ICFE
ICFE eNEWS #11-21 - May 13th 2011

News from the Federal Trade Commission - May 2011

Penn Corner May 2011

New-trition Principles

New-trition Principles

An interagency working group is soliciting public comment on its proposed voluntary principles that encourage the food industry to market healthful foods to children. The guidelines — proposed by the USDA, the CDC, the FDA and the FTC in an effort to fight childhood obesity — recommend that by 2016 foods marketed directly to kids should:

  • provide a meaningful contribution to a healthful diet, and include at least one of these food groups: fruit, veggies, whole grains, fat-free or low-fat milk products, fish, extra lean meat or poultry, eggs, nuts and seeds, or beans
  • have less than a gram of saturated fat, no trans fat, no more than 13 grams of added sugars, and no more than 210 milligrams of sodium per serving.

Continuity Program Dis-Continued

Continuity Program Dis-Continued

The FTC has filed a complaint against two men and their companies for deceptively billing customers without their permission and refusing to give refunds. The FTC alleged that when people provided their bank account information as part of an online payday loan application, Michael Moneymaker and Daniel De La Cruz used it to enroll them in worthless "continuity" programs without their knowledge. Their companies billed consumers up to $49.99 each, plus additional weekly or monthly fees of up to $19.98. At the FTC's request, a federal court temporarily stopped the defendants' deceptive practices and froze their assets.

Dealing with Data Breaches

Dealing with Data Breaches

Two companies that maintain mountains of sensitive information for other businesses, including employee Social Security numbers, have agreed to settle FTC charges that they failed to use appropriate measures to protect the data. The Ceridian Corporation provides payroll processing and other HR services to businesses; Lookout Services, Inc., markets a product that helps businesses comply with immigration laws. Security breaches at both companies put the personal information of tens of thousands of people at risk. The FTC recently recommended that Congress pass legislation that would require companies to implement reasonable security policies and procedures and to notify people in appropriate circumstances if a security breach occurs.

That's Not News

That's Not News

The FTC has asked federal courts to stop the allegedly deceptive tactics of 10 internet marketers that used fake news websites to sell acai berry weight-loss products. Using the logos of national media companies and testimonials from supposedly satisfied customers, the defendants' web pages used false and unsupported claims to pitch their products. The FTC alleged that virtually everything about these sites was fake: the weight loss results, the "investigations," the reporters, the testimonials, and the pretense of objectivity.

Refunds Help Right Wrongs

Refunds Help Right Wrongs

In the last several weeks, the FTC returned more than $18 million to people across the U.S. who lost money to allegedly deceptive business practices:

  • $2.3 million went out to 1,440 homeowners who were allegedly charged an up-front fee by Home Assure LLC, a foreclosure rescue service. The homeowners received full refunds.
  • $11.8 million was returned to more than 248,000 people who purchased the Q-Ray bracelet — a product that claimed it could provide immediate and significant pain relief.
  • More than $3 million was returned to 172,000 people defrauded by the "Wal-Mart Shopping Spree" scam. They were falsely promised free gifts such as shopping sprees, movie passes, and gas vouchers, and charged monthly fees for "program memberships" in discount buying and travel clubs.
  • $1.5 million went out to 3,162 Hispanic borrowers who were allegedly charged higher prices for mortgage loans than non-Hispanic whites by Golden Empire Mortgage, Inc. The price disparities could not be explained by the applicants' credit worthiness or underwriting risk.

Rascally Phone Calls

Rascally Phone Calls

The company that makes Rascal Scooters will pay $100,000 to settle FTC charges that it made more than three million illegal sales calls to numbers on the National Do Not Call Registry. According to the FTC, the company used sweepstakes entry forms to harvest phone numbers for their sales calls. The Telemarketing Sales Rule allows a company to call someone whose number is on the Do Not Call Registry for up to 18 months if they have an "established business relationship." But a sweepstakes entry doesn't create that relationship. The settlement bars the company from using sweepstakes entries as the basis for claiming an established business relationship and imposes monitoring and reporting requirements to ensure compliance.

Pay-for-Delay on the Rise

Pay-for-Delay on the Rise

The FTC reports an alarming jump in the number of deals between branded drug makers and generic rivals that keep lower-cost drugs off the market. According to an FTC report, the number of these sweetheart deals in which the brand name pays a generic firm to delay introducing a generic version skyrocketed by more than 60 percent last year. The FTC estimates that these pay-for-delay deals cost consumers and taxpayers $3.5 billion a year in higher drug prices; the FTC has filed several cases to stop these anticompetitive agreements.

"If companies do not protect the personal information they collect and store, that information could fall into the wrong hands, resulting in fraud and other harm, and consumers could lose confidence in the marketplace."

— David Vladeck, Director, Bureau of Consumer Protection


Green Card Sharks

No one can increase your chances of winning a green card through the U.S. Diversity Visa Lottery, and you never have to pay a fee to enter the program. Someone who claims otherwise is lying. Learn more.

Identity Theft Testimony

The FTC testified before Congress that millions of consumers are victims of identity theft each year. The costs of identity theft are staggering in terms of dollars and lost productivity. The FTC recommended legislation to make Social Security numbers less useful to identity thieves and harder to access. Learn more.

IN OTHER News:

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Share This:

  • Free trial offers aren't always free. A new FTC video highlights the costs hiding in some free trials: http://go.usa.gov/bJi
  • Taken aback by the PlayStation hack? Take steps to avoid something worse: identity theft: http://go.usa.gov/bUf
  • Of course, you want to feel safe in your own home. But some home security salespeople aren’t on the up and up: http://go.usa.gov/bLy

Federal Trade Commission  |  600 Pennsylvania Ave. NW  |  Washington DC 20580


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Sent by:

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


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