ICFE eNEWS #15-09 - Mar 25th 2015

Penn Corner  - FTC update

DIRECTV deception

The FTC filed a complaint against DIRECTV, a national provider of home satellite television services, for deceptively advertising a discounted 12-month programming package. According to the FTC, ads for the programming package don't clearly disclose to customers that the package requires a two-year contract. The complaint also alleges DIRECTV does not clearly say that the package-s cost increases up to $45 more per month in the second year of the contract - or that, if you wanted to cancel before the end of the two-year period, you'd pay fees of up to $480 to cancel the package.

FTC sponsors two robocall contests

As part of a long-term effort to combat illegal robocallers, the FTC announced two new contests. The first contest, Robocalls: Humanity Strikes Back, challenges contestants to create a tool that people can use to block or automatically forward unwanted landline or mobile robocalls. These calls go to a honeypot, which is an information system that researchers and investigators can use to analyze robocalls. The second contest, DetectaRobo, challenges contestants to use honeypot data to predict which incoming calls are robocalls. Visit www.ftc.gov/strikeback and www.ftc.gov/detectarobo for more information.

Survey robocall hid telemarketing pitch

The FTC and 10 state attorneys general took action against Florida-based Caribbean Cruise Line, Inc. (CCL) and seven other companies. According to the FTC, the companies violated the Telemarketing Sales Rule by illegally using political survey robocalls to sell cruise vacations. People who answered the calls heard a pre-recorded message asking them to participate in a 30-second research survey. Those who "pressed one" to get a two-day cruise to the Bahamas were connected to a live telemarketer working for CCL, who tried to sell them cruise vacations.

Not "as-seen-on-TV"

Allstar Marketing Group, LLC, agreed to settle charges from the FTC and the New York Office of the Attorney General that it deceived people with its "buy-one-get-one-free" offers for "as-seen-on-TV" products. According to the charges, the company didn't disclose the total number of products people were buying, or all the related fees and costs, and billed people without their consent. The FTC says that Allstar offered the products to people who believed they were buying items at the prices and quantities they saw advertised on TV. Instead, people who called to order from Allstar were given a confusing sales pitch that mislead them to buy more than what they wanted, and were charged more fees than they bargained for. Allstar will pay $7.5 million for consumer refunds.

Premier Precious Metals refunds

The FTC sent more than $2.4 million in refund checks to people harmed by a Premier Precious Metals investment scam. The Commission alleges that the company took millions of dollars from investors, including many older people, by conning them into buying precious metals on credit without clearly disclosing significant costs and risks. The people affected will recover nearly 70 percent of the amount they lost. If you get a refund check, be sure to cash it within 60 days of the mailing date. And remember, the FTC will never ask you to pay anything or give personal information before you can cash a refund check.

Cancer drugs stay competitive

Global pharmaceutical company Novartis AG has agreed to divest assets related to two oncology drugs currently in development to settle FTC charges that its $16 billion acquisition of GlaxoSmithKline's portfolio of cancer-treatment drugs would likely be anticompetitive. Physicians use BRAF and MEK inhibitors to treat melanoma, and both products are also being developed to treat a variety of other cancers. According to the FTC, if the acquisition went forward as proposed, Novartis would likely have delayed or terminated development of both drugs, raising prices for consumers and depriving them of potentially superior products.

Buying or selling online?

The FTC has two new articles, Online Auctions for Buyers and Online Auctions for Sellers, providing tips for people who want to buy or sell using an online auction. For more free information on a variety of consumer topics, visit consumer.ftc.gov.

"DIRECTV misled consumers about the cost of its satellite television services and cancellation fees. DIRECTV sought to lock customers into longer and more expensive contracts and premium packages that were not adequately disclosed. It's a bedrock principle that the key terms of an offer to a consumer must be clear and conspicuous, not hidden in fine print."
— FTC Chairwoman Edith Ramirez

Double Shot refunds

The FTC mailed 11,585 refund checks totaling more than $464,000 to people who lost money buying dietary supplements deceptively marketed as "fat burning" and "calorie blocking." According to the FTC settlement, Manon Fernet and her company, the "Freedom Center Against Obesity" falsely claimed that their Double Shot pills would cause rapid, substantial, and permanent weight loss without diet or exercise. People receiving refund checks are encouraged to cash them before they expire on April 21, 2015.

Melanoma app crackdown

Two companies – Heath Discovery Corporation and New Consumer Solutions LLC, – that market MelApp and Mole Detective agreed to stop making claims that their mobile apps could detect symptoms of melanoma. According to the FTC, the apps instructed users to photograph a mole with a smartphone camera and input other information about the mole. The apps then claimed to calculate the mole's melanoma risk. The FTC says the marketers lacked adequate scientific evidence to support the claim.

Swatting mosquito repellent claims

According to the FTC, Viatek deceptively marketed Mosquito Shield Bands, claiming that their mint oil wristbands would protect or prevent users from being bitten by mosquitos. Viatek also claimed their bands would create a five-foot vapor barrier and protect people from being bitten for 96-120 hours. The FTC says the company did not have competent and reliable scientific evidence to back up their claims.

Weight-loss product scammers banned

Hispanic Global Way scammers have been banned from telemarketing and selling weight loss products after the FTC said the company charged Spanish-speaking consumers for unordered or defective products. According to the FTC, the company shipped incomplete orders, wrong or defective products, and products that did not perform as advertised on TV. When people called to complain, telemarketers ignored or insulted them. Some people were also told they couldn't return or exchange products, or that they would have to pay a fee to do so.

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Sent by:

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

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