Consumer Protection and Legal Actions

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.

The Federal Trade Commission (FTC) has filed an administrative complaint against HomeAdvisor over allegations that the company misrepresented the quality and the source of project leads to businesses, as well as the odds that those leads would result in actual jobs.

The agency alleges that HomeAdvisor has been making false, misleading, or unsubstantiated claims about the quality and source of the leads the company sells to service providers since 2014. Those service providers include general contractors and small lawn care businesses that used the company's service to search for potential customers.

The HomeAdvisor model is dependent on gig economy workers who offer services like remodeling, cleaning services, and small appliance installation. Once service providers join HomeAdvisor’s network and pay an annual membership fee, the company provides leads that service providers use to contact potential customers.

“Gig economy platforms should not use false claims and phony opportunities to prey on workers and small businesses,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s administrative complaint against HomeAdvisor shows that the FTC will use every tool in its toolbox to combat dishonest commercial practices.”

Misrepresenting leads

The FTC accused HomeAdvisor of misrepresenting the quality of its leads to service providers by informing them that they had a higher chance of landing more home improvement jobs by using its system than its in-house data actually showed. Officials also alleged that HomeAdvisor possibly deceived service providers about the price of an optional one-month subscription to a software platform that HomeAdvisor pitched as an add-on to the leads it sold.

The FTC said service providers were told that they would get to use that platform for free for their first month with an annual membership package. In reality, the first month was not free and resulted in a package that cost $59.99 more than “properly informed” service providers might have otherwise paid.

The FTC stated that service providers ultimately wasted time following up on leads that were below the quality that HomeAdvisor guaranteed. They also allegedly wasted time seeking refunds from the company for those less-than-favorable leads.

In response to the FTC's accusations, an Angi spokesperson told ConsumerAffairs that the agency's claims were meritless and that it plans to "vigorously fight" the allegations.

"The FTC allegations against HomeAdvisor are based on a false narrative using a small handful of cherry picked, incomplete, and out-of-context recorded sales calls - to serve their agenda," the spokesperson said.

Consumer questions vetting of professionals

HomeAdvisor scores a very respectable 4.4 stars out of a possible 5 stars from ConsumerAffairs reviewers, but there were some instances in which the process fell apart for consumers.

“I was looking for someone to deliver and install mulch. A Google search gave me several options with 800 numbers and when I called all of them (3), they were all to Home Advisor,” Deborah from Orlando stated in her ConsumerAffairs review. 

“Finally I gave my project information to Home Advisor and they gave me 4 pro referrals. I called all 4. Two (2) did not provide the service I wanted. One (1) did not return my calls. I did speak with one (1) landscaper and we engaged in text dialog about the project for a couple of weeks, including his availability and price. When I confirmed the quote and asked for a scheduled date, he stopped responding all together. When I asked him for the courtesy of a response whether he could do the job or not, nothing.”

Deborah’s said there appeared to be a lack of transparency on HomeAdvisor’s part when she wanted to write a review about her situation.

“When I tried to write a review for Hector on Home Advisor, because I did not hire the pro, Home Advisor sends my review to the pro (Hector) but does not publish it on their website. What good is that? I did not hire him because he ‘ghosted’ me when it came time to commit to the job,” she said in her review. “Texting was his request, not mine. Beware of Home Advisor using different phone numbers on search engines to drive business their way. Their vetting of pros is apparently not satisfactory in all cases.”

The Federal Trade Commission (FTC) wants to see if it can take a larger bite out of corporate crime. The agency announced Friday that it will expand its criminal referral program and intensify its commitment towards combating misconduct it uncovers in its antitrust and consumer protection investigations.

The FTC says the new program should also allow it to speed up the process of enforcing those efforts, giving local, state, federal, and international agencies the wherewithal to bring criminals to justice sooner.

“At a time when major corporate lawbreakers can treat civil fines as a cost of doing business, government authorities must ensure that criminal conduct is followed by criminal punishment,” FTC Chair Lina M. Khan said in an announcement.

What consumers can expect from the new program

Some of the consumer protection misconduct and antitrust violations the agency wants to hone in on include price-fixing and market allocation deals. Stopping bid-rigging dead in its tracks -- like Pilgrim’s Pride was accused of last year -- is also high on the FTC’s list.

The agency will also be looking to ensure that lower-priced generic drugs are given a fair chance of making it to market. In one notable example, the agency charged Reckitt Benckiser Group and Indivior of using a deceptive scheme to impede lower-priced generic competition to their branded opioid addiction treatment, suboxone. The case ultimately resulted in a $1.4 billion settlement with Reckitt, guilty pleas from former Indivior executives and an Indivior subsidiary, and a civil settlement with Indivior.

The agency’s new policy allows it to use several methods to improve its cooperation with its law enforcement partners. Some of those include:

• Publicly reporting on criminal referral efforts on a regular basis to help reinforce the public’s understanding of how important the agency’s work is, and also to highlight the criminal prosecutions it’s taken on;

• Creating guidelines to ensure criminal law violations — particularly by major corporations and their executives — are identified by staff and promptly referred to criminal law enforcement agencies; and

• Holding regular meetings with federal, state, and local criminal authorities to facilitate the coordination that will enable the appropriate law enforcement partners to take up cases referred by the FTC and develop best practices to enhance this coordination.

“Today the FTC is redoubling its commitment and improving its processes to expeditiously refer criminal behavior to criminal authorities, promoting accountability and deterrence,” Khan said.

The attorneys general of 20 states have filed a formal complaint with the U.S. Postal Regulatory Commission that seeks to overturn changes to United States Postal Service (USPS) delivery standards that allow for slower mail delivery. The changes took effect on Oct. 1.

The new standards, designed to save money, expand the delivery window for some first-class mail from one to three days to one to five days. The USPS has said the slower standard would only affect 39% of first-class mail.

The 20 state officials contend that the changes are not minor. Their complaint to the agency that oversees USPS operations claims that the new standards “will transform virtually every aspect of the Postal Service, rework how the Postal Service transports mail and other products, and overhaul its processing and logistics network.”

Officials claim service has already declined

The changes are part of Postmaster General Louis DeJoy’s 10-year plan to transform the mail delivery service, but Maryland Attorney General Brian Frosh says consumers, businesses, and local governments have already been negatively impacted.

“Americans missed medications, pay and benefit checks, and more,” Frosh said. “Now Mr. DeJoy wants to swing his wrecking ball 10 years into the future.” 

Virginia Attorney General Mark Herring says areas of his state are already experiencing declines in service because of the new delivery standards. 

“Virginians depend on the postal service for so many things – paying bills and other payments, life-saving prescriptions, and other necessary goods – and it’s imperative that any changes made to USPS do not disrupt or delay service,” Herring said.

A consumer’s complaint

Some consumers seem to agree. Rose, of Courtlandt Manor, N.Y., expressed frustration earlier this month after she mailed a parcel to a friend in Alabama.

“Made a pair of slacks for a friend. Mailed them from Mohegan Lake NY. They went to Stamford CT, Jersey City NJ, Albany NY, and are currently in Western Rochester NY,” she wrote in a ConsumerAffairs review. “By the time the pants arrive in Alabama, they will be worn out. Next time I will use UPS or take Amtrak and deliver them myself.”

Connecticut Attorney General William Tong says the changes enacted by the USPS not only raise rates but “dramatically” reduce customer service. He and his colleagues say the Postal Regulatory Commission must thoroughly review the new policy.

The commission said it has received the state officials’ complaint, established a docket for the matter, “and will take it under advisement.”

The Federal Trade Commission (FTC) has refiled its antitrust lawsuit against Facebook, citing more detailed evidence of how it believes the company uses its social media dominance to engage in anti-competitive behavior.

The agency filed an amended complaint Thursday after a judge dismissed its original complaint in late June. The new filing claims that after repeated failed attempts to develop innovative mobile features for its network, Facebook instead resorted to illegal activities to maintain its dominance. 

FTC lawyers claim Facebook carried out an alleged “buy or bury” scheme, unlawfully acquiring innovative competitors with popular mobile features that were better than Facebook’s own offerings.

The complaint further alleges that Facebook “lured” app developers to its platform, carefully watched them for signs of success, and then “buried” them when they became competitive threats. 

‘Failed to compete’

“Facebook lacked the business acumen and technical talent to survive the transition to mobile,” said Holly Vedova, FTC Bureau of Competition acting director. “After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat.”

Vedova compared the alleged action to bribing emerging app competitors not to compete. 

“The antitrust laws were enacted to prevent precisely this type of illegal activity by monopolists,” Vedova said.

For its part, Facebook dismissed the FTC’s claims as “an effort to rewrite antitrust laws” and upend settled expectations of merger review. It said it has always abided by the law.

“It is unfortunate that despite the court's dismissal of the complaint and conclusion that it lacked the basis for a claim, the FTC has chosen to continue this meritless lawsuit,” Facebook said in a Twitter post.

More detailed version of the original suit

On June 28, a federal judge dismissed two antitrust lawsuits against Facebook, saying the FTC and a number of states failed to make their case that the social media giant is a monopoly.

U.S. District Judge James Boasberg ruled that prosecutors had failed to explain what social networking is or how they determined that Facebook controls more than 60% of the market. He also said the FTC had failed to show how Facebook’s business model harms the public, noting that the public pays nothing to use Facebook.

The newly-filed lawsuit is 80 pages and goes into more extensive detail than the first, filed in December 2020. The agency said it seeks to tell a more complete story about why it believes Facebook is an illegal monopolistic force.

Trading app Robinhood has been fined $70 million by the Financial Regulatory Authority (FINRA), the largest penalty imposed in the organization's history. 

On Wednesday, FINRA accused Robinhood of “systemic supervisory failures” and of hurting investors by giving them “false or misleading information.” The fines are tied to a pattern of behavior that the organization said it has seen over the course of a few years. However, the system outages that hit in March 2020, are the focus of FINRA’s sanctions. 

"The fine imposed in this matter, the highest ever levied by FINRA, reflects the scope and seriousness of Robinhood's violations," Jessica Hopper, head of FINRA's department of enforcement, said in a statement.

Under the terms of the settlement, Robinhood must pay a $57 million fine and $12.6 million (plus interest) in restitution to affected customers.

A number of violations

FINRA accused Robinhood of violations connected to options and margins trading, system outages that cost customers money, and failing to report tens of thousands of customer complaints. Although the platform said its mission was to “de-mystify finance for all,” FINRA said its own investigation found that the company has "negligently communicated false and misleading information" since September 2016.

The organization noted, for example, that 20-year-old trader Alexander Kearns believed he had a negative balance of $730,000 in his trading account just before he tragically died by suicide last year. 

“In a note found after his death, he expressed confusion as to how he could have used margin to purchase securities because, he believed, he had not ‘turned on’ margin in his account,” FINRA said. “As noted in the settlement, Robinhood also displayed to this individual (and certain other customers) inaccurate negative cash balances.”

Other alleged examples of Robinhood’s communication failures have to do with shortcomings in informing customers how much buying power they have, how much cash they have in their accounts, and the risk they face in options transactions. 

Costly ‘misstatements’

Collectively, FINRA said customers have amassed more than $7 million in losses “due to Robinhood's misstatements."

“This action sends a clear message—all FINRA member firms, regardless of their size or business model, must comply with the rules that govern the brokerage industry, rules which are designed to protect investors and the integrity of our markets,” Hopper said. “Compliance with these rules is not optional and cannot be sacrificed for the sake of innovation or a willingness to ‘break things’ and fix them later.” 

In a statement, Robinhood noted that it has made changes to the app. The company said it’s sought to improve customer support, enhance educational tools, and ensure that the platform is stable. 

"We are glad to put this matter behind us and look forward to continuing to focus on our customers and democratizing finance for all," a Robinhood spokesperson said in the statement.

A federal judge has dismissed two antitrust lawsuits against Facebook, saying the U.S. Federal Trade Commission (FTC) and a number of states failed to make their case that the social media giant is a monopoly.

U.S. District Judge James Boasberg ruled that prosecutors had failed to explain what social networking is or how they determined that Facebook controls more than 60% of the market. He also said the FTC had failed to show how Facebook’s business model harms the public, noting that the public pays nothing to use Facebook.

“The exact metes and bounds of what even constitutes [social networking] — i.e., which features of a company’s mobile app or website are included in that definition and which are excluded — are hardly crystal clear,” Boasberg wrote in his opinion. “The FTC’s inability to offer any indication of the metric(s) or method(s) it used to calculate Facebook’s market share renders its vague '60%-plus' assertion too speculative and conclusory to go forward.”

Facebook’s response

Facebook expressed satisfaction with the court’s decision and said it shows how flawed the government’s argument against it was. 

"We are pleased that today’s decisions recognize the defects in the government complaints filed against Facebook," Facebook said in a statement posted on Twitter. "We compete fairly every day to earn people’s time and attention and will continue to deliver great products for the people and businesses that use our services."

The FTC was likely less than pleased. An agency spokesperson told CNN that its lawyers are reviewing the judge’s decision to determine a course of action. One option open to the agency is filing an appeal to a higher court.

The lawsuit was seen as the government’s opening offensive against Big Tech. Some officials had argued that Facebook was too big and powerful and should be broken up. Its acquisition of smaller competitors over the years, including Instagram, has united critics on both the left and the right.

Changing antitrust laws?

In October 2020, House Democrats released a report recommending that antitrust laws be modified to require large technology companies to spin off parts of their businesses and make it harder to acquire companies in the future. In the wake of the decision, some lawmakers have said that recommendation has new urgency.

The October report, compiled over a 16-month period, investigated how Facebook and three other large technology companies operate and how they went about acquiring other companies, including potential competitors. 

While Republicans and Democrats generally agree that Washington needs to take on Big Tech, they have different motivations. Democrats have complained about what they see as anticompetitive behavior that harms consumers and stifles competition. Republicans have long maintained that Silicon Valley tech firms discriminate against conservative viewpoints.

The U.S. Postal Service (USPS) faces strong opposition to its money-saving proposal that would slow some first-class mail and make it more expensive.

The attorneys general of 20 states and the District of Columbia have filed a statement of position with the Postal Regulatory Commission that seeks to block the changes from going into effect, threatening to go to court if necessary.

In March, USPS Postmaster General and CEO Louis DeJoy proposed changing the current standard for first-class mail delivery, giving USPS more time to deliver it. He said the plan, along with an increase in first-class postage, would head off a $160 billion deficit over the next 10 years. 

"The need for the U.S. Postal Service to transform to meet the needs of our customers is long overdue," DeJoy said at the time. "Our plan calls for growth and investments, as well as targeted cost reductions and other strategies that will enable us to operate in a precise and efficient manner to meet future challenges, as we put the Postal Service on a path for financial sustainability and service excellence."

Disruptive to government functions

But the state officials, joined by leaders from New York City and San Francisco, said the plan would disrupt state government functions and urged the commission to reject the plan.

USPS currently has a goal of delivering first-class mail between one to three days. That would change to one to five days for 39% of first-class mail, a change the state officials found unacceptable.

“For nearly a year now, we have had to fight the United States Postal Service tooth and nail to fulfill its mission and provide timely delivery of mail, medications, paychecks, ballots, and other essentials to Americans across the nation,” said New York Attorney General Letitia James. “Now, instead of fixing the problems that remain delinquent a year later, Postmaster General DeJoy wants to lead the USPS in making further service cuts that would only result in more delays.”

The position statement called on the commission to require the postal service instead to focus its efforts on “correcting the mistakes” of the previous year that delayed mail delivery during the especially busy holiday season of 2020. 

The states and cities said the proposed changes would be felt with negative effects in up to 96% of U.S. ZIP codes. 

“The Postal Regulatory Commission should reject these changes and direct the USPS to take action to resume USPS service to what it once was,” the officials said. “If they don’t, we will not hesitate to use every tool at our disposal to hold the USPS accountable.”

“The Blessing Loom” is back for a summer rerun. On Monday, the Federal Trade Commission (FTC) and the state of Arkansas sued the operators of a “blessing loom” investment program -- a pyramid scheme-like scam that pitches an enormous return on investment to unwitting victims. 

The scheme involved operators convincing consumers to pay $1,400 to join their program, with the promise that the investment could lead to a potential 800% return if they could get other people to join. 

However, some victims of the scheme ended up paying over $62,000 to participate, and all of their money was allegedly used by the organizers when no more members were willing to join. In total, the FTC said the operators of “Blessings in No Time” (BINT) defrauded thousands of victims out of tens of millions of dollars. 

The couple was charged with violating the FTC Act, the Consumer Review Fairness Act, and Arkansas state consumer protection laws. 

Targeting vulnerable consumers

The agency accused BINT of taking advantage of many consumers early on in the pandemic when they were financially vulnerable. 

“The COVID-19 pandemic attacked Americans’ health and their wallets,” said Daniel Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection. “These scammers, who specifically targeted Black communities, used false promises of wealth to deceive consumers out of money at a time that Americans could least afford to lose it.”

To help convince more skeptical victims, the FTC’s complaint alleges that the defendants assured participants that they wouldn’t lose a single dime and that they could withdraw at any time and receive a full refund for everything they invested.

Just to be sure the scheme had a chance of remaining out of sight of authorities, the FTC said the defendants asked participants not to use certain payment processors or apps due to those processors having previously flagged BINT transactions. The complaint also alleges that the defendants illegally prohibited participants from posting anything about BINT on social media or the internet.

The FTC’s complaint seeks to permanently enjoin BINT’s illegal operation and provide compensation for victims who were bilked out of their money. Officials are also asking for civil penalties to be levied against the defendants under Arkansas state law.

The Federal Trade Commission (FTC) has charged Dr. Stephen Meis, medical director of Golden Sunrise Nutraceutical, with advertising a $23,000 COVID-19 “treatment” plan using unsubstantiated health claims. 

The FTC said Meis falsely stated that the plan was “scientifically proven” to treat COVID-19. Now, the agency has barred him from continuing to advertise in this deceptive manner. Meis will also pay $103,420 to the agency, and that money will be used to refund consumers who bought into the claims. 

"We rely on doctors to follow the scientific evidence when making claims about health products and conditions,” said Daniel Kaufman, Acting Director of the Bureau of Consumer Protection, said in a statement. “Helping to spread false and unproven claims about treating COVID and other diseases is that much worse when done by those in positions of trust.”

Advertised ‘disappearance’ of symptoms

In its complaint, the FTC said Golden Sunrise started advertising its COVID-19 treatment plan in March 2020. The ads went up on billboards, websites, and social media at the start of the pandemic. 

Meis claimed that the supplements, given as part of Golden Sunrise’s Emergency D-Virus plan, were “uniquely qualified to treat and modify the course of the Coronavirus epidemic in CHINA and other countries.” The advertisements also claimed that users could expect COVID-19 symptoms to simply go away.

“With increased use of one of the supplements included in the Emergency D-Virus treatment plan, disappearance of viral symptoms is expected within two (2) to four (4) days,” one advertisement stated. 

Mainly herbs and spices

The company’s supplements included ImunStem, Aktiffvate, and AnterFeerons. Advertisements for the products claimed that the supplements “are available now and once they are started, they will help alleviate the people immediately [sic] with the acute illness of the Coronavirus.”

Meis also promoted supplements that he said would help treat cancer and Parkinson’s disease, among other health conditions and diseases. Some treatments cost as much as $170,000 to $200,000. However, the FTC said the supplements consisted almost entirely of common herbs and spices and that the health claims are unsubstantiated. 

The Federal Trade Commission (FTC) has mailed millions in refunds to consumers who fell victim to a scheme carried out by Reckitt Benckiser Group and Indivior, Inc.

In a statement, the FTC said the “Suboxone Film scheme” sought to snuff out lower-priced generic competition with the branded drug Suboxone -- a prescription medication used to minimize withdrawal symptoms in patients recovering from opioid addiction. In doing so, the FTC says the company “put Americans’ health and safety at risk.” 

The agency alleged that Reckitt Benckiser and Indivior employed deceptive tactics and sought to deny consumers a lower-cost generic alternative in order to “maintain their lucrative monopoly on the branded drug.”  

The FTC stressed that it “does not tolerate the kind of deceptive practices that make it harder or more expensive to get prescription medication” -- especially in light of the ongoing opioid crisis.

“Today the check is in the mail for over 50,000 people suffering from opioid addiction – a pandemic in its own right still ravaging our communities – who were misled by these parties. While we trust the settlement has sent a strong warning to copycat companies, the FTC remains diligent in its work to promote a safe and competitive marketplace,” said FTC Acting Chairwoman Rebecca Slaughter. 

Refunds are in the mail

In its complaint, the FTC said that RB Group, through its subsidiary Indivior, developed a dissolvable oral film version of Suboxone and worked to shift prescriptions to the film version in a deceptive way.

In an attempt to get doctors and patients to switch to Suboxone Film, Reckitt and Indivior allegedly employed a “product hopping” scheme in which they said the film version of Suboxone was safer than Suboxone tablets because children are less likely to be accidentally exposed to the film product. 

“Suboxone Film contains the same active ingredients and is clinically interchangeable with Suboxone Tablets,” the complaint said. “Any differences between the two formulations are clinically insignificant.” 

A total of $59 million is being refunded to 51,875 consumers. The average payment amount is $1,139. Some victims will receive checks and others will receive prepaid debit cards. 

U.S. lawmakers are attempting to flip last week’s Supreme Court decision that takes away the Federal Trade Commission’s (FTC) ability to provide restitution to defrauded consumers. If the new ruling sticks, the FTC’s only avenue to compensate customers who have fallen victim to deceptive business practices would come in the form of injunctions, not money.

Three Representatives -- Frank Pallone Jr., (D-NJ), Jan Schakowsky (D-IL), and Tony Cárdenas (D-CA) -- are leading the fight. Cárdenas has submitted a proposed bill called the Consumer Protection and Recovery Act that would give the FTC more power to provide restitution to fraud victims.

“The FTC, we know, lost the case, but it’s the American people that will suffer,” Pallone said in a joint Facebook Video conference with Schakowsky. “What my colleagues and I have been saying for over a year was a problem is now unfortunately an emergency.”

“The FTC used section 13(b) for over 40 years to sue in court to get consumers the money stolen from them and to force fraudsters to give up illegal profits,” Pallone continued. “And for over 40 years, it was effective in providing relief.” 

As an example of the FTC taking care of consumers, Pallone pointed to the agency’s distribution of $37.5 million in restitution paid to 167,000 residents of New Jersey since 2018.

Giving power back to the FTC

Timing is everything, and Cárdenas wasted none in tying his proposed bill to the increase in scams and fraud that preyed on consumers’ fears and financial insecurities during COVID-19. The hit that consumers took during the pandemic might go down as the worst in history. As of April 29, there have been 272,650 fraud reports, fleecing Americans out of $420.68 million -- an average of $349 per person.

“The FTC’s ability to return money taken from Americans through scams or fraud is under attack in the courts. Inaction is not an option and will only embolden these bad actors,” Cárdenas said. He stated that his proposed bill will give power back to the FTC so that it can put money back in the pockets of hard-working Americans.

While reversing a Supreme Court decision sounds like a daunting task, Professor Shubha Ghosh from the Syracuse University College of Law told ConsumerAffairs that it’s not unusual for Congress to amend legislation to overrule a Court’s reading of a statute. In fact, the Court’s decision essentially invited Congress to rework the legislation, and this could make consumer protections even stronger.

"As for consumer impact in the long run, if Congress responds as indicated, it can strengthen the power of the FTC to fight for consumers,” Ghosh said.

With the stroke of a pen, the U.S. Supreme Court has undercut the Federal Trade Commission’s (FTC) power to force lawbreaking companies to repay consumers or surrender profits they fraudulently gained. 

In the matter of the FTC vs. AMG Capital Management, the Court ruled in favor of AMG and its founder, Scott Tucker, who took more than $1.3 billion from consumers through a deceptive payday lending scheme. That scheme -- which involved various AMG companies such as 500FastCash and Advantage Cash Services -- allowed the FTC to defend defrauded consumers and provide $505 million in restitution.

However, that might be one of the FTC’s last hurrahs. The Court’s opinion in the case could forever change how the FTC handles privacy and antitrust cases on behalf of consumers. 

Under a provision in the FTC Act that’s been in place for more than 40 years, the FTC had the ability to seek monetary relief from companies that have harmed consumers in one way or another. Monetary damages to the consumer have been made possible in a wide variety of cases, including telemarketing fraud, anticompetitive pharmaceutical practices, data security and privacy, charity scams, and even COVID-related scams that bilked consumers out of more than $600 million.

FTC stripped of its strongest tool

The Court’s opinion immediately caught the ire of FTC Acting Chairwoman Rebecca Kelly Slaughter.

“In AMG Capital, the Supreme Court ruled in favor of scam artists and dishonest corporations, leaving average Americans to pay for illegal behavior,” she wrote in a statement sent to ConsumerAffairs. 

“With this ruling, the Court has deprived the FTC of the strongest tool we had to help consumers when they need it most. We urge Congress to act swiftly to restore and strengthen the powers of the agency so we can make wronged consumers whole.”

Slaughter isn’t giving up on the FTC’s rights anytime soon. Sensing that the Court’s opinion could go the wrong way, the full Commission testified before the U.S. Senate Committee on Commerce, Science, and Transportation earlier this week to discuss legislation protecting consumers. Slaughter is also scheduled to appear before Congress to push the agency’s pro-consumer agenda even further.

Others offer their opinion

Ira Rheingold, executive director of the National Association of Consumer Advocates, expressed his dismay at the Supreme Court’s decision. 

"We are very disappointed in the Supreme Court Ruling taking away an extremely important tool that the FTC has successfully used to hold wrongdoers accountable and provide redress to harmed consumers,” he told ConsumerAffairs. “We would hope that both Congress acts swiftly power to restore this authority to the FTC, and that the FTC aggressively uses other parts of its authority to sanction bad actors and provide greater protection to consumers."

Francis Perdue, a “publicist turned serial entrepreneur,” told ConsumerAffairs that this decision has the power to rock the world of many consumers and business owners, especially those wronged by companies. 

“The thought of medical patients who were wronged and can't sue companies or get the help of the FTC is frightening especially in the middle of a pandemic.”

The Federal Trade Commission has taken its first action under the new COVID-19 Consumer Protection Act by charging a chiropractor with deceptively marketing vitamin D and zinc products as “proven” supplements for treating or preventing COVID-19. 

St Louis-based chiropractor Eric Anthony Nepute was advertising the products under the brand name “Wellness Warrior.” He claimed the supplements were equally or more effective than the currently available COVID-19 vaccines. Nepute and his company Quickwork “baselessly” made the following claims, according to the FTC: 

• “COVID-19 Patients who get enough vitamin D are 52% less likely to die”;

• “People who get enough vitamin D are 77% less likely to get the disease”;

•  “Wellness Warrior Vita D is more effective at preventing the disease than approved vaccines.”

“The defendants’ claims that their products can stand in for approved COVID-19 vaccines are particularly troubling: we need to be doing everything we can to stop bogus health claims that endanger consumers,” Acting FTC Chairwoman Rebecca Kelly Slaughter said in a statement. “With this case, the Commission has quickly put to use its new authority to stop false marketing claims related to the pandemic.”

No supplements proven to treat or prevent the virus

In addition to fining Nepute and his company, the FTC is also seeking to block the defendants from falsely claiming that vitamin D and zinc have been proven to be effective in treating or preventing the virus. 

The agency is reiterating that no supplements have been scientifically proven to treat or prevent COVID-19. That said, consumers who see any companies claiming that their products do either should ignore them. The agency recommends getting information straight from government sources like CDC.gov or FDA.gov.

“When there’s a medical breakthrough to treat, prevent, or cure a disease, you’re not going to hear about it for the first time through an ad or sales pitch,” the FTC says. 

A company that sells fish oil supplements and a lab that prepared advertisements for those products have caught the ire of the Federal Trade Commission for allegedly making false and misleading claims.

Regulators say BASF SE and DIEM Labs violated the FTC Act by using deceptive marketing practices to sell Hepaxa and Hepaxa PD supplements. In materials prepared by DIEM and approved by BASF, the companies said the products were “clinically proven” to reduce liver fat in adults and children with nonalcoholic fatty liver disease; they also claimed that consumers would see health improvements within six months of taking the products. 

In actuality, the FTC says trials involving the supplements showed that they performed no better than a placebo.

“BASF and DIEM couldn’t back up serious claims about how Hepaxa capsules would help adults and kids with liver disease,” said Daniel Kaufman, the FTC’s Acting Director of the Bureau of Consumer Protection. “Companies can’t cherry-pick data and need to be upfront about the science behind -- or not behind -- their products.”

BASF and DIEM will pay over $416,000 to the FTC under the terms of the settlement, and those funds will be distributed to all customers who bought either Hepaxa or Hepaxa PD. The companies are also barred from using misleading advertising and must show proper scientific evidence to support any health claims in the future.

Consumers can learn more about the case by contacting the FTC’s Bureau of Consumer Protection online or by phone at 202-326-2125.

Facebook has moved to have government antitrust complaints against it dismissed on the grounds that the complaints fail to "credibly claim” that its behavior suppressed competition or harmed consumers. 

Towards the end of last year, the Federal Trade Commission (FTC) and a group of state attorneys general filed separate lawsuits against Facebook, accusing the company of anti-competitive conduct. 

“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition,” New York Attorney General Letitia James said at a press conference in December. “Facebook used vast amounts of money to acquire potential rivals before they could threaten the company’s dominance.”

In its suit, the FTC alleged that the company illegally maintained its monopoly in the social networking industry “through a years-long course of anticompetitive conduct.” The agency called on the court to unwind the acquisitions of Instagram and WhatsApp. 

“Our aim is to roll back Facebook’s anticompetitive conduct and restore competition so that innovation and free competition can thrive,” Ian Conner, director of the FTC’s Bureau of Competition, said in a December statement.

Facebook pushing back

In two motions filed Wednesday, Facebook sought to have the government’s antitrust complaints dismissed. 

“Antitrust laws are intended to promote competition and protect consumers,” Facebook said in a blog post. “These complaints do not credibly claim that our conduct harmed either.”

The company added that it believes its acquisitions of WhatsApp and Instagram “have been good for competition, good for advertisers and good for people.” 

“Our products remain popular because we constantly evolve, innovate and invest in better experiences for people against world-class competitors. We believe the government should be denied the do-over it seeks,” Facebook said. 

Facebook also argued that the FTC, which approved its acquisition of the apps, doesn’t have sufficient grounds to undo its original decision. 

“Facebook is aware of no comparable, much less successful, challenge by the FTC to a long-completed acquisition that the FTC itself cleared,” Facebook said in the filing. 

New York AG Letitia James said that Facebook was “wrong on the law and wrong on our complaint.”

“We are confident in our case, which is why almost every state in this nation has joined our bipartisan lawsuit to end Facebook’s illegal conduct,” she said in a statement.

The Federal Trade Commission (FTC) has sent out thousands of refund checks to consumers who bought Isoprex, a pain supplement marketed as a “miracle” supplement. 

Isoprex was sold online and through direct mail by Renaissance Health Publishing, LLC and its owner, James DiGeorgia, according to the FTC’s April 2020 complaint. It was touted as a supplement that could give seniors relief from muscle and joint pain, headaches, arthritis, joint inflammation, and a number of other ailments.

Ads promised that the drug was 100 percent effective in relieving “the worst cases” of joint pain and inflammation. But the FTC has found that the company had insufficient support for its claim that the product was a “miracle” pain relief supplement. 

Combination of herbs and spices

The FTC said the company and DiGeorgia falsely claimed to have studies and tests to support its branding as a “miracle” pill. In actuality, the supplement was “primarily a combination of various herbs and spices” that hadn’t undergone testing through any placebo-controlled study.

Additionally, the agency has alleged that Renaissance Health Publishing failed to mention that those who appeared in ads for Isoprex were either compensated for giving glowing reviews or were company employees themselves.

“When you target older adults with promises that your supplement will relieve pain better than FDA-approved drugs, you’d better have the scientific proof to back that up,” Andrew Smith, director of the FTC’s Bureau of Consumer Protection, said in an April news release. “For help with pain or other health conditions, people should rely on their medical professional, not on an advertisement.”

The agency has issued a total of $76,368.54 in refunds to older Americans who purchased Isoprex. Consumers who bought Isoprex will each receive a check for $15.97. 

“People who get checks should deposit or cash them within 60 days. Consumers who did not get a refund, but believe that they should, should contact the refund administrator, Analytics, Inc., at 1-866-969-3783,” the agency said. 

Consumers love things that are free, and one of the best ways to learn about a new product or service is to sign up for a free trial. But a recent settlement between supplement marketing company NutraClick and the Federal Trade Commission (FTC) shows that it pays to be cautious when it comes to these offers.

This week, the FTC announced that Nutraclick LLC and two of its company officers agreed to pay $1.04 million after being accused of participating in deceptive negative option marketing. In illegal versions of this marketing practice, companies will often have consumers sign up for a free trial of a service or subscription but not clearly disclose when it will end. Those who go through the trial and fail to cancel before it ends are then charged by the company. 

In Nutraclick’s case, the company was accused of not telling consumers that they would be enrolled in a membership program when they ordered sample products. Approximately 70,000 consumers who didn’t catch that caveat and didn’t cancel within the 18-day trial period were billed on a monthly basis for between $29.99 and $79.99. The FTC says this led to tens of millions of dollars in unauthorized recurring charges. 

“Hiding the true deadline for canceling a free trial isn’t just bad business -- it’s illegal. And that’s why Nutraclick will be permanently banned from using negative options in the future,” said Andrew Smith, the FTC’s director of the Bureau of Consumer Protection.

Do your research and stay vigilant

While negative option marketing isn’t illegal if the proper disclosures are posted, the FTC says it’s important that consumers do their homework when considering any free offer. In a blog post covering the Nutraclick settlement, FTC consumer education specialist Lisa Lake said consumers should heed the following advice:

• Do some research. Search the product and company name online with words like “review,” “complaint,” or scam” to see what others are saying. 

• Find the terms and conditions for the offer. If you can’t find them or can’t understand exactly what you’re agreeing to and when you’ll be charged -- including what you’ll be charged for and the date by which you have to act to avoid a charge -- don’t sign up.

• Monitor your credit and debit card statements. If you’re charged for something you didn’t order, dispute those charges as soon as you spot them. 

• Read your credit and debit account statements. That way, you’ll know right away if you’re being charged for something you didn’t order. 

As always, if you feel that you’ve been the victim of this kind of scam -- or just about any other kind of scam -- you can report it to the FTC.

The Federal Trade Commission (FTC) is reportedly preparing to file an antitrust lawsuit against Facebook, the Wall Street Journal reported Tuesday. 

Citing unnamed sources, the Journal said the agency is looking into whether Facebook is using its dominant position in the social media landscape to suppress competition. The FTC is said to be considering filing the suit before the end of the year. 

Facebook has been investigated by the FTC before. The agency previously looked into whether Facebook strategically purchased companies like Instagram and WhatsApp to support its main mission or to remove potential competitors from the field.

Facebook CEO Mark Zuckerberg has testified to the agency in the investigation, the Journal reported. The company acknowledged in filings with the Securities and Exchange Commission (SEC) that it is under investigation by the FTC and the Justice Department for potential antitrust charges. 

Big tech facing scrutiny

Technology companies have been at the center of investigations related to privacy and anti-competitive behavior for the past several years. Government regulators have raised concerns about several major players in industry, including Facebook, Google, Amazon, and Apple. 

Some members of Congress have argued that Facebook and Alphabet should be broken up to prevent a monopoly. 

“Digital technology companies are a big part of the economy and our daily lives,” FTC Chairman Joe Simons said earlier this year. “This initiative will enable the Commission to take a closer look at acquisitions in this important sector, and also to evaluate whether the federal agencies are getting adequate notice of transactions that might harm competition. This will help us continue to keep tech markets open and competitive, for the benefit of consumers.

Facebook has finally closed the book on 2018’s Cambridge Analytica scandal as a federal judge has given final approval to the social media company’s $5 billion settlement with the Federal Trade Commission (FTC). 

The settlement won approval last July, but Facebook critics who were concerned about the social media giant’s privacy policies went to court to block the settlement, arguing it wasn’t harsh enough. After hearing all sides over a 10-month period, U.S. District Court Judge Timothy Kelly put his stamp of approval on the deal.

“We are pleased with the Court’s decision,” said FTC Chairman Joe Simons. “As the court notes, the historic $5 billion settlement is ‘by far’ the largest monetary penalty ever obtained by the United States on behalf of the FTC and the ‘second largest in any context.’”

Simons also pointed to the settlement’s conduct relief that will require Facebook to consider privacy at every stage of its operations and provide substantially more transparency and accountability for its executives’ privacy-related decisions.

Previous settlement

The massive fine was due in part to the fact that the FTC had also charged Facebook with violating a 2012 FTC order by deceiving users about their ability to control the privacy of their personal information.

The latest complaint stemmed from a 2018 revelation that Cambridge Analytica, a political marketing firm, had gained unauthorized access to Facebook user data in order to target political ads on behalf of 2016 presidential candidate Donald Trump and the campaign for the UK to leave the European Union.

The settlement order imposes what the FTC calls “unprecedented new restrictions on Facebook’s business operations” while creating multiple channels of compliance. 

Restructured approach to privacy

The agency says the order requires Facebook to restructure its approach to privacy from the corporate board-level down, and it holds Facebook executives personally accountable for the decisions they make about privacy. The FTC said Facebook’s privacy decisions will be subject to meaningful oversight going forward.

“Despite repeated promises to its billions of users worldwide that they could control how their personal information is shared, Facebook undermined consumers’ choices,” Simons said.

In a blog post, Michel Protti, Facebook’s chief privacy officer for product, said the agreement with the government had already brought about “fundamental changes to our company” and improved how it protects users’ privacy.

Last year, the Federal Trade Commission announced that it was settling with Office Depot and software supplier Support.com Inc. over charges that the two entities tricked customers into paying millions for unnecessary repair products and services.

Now, regulators are saying that consumers affected by the scheme will be receiving refunds. The agency announced today that it will be sending over 500,000 checks worth over $34 million to defrauded consumers, with payments averaging $63.35. 

The FTC’s original report alleged that Office Depot and Support.com used a program called PC Health Check to check consumers’ computers for viruses. However, regulators said the program was really just a sales tool that was used to pump up sales of repair tools and services.

Receiving a refund

Recipients are being asked to deposit or cash their refund check within 60 days after receiving it. To avoid letting scammers take advantage of the situation, the agency reminds consumers that it will never require them to pay money or provide account information to receive a refund. 

Those who have more questions about the process can contact the FTC can contact the refund administrator in charge of this case at 1-855-915-0916. More information can also be found at the agency's interactive dashboard here.

The Federal Trade Commission (FTC) has agreed to a settlement with Arizona-based company Quantum Wellness over alleged deceptive claims that the latter used with its “ReJuvenation” pill. 

The agency claimed that Quantum made baseless health claims about the drug by calling it a “cure-all,” anti-aging treatment that was scientifically proven. The company said that ReJuvenation treated cell damage, heart attack damage, brain damage, blindness, deafness, and other negative conditions of the aging process. 

Under the agreement, Quantum will pay $660,000 that will go towards refunds for defrauded consumers who bought into the company’s marketing.  The defendants are also banned from making similar claims in the future unless they are supported by scientific evidence.

“This is another company promising older adults an anti-aging wonder drug that reverses the effects of disease,” said Andrew Smith, the director of the FTC’s Bureau of Consumer Protection. “If you make those kinds of claims, you’d better have credible science to back it up or the FTC is coming for you.”

The Federal Trade Commission (FTC) stayed especially busy in 2019 by responding to fraud complaints from consumers.

In a report wrapping up the year, the FTC said it received 3.2 million reports to its Consumer Sentinel Network last year. FTC responses led to $232 million in refunds to consumers.

The FTC said it had to respond to common scams most of the time, with imposter scams being the most prevalent. Imposter scams -- in which criminals pretended to be government officials from agencies like the FBI, IRS, and Social Security Administration -- were frequent sources of complaints.

Criminals also masqueraded as employees of telephone, utility, and credit reporting companies, usually with the objective of tricking victims into making unnecessary payments or revealing sensitive information.

Government imposter scams

In a mid-year report, the FTC said the number of complaints about government imposter scams had reached record levels totaling about 1.3 million since 2014. The agency said it received about 46,600 complaints in May alone from consumers who were contacted by someone who claimed to be calling on behalf of a government agency.

Under the FTC Act, the agency is authorized to go to court to force fraud offenders into compensating victims. During 2019, more than 1.9 million consumers received and cashed refund checks from the FTC as a result of enforcement actions. 

Not all consumers cashed their checks, so that money was used to send additional mailings in an effort to identify victims. Any remaining money is returned to taxpayers through the U.S. Treasury.

2019 enforcement actions

Among its enforcement actions last year, the FTC shut down operations of four robocallers that were not only accused of violating the Telemarketing Act but were also pushing dubious or outright fraudulent products or services. 

A court banned the defendants from robocalling and most other telemarketing activities, including using an automatic dialer. Additionally, they were ordered to pay “significant financial judgments.”

In September, the FTC took action against operators marketing student loan debt relief services, saying the case provided a cautionary tale for consumers struggling under student loan debt burdens.

The agency charged two student loan debt relief operations and the financing company that assisted them with stepping over several legal lines by charging illegal upfront fees and making false promises.

The FTC receives complaints directly from consumers, as well as from federal, state, and local law enforcement agencies and a number of private partners. Consumers can file a complaint online or call the FTC at  1-877-FTC-HELP (382-4357).

Many consumers might want to take a nice cruise to the Bahamas, but far fewer would want to be targeted for this type of vacation with relentless spam phone calls. 

That’s what the Federal Trade Commission (FTC) says happened in the case of Grand Bahama Cruise Line LLC (GBCL). The agency is fining the company and six other defendants for allegedly placing millions of robocalls hocking free trips between Florida and the Bahamas.

The FTC’s complaint states that GBCL hired telemarketers to place calls to consumers across the U.S. between 2014 and 2017. The company allegedly bought call lists from lead generators and conducted illegal surveys to single out potential customers. 

While these types of calls are already problematic, the FTC says the company never exempted consumers who were signed up on the National Do Not Call Registry. It also purportedly transmitted inaccurate caller ID information in violation of the Telemarketing Sales Rule (TSR).

Substantial civil penalties

The FTC’s proposed settlement would include fines totalling $7.8 million from the defendants and would ban them from violating the TSR in the future. While the fine is expected to be suspended due to an inability to pay, the defendants have not agreed to the settlement thus far.

“This case shows the FTC’s sustained effort to tackle illegal robocall operations that bombard consumers with unsolicited calls. It also demonstrates that anyone who provides substantial assistance to illegal robocall operations may be liable for substantial civil penalties,” said Andrew Smith, the FTC’s director of the Bureau of Consumer Protection.

A copy of the FTC’s full complaint can be viewed here.

The Federal Trade Commission (FTC) threw another punch to the developers of three large “stalking” apps on Tuesday. Regulators say the apps, in effect, kept a record of a person’s every step.

The FTC charges that Retina-X developed three mobile device apps -- MobileSpy, PhoneSheriff, and TeenShield -- that allowed purchasers to monitor mobile devices on which they were installed without the knowledge or permission of the device’s user. 

Retina-X Studios likes to think of its products as “cutting edge technology that helps parents and employers gather important information on devices they own.” The company’s owner, James M. Johns, Jr., is also named in the complaint.

Three apps

Here’s how the company promoted the so-called stalking apps:

MobileSpy: “Need to know if your child or employee is abusing their SMS text messages, GPS locations and mobile apps? Mobile Spy helps parents learn about their child’s smartphone and tablet activities.”

PhoneSheriff: “What does your child do on their mobile? Are you worried they are abusing their phone privileges? PhoneSheriff allows you to monitor actions and filter out those you don't want. You can even create a schedule for allowed usage.” 

TeenShield: “Know everything about your child's digital world to keep them safe.”

The complaint

The FTC argues that Retina-X’s apps supplied app purchasers with the ability to view sensitive information about device users. Those pieces of data run from monitoring the user’s physical movements to where they go and what they do online. As a sidebar issue, the devices that downloaded the app allegedly opened up added security vulnerabilities.

Another major segment of the complaint is that Retina-X and Johns failed to sufficiently secure any information that was collected from mobile devices. 

“This is our first action against a so-called ‘stalking app,’” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “Although there may be legitimate reasons to track a phone, these apps were designed to run surreptitiously in the background and are uniquely suited to illegal and dangerous uses. Under these circumstances, we will seek to hold app developers accountable for designing and marketing a dangerous product.”

The FTC didn’t demand that Retina-X shut down completely. The proposed settlement asks that Retina-X and Johns require purchasers to confirm that they will only use the app to monitor a child, an employee, or another adult who has given them written consent. On top of that, the developer has to place an icon with the name of the app installed on the mobile device; the app would be removable only by the parent or guardian who installed the app.

Protecting yourself against stalking apps

Like so many apps in app land, it’s not easy to pick out the good guys from the bums. The National Network to End Domestic Violence (NNEDV) says that there are easy steps consumers can take to stay vigilant.

Some red flags that might indicate that there is a stalking app on your phone may include:

1. The “abuser” has physical access to your phone (like at your home or office).

2. The “abuser” knows specific information about you (things that only you should know).

3. Your phone battery drains faster than normal.

4. There are unaware, unexplained charges on your credit card statement.

5. You encounter problems turning your phone off.

“An increasing number of apps for smartphones and tablets are attempting to address the issues of domestic violence, sexual assault, and/or stalking,” NNEDV writes. “Some apps are screening tools for survivors and professionals to recognize abuse and find resources. Other apps are meant to be a tool to contact help during an emergency.”

Another for-profit college group has agreed to a settlement after facing charges from the Federal Trade Commission (FTC).

The agency reports Career Education Corporation (CEC) and its subsidiaries will pay a $30 million penalty to resolve charges that lead generators acting on its behalf used illegal tactics to generate leads, including falsely telling prospective students that CEC was affiliated with the U.S. military.

The report also said the company’s marketers persuaded consumers to provide information in hopes of getting jobs or benefit assistance when none were available. Both CEC and the lead generators were also charged with calling consumers on the Do Not Call (DNC) registry.

“You can’t skirt the law by outsourcing illegal conduct to your service providers,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection. “This case demonstrates that the FTC will seek to hold advertisers liable for the deceptive or illegal practices of their affiliates, publishers, or other lead generators.”

Illegal telemarketing

CEC operates  American InterContinental University, Inc., AIU Online, LLC, Marlin Acquisition Corporation, Colorado Technical University, Inc., and Colorado Tech., Inc. 

In agreeing to the settlement the defendants neither admit nor deny any of the allegations, except as specifically stated in the Order.

The FTC alleged that the illegal telemarketing operation began in 2012 in an effort to lure consumers to the schools and to “trick” them into providing their contact information by pretending to offer services unrelated to post-secondary education.

Allegedly posed as military recruiters

In some cases, CEC lead generators allegedly presented themselves as official U.S. military recruiters or as job-finding services. Next, they allegedly called consumers to pitch CEC schools after obtaining their phone numbers.

The FTC charges that CEC’s lead generators -- some of whom have been subject to separate FTC investigations -- violated the FTC Telemarketing Sales Rule (TSR) by calling consumers on the DNC list.

The FTC provides helpful information for students who are considering higher education opportunities, including attending for-profit schools. The agency advises consumers to determine who is actually requesting your personal information before filling out any applications or forms online. Conduct a search using the name of the school and “complaint” or “review.”

Remember that giving your Social Security number to the wrong people can lead to identity theft. Consumers interested in serving in the U.S. military should go to the Department of Defense’s site for more information.

The Federal Trade Commission (FTC) has reached a settlement agreement with Gerber to resolve a 2014 lawsuit against the baby food products maker.

The original report alleged that Gerber Products Company, also doing business as Nestlé Nutrition, deceptively advertised one of its baby formula products. Specifically, the FTC said the company claimed that Good Start Gentle formula would help infants with a family history of allergies reduce their risk of developing allergies later in life.

Gerber and the FTC have agreed to settle the dispute under terms set out in the stipulated order announced by both parties. 

When it filed its report in October 2014, the government also charged that the company falsely advertised that the Food and Drug Administration (FDA) had approved its health claims.

“Parents trusted Gerber to tell the truth about the health benefits of its formula, and the company’s ads failed to live up to that trust,” Jessica Rich, then-director of the FTC’s Bureau of Consumer Protection, said at the time. “Gerber didn’t have evidence to back up its claim that Good Start Gentle formula reduces the risk of babies developing their parents’ allergies.”

The lawsuit claimed that Gerber had used that marketing pitch for three years before being called on it by the FTC. The agency pointed to advertisements during that period appearing on TV, in magazines, online, and at point-of-sale displays.

The formula product is made with partially hydrolyzed whey proteins (PHWP). Gerber allegedly claimed that feeding babies this formula, instead of formula made with intact cow’s milk proteins, would prevent or reduce the risk that they would develop allergies. 

Breast milk may work best

The American Academy of Allergy, Asthma, & Immunology (AAAAI) cautions that reducing the risk of allergies in infants is problematic. The group says restricting a mother's diet of specific allergens during pregnancy and while breast-feeding, when a child is otherwise well, is not routinely recommended as a means to prevent food allergies. 

“Most recent information indicates there is no significant allergy prevention benefit to your baby if you avoid highly allergenic foods during this time,” AAAAI writes on its website. “Breast milk is the ideal way to nourish your infant. It is least likely to trigger an allergic reaction, it is easy to digest and it strengthens the infant’s immune system.”

The group says breast milk in the first four to six months may reduce early eczema, wheezing, and cow’s milk allergy. For infants at risk for food allergy where the mother is unable to breastfeed, AAAAI recommends hydrolyzed infant formulas as hypoallergenic substitutes over cow’s milk and soy formulas.

The Federal Trade Commission has accepted $23.5 million to settle charges that Certified Merchant Services (CMS) violated the FTC Act while providing merchants with credit-card payment services.

The payment to the FTC came from a forced sale of CMSs assets, and will be used to provide full redress to merchants. The sale was part of a stipulated final judgment and order which also permanently bars the defendants from falsifying merchants signatures; altering or adding to signed documents relating to merchant accounts; certain billing and debiting practices; and misrepresenting the savings that merchants would achieve by doing business with CMS.

The judgment settled the FTCs first-ever complaint against an Independent Sales Organization (ISO) for practices related to the marketing of credit- and debit-card merchant accounts to small businesses nationwide.

The FTC filed its complaint in February 2002 against Certified Merchant Services, Ltd.; Certified Merchant GP, Inc.; Certified Merchant Services, Inc., and CMS-LP (collectively CMS); and Jonathan Frankel, Craig Frankel, and Randall Best of Plano, Texas.

The companies also did business under the names Transaction Merchant Services (TMS), Transaction Merchant Services.Com, and Electrocheck.

The Commissions amended complaint alleged that CMS contacted small business owners throughout the United States to induce them to establish merchant accounts and, in the process, violated the FTC Act by unfairly and deceptively: 1) modifying customer contracts; 2) debiting customer accounts without authorization; 3) making misrepresentations regarding various goods or services offered; and 4) failing to disclose various charges or fees.

In addition, in connection with providing card processing or check conversion processing, the defendants are permanently barred from debiting, billing, or receiving money, or assisting others in doing the same: 1) from merchants before the defendants have provided the merchants with the promised card processing services or goods; 2) from merchants for check conversion processing before the merchants have signed up for and activated such services; and 3) from merchants for services or goods after the merchants have cancelled in writing. If the defendants cannot defer automatic debiting, the order requires them to reimburse any debits that fall into the categories above.

The stipulated final order was filed by Judge Paul Brown of the U.S. District Court for the Eastern District of Texas, Sherman Division, on December 30, 2002. On January 27, 2003, the court made public a partially sealed version of the order. The judgment amount remains under seal; however, on January 5, 2004, the court ordered that the payment made to the FTC to satisfy the judgment was not covered by the seal and could therefore be made public.