FTC SENDS REFUNDS CHECKS TO CONSUMERS VICTIMIZED BY ALLEGED MORTGAGE RELIEF SCAMS

FROM:  U.S. FEDERAL TRADE COMMISSION 

FTC Mails Refund Checks Totaling Approximately $800,000 to Consumers Victimized by Alleged Mortgage Relief Scams

The Federal Trade Commission, through an administrator, is mailing checks totaling approximately $800,000 to 1,305 consumers who fell prey to two related mortgage relief scams.

In one scheme, using the name Precision Law Center, the defendants allegedly made false promises to consumers that if they sued their lenders along with other homeowners in so-called “mass joinder” lawsuits, they could obtain favorable mortgage concessions from their lenders or stop the foreclosure process. In the other, using names such as FreeFedLoanMod.org, HouseHoldRelief.org, and MyHomeSupport.org, the defendants charged consumers for “forensic loan audits,” and allegedly misrepresented that they could use the results to force lenders to give them better mortgage terms.

 The checks must be cashed on or before October 7, 2014. The amount consumers will receive varies depending on how much they lost.  The FTC never requires consumers to pay money or provide information before redress checks can be cashed.

Consumers should carefully evaluate offers of help in lowering their mortgage payments or saving their homes from foreclosure. Consumers should also know that it is illegal for anyone to collect money up-front for loan modification or foreclosure rescue services. For more information see: Mortgage Relief Scams.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.

CONSUMERS GET REFUNDS IN ALLEGED CREDIT CARD INTEREST TELEMARKETING FRAUD CASE

 FROM:  FEDERAL TRADE COMMISSION 

FTC Mails Refund Checks to Consumers Allegedly Defrauded by Telemarketers Who Charged a Fee, Promising to Help Lower Their Credit Card Interest Rates
An administrator working for the Federal Trade Commission today began mailing refund checks to more than 4,800 consumers allegedly defrauded by National Card Monitor, LLC, a telemarketing operation that promised to substantially lower consumers’ credit card interest rates for an advance fee.

In July 2013, National settled an FTC complaint, agreeing to provide the FTC with lists of consumer victims and to have their assets frozen by the court. Based on the money recovered, a refund check for $25.13 will be mailed to defrauded consumers. The checks must be cashed within 60 days of when they are issued.

FTC VOTES 4-0 TO APPROVE KIDSAFE SAFE HARBOR PROGRAM

FROM:  FEDERAL TRADE COMMISSION 
FTC Approves kidSAFE Safe Harbor Program

Following a public comment period, the Federal Trade Commission has approved the kidSAFE Seal Program as a safe harbor program under the Children’s Online Privacy Protection Act (COPPA) and the agency’s COPPA Rule.

The Commission’s COPPA Rule requires operators of online sites and services directed at children under the age of 13 to provide notice and obtain permission from a child’s parents before collecting personal information from that child. The COPPA safe harbor provision provides flexibility and promotes efficiency in complying with the Act by encouraging industry members or groups to develop their own COPPA oversight programs.

The COPPA law also directs the Commission to review and approve self-regulatory program guidelines that would serve as safe harbors. Website operators that participate in a COPPA safe harbor program will, in most circumstances, be subject to the review and disciplinary procedures provided in the safe harbor's guidelines in lieu of formal FTC investigation and law enforcement.

The Commission determined that the kidSAFE safe harbor program provides “the same or greater protections for children” as those contained in the COPPA Rule; effective mechanisms used to assess operators’ compliance; effective incentives for operators’ compliance with the guidelines; and an adequate means for resolving consumer complaints.

The Commission vote to approve the kidSAFE safe harbor application was 4-0.

FTC SUPPORTS DATA SECURITY LEGISLATION

Testifying Before the Senate Judiciary Committee, FTC Reiterates its Support for Data Security Legislation

The Federal Trade Commission testified before Congress today on the agency’s ongoing efforts to promote data security, and reiterated its support for enactment of a strong federal data security and breach notification law.

Testifying on behalf of the Commission before the Senate Judiciary Committee, FTC Chairwoman Edith Ramirez outlined the agency’s efforts to promote data security through civil law enforcement, education, and policy initiatives. The testimony notes that businesses are collecting more personal information about consumers than ever before, and that rising reports of data breaches show that these systems are susceptible to being compromised.

“Never has the need for legislation been greater.  With reports of data breaches on the rise, and with a significant number of Americans suffering from identity theft, Congress needs to act,” the testimony states.

The testimony points out that, according to estimates by the Bureau of Justice Statistics, 16.6 million persons – or 7 percent of all U.S. residents ages 16 and older – were victims of identity theft in 2012.

The testimony explains that, to promote data security, the FTC enforces several statutes and rules that impose obligations upon businesses that collect and maintain consumer data.  These include the proscription against unfair or deceptive acts or practices in Section 5 of the FTC Act; the Gramm-Leach-Bliley Act; the Fair Credit Reporting Act; and the Children’s Online Privacy Protection Act.

The testimony stresses the Commission’s bipartisan support for data security legislation that would enhance existing laws and strengthen the agency’s existing authority.  The Commission supports legislation, for example, that would give the FTC the ability to seek civil penalties to help ensure FTC enforcement actions have an appropriate deterrent effect.  Under current laws, the FTC only has the authority to seek civil penalties for data security violations involving companies that fail to protect children’s information provided online in violation of the COPPA Rule or credit report information in violation of the FCRA.  The Commission also recommends data security legislation that would provide the agency with jurisdiction over non-profits, which have been the source of a substantial number of breaches

The Commission also recommends that Congress enact a federal law that would require companies, in appropriate circumstances, to notify consumers when there is a security breach, the testimony states.  This would help consumers mitigate likely harm from the misuse of their data.  Although most states have breach notification laws, a strong and consistent, national requirement would ensure that all consumers are protected.  

In addition, the Commission promotes better data security practices through consumer education and business guidance, the testimony notes.  On the consumer education front, the Commission recently posted information for consumers who may have been affected by the recent Target and other breaches, providing steps they should take to protect themselves.  It also widely disseminates a business guide on data security, along with an online tutorial, that are designed to provide diverse businesses – and especially small businesses – with practical, concrete advice as they develop data security programs and plans for their companies.

The Commission vote approving the testimony and its inclusion in the formal record was 4-0.

FTC TESTIFIES ON IDENTITY THEFT

FROM:  FEDERAL TRADE COMMISSION 

Testifying Before the House Energy and Commerce Committee, Subcommittee on Commerce, Manufacturing and Trade, FTC Reiterates its Support for Data Security Legislation

The Federal Trade Commission testified before Congress for the third time in as many days today, emphasizing the agency’s ongoing efforts to promote data security, and reiterating its unanimous support for enactment of a strong federal data security and breach notification law.

Testifying on behalf of the Commission before the House Energy and Commerce Committee’s Subcommittee on Commerce, Manufacturing and Trade, FTC Chairwoman Edith Ramirez outlined the agency’s efforts to promote data security through civil law enforcement, education, and policy initiatives. The testimony notes that businesses are collecting more personal information about consumers than ever before, and that rising reports of data breaches show that these systems are susceptible to being compromised.

“Never has the need for legislation been greater.  With reports of data breaches on the rise, and with a significant number of Americans suffering from identity theft, Congress needs to act,” the testimony states.

The testimony points out that, according to estimates by the Bureau of Justice Statistics, 16.6 million persons – or 7 percent of all U.S. residents ages 16 and older – were victims of identity theft in 2012.

The testimony explains that, to promote data security, the FTC enforces several statutes and rules that impose obligations upon businesses that collect and maintain consumer data.  These include the proscription against unfair or deceptive acts or practices in Section 5 of the FTC Act; the Gramm-Leach-Bliley Act; the Fair Credit Reporting Act; and the Children’s Online Privacy Protection Act.

The testimony stresses the Commission’s bipartisan support for data security legislation that would enhance existing laws and strengthen the agency’s existing authority.  The Commission supports legislation, for example, that would give the FTC the ability to seek civil penalties to help ensure FTC enforcement actions have an appropriate deterrent effect.  Under current laws, the FTC only has the authority to seek civil penalties for data security violations involving companies that fail to protect children’s information provided online in violation of the COPPA Rule or credit report information in violation of the FCRA.  The Commission also recommends data security legislation that would provide the agency with jurisdiction over non-profits, which have been the source of a substantial number of breaches

The Commission also recommends that Congress enact a federal law that would require companies, in appropriate circumstances, to notify consumers when there is a security breach, the testimony states.  This would help consumers mitigate likely harm from the misuse of their data.  Although most states have breach notification laws, a strong and consistent, national requirement would ensure that all consumers are protected.  

In addition, the Commission promotes better data security practices through consumer education and business guidance, the testimony notes.  On the consumer education front, the Commission recently posted information for consumers who may have been affected by the recent Target and other breaches, providing steps they should take to protect themselves.  It also widely disseminates a business guide on data security, along with an online tutorial, that are designed to provide diverse businesses – and especially small businesses – with practical, concrete advice as they develop data security programs and plans for their companies.

The Commission vote approving the testimony and its inclusion in the formal record was 4-0.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

DECEPTIVE CREDIT CARD RATE-REDUCTION ROBOCALLERS SHUT DOWN IN FTC SETTLEMENTS

FROM:  FEDERAL TRADE COMMISSION 
Deceptive Robocallers Permanently Shut Down In FTC Settlements

Companies Behind Credit Card Rate-Reduction Scams Will Be Banned From Telemarketing, Robocalling

The Federal Trade Commission has continued its crackdown on illegal robocallers, with two more companies agreeing to settle charges that they used prerecorded calls to trick consumers into deceptive credit card interest rate reduction scams.

Under separate proposed settlements, the defendants behind Treasure Your Success and Ambrosia Web Design will be banned from telemarketing and delivering robocalls.  They also will be permanently prohibited from advertising, marketing, promoting, or offering for sale any debt relief product or service, or assisting others in doing so.

The FTC filed the initial cases against the operators of both companies in 2012 as part of a joint-agency crackdown on companies and individuals responsible for making millions of illegal “Rachel” robocalls pitching credit card rate-reduction services.

Treasure Your Success

In its original complaint against Treasure Your Success, the FTC alleged that the defendants tricked consumers into paying up-front fees for as much as $1,593, using deceptive offers for credit card interest rate reduction services.

The complaint named two individuals, Willy Plancher and Valbona Toska, as well as their three companies, WV Universal Management, Global Financial Assist, and Leading Production.  The defendants began marketing credit card interest rate reduction services in 2010.  According to the FTC’s complaint, the defendants lured consumers by telling them they could substantially reduce their credit card interest rates, down to as low as three percent, in many instances.  After collecting the upfront fees, however, consumers typically failed to get any interest rate reduction or any savings at all.

In November 2012, at the FTC’s request, a federal court halted the scheme and froze the defendants’ assets pending further court proceedings. The FTC subsequently amended its complaint to include new defendants and additional counts.

In addition to the other provisions of the settlement, the proposed order holds the defendants liable for $2,032,626, based on the amount of consumer injury in the case. Due to the inability of the individual defendants to pay redress, the monetary judgment has been suspended. However, if the defendants misstate or fail to disclose any of their material assets, the full amount of the judgment will be immediately due and payable.

The case against Treasure Your Success was filed in the U.S. District Court for the Middle District of Florida, Orlando Division. Litigation continues against: HES Merchant Services Company, Business First Solutions, VoiceOnyx Corp., Hal E. Smith, Jonathon E. Warren, Ramon Sanchez-Ortega, Universal Processing Services of Wisconsin, and Derek Depuydt.

Ambrosia Web Design

According to the FTC’s complaint, the Ambrosia Web Design defendants delivered prerecorded calls that urged consumers they called to “press one” if they were interested in credit card interest rate reduction services.  Consumers who pressed one were connected to a telemarketer who promised to get them very low interest rates or, in some cases, specific amounts of interest savings.  The defendants often deceived consumers into thinking defendants were affiliated with a government program.  If consumers agreed to sign up, the telemarketer got their credit card information, often charging an illegal advance fee before providing any service, the FTC alleged.

The FTC alleged that defendants then typically failed to deliver on their promises. In addition, the FTC charged defendants with failing to disclose their purported no-refund/no cancellation policy and billing some consumers without their express authorization.  Finally, the FTC alleged defendants illegally called many phone numbers on the National Do Not Call Registry.

In June 2013, the FTC amended its original complaint to add charges of credit card laundering in violation of the agency’s Telemarketing Sales Rule.  According to the FTC, in many cases, the defendants laundered credit card payments by processing them for other telemarketers through the Ambrosia defendants’ own merchant accounts; and arranging for other merchants to process credit card payments for the defendants through their accounts.

In addition to the bans on outbound telemarketing and robocalling, the proposed settlement order:

Bans the defendants from using certain payment processing methods, such as remotely created checks, that are often used to conduct fraud;
Prohibits the defendants from making misrepresentations regarding any “financial products or services;” and Prohibits the defendants from misrepresenting the efficacy of a product or service.

The proposed settlement requires the defendants to liquidate virtually all of their assets, including a valuable watch and a sports memorabilia collection.  It also includes a judgment of $8.3 million, which will be suspended if defendants comply with the terms of the settlement.

The settlement resolves the FTC’s charges against: 1) Ambrosia Web Design, LLC, also doing business as AWD; 2) Concord Financial Advisors LLC; 3) CAM Services Direct LLC; 4) AFB LLC; 5) Western GPS LLC; 6) Chris Ambrosia, individually and as a manager of Ambrosia Web Design LLC and CAM Services Direct LLC; and 6) LeRoy Castine, also known as Lee Castine, individually and as a manager of Ambrosia Web Design LLC, Concord Financial Advisors LLC, AFB LLC, and Western GPS LLC.

The case against Ambrosia Web Design was filed in the U.S. District Court for the District of Arizona.

The Commission vote approving the proposed settlements in both actions was 4-0.

Information for Consumers

The FTC has tips for consumers, as well as two new consumer education videos explaining robocalls and describing what consumers should do when they receive one.  See ftc.gov/robocalls for more information.

POSTAL JOBS SCHEME OPERATORS BANNED FROM SELLING EMPLOYMENT SERVICES .

FROM:  FEDERAL TRADE COMMISSION

Operators of Postal Jobs Scheme Banned from Selling Employment Services
Under settlement orders with the Federal Trade Commission announced today, the operators of an alleged federal jobs scam have been banned from selling employment products or services.  Last year, as part of Operation Lost Opportunity, the FTC charged Career Exams, Inc., O’Brien Marketing, Inc., Jeryn B. Lee, and Derek Jackson with running deceptive ads for nonexistent U.S. Postal Service jobs.  The FTC alleged that the defendants lured consumers into paying $120 by representing that Postal Service jobs were available in the consumer’s geographic area.  Instead of jobs, consumers simply received a booklet containing general information about the hiring process for the federal civil service and Postal Service.

In addition to banning the defendants from selling employment products or services, the settlement orders prohibit the defendants from misrepresenting material facts about any products and services that they market or sell in the future.  Under the orders, the defendants will surrender cash and investments totaling approximately $45,000.  The orders also impose a $4.8 million judgment that will be partially suspended based on the defendants’ inability to pay the full judgment.  The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The Commission vote authorizing the staff to file the proposed consent judgments settling this action was 4-0.  The consent judgments were entered by U.S. District Court for the Western District of Kentucky on June 28 and July 10, 2013.

NOTE:  Consent judgments have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.

DEFENDANTS SETTLE IN 'RACHEL ROBOCALL" SCHEME

FROM:  U.S. FEDERAL TRADE COMMISSION 
FTC Settles ‘Rachel’ Robocall Enforcement Case

The Federal Trade Commission has settled with a set of defendants associated with the A+ Financial Center scheme.  They were charged in last year’s joint law enforcement sweep against five companies that made millions of illegal pre-recorded robocalls claiming to be from “Rachel” and “Cardholder Services” and pitching credit card interest rate reduction services.

In the five complaints announced in November 2012, the FTC charged the companies and their principals with misleading consumers about their services, calling phone numbers on the Do Not Call Registry, illegally collecting up-front fees, and making illegal robocalls. According to the FTC, the A+ Financial Center defendants told consumers that for an up-front fee of between $495 and $1,595, they would lower their credit card interest rate, often promising rates as low as six percent or even zero percent. But after collecting the fee, the defendants did little if anything to help consumers lower their credit card interest rates, or obtain the promised long-term savings.

In settling the FTC’s charges, the defendants are banned from making robocalls, continuing to pitch unsecured debt relief services, misrepresenting the attributes of any financial product or service, and engaging in abusive telemarketing practices such as calling numbers on the Do Not Call Registry. The order also prohibits the defendants from misrepresenting the attributes of any goods or services, and from misrepresenting their relationship with any bank, credit card issuer, credit reporting agency, other lender, or government entity. It also requires them to have reliable evidence to support any claims they make to consumers.

In addition, the proposed order prohibits the A+ defendants from disclosing or benefiting from their customer lists, and prohibits them from collecting or trying to collect money from any consumer who bought their service. Finally, it imposes a judgment of $9,238,155, which will be suspended after defendants transfer all of their assets (except $25,000), including a 2007 Mercedes Benz CL, a 1999 boat valued at approximately $17,000, and a 2002 boat worth about $45,000.

The case against A+ Financial Center, LLC was filed in the U.S. District Court for the Southern District of Florida against the following defendants: A+ Financial Center, LLC, also doing business as Accelerated Financial Centers, LLC; Accelerated Accounting Services LLC; Christopher L. Miano, individually and as the managing member of Accelerated Accounting Services LLC; and Dana M. Miano, individually and as the managing member of A+ Financial Center, LLC.

The Commission vote approving the proposed settlement was 4-0.

Information for Consumers

The FTC has tips for consumers, as well as two new consumer education videos explaining robocalls and describing what consumers should do when they receive one. See ftc.gov/robocalls for more information.

NOTE: Consent judgments have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.