likely increase the cost of the product.

Abbott Labs, the maker of Similac infant formula, told the Wall Street Journal that it is cooperating with the investigation. Lawyers for the company have said they are unaware of any collusion and are in the dark about what triggered the probe.

The industry has drawn regulator’s attention since the COVID-19 pandemic, when a shutdown of Abbott’s main production facility, coupled with supply chain issues, created shortages in the infant formula market.

In February 2022, Abbott recalled powder formulas, including Similac, Alimentum, and EleCare, that were manufactured at its Sturgis, Mich., plant. The firm said it had received complaints related to Cronobacter sakazakii or Salmonella Newport in infants. Cronobacter sakazakii can cause fever, poor feeding, excessive crying, or low energy in infants.

In June, Abbott Labs reopened the Sturgis facility but it took several weeks to make it fully operational.

The Federal Trade Commission (FTC) has finalized its recent order and will require Epic Games, the company that makes the popular Fortnite video game, to pay $425 million to consumers.

Back in December, the FTC and Epic games reached an agreement to settle charges that the company employed dark patterns to trick users to make unwanted purchases. The FTC also charged that the company allowed children to run up large bills without their parent’s approval.

The company agreed to pay the FTC $520 million, with $425 million going to reimburse consumers.

“Fortnite’s counterintuitive, inconsistent, and confusing button configuration led players to incur unwanted charges based on the press of a single button,” the agency charged. “The company also made it easy for children to make purchases while playing Fortnite without requiring any parental consent.”

When players complained or tried to dispute the charges, the FTC charged Epic locked them out of their accounts.

What to do

If you or your children played Fortnite and ended up buying things you didn’t want, you’re probably due a refund. The FTC is in the process of setting up its compensation system.

For starters, refunds will be made to:

• Parents whose children made an unauthorized credit card purchase in the Epic Games Store between January 2017 and November 2018

• Fortnite players who were charged in-game currency (V-Bucks) for unwanted in-game items (such as cosmetics, llamas, or battle passes) between January 2017 and September 2022

• Fortnite players whose accounts were locked between January 2017 and September 2022 after disputing unauthorized charges with their credit card companies.

The FTC said it will send emails to consumers who made in-game purchases when it has developed instructions for applying for a refund. However, if you think you are eligible you should bookmark www.FTC.gov/Fortnite and check it from time to time.

It costs nothing to apply for a refund, so if you are contacted by someone claiming to be from the FTC and requesting payment, the FTC said you are dealing with a scammer. 

The Federal Trade Commission (FTC) has announced how it plans to distribute $245 million of a $520 million settlement with Epic Games, the maker of the Fortnite video game. Players and parents of children who play the game may be in line for compensation.

According to the FTC, the company charged parents and gamers of all ages for unwanted items and locked the accounts of customers who disputed wrongful charges with their credit card companies.

The FTC plans to make refunds available to:

• Parents whose children made an unauthorized credit card purchase in the Epic Games Store between January 2017 and November 2018

• Fortnite players who were charged in-game currency (V-Bucks) for unwanted in-game items (such as cosmetics, llamas, or battle passes) between January 2017 and September 2022

• Fortnite players whose accounts were locked between January 2017 and September 2022 after disputing unauthorized charges with their credit card companies.

No action is required right now

The agency has not disclosed when it plans to begin the distribution of the funds. If you believe that you are eligible for a payment, you don't need to do anything right now. 

“When we have more information about the refund program, we will post updates here and send email notices to customers who paid for in-game purchases,” the FTC said.

Officials suggest that people who think they are eligible bookmark FTC.gov/Fortnite and check back often for updates. You can also sign up here to get email updates about the refund program.

Since a lot of money is involved and so many people may be eligible for compensation, the FTC warns consumers to beware of scammers who try to take advantage of the situation. The FTC said it never asks you to pay to file a claim or get a refund. Don't pay anyone who promises you an FTC refund in exchange for a fee.

If you have been a Vonage customer and found it nearly impossible to cancel the service, the Federal Trade Commission (FTC) may have some money for you.

The agency has gone to court to stop Vonage, which provides internet phone service, from imposing “junk” fees and creating obstacles for those who try to cancel their service. The FTC alleges that the company used dark patterns to make it difficult for consumers to cancel and often continued to illegally charge them even after they spoke to an agent directly and requested cancellation. 

The FTC has negotiated a court order that, if approved, would require Vonage to pay $100 million in refunds to consumers harmed by the company’s actions. The company would also be required to make its cancellation process simple and transparent, and stop charging consumers without their consent.

“Today the FTC delivers on our commitment to protect consumers from illegal dark pattern tactics by companies that prevent consumers from canceling their services,” said Samuel Levine, director of the FTC's Bureau of Consumer Protection. “This record-breaking settlement should remind companies that they must make cancellation easy or face serious legal consequences.”

The FTC has previously served notice on companies that sell subscriptions that they must offer “clear and conspicuous” instructions for customers who want to cancel the service. A year ago the FTC issued a new policy enforcement statement that warned companies not to deploy illegal dark patterns that trick or trap consumers into subscription services. 

Rising number of complaints

At the time, the FTC said the move was a response to a rising number of complaints about the financial harms caused by deceptive sign-up tactics, including unauthorized charges or ongoing billing that is impossible to cancel.

The FTC’s policy statement puts companies on notice that they will face legal action if their sign-up process fails to provide clear, up-front information, obtain consumers’ informed consent, and make cancellation easy. The FTC said the action against Vonage is a result of that policy.

The FTC complaint against Vonage contends the company has harmed consumers by:

• Eliminating cancelation options

• Making the cancelation process difficult to complete

• Imposing “junk” fees when customers do cancel

• Continuing the charge customers even after they cancel

If the agreement is approved by the court, Vonage will pay the FTC $100 million. The agency will then distribute the money to consumers.

Can’t pay your mortgage? The Federal Trade Commission (FTC) warns homeowners who are trying to keep the proverbial wolf away from their door that there are companies who say they can help out, but they’re only helping themselves.

The FTC and California’s Department of Financial Protection and Innovation (DFPI) have secured a court order, in response to their lawsuit, suspending operations by Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, Golden Home Services America, as well as their owners.

The court agreed there was strong evidence that people were illegally charged thousands of dollars up-front for the false promise that the company would help the homeowner out by negotiating lower interest rates or monthly payments on their mortgage.

The suit also claimed Home Matters led people to believe the company was connected with government mortgage relief programs and COVID-19 relief programs that the company said it could enroll them in.

Additionally, the FTC said that Home Matters told people to stop paying and communicating with their mortgage companies for three months, the estimated time the company said it would take to get the modification completed.

FTC said that in many cases, Home Matters never got the promised modification. It said people not only lost the money they paid Home Matters, but also had to pay their mortgage lenders more to avoid foreclosure.

Adding insult to injury, the agency said many people ended up with lower credit scores, had their homes placed in foreclosure, or even lost their homes completely.

In making its ruling the U.S. District Court for Central California ordered Home Matters and its affiliates to temporarily suspend operations pending trial or settlement. 

"Weighing the equities and considering Plaintiffs’ likelihood of ultimate success on the merits, a temporary restraining order with an asset freeze, the appointment of a temporary receiver, expedited discovery, and other equitable relief is in the public interest, the court ruled. 

If making a mortgage payment becomes a problem…

FTC guidelines state "It's illegal to charge upfront fees. You can't collect money from a customer unless you deliver – and the customer agrees to – a written offer of mortgage relief from the customer's lender or servicer." 

So, what’s someone to do in this situation? Among the pieces of advice the agency passes out, one word to the wise is that anyone who’s having trouble paying their mortgage or has received a foreclosure notice should first reach out to their mortgage servicer, even if they’re already in foreclosure. 

Another safety net is talking to a certified housing counselor for free. The U.S. Department of Housing and Urban Development (HUD) provides a searchable list of approved housing counseling agencies across the country and can be accessed here.