ICFE
ICFE eNEWS #11-28 - July 15th 2011

News from the Federal Trade Commission - July 2011

Penn Corner July 2011

Slim Chance

Fat Foe Weight Loss Website

To settle FTC charges, Beiersdorf, Inc., must stop claiming that people who regularly use its Nivea My Silhouette! skin cream can reduce their body size significantly. Beiersdorf marketed the cream in nationwide television ads, including one featuring a woman applying My Silhouette! cream to her stomach and thighs, and then fitting into an old pair of jeans. The company has agreed to pay $900,000 for refunds. Find the skinny on weight loss ads at FatFoe.


A Real Bad Deal

A Real Bad Deal

Ruling in favor of the FTC, a federal judge has ordered Real Wealth, Inc., and Lance Murkin, its owner, to pay $10.4 million – the amount people spent for the work-at-home and grant schemes the company sold. The defendants' direct mail campaign baited at least 100,000 people into buying products that supposedly would have allowed them to "collect up to $9,250" with a "simple 3 minute form," or "rake in up to $1,500+ per week" by learning "secrets" about the "$700 billion banking industry bailout." But few, if any, of the customers made the promised income with the defendants' products. The court also banned Real Wealth and Murkin from marketing or selling work-at-home or grant-related products and from helping others do so.


Modification Masquerade

Modification Masquerade

Three men who allegedly used their company to deceive more than 13,000 desperate homeowners have been ordered to pay nearly $19 million to provide refunds. According to the FTC, the trio behind First Universal Lending told homeowners that the company would negotiate with lenders to modify their mortgages to make them more affordable. They even encouraged the homeowners to stop making mortgage payments so the lenders would negotiate. But, the agency said, the defendants charged the homeowners up to $7,000 in advance fees and then did little or nothing to help them. The settlement order also bans the defendants from the mortgage relief services business. If you're having trouble making your mortgage payments, see ftc.gov/yourhome.


Not For Sale

Not For Sale

Teletrack, Inc., a company that sells credit reports to payday lenders, rent-to-own stores, and certain auto lenders, among other businesses, has agreed to pay $1.8 million to settle FTC charges that it violated the Fair Credit Reporting Act (FCRA). The FTC's complaint alleges that Teletrack created a database with information mined from its credit reporting business, and then sold the information to marketers looking to target potential customers. But a sales pitch isn't a "permissible purpose" under FCRA, said the FTC. Credit reports are supposed to help companies make decisions about whether to provide credit to their customers, and on what terms – not to serve as marketing tools.


Stopping Immigration Services Scams

Stopping Immigration Services Scams

The FTC has shut down a company for allegedly scamming immigrants. The agency claimed that the couple behind Loma International Business Group, Inc., lied about being authorized by the U.S. government to provide immigration services. This follows an earlier FTC action against Immigration Center, one of several associated companies allegedly masquerading as a U.S. government website, and tricking people into paying fees the company falsely claimed would cover processing fees charged by U.S. Citizenship and Immigration Services. Navigating U.S. immigration laws can be complex, and missing a deadline or choosing the wrong form can jeopardize a person's immigration status – or make it hard to remain in the U.S. legally. Immigrants with limited English language proficiency often are the target of scammers who call themselves "immigration consultants" or "notarios" or who falsely claim that they're attorneys. That's why the FTC is distributing education materials in English, Spanish, Chinese, and Korean, and rolling out six new radio public service messages in English, Spanish, and Mandarin Chinese about immigration scams.


Avoiding High Drug Prices

Avoiding High Drug Prices

The FTC has approved a final order settling charges that Hikma Pharmaceuticals PLC's acquisition of certain Baxter Healthcare Corp. assets was anticompetitive. According to the FTC, Hikma Pharmaceuticals' $111.5 million purchase of rival Baxter Healthcare would likely have led to higher prices for two generic injectable drugs used to control seizures and treat allergies, nausea, pain, and anxiety. To settle the charges, Hikma has agreed to sell the two drugs – phenytoin and promethazine – to X-Gen Pharmaceuticals, a firm with 40 products and an active product development pipeline. The FTC agrees that X-Gen can replace the competition that would have been lost due to the merger.

 

"The real skinny on weight loss is that no cream is going to help you fit into your jeans. The tried and true formula for weight loss is diet and exercise."

— Jon Leibowitz, FTC Chairman


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Sent by:

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


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