ICFE eNEWS #11-04 - January 12th 2011

Penn Corner  - FTC update

Dannon's Deceptive Claims

Dannon has agreed to settle FTC charges that it exaggerated the health benefits of Activia yogurt and DanActive dairy drinks, two products that contain beneficial bacteria known as probiotics. According to the FTC, Dannon's ads claimed that eating one serving of Activia a day would relieve temporary irregularity and that drinking DanActive would help prevent colds and the flu. In addition, the company said it had scientific proof to back up its claims. The FTC said Dannon not only overstated the health benefits of the products, but also couldn't substantiate its claims.

Pay Me Now ... and Pay Me Later

The FTC has charged a massive internet enterprise with scamming hundreds of thousands of people out of millions of dollars by billing them every month for products and services they didn't order. The FTC alleged that I Works offered bogus programs offering "free" and "risk-free" money-making and government-grant opportunities. The agency says that customers gave their credit and debit card numbers to pay a small shipping and handling fee, and then were charged one-time fees of up to $129.95, monthly fees of up to $59.95, and still more for other products and services they didn't order. The FTC is seeking refunds for I Works customers.

A Dose of Reality

Major marketers of certain Disney and Marvel children's vitamins have agreed to stop making false and unproven claims that their supplements promote healthy brain and eye development. Print ads and packaging on multivitamin gummies and tablets featuring characters like Disney Princesses, Winnie the Pooh and SpiderMan touted the health benefits of DHA - an Omega-3 fatty acid. But according to the FTC, the vitamins contained only trace amounts of the ingredient. The companies will ante up $2.1 million for refunds.

Policing Debt Relief Promises

The FTC charged several debt relief providers with making false claims that consumers who enrolled in their programs could eliminate 30 to 60 percent of their credit card debt and be debt-free in less than 36 months. These claims lured people into paying thousands of dollars in upfront fees, but according to the FTC, very few people got the promised results. In addition, the FTC has put one operation out of the debt relief business forever. 800 Credit Card Debt and Debt.com claimed they would eliminate or reduce debts quickly and stop calls from debt collectors. The FTC said they had no support for their claims and failed to provide debt settlement services.

Stopping a Sweepstakes Scam

At the FTC's request, a federal court has shut down a scheme that allegedly tricked people into sending money to collect bogus sweepstakes prizes. The FTC said that operators of the scam sent personalized mailers - some with fake government agency names and official-looking seals - to hundreds of thousands of people, instructing them to send a $20 "processing fee" to get their multi-million-dollar prizes. Instead of a check, the people who paid the fee got information about entering sweepstakes.

Lab Grab

The FTC wants to stop the merger of competing lab test providers because the deal could raise health care costs for millions of patients in Southern California. The FTC claims that if Laboratory Corporation of America buys Westcliff Medical Laboratories, Inc., LCA would control 89% of the market for critical testing services that Southern California physicians use to make diagnoses. According to the FTC, Westcliff has offered doctors lower prices for lab services, and prices are likely to rise if the companies merge.

"Too many companies are trying to use phony monthly billing to rip off Americans and this bill will help strengthen our hand."
- Chairman Jon Leibowitz on the Restore Online Shoppers' Confidence Act

National Consumer Protection Week 2011

The FTC and nearly 30 government agencies and national organizations are preparing for the 13th annual National Consumer Protection Week (NCPW), March 6-12. Visit ncpw.gov to read the NCPW Blog and browse free educational materials that can help you protect your privacy, manage money and debt, recognize identity theft, and avoid frauds and scams. Order free resources by Jan. 19 for delivery by March 6.

Warranty Work

It's illegal for a car dealer not to honor your warranty because you had routine maintenance and repairs done somewhere else. For more tips about the warranty on your car, read Auto Warranties, Routine Maintenance, and Repairs: Is Using the Dealer a Must?

A Tip for Businesses

Employees who are responsible for securing computers and servers also should be responsible for securing data stored on digital copiers. For more information, read Copier Data Security: A Guide for Businesses.


FTC Settlement Ends "Tested Green" Certifications That Were Neither Tested Nor Green FTC Charges Another Defendant as Part of Crackdown on Bogus Medical Discount Plans

ICFE eNEWS is available FREE upon request by visting our Web site and filling out the contact form, with the words "eNews request" included in the comments field. Please pass this eNEWS on to your peers and interested others and invite them to subscribe for free.

Sent by:

Paul Richard
President - Executive Director
Institute of Consumer Financial Education (ICFE)

ICFE - Institute of Consumer Financial Education - ICFE.info - 619.239.1401