: The Federal Trade Commission finalized orders requiring Cox Media Group (CMG) and two other firms to pay a total of $930,000 to settle allegations they deceived customers by falsely claiming to offer an AI-powered service that could target localized ads based on conversations captured from consumers’ smart devices and that consumers had opted into such targeting. In three separate complaints first announced in May , the FTC alleged that Georgia-based media and marketing company CMG Media Corporation, which does business as Cox Media Group , and two marketing firms it worked with, New Hampshire-based MindSift LLC and Wisconsin-based 1010 Digital Works LLC , deceived customers by claiming they used a special algorithm to listen in on and detect pertinent conversations from smart devices in order to target ads to consumers within a specific geographic region. Contrary to these companies’ claims, however, the marketing service wasn’t based on voice data, and consumers hadn’t opted into this service. If the s[...]
: Setting the debt parking brake lfair November 30, 2020 | 12:14PM Setting the debt parking brake By Lesley Fair What are the biggest risks of parking? A dinged door? A bruised bumper? For consumers victimized by the pernicious practice of debt parking, the impact on their financial health can be devastating. And if you’re a debt collector who engages in debt parking, an FTC settlement with Midwest Recovery Systems suggests you could face law enforcement action for violations of the FTC Act, the Fair Debt Collection Practices Act, and the Fair Credit Reporting Act. Just what is debt parking? It’s the practice of placing purported debts on consumers’ credit reports without first attempting to communicate with the consumer about the debt. Some call it “passive debt collection,” but there’s nothing passive about the injury it can inflict. Consumers often don’t learn about it until a mortgage company, prospective employer, or other decision maker pulls their credit report and spots what appears to be an unpaid deb[...]
: We can’t go for that (no can do) lfair July 17, 2017 | 11:38AM We can’t go for that (no can do) By Lesley Fair Of course, phantom debt collection – the practice of pressuring people to pay “debts” they don’t owe – harms consumers. But as an FTC complaint demonstrates, when phantom debt collectors strike, they could affect your company, too. According to the FTC , a Florida-based outfit engaged in a scheme to defraud consumers through the collection of debts people didn’t actually owe or the company didn’t have the authority to collect. The complaint charges that the defendants – Hardco Holding Group, S & H Financial Group, Dequan M. Sicard, and Daryl M. Hall (no, not that Daryl Hall) – violated the FTC Act and Fair Debt Collection Practices Act. When contacting consumers, in many instances the defendants allegedly impersonated attorneys and threatened to have people thrown in jail if they didn’t pay up on delinquent payday loans – loans, remember, that many consumers didn’t take out in the first place and de[...]
: First Consumer Review Fairness case takes on promoter’s “big bucks on Amazon” claim lfair August 6, 2018 | 11:11AM First Consumer Review Fairness case takes on promoter’s “big bucks on Amazon” claim By Lesley Fair T he marketers behind a purported money-making promotion called Sellers Playbook appear to have skipped the chapter about complying with federal and state consumer protection laws. That’s the allegation in a complaint filed by the FTC and the Minnesota Attorney General . In addition, it’s the FTC’s first case charg ing violations of the Consumer Review Fairness Act. The roots of the allegations go back to another venture sued by the FTC earlier this year: FBA Stores, also known as Amazing Wealth System and Amazon Wealth Systems. The defendants in that case ran online ads and in-person workshops that claimed to reveal the secret s of making major money on Amazon. But few, if any, of the consumers who forked over thousands of dollars and implemented their “plug-and-play systems” earn ed the kind of c[...]
: The Federal Trade Commission is taking action against Illusory Systems Inc. for failing to implement adequate data security measures, leading to a major security breach in which hackers stole $186 million from consumers. Under a proposed order settling the FTC’s allegations, Utah-based Illusory, which does business as Nomad, will be required to implement an information security program to address numerous alleged security failures and to return recovered money to affected consumers. “The FTC Act requires companies to take reasonable security measures,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection. “It’s important that companies live up to their security promises to consumers.” In its complaint , the FTC alleged that Nomad prominently touted its security in its advertising, claiming that it offered “security-first” services. The FTC, however, alleged that the company failed to live up to these promises by failing to: use secure coding practices; implement processes for recei[...]
: First FTC ROSCA case challenges bogus BOGO and "free" claims wfg-adm109 October 21, 2014 | 12:02PM First FTC ROSCA case challenges bogus BOGO and "free" claims By Lesley Fair It’s called ROSCA – the Restore Online Shoppers’ Confidence Act – and it prohibits marketers from charging consumers for an online transaction unless the marketer has clearly disclosed all material terms of the deal and received the consumer’s express informed consent. Your e-commerce clients will want to know about the FTC’s first ROSCA case , filed recently in Nevada. According to the lawsuit, Health Formulas, LLC and a tangle of related California- and Nevada-based companies and individuals – consumers may know them as Simple Pure Nutrition – pitched a variety of products for weight loss, muscle building, virility, and skin care. The defendants advertised diet supplements like Pure Green Coffee Bean Plus and RKG Extreme as a shortcut to drop the pounds: “Burn fat without diet or exercise,” “Extreme weight loss!” “Shed pounds fast!” “[...]
: FTC, Florida AG to small business: Scrutinize “o-fishy-al” invoices lfair July 30, 2018 | 11:05AM FTC, Florida AG to small business: Scrutinize “o-fishy-al” invoices By Lesley Fair If it looks like a duck and quacks like a duck, it’s probably a duck. But the same can’t be said for a mailer that looks like an official invoice. It could be an “o- fishy -al” offer that deceptively mimics the appearance of a government document. A case filed by the FTC and the Florida Attorney General challenges the practice of sending mailers that allegedly create the false impression that small businesses are required to buy labor regulation posters from the sender. Consider what defendants Starwood Consulting, also doing business as Corporate Compliance Services, and company president Thomas Henry Fred, Jr., sent to small businesses. The mailers – which include a Washington, D.C., 202 area code – are titled “LABOR LAW COMPLIANCE REQUEST FORM” and include the warning “Failure to comply with posting regulations can lead to fine[...]
: Keep FCRA in the foreground when the subject is background screening chundycz April 9, 2014 | 12:13AM Keep FCRA in the foreground when the subject is background screening By Lesley Fair When the talk turns to Big Data, part of the conversation is about all the public information available about people's lives – and how companies market it to prospective employers, landlords, etc. Two cases just announced by the FTC serve as a cautionary reminder to members of the industry that what they do may be subject to the long-standing consumer protections of the Fair Credit Reporting Act (FCRA) . InfoTrack, an Illinois company, and San Diego-based Instant Checkmate will be paying civil penalties to settle FTC lawsuits that they violated the FCRA. Is it time for an FCRA refresher at your business? Instant Checkmate marketed its reports as a way for prospective employers and landlords to investigate applicants. For example, the company advertised that one of the “GOOD REASONS to get instant criminal checks on anyo[...]
: Made in USA? Avoiding a Yankee Doodle Don't wfg-adm109 October 21, 2013 | 11:17AM Made in USA? Avoiding a Yankee Doodle Don't By Lesley Fair There are lots of nifty phone accessories, bottle holders, tow straps, pet items, and lanyards out there. So a label that says the product is Made in the USA may help make the decision for some consumers. When it bears the American flag and says “TRULY MADE IN THE USA,” that just might seal the deal. But according to an FTC lawsuit , a lot of the “Made in the USA” merchandise touted by Logan, Utah-based E.K. Ekcessories wasn’t really made in the USA – turning the company’s claims from a Yankee Doodle Do to a Yankee Doodle Don't. E.K. Ekcessories sells a variety of outdoor equipment through popular retailers and on its own site. In addition to the labels, the company touted its products’ U.S. pedigree with statements like “For 28 years E.K. Ekcessories has been producing superior quality made accessories in our 60,000 sq. ft. facility in Logan, Utah,” and “Our source[...]