Author: jmayfield

The Federal Trade Commission has issued its latest report to Congress on protecting older adults, which highlights key trends based on fraud reports by older adults, and the FTC’s multipronged efforts to combat the problem through law enforcement actions, rulemaking, and outreach and education programs.

The report, Protecting Older Consumers, 2023-2024, A Report of the Federal Trade Commission, also outlines a number of actions taken by the FTC-led Scams Against Older Adults Advisory Group, which was created as a result of 2022’s Stop Senior Scams Act. The group, which includes representatives from numerous federal and state government agencies, developed guidance designed to help interrupt scams that target seniors and prepared a report highlighting what research says are the challenges to effective consumer education messaging to prevent scams.

“Through our cases, rulemaking, and outreach, we’re taking every step we can to stop scams targeting older adults and help them protect themselves,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This report highlights that work and the key actions of the working group formed under the Stop Senior Scams Act.”

Older Adult Fraud Reporting

The report finds that older adults reported losing more than $1.9 billion to fraud in 2023.

Because the vast majority of frauds are not reported, this figure represents only a fraction of the overall cost of fraud to older consumers in 2023, which the FTC estimates may be as high as $61.5 billion.

As in prior years, the analysis of fraud reports received by the FTC in 2023 showed that adults aged 60 and over were less likely to report losing money to fraud than adults aged 18-59. When they did report losing money, though, adults over 60 often reported losing substantially more than younger adults. Consumers 80 and older reported losing a median of $1,450 to fraud, while those in their seventies reported a median loss of $804. The number of older adults reporting losses of $100,000 or more has increased more than threefold since 2020.

The analysis included in the report to Congress also found that adults 60 and older were more than five times as likely as adults aged 18 to 59 to report losing money to a tech support scam. Older adults were nearly three times as likely to report a loss to a prize, lottery or sweepstakes scam, and 53% more likely to report losing money to a friend or family impersonation scam.

Older adults report losing more money, $538 million—a 34% increase over 2022, to investment scams caused than any other type of fraud, followed by business imposters at $311 million (up 16% from 2022), and romance scams at $277 million (up 16% from 2022).

The report shows that older adults reported losing far more money to fraud using bank transfers and cryptocurrency than any other methods of payment. Reports indicating cryptocurrency as the payment method often involved the use of Bitcoin ATM machines. Gift cards continued to be the most frequently reported payment method on a number of common fraud types, including tech support scams and family and friend impersonation scams.

Scams Against Older Adults Advisory Group

The report also highlights actions taken by the Advisory Group’s committees. The group’s consumer education committee implemented multiple consumer education pilot programs, and experimented with new materials, partnerships, or communication channels to provide more effective education on scams to older adults. It also created a simple reference sheet outlining best practices on effective consumer outreach that anyone can use in their education efforts.

The industry training committee reviewed current training methods and identified best practices and gaps that exist across industries on how employees are trained to stop and prevent fraud. The committee produced guidance documents designed to help companies create or enhance existing trainings for employees, and multiple committee members reported successes within their organization in applying the guidance.

The technology and new methods committee established multiple working groups addressing issues from ways to better help recover funds lost by consumers to scammers, particularly through bank transfers, as well as ways to reduce fraud in the gift card system and in text messaging. The committee is also addressing ways to enhance information sharing to help prevent fraud, particularly among private companies.

In addition, the working group’s research committee presented findings from a review of research across academic literature on effective scam prevention messaging. Its findings outlined a number of challenges to effective messaging both to older adults and the general public and included recommendations based on those findings. It also includes recommendations on what additional research would be useful in developing more effective scam prevention messaging.

The Scams Against Older Adults deliverables are available to the public at ftc.gov/olderadults.

Cases, Referrals and Outreach

The report focuses on key actions the FTC has taken to protect older consumers, including a number of enforcement actions that had a particular impact on older consumers. The report also highlights work to target fraud reports with a high dollar loss for fast referral to the FBI, which may be able to assist consumers in recovering or stopping payment of funds, including a number of examples of successful referrals.

The report highlights work by the FTC to enact rules designed to provide more ability for the agency to seek money back for consumers after the Supreme Court’s AMG Capital Management decision. The FTC continues to urge Congress to amend Section 13(b) of the FTC Act to provide the FTC the ability to seek equitable monetary remedies so it can provide refunds to harmed consumers and prevent violators from benefitting from their schemes by keeping their illegally gained profits.

Finally, the report details the FTC’s outreach and education efforts through such programs as the Pass it On campaign, which focuses on providing fraud prevention resources to older adults so they can help protect their communities by sharing the information and materials with family and friends.

The Commission vote authorizing the report to Congress was 5-0.

The Federal Trade Commission is taking action against Invitation Homes, the country’s largest landlord of single-family homes, for an array of unlawful actions against consumers, including deceiving renters about lease costs, charging undisclosed junk fees, failing to inspect homes before residents moved in, and unfairly withholding tenants’ security deposits when they moved out.

Invitation Homes has agreed to a proposed settlement order that would require the company to turn over $48 million to be used to refund consumers harmed by its actions. The corporate landlord will also be required to clearly disclose its leasing prices, establish policies and procedures to handle security deposit refunds fairly, and stop other unlawful behavior.

“Invitation Homes, the nation’s largest single-family home landlord, preyed on tenants through a variety of unfair and deceptive tactics, from saddling people with hidden fees and unjustly withholding security deposits to misleading people about eviction policies during the pandemic and even pursuing eviction proceedings after people had moved out,” said FTC Chair Lina M. Khan. “No American should pay more for rent or be kicked out of their home because of illegal tactics by corporate landlords. The FTC will continue to use all our tools to protect renters from unlawful business practices.”

Deceptive Pricing and Junk Fees

The complaint alleges that Invitation Homes advertised monthly rental rates that failed to include mandatory junk fees that could total more than $1,700 yearly. Consumers looking for rental houses paid nonrefundable fees—including application fees up to $55 and reservation fees up to $500—based on the deceptively advertised rates. Consumers learned that the price would be higher than advertised only when they received a copy of their lease, and sometimes not even until after they signed the lease. These undisclosed fees ranged from “services” such as “smart home” technology and “utility management,” to air filter delivery and internet packages. Renters could not opt out of paying these fees. Since 2019, Invitation Homes has collected more than $18 million in application fees alone for deceptively priced houses.

The mandatory fees were also highly profitable for Invitation Homes. Between 2021 and June 2023, the complaint alleges, Invitation Homes charged consumers tens of millions of dollars in junk fees as part of their monthly rental payments. The complaint cites a 2019 email from Invitation Homes’ CEO calling on the senior vice president responsible for overseeing the company’s fee program to “juice this hog” by making the smart home fee mandatory for renters. The complaint also points to multiple times the company actively chose not to disclose the fees prior to consumers paying nonrefundable application and reservation fees, despite the company receiving numerous complaints about the fees after renters learned their actual monthly lease prices were higher than advertised.

Deceptive Promises of Home Inspections and “24/7 Emergency Maintenance”

According to the complaint, Invitation Homes’ marketing materials promote that every home the company rents passes a “quality assurance inspection” before renters move in and that the company provides “24/7 emergency maintenance.” However, there are numerous instances in which renters arrived to a home to find it in significant disrepair.

The complaint alleges that, between 2018 and 2023, residents in 33,328 properties submitted at least one work order within the first week after they moved in for issues including plumbing, electrical, and heating and air conditioning service requests. In some instances, residents reported houses that were unclean and had mold, broken appliances, rodent feces, and exposed wiring.

These problems were known to Invitation Homes, with one employee noting, “The number of resident complaints I field from new move-ins related to the home not being lease ready is both alarming and growing.” A senior employee overseeing thousands of rental houses called the process of preparing houses for new renters a “train wreck.”

Even after renters moved in, the company’s supposed “24/7 emergency maintenance” was frequently nonexistent. According to the complaint, numerous residents complained about being forced to endure days and even weeks in unacceptable—and sometimes dangerous—conditions, including no heat in the middle of winter, no air conditioning in the middle of summer, and flooding or sewage backing up in the home.

Deceptive and Unfair Withholding of Security Deposits

The FTC also alleges that Invitation Homes has systematically withheld renters’ security deposits when they moved out of the company’s houses, including by deceptively and unfairly charging them for normal wear-and-tear, damages that existed before renters moved in, and even renovations. These charges were not renters’ responsibility and directly contradicted Invitation Homes’ clear representations to prospective renters that security deposits would be charged only for damage the resident caused beyond normal wear and tear.

According to the complaint, before a renter moves out, an Invitation Homes employee walks through the home and assesses all the damages, repairs, and renovations the home needs before a new tenant moves in. All such items then are placed on the renter’s account, regardless of whether the renter is actually responsible for the cost.

Later, a different employee, who never sets foot in the home, supposedly decides which costs should be passed on to the renter. According to the complaint, this process resulted in numerous improper charges to residents. For example, some regions of the country with thousands of rental homes did away with the review process altogether, charging renters for all repairs by default and reviewing charges only when residents disputed them. But residents were often unable to reach anyone with authority to review their dispute. One employee noted that aggressively charging residents “is how we get upset residents but also make the numbers [the Chief Financial Officer] communicated investors need [to] see.”

Invitation Homes’ security deposit refund practices were far outside of national norms, with the complaint noting that, between 2020 and 2022, Invitation Homes returned only 39.2% of consumers’ total security deposit dollars collected, compared to the national average of 63.9%.

Unfair Eviction Practices

According to the complaint, Invitation Homes has used unfair eviction practices, including during the COVID-19 pandemic when both national and many state restrictions on evictions were in place. When the Centers for Disease Control and Prevention (CDC)’s eviction moratorium was in place, Invitation Homes intentionally steered its renters away from filing the CDC declaration required to prevent renters from being evicted, instead encouraging renters to complete the company’s own “Hardship Affidavit.” Despite its name, this document provided no eviction protection to renters.

The complaint notes that Invitation Homes took steps to prevent renters from being made aware of the CDC declaration, including ensuring that the company’s call centers did not recommend that renters file the CDC declaration. When consumers would reach out to company employees for help, employees regularly failed to inform renters about their option to file the CDC declaration, instead falsely telling tenants their only options were to pay rent, accept a balance forgiveness and move out, or undergo the eviction process.

The complaint alleges Invitation Homes even started eviction proceedings against renters who the company knew had already moved out of their houses, which in some cases resulted in eviction filings appearing on tenant screening reports, making it harder for them to rent houses in the future. In one instance noted in the complaint, a renter was told by Invitation Homes that if she moved out of her house, she would not have an eviction filed against her, but after she moved out the company still filed the eviction.

Settlement Details

Under the terms of the proposed settlement, Invitation Homes would be required to turn over $48 million to the FTC to be used to provide refunds to consumers harmed by the company’s unlawful actions.

The settlement also places a number of requirements on Invitation Homes moving forward. The company would be:

• prohibited from deceiving consumers about the true rental price of a house, including a requirement to include all mandatory monthly fees in a house’s advertised rental price and disclose whether listed fees are mandatory or not.
• prohibited from withholding security deposit money for damages that are part of normal wear and tear and requiring that any money withheld be used to repair or correct the damage for which it was withheld.
• prohibited from using withheld security deposit money to fix issues that were present before the renter moved in or to cover the cost of maintenance, repairs, or capital improvements not related to damage caused by a renter.
• required to notify consumers about federal, state, or local programs designed to assist people facing eviction.
• prohibited from filing evictions against certain renters who have already moved out of their house and notified Invitation Homes of their departure.

The settlement, which must be approved by a federal judge before it can go into effect, would also require Invitation Homes to destroy consumer financial data it collected prior to the settlement except under certain conditions, including if that information is needed for current renters.

Earlier this year, the FTC formed an agency-wide Renters Working Group to examine unfair, deceptive, and anticompetitive practices affecting renters. The Commission is holding listening sessions to hear directly from renters, and recently warned that price fixing by algorithm is still price fixing. This is the agency’s first enforcement action since the launch of the group, and it builds on previous housing-related actions like TransUnion, Roomster, Opendoor, and WeTakeSection8.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 5-0. Commissioner Melissa Holyoak issued a concurring statement and Commissioner Andrew Ferguson issued a concurring and dissenting statement. The FTC filed the complaint and final order/injunction in the U.S. District Court for the Northern District of Georgia.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final injunctions/orders have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter were Michael Boutros, Robin Rock, Marguerite Moeller, Christopher Gleason, and Natalya Rice of the FTC’s Southeast Region.

As a result of a Federal Trade Commission lawsuit, an individual and his company who helped operate a sprawling business opportunity scheme known as Blueprint to Wealth have agreed to a settlement that permanently bans them from the telemarketing industry.

The FTC first sued Charles Joseph Garis, Jr., and Business Revolution Group, Inc. (BRG) in December, 2023, alleging that Garis and his company played key roles in the Blueprint to Wealth scheme, which targeted consumers looking to build their own businesses with a program that offers essentially no value, other than commissions that come from encouraging others to join the scheme.

“This settlement demonstrates the FTC’s commitment to go after those like Garis and his company, Business Revolution Group, who use phony earnings claims to promote and sell worthless business or investment opportunities,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.

Two other individual defendants in the case, Robert William Shafer and Samuel J. Smith, previously agreed to settlements to resolve the FTC’s allegations against them for their participation in Blueprint to Wealth.

The scheme took millions of dollars from consumers by charging them at least $3,000 and as much as $21,000, plus hundreds of dollars in additional “administrative fees,” for membership in the scheme, which nominally promised its members turnkey online businesses that would be operated on the members’ behalf, according to the FTC’s complaint. Those businesses, however, existed only to sell more supposed businesses to more consumers.

The stipulated final order settling the case against Garis and BRG permanently bans them from telemarketing as well as from any role in selling or marketing money-making or investment opportunities. In addition, they are required to pay $100,000 to the FTC and turn over the contents of numerous bank accounts and funds, which could be used to provide refunds to consumers.

Garis and BRG are subject to a monetary judgement totaling more than $567,000, which has been partially suspended based on their inability to pay that amount. If they are found to have lied to the FTC about their financial condition, the full amount of the judgment would be immediately due.

The Commission vote approving the stipulated final order was 5-0. The FTC filed the proposed order in the U.S. District Court for the Eastern District of Pennsylvania.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter are Connell McNulty and Lauren Rivard of the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission has provided the Consumer Financial Protection Bureau (CFPB) with its annual summary of activities to protect consumers in the debt collection arena.

The summary is used by CFPB in its annual report to Congress on the activities of both agencies, which share law enforcement responsibility in this area.

In the summary, the Commission highlights its debt collection work to protect individuals and small business consumers, including:

• settlements and/or completed trials in cases against two debt collection operations that, the FTC charged, used a variety of illegal tactics to target small businesses with threats about supposed debts;
• halting collections of millions of dollars in student debt that originated from illegal financing practices;
• bringing two cases against companies for using dark patterns to lock consumers in unwanted subscriptions that can add to their debt burdens;
• actions to combat unlawful practices that add to car debt, including the finalized CARS Rule and a law enforcement action against a car dealership group;
• providing tens of millions of people with educational materials, in both English and Spanish, informing them about their rights, and educating debt collectors about their responsibilities, under the FDCPA and FTC Act.

The staff of the Federal Trade Commission have issued a report that details findings from a review of income disclosure statements from 70 different multi-level marketers (MLMs).

Staff reviewed income disclosure statements in February 2023 that were publicly available on the websites of a wide array of MLMs, from large household names to smaller, less well-known companies. These statements are sometimes provided to consumers who are considering joining MLMs, and often purport to show information about income that recruits could expect to receive.

According to the report, FTC staff found a number of issues with the statements they reviewed, including that most omit key information when calculating the earnings amounts they present. Specifically, the report notes that most of the reviewed statements do not include participants with low or no earnings in their display of earnings amounts and also don’t account for the expenses faced by participants, which can outstrip the income they make. The report notes that these omissions are often not plainly disclosed in the income statements.

The report also notes that most statements emphasize the high earnings of a small group of participants, and many entirely omit or only inconspicuously disclose key information about the limited earnings made by most participants. In addition, the staff report notes that most of the disclosure statements staff reviewed present earnings information in a potentially confusing way, like giving average earnings amounts for groups that could have very different actual incomes, or using annual income figures that aren’t based on what an actual group of participants made for the year.

The report also notes based on staff’s analysis of data in the income disclosure statements, including information included in fine print, that many participants in those MLMs received no payments from the MLMs, and the vast majority received $1,000 or less per year—that is, less than $84 per month, on average.

New data from the Federal Trade Commission shows a massive increase in the amount of money consumers report losing to scammers involving Bitcoin ATM machines. Since 2020, the amount consumers reported losing has increased nearly tenfold to over $110 million in 2023.

Bitcoin ATMs are machines that look like a traditional ATM and are often found at convenience stores, gas stations and other high-traffic areas. Instead of distributing cash, they accept cash in exchange for cryptocurrency. Their use by scammers, who urge consumers to deposit cash into them to “protect” their savings, is on the rise.

In a newly released data spotlight, the FTC says that fraud losses to Bitcoin ATMs have topped $65 million in just the first six months of 2024. During this timeframe, consumers over the age of 60 were more than three times as likely as younger adults to report losing money to Bitcoin ATM scams. Across all ages, the median loss reported in the first half of this year was a staggering $10,000.

The majority of scam losses involving Bitcoin ATMs come as a result of government impersonation, business impersonation, and tech support scams. The lies told by scammers vary, but they all create some urgent justification for consumers to take cash out of their bank accounts and put it into a Bitcoin ATM. As soon as consumers scan a QR code provided by scammers at the machine, their cash is deposited straight into the scammers’ crypto account.

The spotlight includes tips for consumers to avoid being drawn into scams like these, including:

• Never click on links or respond directly to unexpected calls, messages, or computer pop-ups. If you think it could be legitimate, contact the company or agency, but look up their number or website yourself. Don’t use the phone number the caller or message gave you.
• Slow down. Scammers want to rush you, so stop and check it out. Before you do anything else, talk with someone you trust.
• Never withdraw cash in response to an unexpected call or message. Only scammers will tell you to do that.
• Don’t believe anyone who says you need to use a Bitcoin ATM, buy gift cards, or move money to protect it or fix a problem. Real businesses and government agencies will never do that – and anyone who asks is a scammer.

As a result of a lawsuit filed by the Federal Trade Commission and the State of Florida, a federal court has ordered so-called “trucking automation” company RivX to cease its operations over allegations the firm has scammed consumers out of millions of dollars with deceptive promises of trucking industry investment opportunities.

The complaint filed by the FTC and the Florida Office of Attorney General alleges that RivX, along with its owner Antonio Rivodo and company executive Noah Wooten, have used deceptive claims of guaranteed income to entice consumers to pay $75,000 dollars or more to buy trucks that they often never received.

“Defendants tricked consumers into paying tens of thousands of dollars each with false promises that they would operate a trucking business for the consumer,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Instead of receiving the lucrative returns promised by defendants, many consumers lost their life’s savings. The FTC will continue to aggressively pursue those who prey on consumers with bogus earnings claims.”

According to the complaint, RivX offered business opportunities in the trucking industry, claiming that after consumers pay $75,000 or more, RivX would purchase a semi-truck in the consumers’ name and operate it on their behalf, securing loads, drivers, and managing all the logistics for the consumer. In its advertising and marketing, RivX makes numerous claims about how much money consumers can supposedly earn from the scheme, but according to the complaint, very few consumers have ever received trucks, and none have been able to recoup their investment, much less make any profit.

RivX, Rivodo, and Wooten claim consumers can make “passive income” totaling $5,000 to $7,000 every month from their truck, and have regularly guaranteed that consumers will make back all their money plus more, with the consumers’ entire trucking “business” being set up in as little as 60 days. In numerous online videos cited in the complaint, Rivodo has made baseless claims about the ease with which consumers will make substantial profits, such as:

• “We are making sure that that truck is operating, it’s consistently bringing in income, it’s covering all the expenses and it’s also leaving that amazing passive income every single month.”
• “This is a literally done-for-you business model. You are literally going to lift as little as a finger as you have to… this truck will literally just become a passive income asset.”
• “We want to make sure the results that we create for you [are] passive… that money’s going to come in like mailbox money, coming in every single month.”

RivX has littered the internet, according to the complaint, with videos featuring Rivodo making false claims on social media and other sites of guaranteed income. When consumers reach out to RivX, they hear more false income claims from Rivodo and Wooten and even receive documentation saying that if they fail to make the promised profits, RivX will return their initial investment.

According to the complaint, RivX, Rivodo and Wooten have pocketed millions of dollars from consumers while failing to provide anything approaching the profits they promised. In addition, the company’s contracts include unlawful provisions that make consumers liable for as much as $100,000 every time they publicly complain about the company or leave a negative review online.

In response to the FTC and Florida’s court complaint, a federal court has issued a temporary restraining order that halts the company’s operations and freezes the assets of RivX, Rivodo, Wooten and several associated companies that are part of the RivX operation or have profited from the illegal scheme.

The complaint charges the defendants with violating the FTC Act, the FTC’s Business Opportunity Rule, the Florida Deceptive and Unfair Trade Practices Act, and the Consumer Review Fairness Act.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Southern District of Florida. Commissioner Andrew Ferguson issued a statement.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The staff attorneys on this matter are Angeleque Linville and Harold Kirtz of the FTC’s Southeast Region.

The Federal Trade Commission is taking action against Care.com (Care), alleging that the child and older adult care gig platform has systematically deceived caregivers who were looking for jobs while failing to give families seeking care a simple way to cancel their paid memberships.

In a federal court complaint, the FTC alleges that Care’s marketing messages about both the number of jobs available on their site and the amount workers could expect to be paid were deceptive.

Care has agreed to a settlement that will require it to turn over $8.5 million to be used to refund consumers harmed by their practices, as well as requiring the company to be able to back up the earnings claims it makes and be honest about the number of jobs available on their site.

“Care.com used inflated job numbers and baseless earnings claims to lure caregivers onto its platform, and used deceptive design practices to trap consumers in subscriptions,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection “The order announced today puts a stop to these unlawful practices, returns millions of dollars to consumers, and helps ensure an honest marketplace for families looking for care and caregivers looking for work.”

Care provides an online platform where people looking to hire workers for jobs like child and older adult care, care for people with special needs, and pet sitting can post jobs and where people looking for such work can contact potential employers. In order to contact job posters or job seekers, users are required to purchase an auto-renewing paid subscription.

Misleading Messages

According to the complaint, Care’s deceptive advertising entices consumers to buy subscriptions in order to apply for jobs. The deception has taken on two forms – vastly overstating the number of jobs available on the platform and making unsubstantiated claims about how much consumers could expect to earn through these jobs.

Care’s advertising frequently has included the number of jobs available on its platform—a number that is deceptively inflated by including jobs for which there is little to no chance a job seeker could be hired. Since at least 2019, Care has advertised millions of these jobs in an effort to entice care providers to pay for subscriptions to its platform, according to the complaint.

Care’s platform allows those looking for workers to join the site for free. When they answer a questionnaire, Care creates a job listing on its platform, but the only way for a job poster to see a worker’s job application is if both people have paid memberships; if the poster hasn’t purchased a paid membership, then there is no way they can hire someone who applies for their job. The lawsuit points to numerous complaints from consumers who expressed frustration at the number of jobs they applied for without hearing anything back.

In addition to the inflated job claims, the complaint also charges that Care deceived users about how much money consumers can earn when they get a job on the platform. In advertisements and landing pages, Care has touted hourly as well as weekly earnings totals that are designed to entice consumers into paying for subscriptions despite having little to no data to back up such earnings claims, according to the complaint.

The complaint cites one 2021 Care ad campaign on a third-party site saying “Childcare jobs from $18/hr,” while at the same time saying on its own website that, “On average, the national pay rate for babysitting jobs” and “The average rate for babysitters on Care.com” was between $13 and $14.25 per hour.

According to the complaint, Care has not actually tracked earnings for jobs found on its platform and has little to no credible information to back up its earning claims in its advertising and marketing. Care’s claims about earnings for specific types of work are based on an average of those specific types of jobs listed on its site, and Care does not track or know the actual pay rates negotiated between job seekers and job posters after they make contact off the site.

According to the complaint, Care continued these deceptive earnings claims even after receiving a Notice of Penalty Offenses related to earnings claims from the FTC in 2021.

Cancellation Interference

The complaint also alleges that Care has used a number of unlawful tactics, sometimes referred to as dark patterns, to prevent consumers – both job posters and job seekers – from being able to cancel their subscriptions.

When consumers try to cancel Care subscriptions, they must click through a number of unrelated links to find information about how to cancel. According to the lawsuit, consumers regularly complained about difficulties in finding the cancellation options, with many resorting to searching online for instructions on how to cancel.

Once consumers find their way to the cancellation “flow” for their paid subscription, they face multiple steps designed to impede them from successfully cancelling. In some cases, consumers run into multi-page questionnaires, confusing language, warnings about the effects of cancellation, and offers to buy other paid memberships before finally being able to successfully cancel. Care makes it much more difficult to cancel a paid subscription than a free subscription, which is a relatively simple two-step process, according to the complaint.

Settlement Requirements

Under the terms of the proposed settlement, Care will be required to:

• Turn over $8.5 million to the FTC to be used to provide refunds to consumers harmed by Care’s unlawful practices.
• Only make earnings claims that are true and that Care has evidence to back up.
• Only make claims about the number of jobs available on the site that are posted by users who can actually hire a potential worker.
• Be upfront with consumers about how communication on the site works before taking consumers’ money.
• Provide users with a simple cancellation method for any negative option subscriptions available on the site.

The Commission vote authorizing the staff to file the complaint and stipulated order was 5-0. The FTC filed the complaint and stipulated order in the U.S. District Court for the Western District of Texas. Commissioner Rebecca Kelly Slaughter issued a statement.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter are Edward Hynes and Erica Hilliard of the FTC’s Southwest Region.

The Federal Trade Commission is acting against a large automotive dealer group, Asbury Automotive, for systematically charging consumers for costly add-on items they did not agree to or were falsely told were required as part of their purchase. The FTC also alleges that Asbury discriminates against Black and Latino consumers, targeting them with unwanted and higher-priced add-ons.

In an administrative complaint, the FTC alleges that three Texas dealerships owned by Asbury that operate as David McDavid Ford Ft. Worth, David McDavid Honda Frisco, and David McDavid Honda Irving, along with Ali Benli, who acted as general manager of those dealerships, engaged in a variety of practices to sneak hidden fees for unwanted add-ons past consumers. These tactics included a practice called “payment packing,” where the dealerships convinced consumers to agree to monthly payments that were larger than needed to pay for the agreed-upon price of the car, and then “packed” add-on items to the sales contract to make up that difference.

“The FTC will continue to crack down on illegal hidden fees and discrimination, which have no place at car dealerships,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Like the Combating Auto Retail Scams (CARS) Rule, today’s action underscores our commitment to protecting consumers shopping for cars and leveling the playing field for honest dealers.”

Numerous consumers complained about Asbury’s practices. Consumers reported being charged thousands of dollars without their knowledge for add-ons that range from supposedly protective chemical coatings and service contracts to life and disability insurance policies, according to the complaint.

While some consumers reported that salespeople never discussed these products during the sales process, others said that they specifically declined these products only to find they were added on without consent. The FTC says that Asbury’s sales and financing process made it difficult, if not impossible, for consumers to know they were being charged for these add-ons, with consumers being asked to sign documents on electronic devices that showed only the places where they should sign and not the full documents. In other cases, consumers who noticed the add-on charges were falsely told they were mandatory.

A survey of customers across the dealerships showed that as many as 75 percent of consumers reported that they were charged for add-on products and services they did not authorize or were falsely told were required.

In addition, according to the complaint, company documents show that the dealerships treated Black and Latino consumers differently from non-Latino White consumers, charging them hundreds of dollars extra on average for add-ons – including those add-ons for which they were charged without consent. The complaint alleges that there was no non-discriminatory reason for these higher costs.

This happened in financed transactions across each of the dealerships, with one charging Black consumers, on average, $298 more for the same add-ons, and Latino consumers, on average, $214 more for the same add-ons than non-Latino White consumers.

The complaint alleges that Asbury Auto Group and the three dealerships, along with Benli, violated the FTC Act and the Equal Credit Opportunity Act.

The Commission vote to issue the administrative complaint was 5-0. Commissioner Melissa Holyoak issued a statement. Commissioner Andrew Ferguson issued a statement.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.

The staff attorneys on this matter are Jamie Brooks, James Doty, Dan Dwyer, and Sarah Abutaleb of the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission and State of Arizona are taking action against Arizona-based Coulter Motor Company for engaging in a wide array of practices that harm consumers, from deceptive online vehicle pricing to charging Latino car buyers more in interest and add-on products. Coulter, along with its former general manager, Gregory Depaola, will pay $2.6 million to settle the lawsuit, most of which will go to provide refunds to consumers harmed by defendants’ allegedly unlawful actions.

In the complaint announced today, the FTC and State of Arizona allege that Coulter, which operates Coulter Cadillac Tempe and Tempe Buick GMC, along with Depaola, regularly charged consumers for unwanted add-ons that consumers never agreed to pay and other bogus fees. A survey of consumers who purchased or leased cars from Coulter found that 92 percent of the consumers surveyed were charged for at least one add-on without their authorization, or that they thought was required.

“Coulter used junk fees and other illegal tactics to drive up prices for consumers, especially Latino consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue cracking down on practices that drive up prices, cheat consumers, and undercut honest sellers.”

According to the complaint, Coulter advertised prices for cars online at significant discounts under the cars’ suggested retail prices, in many cases thousands of dollars less, leading consumers to think they could purchase the advertised car for that advertised amount. Consumers complained that when they arrived at the dealership, they were told the advertised price was not available. Instead, the dealership added hundreds or thousands of dollars more than the advertised price in a so-called “market adjustment,” supposed add-ons that were pre-installed on the car, and other miscellaneous fees.

The add-ons included items like vehicle identification number etching, window tinting, nitrogen-filled tires, and theft recovery services – items that Coulter would deceptively tell consumers were required to purchase the car. The complaint alleges that in some cases, Coulter charged consumers twice for the same add-ons, once individually and again as part of an add-on “package.”

The complaint also alleges that Coulter discriminated against Latino consumers in vehicle transactions. On average, Latino consumers who shop at Coulter pay nearly $1,200 more in interest and add-on charges than their non-Latino White counterparts. These increased costs come in the form of higher interest rate markups on financing, as well as higher charges for various add-on products.

The complaint charges Coulter and Depaola for violations of the FTC Act, the Equal Credit Opportunity Act, and the Arizona Consumer Fraud Act.

Under the terms of the proposed federal court order with the FTC and the State of Arizona, Coulter and Depaola are required to pay a $2.6 million judgment, of which $2.35 million will be used to provide refunds to consumers harmed by their allegedly unlawful actions. The proposed settlement also requires Coulter to establish a comprehensive fair lending program that includes appointing a fair lending officer, conducting employee training, and implementing policies for charging fees and markups.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 5-0. The complaint and stipulated final order were filed in the U.S. District Court for the District of Arizona. Chair Lina M. Kahn, Commissioner Rebecca Kelly Slaughter and Commissioner Alvaro M. Bedoya issued a majority statement. Commissioner Melissa Holyoak issued a statement. Commissioner Andrew Ferguson issued a statement.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest.  Stipulated final orders have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter are Sanya Shahrasbi and Brian Berggren of the FTC’s Bureau of Consumer Protection.

As a result of a Federal Trade Commission case, the operators of a sweepstakes scam that cost consumers millions have agreed to settlements that permanently ban them from operating sweepstakes or making claims to consumers about prizes they have won or may win.

The FTC first filed its complaint against Matthew Pisoni, Marcus Pradel and John Leon in 2015, alleging that they helped operate a sprawling sweepstakes operation that took more than $28 million from consumers throughout the United States and other countries, including Australia, Canada, France, Germany, Japan, and the United Kingdom.

“While these settlements will keep these defendants from harming more consumers with bogus prize claims, they will unfortunately not return money to consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Since the case was first filed, the Supreme Court’s decision in the AMG Capital Management case removed our ability to put the money defendants took back in consumers’ pockets. It is urgent that Congress restore the Commission’s ability to make consumers whole when they are targeted by scammers.”

The FTC’s complaint charged that the defendants mailed personalized letters falsely telling consumers that they had won large cash prizes, typically more than $2 million. To collect the “guaranteed” money, consumers had to mail the defendants a $20-$30 fee by cash, check or money order typically within 10 days, and the letters warned consumers they would forfeit their winnings if they didn’t pay on time. In reality, consumers had not won anything. The defendants had no connection to any sweepstakes and could not award or pay anyone the promised prizes.

Under the terms of the settlements, Pisoni, Pradel and Leon are permanently banned from any involvement in any sweepstakes or other form of prize promotion that tells consumers that they either have won or could be eligible to win a prize. In addition, the settlements prohibit the three defendants from any further deception related to any product or service and also prohibit them from making use of any consumer information they acquired through running the sweepstakes scam.

The Commission vote approving stipulated final orders was 5-0. The FTC filed the proposed orders in the U.S. District Court for the Southern District of Florida. The orders were approved and entered on June 21, 2024.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The staff attorney on this matter is William J. Hodor of the FTC’s Midwest Region.

The Federal Trade Commission is taking action against software maker Adobe and two of its executives, Maninder Sawhney and David Wadhwani, for deceiving consumers by hiding the early termination fee for its most popular subscription plan and making it difficult for consumers to cancel their subscriptions.

A federal court complaint filed by the Department of Justice upon notification and referral from the FTC charges that Adobe pushed consumers toward the “annual paid monthly” subscription without adequately disclosing that cancelling the plan in the first year could cost hundreds of dollars. Wadhwani is the president of Adobe’s digital media business, and Sawhney is an Adobe vice president.

“Adobe trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel. The FTC will continue working to protect Americans from these illegal business practices.”

After 2012, Adobe shifted principally to a subscription model, requiring consumers to pay for access to the company’s popular software on a recurring basis. Subscriptions account for most of the company’s revenue.

According to the complaint, when consumers purchase a subscription through the company’s website, Adobe pushes consumers to its “annual paid monthly” subscription plan, pre-selecting it as a default. Adobe prominently shows the plan’s “monthly” cost during enrollment, but it buries the early termination fee (ETF) and its amount, which is 50 percent of the remaining monthly payments when a consumer cancels in their first year. Adobe’s ETF disclosures are buried on the company’s website in small print or require consumers to hover over small icons to find the disclosures.

Consumers complain to the FTC and the Better Business Bureau about the ETF, according to the complaint. These consumers report they were not aware of the existence of the ETF or that the “annual paid monthly” plan required their subscription to continue for a year. The complaint notes that Adobe has been aware of consumers’ confusion about the ETF.

Despite being aware of consumers’ problems with the ETF, the company continues its practice of steering consumers to the annual paid monthly plan while obscuring the ETF, according to the complaint.

In addition to failing to disclose the ETF to consumers when they subscribe, the complaint also alleges that Adobe uses the ETF to ambush consumers to deter them from cancelling their subscriptions. The complaint also alleges that Adobe’s cancellation processes are designed to make cancellation difficult for consumers. When consumers have attempted to cancel their subscription on the company’s website, they have been forced to navigate numerous pages in order to cancel.

When consumers reach out to Adobe’s customer service to cancel, they encounter resistance and delay from Adobe representatives. Consumers also experience other obstacles, such as dropped calls and chats, and multiple transfers. Some consumers who thought they had successfully cancelled their subscription reported that the company continued to charge them until discovering the charges on their credit card statements.

The complaint charges that Adobe’s practices violate the Restore Online Shoppers’ Confidence Act.

The Commission vote to refer the civil penalty complaint to the DOJ for filing was 3-0. The Department of Justice filed the complaint in the U.S. District Court for the Northern District of California.

NOTE: The Commission refers a complaint for civil penalties to the DOJ for filing when it has “reason to believe” that the named defendants are violating or are about to violate the law and that a proceeding is in the public interest. The case will be decided by the court.

The staff attorneys on this matter are Sana Chaudhry and Daniel Wilkes of the FTC’s Bureau of Consumer Protection.

New Federal Trade Commission data reveals that government impersonation scammers are targeting consumers for payments in cash, with the amount of cash reported lost to these scams nearly doubling from 2022 to 2023.

The FTC data shows that consumers reported losing $76 million when paying cash to government impersonation scammers in 2023, up from $40 million in 2022, an increase of 90 percent. In just the first quarter of 2024, consumers have reported losing $20 million to government impersonation scams when paying with cash.

“The impact of government impersonation scams is massive across the board, costing consumers millions,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “For consumers who are convinced by scammers to pay cash, the harms are amplified even further. We’re glad to join with other agencies across the federal government to raise awareness of this issue and work to put a stop to it.”

The median loss for consumers who reported paying cash to government impersonation scammers in the first three months of 2024 was $14,740 – far higher than for any other method of payment. Consumers have reported mailing cash as well as handing cash to drivers sent to collect the money.

The FTC, along with the Department of Justice, Federal Bureau of Investigation, U.S. Postal Inspection Service, Internal Revenue Service, Social Security Administration, Customs and Border Protection, Department of Labor, Securities and Exchange Commission, Department of Health and Human Services, Veterans Administration, Americorps and the Federal Reserve Board, among others, are working to raise awareness of these scams and help consumers understand how they can avoid being drawn into handing over their hard-earned money.

Scammers frequently impersonate government agencies, from local police to federal agencies, and while details of the pitch may vary, a common element is that the consumer they are targeting needs to send or transfer money to address an urgent issue or serious problem. This news is usually accompanied with a combination of dire warnings or threats designed to put their target in a state of mind where the urgency of the moment bypasses any doubts they have.

The key fact is this: government agencies will never call, email, text, or message you on social media to ask for money or personal information, and they will never demand a payment. Only a scammer will do that.

Reported losses to government impersonation scammers across all forms of payment reached $618 million in 2023, up from $497 million in 2022 and $428 million in 2021.

The FTC recently put into effect a new rule that gives the agency stronger tools to combat and deter scammers who impersonate government agencies and businesses, enabling the FTC to file federal court cases seeking to get money back to injured consumers and civil penalties against rule violators.

Consumers who are targeted by a government impersonation scam should report it to the FTC at ReportFraud.ftc.gov. More data about government impersonation scams is available on the FTC’s data dashboards.

The staff of the Federal Trade Commission has provided its annual report to the Consumer Financial Protection Bureau on its enforcement and related activities in 2023 on the Truth in Lending Act (TILA), Consumer Leasing Act (CLA), and Electronic Fund Transfer Act (EFTA).

The report highlights the FTC’s enforcement actions and initiatives under these laws and their implementing regulations, including in the areas of automobile financing and leasing, payday lending, other credit and leasing, and electronic fund transfers:

• Automobile Sales, Financing, and Leasing: The report highlights the Commission’s Combatting Auto Retail Scams (CARS) Rule, which is designed to put an end to bait-and-switch tactics and hidden fees used by unscrupulous car dealers. The rule also includes clear protections for military members. The new rule is expected to save consumers nationwide more than $3.4 billion and an estimated 72 million hours each year shopping for vehicles. The report notes that the rule was set to go into effect July 30, 2024 but the Commission issued an order postponing the rule’s effective date pending judicial review. The report also notes the Commission’s ongoing litigation against auto dealer marketing firm Traffic Jam Events, and refund payments sent to consumers in 2023 in the Napleton Auto case.
• Junk Fees: The report notes the Commission’s proposed rule regarding junk fees, which would prohibit hidden and bogus fees, ensure consumers know how much they are paying and what they are getting, and help spur companies to compete.
• Negative Options: The report notes the Commission’s proposed updates to the Negative Option rule that include a “click to cancel” provision requiring sellers to make it as easy for consumers to cancel their enrollment as it was to sign up. The report also notes additional refund payments sent to consumers in 2023 as a result of the Commission’s case against Triangle Media Corporation.

The report also highlights the agency’s Military Task Force, which comprises a cross-section of FTC representatives and focuses on various initiatives to assist military consumers, and other  FTC work involving military lending, including with the Department of Defense. The report further outlines the FTC’s consumer and business education efforts on truth in lending, consumer leasing, and electronic fund transfer issues.

The FTC also provided a copy of the report to the Federal Reserve Board.

The lead attorney on this matter for the FTC was Carole Reynolds in the Bureau of Consumer Protection.

The Federal Trade Commission is sending more than $180,000 in refunds to consumers who were harmed by false Made in USA claims by the motocross and ATV parts maker Cycra.

On its website, social media and in product packaging, , from 2019 until at least May 2022, deceptively claimed  that its products were made in the United States, according to the FTC’s June 2023 complaint against the company.. The claims included a web banner that said, “Proudly designed, developed and manufactured in Lexington, North Carolina,” and product labels featuring the words “Made in USA” with an image of the American flag. Despite these claims, the FTC alleged Cycra regularly imported parts from Asia and Europe for its products, with some arriving in the U.S. already labeled “Made in USA”.

The FTC is sending payments to 889 consumers. Most consumers will get a check in the mail. Recipients should cash their checks within 90 days, as indicated on the check. Eligible consumers who did not have an address on file will receive a PayPal payment, which should be redeemed within 30 days.

Consumers who have questions about their payment should contact the refund administrator, Epiq Systems, at 855-787-8694 or visit the FTC website to view frequently asked questions about the refund process. The Commission never requires people to pay money or provide account information to get a refund.

The Commission’s interactive dashboards for refund data provide a state-by-state breakdown of refunds in FTC cases. In 2023, FTC actions led to $324 million in refunds to consumers across the country.

A Federal Trade Commission action against household water treatment funding company Aqua Finance, Inc. (AFI) has led to a settlement that will provide $20 million in refunds and an additional $23.6 million in debt forgiveness for consumers harmed by its dealers’ deceptive sales tactics.

The FTC’s complaint against AFI charges that the company’s nationwide network of dealers went door-to-door, deceiving consumers about the financing terms for water filtering and softening products. According to the complaint, the bogus claims left consumers with thousands of dollars in unexpected debt and huge interest payments, while its financing terms impaired some consumers’ ability to sell their homes.

“AFI and its dealers used deceptive teaser rates to lure consumers into signing up for AFI’s loans, costing them hundreds of dollars extra apiece,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “As this order makes clear, the FTC will continue to use every tool available to hold upstream actors accountable for profiting from consumer harm.”

Since at least 2018, according to the complaint, AFI has provided dealers across the country with access to a variety of financing programs they can use when going door-to-door to sell consumers products and equipment that will supposedly increase the quality of the water in their home.

The FTC charges that AFI’s dealers have frequently used deception to lure consumers into taking on expensive financing and misleading them about the terms of AFI’s programs that offer deferred payments and low initial interest rates.

The complaint states that dealers frequently led consumers to think introductory rates and payments were permanent or failed to inform them that, even when payments were deferred, the loans were continuing to accumulate interest. Consumers were then left with payments they were unable to afford, leading to delinquencies and harm to their credit.

According to the complaint, in many cases dealers failed to clearly inform consumers that AFI’s financing products include AFI’s obtaining a security interest in the equipment sold to consumers and installed in their homes. This security interest essentially functions as a lien making it difficult or at times impossible for many consumers to sell their homes.

The complaint notes that AFI was aware that its dealers were misleading consumers and repeatedly failed to act to sanction or stop dealers from selling its financing. In a 2020 email, an AFI vice president wrote to the CEO regarding complaints the company received from consumers, “Two systemic issues we see repeatedly; lack of understanding of how interest works/thinks they are being over charged and a dissatisfaction with the product.”

Since 2018, the company received thousands of complaints both directly from consumers and through outside organizations, according to the FTC. Beyond issues with financing, consumers also told AFI that dealers had sold them non-functioning systems or deceived them about the terms or existence of warranties, charging them hundreds to fix systems that consumers believed were guaranteed.

In addition, the complaint points to practices by AFI itself that harmed consumers’ credit, including requiring consumers who had previously opened what they believed to be lines of credit to seek additional loans even when they should have still had credit available under their existing credit lines, causing harm to their credit ratings.

Under the terms of a proposed settlement agreed to by AFI, the company will be required to:

• Closely monitor dealers: The order would require AFI to put robust monitoring programs in place for its dealers, including closely tracking complaints and investigating dealers, and terminating agreements with dealers who repeatedly mislead consumers.
• Make required disclosures: The order would require AFI to provide consumers with clear and conspicuous disclosures about the nature of the liens against consumers’ property that come with the company’s financing.
• Provide money for refunds: AFI will be required to pay $20 million to be used to provide refunds to consumers harmed by its dealers’ deception.
• Provide loan forgiveness: AFI will also be required to forgive loans totaling $23.6 million for certain consumers, including ensuring that any liens against those consumers’ property are lifted.
• Stop misrepresenting financing terms: AFI will be prohibited from misleading consumers about the terms of the financial products they offer.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 3-0-2, with Commissioners Melissa Holyoak and Andrew Ferguson not participating. The FTC filed the complaint and stipulated final order in the U.S. District Court for the Western District of Wisconsin.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Commission thanks the Tennessee Office of Attorney General, the California Department of Financial Protection and Innovation, and the Texas RioGrande Legal Aid for their assistance in this matter.

The FTC staff attorneys on this matter were Edward Hynes, Luis Gallegos, Reid Tepfer, Erica Hilliard, and Tammy Chung of the FTC’s Southwest Region.

The Federal Trade Commission is taking action against payment processing company BlueSnap, Inc., along with its former CEO Ralph Dangelmaier and senior vice president Terry Monteith, charging them with knowingly processing payments for deceptive and fraudulent companies. The defendants have agreed to a settlement that will require them to turn over $10 million for consumers and stop processing payments for certain high-risk clients.

In a federal court complaint, the FTC charged that BlueSnap and its officers processed millions of dollars in credit card payments for ACRO Services despite substantial evidence that the company was fraudulent. The FTC sued ACRO Services in November 2022.

“Companies like BlueSnap that knowingly process payments for scammers are breaking the law and making it easier to cheat consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue cracking down on firms and their executives that break the law by facilitating fraud.”

According to the complaint, BlueSnap, Dangelmaier and Monteith turned a blind eye to glaring warnings that ACRO Services was defrauding consumers from at least 2019 to 2021. The FTC says BlueSnap continued processing payments from consumers who were targeted by the scam and even advised ACRO Services on how to avoid fraud detection programs.

The warnings received by BlueSnap and its officers about ACRO were clear, according to the complaint. In 2019, BlueSnap was told by another payment processor to consider closing ACRO’s accounts due to high rates of chargebacks from consumers, but it left them open. BlueSnap, the complaint charges, continued to process payments for ACRO for over a year even though reports from Visa repeatedly showed that between 29% and 40% of the company’s charges were being disputed as fraudulent and even after American Express directly contacted Monteith asking her to close down ACRO’s accounts.

In addition to external warnings about ACRO’s fraudulent behavior, BlueSnap’s own internal fraud monitoring team reported to both Dangelmaier and Monteith that ACRO was defrauding consumers and they still failed to act to shut down the company’s accounts, according to the complaint. According to the FTC, Dangelmaier and Monteith provided advice to ACRO’s owners on how to open new merchant accounts to evade fraud detection, and the BlueSnap officers funneled payments through those accounts until BlueSnap’s processing partner ordered it to shut them down.

The complaint charges that BlueSnap processed payments for other companies accused of fraud including Powerline Group, which was the target of a law enforcement action by the New York Attorney General. The FTC’s complaint notes that, as with ACRO, BlueSnap was aware of very high chargeback rates and continued to process the company’s payments until it was forced to stop in 2021.

The proposed court order agreed to by the defendants will require them to turn over $10 million to the FTC to provide refunds to consumers. In addition, the settlement will prohibit the defendants from providing payment processing services to debt collection or debt relief companies, as well as companies listed through an industry fraud monitoring program. In addition, the company will be required to closely screen and monitor other high-risk clients and be prohibited from helping any client take steps to evade fraud monitoring.

The Commission vote authorizing the staff to file the complaint and proposed stipulated final order was 5-0. The FTC filed the complaint and final order in the U.S. District Court for the Northern District of Georgia.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final injunctions/orders have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter are Margaret Burgess, Alan Bakowski, and Natalya Rice of the FTC’s Southeast Region.

Home products company Williams-Sonoma will be required to pay a record civil penalty of $3.175 million for violating a 2020 Federal Trade Commission order requiring the retailer to tell the truth about whether the products it sells are Made in USA.

In a complaint filed by the Department of Justice upon notification and referral from the FTC, the agency charges that Williams-Sonoma listed multiple products for sale as being “Made in USA” when in fact they were made in China and other countries. The company has agreed to a settlement that requires them to pay the civil penalty, which is the largest ever in a Made in USA case.

“Williams-Sonoma claimed its products were made in the United States even though they were made in China,” said FTC Chair Lina M. Khan. “Williams-Sonoma’s deception misled consumers and harmed honest American businesses. Today’s record-setting civil penalty makes clear that firms committing Made-in-USA fraud will not get a free pass.”

The FTC sued Williams-Sonoma in 2020, charging that the company advertised multiple product lines under its Goldtouch, Rejuvenation, Pottery Barn Teen and Pottery Barn Kids brands as being all or virtually all made in the USA when they were not. The company agreed to an FTC order that required them to stop their deceptive claims and follow Made in USA requirements.

The current complaint notes that the FTC became aware that the company was marketing mattress pads under its PBTeen brand as “Crafted in America from domestic and imported materials” when it was actually made in China. The FTC then investigated six other products the company advertised as Made in USA and found those claims were also deceptive in violation of the 2020 order.

In addition to the civil penalty, the federal court settlement also requires Williams-Sonoma to submit annual compliance certifications, and imposes a number of requirements about the claims the company makes, reinforcing requirements from the 2020 FTC order:

• Restriction on unqualified claims: Williams-Sonoma will be prohibited from making unqualified U.S.-origin claims for any product, unless it can show that the product’s final assembly or processing—and all significant processing—takes place in the U.S., and that all or virtually all ingredients or components of the product are made and sourced in them U.S.
• Requirement for qualified claims: The company is required to include in any qualified Made in USA claims a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients or components, or processing.
• Requirement for assembly claims: The company must also ensure, when claiming a product is assembled in the U.S., that it is last substantially transformed in the U.S., its principal assembly takes place in the U.S., and U.S. assembly operations are substantial.

The FTC is committed to ensuring that “Made in USA” claims are truthful. The FTC’s Enforcement Policy Statement on U.S. Origin Claims provides guidance on making non-deceptive “Made in USA” claims. In addition, the FTC’s Made in USA Labeling Rule went into effect on Aug. 13, 2021. Companies that violate the Rule from that date forward may be subject to civil penalties.

The Commission vote to authorize the staff to refer the complaint to the DOJ and to approve the proposed consent decree was 3-0. The DOJ filed the complaint and proposed consent decree in U.S. District Court for the Northern District of California. The FTC thanks Truth In Advertising.org for their assistance in this matter.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Consent decrees have the force of law when approved and signed by the District Court judge.

The lead staff attorney on this matter was Julia Solomon Ensor in the Bureau of Consumer Protection.

The Federal Trade Commission is taking action against bill payment company Doxo and two of its co-founders, charging that the company uses misleading search ads to impersonate consumers’ billers and deceptive design practices to mislead consumers about millions of dollars in junk fees they tacked on to consumers’ bills.

The complaint alleges that Doxo, its CEO and co-founder Steve Shivers, and its vice president and co-founder Roger Parks, have known from years of internal surveys and complaints from tens of thousands of consumers and hundreds of billers of the harms their business model caused consumers and have still failed to correct their unlawful actions.

The FTC’s complaint notes that, even though Doxo immediately charges a consumer for payment, in many instances, the company then prints a paper check that is mailed to the biller – arriving days or sometimes weeks after the customer believes their bill is paid. As a result, many consumers have had their utilities shut off, have had car and health insurance lapse, and have been charged fees and fines even though they paid their bills on time.   

“Doxo intercepted consumers trying to reach their billers and tricked them into paying millions of dollars in junk fees,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to take action when companies use deceptive design tricks to harm consumers.”

According to the FTC’s complaint, Doxo purchases search engine ads that appear when consumers search online for information about companies they owe bills to. These ads are created to mislead consumers into believing that Doxo is affiliated with those companies. The complaint cites as an example Doxo’s ads that are designed to trick consumers into believing they are affiliated with a prominent medical testing company. Doxo bought ads that appeared when consumers searched for the company’s name or website, and the ads included headlines that included the company’s name but not Doxo’s.

Doxo’s landing pages prominently feature the biller’s company name and sometimes even their logo, even though Doxo generally does not have a formal relationship with the biller. In fact, less than two percent of the companies in Doxo’s “network” authorize Doxo to accept payments on their behalf, according to the complaint.

Once consumers provide their billing details, Doxo then shows a final payment amount, onto which the company tacks an extra fee that is included only at the final payment step, and even then only in greyed-out fine print.

The complaint also outlines Doxo’s deceptive process to sign consumers up for its recurring subscription program, noting that, until February 2024, after learning of the FTC’s proposed complaint, the company would automatically check the box to sign consumers up when they clicked to read a terms of service document. In addition, while Doxo said consumers would save on the company’s “delivery” fees, consumers paying for the monthly plan are still often charged those fees.

Tens of thousands of consumers have complained about Doxo’s deceptive practices, according to the complaint, with many pointing to the fact that they paid more than their actual bill amount, even when the actual billers did not charge for online payments. The complaints were so numerous that, in 2021, employees of a major search engine declared Doxo’s ads to be “super misleading,” but the company still has not changed the fundamental structure of its ads. The complaint points to multiple instances in which the company’s top executives, Shivers and Parks, were personally made aware of complaints against Doxo.

The complaint alleges that Doxo violated the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Gramm-Leach-Bliley Act.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Western District of Washington.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The staff attorneys on this matter are James Doty and Edward Smith of the FTC’s Bureau of Consumer Protection.

As the Federal Trade Commission’s new rule on government and business impersonation goes into effect today, the agency is highlighting new data on the most common ways consumers are targeted by these treacherous scams. Combined, reported losses to these impersonation scams topped $1.1 billion for the year, more than three times what consumers reported in 2020.

The new data spotlight reveals the five most commonly reported ways that government and business impersonators convince consumers to turn over their hard-earned money: copycat account security alerts; phony subscription renewals; fake giveaways, discounts, or money to claim; bogus problems with the law; and made-up package delivery issues.

In addition, the spotlight highlights two key trends since 2020 when it comes to government and business impersonation scams: how consumers are contacted by scammers and how they pay scammers. Reports of text messages and email are trending up as phone calls decline. When it comes to payment methods, reported losses by bank transfers and cryptocurrency outrank every other payment method used to pay these scammers. Bank transfers account for about 40 percent of reported losses to government and business impersonators in 2023, followed by cryptocurrency at 21 percent of reported losses. Reported losses using both payment methods have increased many times over since 2020.

Today marks the effective date of the FTC’s new rule on government and business impersonation, which was finalized last month. The rule gives the agency stronger tools to combat and deter scammers who impersonate government agencies and businesses, enabling the FTC to file federal court cases seeking to get money back to injured consumers and civil penalties against rule violators.

The FTC is also accepting public comments until April 30, 2024, on a supplemental notice of proposed rulemaking that would prohibit the impersonation of individuals and prohibit providing scammers with the means and instruments to execute such scams.

The Federal Trade Commission is taking action against two companies – Biz2Credit and Womply – that made false promises to small businesses seeking to take part in the Paycheck Protection Program (PPP), delaying and sometimes preventing them from obtaining funds they needed to keep their businesses afloat during the COVID-19 pandemic.

The companies have agreed to settle the FTC’s charges against them: Biz2Credit will pay $33 million and Womply will pay $26 million to the FTC for small businesses harmed by their deceptive conduct. These are the largest damages amounts ever secured by the agency under Section 19 of the FTC Act, and include money consumers lost because of the companies’ conduct, even if consumers made no payments directly to the companies.

“Biz2Credit and Womply deceived small business owners trying to secure loans at their time of greatest need,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to protecting small businesses from these sorts of unlawful practices.”

These cases are part of the FTC’s continuing work to protect small businesses from deceptive and unfair practices in the marketplace. In addition to these cases, the FTC recently revised the Telemarketing Sales Rule to extend protections to businesses that are targeted with illegal telemarketing.

Biz2Credit

Biz2Credit, Inc., and its subsidiary, Itria Ventures, have agreed to pay $33 million in damages to settle the Federal Trade Commission’s charges that they deceptively advertised that consumers’ emergency PPP loan applications would be processed in an average of 10-14 business days when, in reality, the average processing took well over a month.

The FTC’s complaint that Biz2Credit’s application processing was riddled with delays, and the average processing time was double what the defendants claimed, with tens of thousands of consumers waiting more than two months for a final determination. Even though they were aware of these delays, the defendants continued to make their false timing claims to consumers until nearly the end of the program.

Biz2Credit’s promises of fast processing times were critical because the PPP was extraordinarily time-sensitive, providing loans on a first-come, first-served basis. When the program ran out of funds in May 2021, the government stopped accepting new PPP loan applications, leaving some Biz2Credit consumers without any funds. Even the consumers who eventually obtained loans were deprived for a time of funds they needed immediately.

The FTC’s complaint also says that Biz2Credit unfairly ignored many consumers’ repeated and urgent pleas to withdraw their loan applications. As a result, the defendants delayed and sometimes even prevented these consumers from obtaining PPP funds elsewhere. The complaint also alleges that the defendants designed their application process to lock in as many consumers as possible before underwriting these loans, restricting these consumers from submitting additional applications to other PPP lenders.

In addition to the $33 million monetary judgment, the settlement with Biz2Credit also prohibits the defendants from misrepresenting key information about loan applications or any material fact about a government benefit. The proposed order also prohibits Biz2Credit from failing to allow consumers to promptly withdraw their applications.

Womply

Womply and its CEO, Toby Scammell, have agreed to pay $26 million to settle FTC charges they preyed on small businesses in desperate need of PPP funding. The FTC’s complaint alleges they widely advertised that small businesses – particularly one-person businesses like gig workers – could successfully get PPP funding when they applied through Womply. The complaint charges, however, that more than 60 percent of Womply applications never resulted in funding.

In addition, according to the complaint, Womply and Scammell advertised that their automated processes and good customer service would help small businesses secure PPP loans fast. In fact, applicants regularly faced significant issues that slowed down or fully hindered their applications and were often unable to receive customer service assistance they were promised, according to the complaint.

The complaint notes that millions of consumers initiated PPP applications through Womply, but many who were eligible never received funding because the company and its CEO failed to fix known technical issues with their system or provide consumers with assistance.

According to the complaint, the company promised that its “helpful, friendly support agents” would assist applicants through the process. However, after just one month and more than 4,800 support requests from applicants, Womply completely deactivated its phone-based customer service. When applicants used the company’s online chat support, they often didn’t receive replies for hours or sometimes days and some went to great lengths looking for answers, including by reaching out to employees of a third-party company that worked with Womply on their personal social media accounts.

The company’s advertising and marketing also focused on the speed with which applicants’ loans would be funded, using product names like “PPP Fast Lane” and promises that loan applications would be prepared within 24 hours and “faster than a bank.” But the complaint details multiple examples of Womply failing to deliver on these promises.

Small business owners still faced problems even after their applications were completed and approved by SBA. One small business owner whose complaint to Womply is highlighted in the complaint noted that she received notice that her loan had been funded, but never received the money. After spending weeks pleading to Womply for help without success, she had to close her business due to a lack of funding.

In addition to the $26 million monetary judgment, the settlement with Womply and Scammell prohibits them from making any deceptive, false or unsubstantiated claims about financial services or products.

The Commission votes authorizing the staff to file the complaints and proposed stipulated orders in both cases was 3-0. The complaint and proposed order in Biz2Credit were filed in the U.S. District Court for the Southern District of New York; the complaint and proposed order in Womply were filed in the U.S. District Court for the Northern District of California.

The staff attorneys on the Biz2Credit matter are Evan Zullow, Wendy Miller, and James Doty of the FTC’s Bureau of Consumer Protection; the staff attorneys on the Womply matter are Julia Heald, Katherine Worthman, and Paola Henry, also of the FTC’s Bureau of Consumer Protection.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. 

The Federal Trade Commission is sending nearly $100 million in refunds to consumers who were charged for sham health plans marketed by Benefytt Technologies.

According to the FTC’s August 2022 complaint, Benefytt and its third-party partners operated a series of deceptive websites that targeted consumers who were searching for comprehensive health insurance plans qualified under the Affordable Care Act. Sales agents pitched Benefytt’s sham plans even though they were not ACA-qualified health plans and lacked key elements. Consumers were led to believe that they were buying comprehensive health insurance and were then charged hundreds of dollars per month for Benefytt products and services that often left them unprotected in a medical catastrophe.

Benefytt agreed to a settlement that required the company to pay $100 million to provide refunds and prohibited the company from lying about its products or charging illegal junk fees. Separate orders permanently banned Benefytt’s former CEO and a former vice president of sales from selling or marketing any healthcare-related product, and the former vice president was also banned from telemarketing.

The FTC is sending checks to 463,629 consumers. Recipients should cash their checks within 90 days, as indicated on the check. Consumers who have questions about their payment should contact the refund administrator, Epiq Systems, at 888-574-3126 or visit the FTC website to view frequently asked questions about the refund process. The Commission never requires people to pay money or provide account information to get a refund.

The Commission’s interactive dashboards for refund data provide a state-by-state breakdown of refunds in FTC cases. In 2023, FTC actions led to $324 million in refunds to consumers across the country.

The Federal Trade Commission and 10 states are suing sham charity Cancer Recovery Foundation International, also known as Women’s Cancer Fund, and its operator, Gregory B. Anderson, for deceiving generous donors who sought to offer financial support to women battling cancer and their families.

In a complaint filed in federal court, the FTC and states allege that, from 2017 to 2022, Women’s Cancer Fund collected more than $18 million from donors. The sham charity claimed that it would use the donated funds to help women who were undergoing treatment for cancer and their families pay for basic needs. Instead, the complaint charges, only about a penny of every dollar donated went to provide such support, while the overwhelming majority went to pay for-profit fundraisers and Anderson.

“Cancer Recovery Foundation International and Anderson abused the generosity of American donors in the most egregious way” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to aggressively pursuing such illegal conduct, which hurts donors and deprives legitimate charities of needed funding. We are grateful to our state partners for joining in this effort to protect the public.

“Virginians are generous people. Unfortunately, there are bad actors who take advantage of hardworking Virginians’ generosity. In the case of Cancer Recovery Foundation International, solicitors told Virginians and many other Americans that their donations would help cancer survivors and their families, but that money was instead used for their own personal gain. We join the FTC along with the other states in this lawsuit to right the wrongs of this sham charity,” said Virginia Attorney General Jason Miyares.

According to the complaint, fundraisers for Women’s Cancer Fund told prospective donors that their gifts would “help save lives” and “directly help patients with basic living expenses.” But the sham charity’s tax filings and records tell a different story, the complaint alleges.

While Women’s Cancer Fund collected $18 million from tens of thousands of donors between 2017 and 2022, it only spent $194,809 on financial support to cancer patients. At the same time, it paid Anderson $775,139 – nearly four times as much as Women’s Cancer Fund collectively gave to all the cancer patients it supported. In addition to his salary, Anderson also used donated funds for various costly expenses, such as hotels and travel. Meanwhile Women’s Cancer Fund gave the vast majority of the funds it collected from donors, about 85%, to for-profit fundraisers that Anderson hired to make deceptive pitches on behalf of the sham charity.

According to the complaint, in addition to using deceptive phone solicitation pitches, Women’s Cancer Fund also used deceptive solicitation letters, often signed by Anderson. One such letter stated: “While other organizations rightfully invest millions of dollars in cancer research to find a cure for patients in the future, we help patients keep a roof over their head and the lights on so they can survive cancer today.”

The FTC in 2021 sued two of the fundraising companies, Associated Community Services and Directele, hired by Women’s Cancer Fund for deceptive fundraising. The complaint in the latest action alleges that those enforcement actions did not deter Anderson, who went on to hire other fundraisers to make similar deceptive claims on behalf of Women’s Cancer Fund.

The complaint, which was filed by the FTC along with the attorneys general and/or secretaries of state of California, Florida, Maryland, Massachusetts, North Carolina, Oklahoma, Oregon, Texas, Virginia, and Wisconsin, alleges that Women’s Cancer Fund and Anderson violated the FTC Act, the Telemarketing Sales Rule, and state consumer protection laws.

Consumers looking for more information about how to donate safely and avoid charity scams can find it on the FTC’s website. 

The Commission vote authorizing the staff to file the complaint was 3-0. The complaint was filed in the U.S. District Court for the Southern District of Texas.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The staff attorneys on this matter are J. Ronald Brooke, Jr. and Miry Kim of the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission will host an online meeting of the Scams Against Older Adults Advisory Group on April 2, 2024. The meeting will include reports from the committees formed at the group’s inaugural meeting.

Four committees are addressing separate areas of interest: expanding consumer education and outreach efforts; improving industry training on scam prevention; identifying innovative or high-tech methods to detect and stop scams; and reviewing research on effective consumer messaging to prevent scams.

The meeting will begin at 2 p.m. Eastern Time with opening remarks by FTC Bureau of Consumer Protection Director Samuel Levine. The meeting is taking place online and will be viewable by the public on ftc.gov. Registration is not required to view the webcast.

The advisory group was formed because of the Stop Senior Scams Act, passed by Congress in 2022. The group is made up of representatives of government agencies, advocacy groups and private industry, including: AARP, AmeriCorps, Chamber of Digital Commerce, Commodity Futures Trading Commission, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, Federal Reserve Board, FTC, Financial Crimes Enforcement Network, Financial Industry Regulatory Authority, Innovative Payments Association, National Retail Federation, Office of the Vermont Attorney General, Retail Gift Card Association, Securities and Exchange Commission, The Money Services Round Table, U.S. Department of Health and Human Services Administration for Community Living, U.S. Department of Justice, U.S. Department of Treasury, U.S. Postal Inspection Service and USTelecom.

The owners of a money-making scheme that claimed to use artificial intelligence to boost earnings for consumers’ e-commerce storefronts have agreed to surrender millions in assets to settle the FTC’s case against them. In addition, all the businesses and two of their owners face a lifetime ban on selling business opportunities or coaching programs involving ecommerce stores.

In a case filed in August 2023, the FTC charged that Roman Cresto, John Cresto, and Andrew Chapman along with multiple companies they controlled, including Automators AI, Empire Ecommerce, and Onyx Distribution, deceived consumers with unfounded promises of “passive investment income” in online storefronts supposedly powered by AI. 

“The defendants lured consumers into investing millions in online stores supposedly powered by artificial intelligence and made empty promises that they could coach consumers into achieving success and profitability,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s action holds the defendants accountable for this scheme by banning them from the coaching business, barring bogus claims, and requiring redress to defrauded consumers.” 

In its complaint, the FTC charged that the defendants offered consumers high returns from profitable e-stores. The defendants also offered to teach consumers how to successfully set up and manage e-stores on Amazon and Walmart themselves using a “proven system” and the powers of artificial intelligence.

The FTC alleged, however, that the vast majority of the defendants’ clients did not make the promised earnings or even recoup their sizable investment. Instead, most lost significant amounts of money, and Amazon and Walmart routinely suspended, blocked, or terminated the stores that defendants operated for their clients for repeated policy violations.

The settlement order includes a number of requirements:

• Permanent ban on offering business opportunities or coaching for e-commerce platforms: Each of the defendants other than Chapman and his company, Pelenea Ventures, LLC, will be permanently banned from offering business opportunities or coaching services related to managing online marketplace e-commerce platforms.
• Prohibition on deceptive earnings claims: The order would also prohibit all defendants from making deceptive earnings claims and would require them to have evidence to back up any earnings claims they may make in the future.
• Prohibition on preventing negative reviews: The order would also prohibit all of the defendants from enforcing parts of their contracts that restricted their customers from leaving negative reviews about their companies or including such provisions in future contracts.
• Turn over possessions: The orders would require the defendants give up their claims to assets held by the receiver in the case, along with the contents of numerous bank and cryptocurrency accounts. These assets have a combined value of millions of dollars and will be used by the FTC to provide refunds to affected consumers.

The orders contain a total monetary judgment of $21,765,902.65, which is partially suspended based on the defendants’ inability to pay the full amount. If the defendants are found to have lied to the FTC about their financial status, the full judgment would be immediately payable.

The Commission vote approving the stipulated final order was 3-0. The FTC filed the proposed order in the U.S. District Court for the Southern District of California. 

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter are Colleen Robbins, Christopher E. Brown, and Frances Kern of the FTC’s Bureau of Consumer Protection.

As a result of a Federal Trade Commission lawsuit, Kevin Lipsitz, who defrauded consumers by falsely promising “next day” shipping of facemasks and respirators to consumers at the height of the COVID-19 pandemic, will be banned from selling personal protective equipment (PPE) and be required to turn over more than $145,000 to the FTC.

The FTC first sued Lipsitz and his company, SuperGoodDeals.com, in July 2020. Beginning in March of that year, when the company sought to capitalize on the soaring demand for PPE from consumers worried about being exposed to the coronavirus, SuperGoodDeals’ website claimed PPE was “in stock,” and touted “Pay Today, Ships Tomorrow.” In numerous instances, though, Lipsitz and SuperGoodDeals did not have masks in stock and took weeks to ship the PPE merchandise customers ordered.

“Failing to adhere to promised fast shipping times for facemasks, or any other product for that matter, isn’t just unscrupulous – it’s illegal,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will take strong action against those engaging in such practices.”

SuperGoodDeals received many complaints through emails, phone calls, and website chat messages about the shipping delays. Some of the complaints were from customers who were in dire need of PPE, including those ordering facemasks for healthcare professionals, immunocompromised family members, and child welfare workers making in-home visits.

The proposed court order, which was agreed to by Lipsitz and SuperGoodDeals, includes a number of requirements:

• Permanent ban on selling protective equipment: Lipsitz and SuperGoodDeals are permanently banned from selling any PPE designed to prevent the spread of disease or infection.

• Prohibition on misleading shipping promises: The proposed order also prohibits Lipsitz and SuperGoodDeals from making promises about shipping times without a reasonable basis for those claims. In addition, the proposed order requires Lipsitz and the company to abide by the requirements of the Mail, Internet, or Telephone Order Merchandise Rule.

• Prohibition on other deceptive practices: The proposed order also prohibits Lipsitz and SuperGoodDeals from misrepresenting any refund policy, the nature or quality of any good including whether it is certified or specifically branded, and any other material misrepresentations.
• Turn over funds: The order requires Lipsitz to turn over $145,958.59 to the FTC.

The proposed order contains a total monetary judgment of $1,088,984.20, which is partially suspended based on the defendants’ inability to pay the full amount. If the defendants are found to have lied to the FTC in their financial disclosures, the full judgment would be immediately payable.

The Commission vote approving the stipulated final order was 3-0. The FTC filed the proposed order in the U.S. District Court for the Eastern District of New York.

NOTE: Stipulated final orders or injunctions have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter were Brian M. Welke and Daniel T. Wilkes of the FTC’s Bureau of Consumer Protection.

The staff of the Federal Trade Commission has provided the Consumer Financial Protection Bureau (CFPB) an annual summary of its enforcement and related activities on the Equal Credit Opportunity Act (ECOA).

The FTC is responsible for ECOA enforcement and education regarding most non-bank financial service providers. In its summary, FTC staff describes the Commission’s work on ECOA-related issues, including activities addressed in enforcement, research, and policy development such as:

• a case against an auto dealership group—Rhinelander—that charged the dealership and its current and prior owners violated ECOA by discriminating against American Indian consumers with respect to interest rate markups and illegal junk fees;
• refund distributions in two other cases against auto dealership groups—Napleton Auto and Passport Auto;
• an amicus filing in CFPB v. Townstone Financial and Barry Sturner challenging a district court ruling that invalidated a key anti-discrimination rule in ECOA;
• a report detailing the consumer issues that affect American Indian and Alaska Native populations, as well as the FTC’s enforcement, outreach, and education work on these issues;
• a joint statement with the CFPB, Department of Justice (DOJ), and Equal Employment Opportunity Commission pledging to uphold America’s commitment to the core principles of fairness, equality, and justice as emerging automated systems, including those sometimes marketed as “artificial intelligence” or “AI,” become increasingly common in our daily lives – impacting civil rights, fair competition, consumer protection, and equal opportunity.
• the FTC’s participation as a member of the Interagency Task Force on Fair Lending, a joint undertaking with the CFPB, DOJ, the Department of Housing and Urban Development (HUD), and the federal banking agencies, which shares information and discusses policy issues; and
• the FTC’s participation as a member of the Interagency Fair Lending Methodologies Working Group, with the CFPB, the Federal Housing Finance Agency, DOJ, HUD, and the federal banking agencies, to coordinate and share information on analytical methodologies used in enforcement of and supervision for compliance with fair lending laws, including ECOA.

The summary also outlines the Commission’s business and consumer education efforts on fair lending issues.

The Commission vote authorizing staff to send the summary to the CFPB was 3-0. A copy of the summary was also provided to the Federal Reserve Board.

The lead attorney on this matter for the FTC was Carole Reynolds in the Bureau of Consumer Protection.

A federal court has issued an order banning the operators of the Home Matters USA mortgage relief scam from the telemarketing and debt relief businesses and requiring them to turn over $19 million as a result of a lawsuit by the Federal Trade Commission and the California Department of Financial Protection and Innovation (DFPI).

The FTC and DFPI sued companies doing business as Home Matters USA, Academy Home Services, Atlantic Pacific Service Group, and Golden Home Services America and the owners of the companies, Michael R. Nabati, Armando Solis Barron, Dominic Ahiga (also known as Michael D. Grinnell), and Roger S. Dyer in September 2022, charging them with taking millions of dollars from thousands of struggling homeowners seeking mortgage relief.

The court found that the defendants falsely promised to reduce homeowners’ mortgage payments and prevent foreclosures, defrauding distressed homeowners out of millions of dollars. The scheme harmed more than 3,000 people nationwide, particularly elders and veterans.

“Our win in this case sends a clear message to scammers who target consumers facing financial hardship: the FTC and our law enforcement partners are focused on fighting fraud and halting it,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We look forward to more opportunities to partner with the California DFPI on behalf of consumers.”

“This case also demonstrates the value of the California Consumer Financial Protection Law as a tool to combat deceptive and predatory financial schemes. Fraudsters everywhere should take note – DFPI will find you, expose you, and hold you accountable. Victims of fraud should likewise take heart. The DFPI has your back,” said DFPI Commissioner Clothilde Hewlett.

The court’s orders bar the individuals and their companies from directly or indirectly engaging in telemarketing, debt relief services, and making any misrepresentations or unsubstantiated claims about any product or service.

The Federal Trade Commission is seeking public comment on a supplemental notice of proposed rulemaking that would prohibit the impersonation of individuals. The proposed rule changes would extend protections of the new rule on government and business impersonation that is being finalized by the Commission today.

The agency is taking this action in light of surging complaints around impersonation fraud, as well as public outcry about the harms caused to consumers and to impersonated individuals. Emerging technology – including AI-generated deepfakes – threatens to turbocharge this scourge, and the FTC is committed to using all of its tools to detect, deter, and halt impersonation fraud.

The Commission is also seeking comment on whether the revised rule should declare it unlawful for a firm, such as an AI platform that creates images, video, or text, to provide goods or services that they know or have reason to know is being used to harm consumers through impersonation.

“Fraudsters are using AI tools to impersonate individuals with eerie precision and at a much wider scale. With voice cloning and other AI-driven scams on the rise, protecting Americans from impersonator fraud is more critical than ever,” said FTC Chair Lina M. Khan. “Our proposed expansions to the final impersonation rule would do just that, strengthening the FTC’s toolkit to address AI-enabled scams impersonating individuals.”

The supplemental notice of proposed rulemaking is being issued in response to comments received during the public comment period on the government and business impersonation rule that pointed to the additional threats and harms posed by impersonation of individuals. As scammers find new ways to defraud consumers, including through AI-generated deepfakes, this proposal will help the agency deter fraud and secure redress for harmed consumers.

Final Rule on Government and Business Impersonation

In addition to the supplemental notice, the FTC has finalized the Government and Business Impersonation Rule, which gives the agency stronger tools to combat scammers who impersonate businesses or government agencies, enabling the FTC to directly file federal court cases aimed at forcing scammers to return the money they made from government or business impersonation scams. This is particularly important given the Supreme Court’s April 2021 ruling in AMG Capital Management LLC v. FTC, which significantly limited the agency’s ability to require defendants to return money to injured consumers.

Government and business impersonation scams have cost consumers billions of dollars in recent years, and both categories saw significant increases in reports to the FTC in 2023. The rule authorizes the agency to fight these scams more effectively.

For example, the rule would enable the FTC to directly seek monetary relief in federal court from scammers that:

• Use government seals or business logos when communicating with consumers by mail or online.
• Spoof government and business emails and web addresses, including spoofing “.gov” email addresses or using lookalike email addresses or websites that rely on misspellings of a company’s name.
• Falsely imply government or business affiliation by using terms that are known to be affiliated with a government agency or business (e.g., stating “I’m calling from the Clerk’s Office” to falsely imply affiliation with a court of law).  

The publication of the final rule comes after the two rounds of public comment in response to an advance notice of proposed rulemaking issued in December 2021, a notice of proposed rulemaking issued in September 2022, and an informal hearing in May 2023.

The Commission vote to issue the final rule and the supplemental notice of proposed rulemaking and to publish them in the Federal Register was 3-0. Chair Lina M. Khan issued a separate statement that was joined by Commissioners Rebecca Kelly Slaughter and Alvaro M. Bedoya.

Both items will appear in the Federal Register shortly. The final rule on government and business impersonation will become effective 30 days from the date it is published in the Federal Register. The public comment period for the SNPRM will be open for 60 days following the date it is published in the Federal Register, and instructions for how to comment will be included in the notice.

As a result of a Federal Trade Commission lawsuit, a federal court has entered a judgment requiring merchant cash advance operator Jonathan Braun to pay $20.3 million in monetary relief and civil penalties. This is the first trial by jury that the FTC has ever conducted. 

The judgment follows a January trial in which a jury found that Braun, in his role with small-business funding company RCG Advances, which formerly did business as Richmond Capital Group, knowingly violated the Gramm-Leach-Bliley Act by deceiving small businesses about the amount of funding that Defendants would provide to and collect from them. The court entered a judgment of $3,421,067 to redress the harm that Braun’s misconduct caused to small businesses.  In addition, noting the utter disregard and contempt that Braun showed to consumers, including spewing vile threats and profanities to small business owners, the court imposed $16,956,000 in civil penalties for Braun’s violations of law.

“I agree with the Court’s assessment regarding the egregiousness and deliberateness of Braun’s extensive lawbreaking,” said Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to protecting small businesses, and the $20.3 million judgment sends a powerful message that lies and deception will not be tolerated in the marketplace.” 

The FTC sued Braun in June 2020, along with four other defendants, charging that he deceived small businesses and other organizations by misrepresenting the terms of merchant cash advances his business provided, and then used unfair collection practices, including sometimes threatening physical violence, to compel consumers to pay.

The suit also alleged that Braun and the other defendants made unauthorized withdrawals from consumers’ accounts and required businesses and their owners to sign confessions of judgment as part of their contracts, which allowed the defendants to go immediately to court and obtain an uncontested judgment in case of an alleged default. The complaint alleged that the defendants unlawfully and unfairly used these confessions of judgment to seize consumers’ personal and business assets in circumstances not expected by consumers or permitted by the defendants’ financing contracts.

The court issued a summary judgment decision and permanent injunction against Braun in October 2023. The injunction included a permanent ban from the merchant cash advance and debt collection industries.

The other defendants in the FTC’s case previously settled the FTC’s charges against them, resulting in industry bans and monetary relief for small businesses totaling more than $2 million.

Newly released Federal Trade Commission data show that consumers reported losing more than $10 billion to fraud in 2023, marking the first time that fraud losses have reached that benchmark. This marks a 14% increase over reported losses in 2022.

Consumers reported losing more money to investment scams—more than $4.6 billion—than any other category in 2023. That amount represents a 21% increase over 2022. The second highest reported loss amount came from imposter scams, with losses of nearly $2.7 billion reported. In 2023, consumers reported losing more money to bank transfers and cryptocurrency than all other methods combined.

“Digital tools are making it easier than ever to target hard-working Americans, and we see the effects of that in the data we’re releasing today,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is working hard to take action against those scams.”

The FTC received fraud reports from 2.6 million consumers last year, nearly the same amount as 2022. The most commonly reported scam category was imposter scams, which saw significant increases in reports of both business and government impersonators.

Online shopping issues were the second most commonly reported in the fraud category, followed by prizes, sweepstakes, and lotteries; investment-related reports; and business and job opportunity scams.

Another first is the method scammers reportedly used to reach consumers most commonly in 2023: email. Email displaced text messages, which held the top spot in 2022 after decades of phone calls being the most common. Phone calls are the second most commonly reported contact method for fraud in 2023, followed by text messages.

The Commission monitors these trends carefully, and is taking a comprehensive approach to detect, halt, and deter consumer fraud, including in 2023 alone:

• Leading the largest-ever crackdown on illegal telemarketing: The FTC joined more than 100 federal and state law enforcement partners nationwide, including the attorneys general from all 50 states and the District of Columbia in Operation Stop Scam Calls, a crackdown on illegal telemarketing calls involving more than 180 actions targeting operations responsible for billions of calls to U.S. consumers.
• Proposing a ban on impersonator fraud: The FTC is in the final stages of a rulemaking process targeting business and government impersonation scams.
• Cracking Down on Investment Schemes: The FTC has brought multiple cases against investment and business opportunity schemes, including Wealthpress, Blueprint to Wealth, Traffic and Funnels, Automators and Ganadores.
• Confronting Emerging Forms of Fraud: The FTC has taken steps to listen to consumers and build knowledge and tools to fight emerging frauds. For example, the FTC announced a challenge in 2023 to help promote the development of ideas to protect consumers from the misuse of artificial intelligence-enabled voice cloning for fraud and other harms.
• Stepping up CAN-SPAM Enforcement: The FTC is using its authority under the CAN-SPAM Act to rein in unlawful actions, including in cases against Publishers Clearing House and Experian.
• Reaching Every Community: The FTC has expanded its ability to hear directly from consumers in multiple languages through the Consumer Sentinel Network.

The FTC’s Consumer Sentinel Network is a database that receives reports directly from consumers, as well as from federal, state, and local law enforcement agencies, the Better Business Bureau, industry members, and non-profit organizations. More than 20 states contribute data to Sentinel.

Sentinel received 5.4 million reports in 2023; these include the fraud reports detailed above, as well as identity theft reports and complaints related to other consumer issues, such as problems with credit bureaus and banks and lenders. In 2023, there were more than 1 million reports of identity theft received through the FTC’s IdentityTheft.gov website.

The FTC uses the reports it receives through the Sentinel network as the starting point for many of its law enforcement investigations, and the agency also shares these reports with approximately 2,800 federal, state, local, and international law enforcement professionals. While the FTC does not intervene in individual complaints, Sentinel reports are a vital part of the agency’s law enforcement mission and also help the FTC to warn consumers about identify fraud trends it is seeing in the data.

A full breakdown of reports received in 2023 is now available on the FTC’s data analysis site at ftc.gov/exploredata. The data dashboards there break down the reports across a number of categories, including by state and metropolitan area, and also provide data from a number of subcategories of fraud reports.

Tractor maker Kubota North America Corporation will pay a $2 million civil penalty as a result of a Federal Trade Commission action against the company for falsely labeling some of its replacement parts as being “Made in USA.”

Under a stipulated court order filed by the Department of Justice on the FTC’s behalf and agreed to by the company, Kubota will be prohibited from making deceptive claims in addition to requiring them to pay the penalty, which is the largest ever in a Made in USA case.

“Today’s settlement includes the largest civil penalty assessed for violating the Made in USA Labeling Rule,” said Samuel Levine, Director of the Bureau of Consumer Protection.  “The FTC will continue cracking down on deceptive Made in USA claims that cheat consumers and honest businesses.”  

The complaint filed in the case charges that since at least 2021, Kubota has labeled thousands of replacement parts for its tractors and other agricultural equipment as Made In USA, even though they were made entirely overseas. In addition, after the company moved manufacturing for some parts to other countries, it failed to update the products’ labeling to reflect that change, leaving them labeled as “Made in USA,” according to the complaint.

Kubota was previously sued by the FTC in 1999 for falsely claiming that a line of lawn tractors it manufactured was Made in USA, and was subject to an FTC order in that case that expired in 2019.

The stipulated order against Kubota, which the company has agreed to, includes a number of requirements about the claims the company makes:

• Restriction on unqualified claims: Kubota will be prohibited from making unqualified U.S.-origin claims for any product, unless it can show that the product’s final assembly or processing—and all significant processing—takes place in the U.S., and that all or virtually all ingredients or components of the product are made and sourced in the U.S.
• Requirement for qualified claims: Kubota is required to include in any qualified Made in USA claims a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients or components, or processing.
• Requirement for assembly claims: Kubota must also ensure, when claiming a product is assembled in the U.S., that it is last substantially transformed in the U.S., its principal assembly takes place in the U.S., and U.S. assembly operations are substantial.
• Civil Penalty: The order includes a civil penalty of $2 million, which must be paid to the U.S. Treasury.

The FTC is committed to ensuring that “Made in USA” claims are truthful. The FTC’s Enforcement Policy Statement on U.S. Origin Claims provides guidance on making non-deceptive “Made in USA” claims. In addition, the FTC’s Made in USA Labeling Rule went into effect on Aug. 13, 2021. Companies that violate the Rule from that date forward may be subject to civil penalties.

The Commission vote to authorize the staff to refer the complaint to the DOJ and to approve the stipulated consent decree was 3-0. The DOJ filed the complaint and stipulated consent decree on behalf of the Commission in U.S. District Court for the Northern District of Texas.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Consent decrees have the force of law when approved and signed by the District Court judge.

The lead staff attorney on this matter was Julia Solomon Ensor in the Bureau of Consumer Protection.

The Federal Trade Commission is charging online cash advance provider FloatMe and its co-founders with using empty promises of quick and free cash advances to entice consumers to join its service, only to fail to deliver the promised advance amounts, make it difficult to cancel, and discriminate against consumers who receive public assistance. FloatMe is also being charged with making baseless claims that cash advance limits would be increased by an algorithm or another automated system.  

Under the terms of a settlement order, FloatMe, as well as its co-founders Joshua Sanchez and Ryan Cleary, are required to provide $3 million to be used to refund customers, stop the company’s deceptive marketing, make it easier for consumers to cancel their subscriptions, and institute a fair lending program.

“FloatMe lured consumers in with false promises of free money advances, and then used dark patterns to make it difficult for consumers to cancel,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to hold companies accountable for unfair, deceptive, and discriminatory credit practices, whether they call their products loans, advances, income-share agreements or something else.”

In its complaint against FloatMe, the FTC says that the company charged consumers $1.99 per month to join the app, and promised that consumers could access up to $50 in cash advances instantly as part of their membership.

The FTC said, however, that consumers were only able to access $20 in advances when they signed up and were charged a $4 fee if they wanted to get cash “instantly,” otherwise they had to wait up to three days for the promised funds. This stood in contrast to FloatMe’s ads that said consumers could get “emergency funds” for free “within minutes.”

When consumers contacted FloatMe to request a larger cash advance amount, the company told them that their advance limit could be increased by an algorithm over time, but the complaint charges that the algorithm did not exist. In fact, one company supervisor admitted the company’s claim was “a lie” in an email to colleagues. Instead of an algorithm, the complaint points to a complicated series of steps that required manual intervention to increase a consumer’s limit, which rarely happened.

The complaint also charges that FloatMe used dark patterns and other tricks to make it difficult for customers to cancel their subscriptions. In fact, the complaint alleges that Sanchez acknowledged in an internal communication that the cancellation process “make[s] it difficult for someone to quit.” At first, FloatMe’s cancellation process, according to the complaint, was manual-only, delay-filled, and error-ridden. Even after numerous consumer complaints caused the company to change its cancellation process in 2020, the issues still persisted, including a system that refused cancellation requests without actually informing the consumer of that decision.

FloatMe also illegally discriminated against consumers who receive public assistance like Social Security, military, and unemployment benefits, according to the complaint. The company failed to consider any income received through a public assistance program in determining whether a consumer was eligible to receive an advance, and it declined advances to consumers whose income came from public assistance. Despite this, FloatMe still charged these consumers for its monthly subscription, even though they could not access the main service offered by the company.

The complaint charges that FloatMe’s practices violate the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Equal Credit Opportunity Act.

The court order, which was agreed to by the defendants in the case, requires them to pay $3 million to the FTC to be used to provide refunds to consumers. It also prohibits them from deceiving consumers about their products or services, including misrepresenting that they use an algorithm or artificial intelligence. The order requires them to get consumers’ express, informed consent for charges and provide an easy method for cancellation. The order also prohibits the defendants from deploying discriminatory practices and requires them to enact a fair lending program. In addition, the order requires defendants to create and maintain records of consumer testing, including A/B and multivariate testing, which are real-time experiments that companies can use to steer consumer behavior.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 3-0. The FTC filed the complaint and final order in the U.S. District Court for the Western District of Texas. The Court entered the order on January 23, 2024.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final orders have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter are Angel Reyes and James Doty of the FTC’s Bureau of Consumer Protection.

Following a public comment period, the Federal Trade Commission finalized a consent order settling charges that Florida-based EXOTOUSA LLC, (doing business as Old Southern Brass) falsely claimed that certain company products were manufactured in the U.S, and that the company was veteran-operated and donated 10 percent of its sales to military service charities.

The FTC’s complaint against the company, first announced in December 2023, said that the company made numerous claims that its products were “Made in USA,” but in spite of such claims, many of the company’s products were wholly imported from China or contained significant imported content. The company falsely claimed various forms of affiliation with the U.S. military, including being veteran-operated and contributing a portion of proceeds to military charity groups, according to the complaint.

The final order requires the company to pay $150,000 to the FTC, stop making false claims, and comply with specific requirements relating to future country-of-origin claims. The order also includes a monetary judgment of $4,572,137.66, which is partially suspended based on the defendants’ inability to pay the full amount.

The Commission vote to approve the final order was 3-0.

Following is a statement from Samuel Levine, Director of the Federal Trade Commission’s Bureau of Consumer Protection, regarding the Commission’s opinion and order in the case against Intuit Inc.:

The Commission’s opinion finding that Intuit has engaged in a “broad, enduring, and willful” deceptive advertising campaign is a major win for consumers and honest marketers.

In its opinion, the Commission conducted its own review of the facts and law to decide that Intuit’s claims that TurboTax was a “free” service were wholly unsupported, and that the vast majority of tax filers were not eligible for the “free” version of the service. Instead, they were upgraded into costly deluxe and premium products. As the Commission has long understood, “free” is a powerful lure, one that Intuit deployed in scores of ads. Its attempts to qualify its “free” claim were ineffective and often inconspicuous. The Commission found that Intuit’s “‘simple returns only’ disclosure is anything but clear and unambiguous,” and “does not change the strong and powerful net impression of the ‘free’ ads.”

The Commission concluded that “Intuit’s deceptive advertising campaign has been widespread,” and that it “lasted for years and continues to the present day.”  It found that Intuit kept running the ads “knowing that they led consumers to believe that they could file their returns for free.” .The Commission described these violations as “egregious.”

The Commission has issued an order setting forth a  clear standard that Intuit must follow. They must stop their deceptive ads and tell the truth about how many people are actually eligible for their supposed “free” products. The order also sends a message across industry – “free” means free – not “free for a few” or “free for some.” Businesses can expect an FTC enforcement action if they harness the power of “free” in the dishonest way Intuit did.

I congratulate our team in the Division of Marketing Practices for securing this hard-fought victory for American consumers. 

The Federal Trade Commission has issued an order postponing the effective date of the Combatting Auto Retail Scams (CARS) Rule while a legal challenge against the rule is pending.

Two industry groups have petitioned to overturn the rule, asserting that the rule should be stayed while the court challenge is pending. In its order, the Commission notes that these assertions rest on mischaracterizations of what the rule requires. Specifically, the Commission’s order points to the inaccurate argument that the rule will increase compliance costs for car dealers, which is not true for dealers who currently follow the law. 

The Commission’s order states, “In fact, the rule does not impose substantial costs, if any, on dealers that presently comply with the law, and to the extent there are costs, those are outweighed by the benefits to consumers, to law-abiding dealers, and to fair competition—as honest dealers will not be at a competitive disadvantage relative to dishonest dealers.” The Commission’s order explains that the petitioners’ suggestion that legally compliant dealers have to make unnecessary changes to satisfy petitioners’ misunderstandings of the rule have created uncertainty. The Commission further notes that if the court reviewing the rule grants expedited review, as the litigants requested, a stay of the effective date should not postpone implementation of the rule by more than a few months, if at all. The rule was set to go into effect July 30, 2024.

As the Commission noted when finalizing the rule, the CARS Rule will save consumers more than $3.4 billion and an estimated 72 million hours each year shopping for vehicles by targeting persistent and illegal bait-and-switch scams and junk fees in the car buying process.

The Commission vote to approve the issuance of the order was 3-0.

A Federal Trade Commission lawsuit has led to the permanent end to a business opportunity scam known as Ganadores Online and Ganadores Inversiones Bienes Raíces that targeted Spanish-speaking consumers with brazen and false money-making pitches for online businesses and real estate investments.

Under the terms of proposed federal court orders, several defendants in the case—including the companies behind Ganadores, the companies’ owners and managers Richard and Sara Alvarez, and an employee who played a key role in the marketing of the scheme, Bryce Chamberlain— will be permanently banned from selling ecommerce or real estate coaching services and will be required to turn over substantial assets to the FTC, which will be used to provide refunds to consumers harmed by the scam.

“Ganadores scammed hard-working people with false promises of financial freedom, leaving many consumers with nothing but crushing credit card debt,” said Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection. “We have taken decisive action to end that egregious conduct and recover ill-gotten gains, and we will continue to vigorously pursue those who engage in violations of the laws we enforce.”

The FTC sued Ganadores in June 2023, charging that the scam targeted Spanish-speaking consumers with false or unfounded earnings claims and other deceptive promises relating to business opportunities, including that its “infallible system” could help consumers find financial freedom, replace their day jobs, and give their families financial independence. The complaint charged that after consumers paid significant amounts—sometimes tens of thousands of dollars—for training and coaching, they discovered that Ganadores failed to deliver the training and mentoring that they promised and that they did not make any money.

When consumers realized that Ganadores’ promises were false and sought refunds, the defendants often refused, telling consumers they had only three days to seek a refund. The complaint also charges that while the company’s marketing and sales were conducted largely in Spanish and many of its targeted audience had limited or no English fluency, the company’s contracts with consumers, including key disclosures, were often provided exclusively in English.

The settlements include two proposed court orders: one order against the companies and Richard Alvarez and Sara Alvarez; and the other order against Bryce Chamberlain. Both orders include a number of key provisions:

• Ban on ecommerce and real estate coaching: The order would permanently ban the defendants from offering any business coaching on ecommerce or real estate.
• Prohibition on misleading earnings claims: The orders would require the defendants to be able to back up claims they make about how much consumers can earn using any product or service that the defendants market or sell.
• Prohibition on other practices: The orders would specifically prohibit the defendants from repeating the unlawful practices that they engaged in.
• Turn over assets: The order against the companies and the Alvarezes would require them to surrender funds, real estate, and other assets with a total value of approximately $6 million. The order against Chamberlain requires him to turn over $35,000 to the FTC.

The orders contain a total monetary judgment of $29,175,000, which is partially suspended but for the asset transfers described above, based on the defendants’ inability to pay the full amount. If the defendants are found to have lied to the FTC about their financial status, the full judgment would be immediately payable.

The case against defendant Robert Shemin is ongoing.

The Commission vote approving the stipulated final order was 3-0. The FTC filed the proposed order in the U.S. District Court for the Middle District of Florida.

NOTE: Stipulated final orders or injunctions have the force of law when approved and signed by the District Court judge.

The FTC staff attorneys on this matter are J. Ronald Brooke, Jr. and Virginia Rosa of the FTC’s Bureau of Consumer Protection. The FTC would like to thank the Orlando Police Department for their valuable assistance in this matter.

The Federal Trade Commission and the State of Connecticut are taking action against auto dealer Manchester City Nissan (MCN), along with its owner and a number of key employees, for systematically deceiving consumers about the price of certified used cars, add-ons, and government fees.

The complaint alleges that the dealership, in addition to deceiving consumers, regularly charges them junk fees for certification, add-on products, and government charges without the consumers’ consent, sometimes costing them thousands of dollars in unwanted and unauthorized charges.

Connecticut also alleges that all these practices are deceptive or unfair under Connecticut law.

“With this action against Manchester City Nissan, its top executives, and its managers, the Commission and its partner, the State of Connecticut, continue to crack down on deceit and unfairness in the auto industry,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This action follows on the heels of the Commission’s announcement of the Combating Auto Retail Scams (CARS) Rule, and once again makes clear that bait-and-switch tactics and hidden junk fees have no role in honest dealmaking.”

“Today’s action sends a strong warning to any dealership engaging in these types of deceptive practices that misconduct will not be tolerated,” said Connecticut Attorney General William Tong. “Manchester City Nissan’s egregious business practices appear to have violated multiple laws, and we’re going to hold them accountable on behalf of all the consumers they deceived.”

Double Charges for “Certified Pre-Owned” Vehicles

According to the complaint, MCN advertises numerous cars, including Nissan vehicles, as being “certified pre-owned.” This term refers to a used vehicle that has been inspected and repaired to the manufacturer’s specifications, which comes with an extended warranty from the carmaker. Nissan’s rules prohibit dealers from charging a fee for certification beyond the price of the car.

However, the complaint alleges the dealership and its employees regularly tack on a certification charge for these vehicles when consumers arrive looking to buy the advertised cars. One example cited in the complaint describes a consumer that came in looking to buy a certified pre-owned car advertised for $15,700, but then the dealer added a $5,295.65 junk “inspection fee” for a car it had already inspected.

In addition, the complaint alleges that MCN often charges consumers extra for an inspection or repair that has already occurred, but then fails to report to Nissan that the certified car was sold, leaving consumers without the additional warranty that was promised in MCN’s advertising.

Bogus Add-Ons

The complaint alleges that MCN and its employees frequently charge consumers for bogus add-ons they did not agree to pay. They often charge consumers for add-ons such as General Asset Protection (GAP), service contracts, maintenance contracts, and Total Loss Protection (TLP). TLP, in particular, appears in 90 percent of all sales by MCN.

One consumer, as described in the complaint, negotiated a price of $20,500 for a Nissan Rogue Sport, but when she went to sign the sales contracts, her promised monthly payment had increased, which she attributed to a credit issue. Instead, she found that MCN had tacked more than $7,000 in add-ons to the amount she financed for the car.

Bogus Government Fees

MCN and its employees also regularly deceive consumers during the sales process about government-imposed taxes and fees, claiming that junk fees added by MCN are required by the government or deceptively inflating the actual government fees to register the car and keeping the difference as profit.

An example cited in the complaint shows that MCN told one consumer that Connecticut registration and other state fees were $345. But, in fact, Connecticut registration and other fees were only $208.20.

The complaint charges Chase Nissan (which does business as MCN) along with its principals Patrick Dibre and Refaat (Brian) Soboh, general manager Michael Hamadi, finance manager Aiham Alkhatib, and sales managers Matthew Chmielinksi and Fred (Freddy) Mojica with violating the FTC Act and the Connecticut Unfair Trade Practices Act.

The Commission vote authorizing the staff to file the complaint was 3-0. The complaint was filed in the U.S. District Court for the District of Connecticut.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

The FTC staff attorneys on this matter are Samuel Jacobson and Edward Smith of the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission has obtained proposed orders against the operators of a wide-ranging scheme known as “The Sales Mentor” that made millions by falsely promising consumers that they could make big money from telemarketing sales.

The defendants have agreed to proposed court orders that would require them to pay a total of $1 million for consumer refunds.

In a federal court complaint, the FTC charged the Tennessee-based group of companies, their owners, their officers, and a former sales director with deceiving consumers to pay hundreds or even thousands of dollars for supposed telemarketing training programs that rarely, if ever, delivered on what was promised. In addition, the FTC said the companies continued to make deceptive earnings claims even after they received the FTC’s Notices of Penalty Offenses on money-making opportunities and on endorsements and testimonials warning them that such conduct is illegal.

“Traffic and Funnels lured people looking to work and earn an income with false or unfounded earnings claims, even after receiving legal notices from the FTC about the illegality of such conduct,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to crack down on deceptive earnings claims that cheat consumers.”  

In its complaint, the FTC charged that the companies, their owners Taylor Welch and Christopher Evans, and employees Payton Welch and Ashton Shanks falsely told consumers that The Sales Mentor program for the “high demand” field of telemarketing sales could net them incomes of $10,000 to $20,000 per month on average. In their ads, online videos and other sales pitches, the defendants made false claims that they had successfully “helped over 25,000 people find secure, dependable, consistent and life-changing incomes,” according to the complaint.

Another advertisement claimed that “…it’s virtually IMPOSSIBLE NOT to enjoy a job-replacing six-figure income, even part-time.”

The defendants also falsely claimed, according to the complaint, to have access to a “waiting list” of companies looking to hire consumers who completed their program, when often all they had available was an outdated list of job openings.

The various Sales Mentor “packages” ranged in price from $97 to more than $9,000, according to the complaint. Consumers complained that the supposed private mentoring at higher levels was never made available, and that in many cases the higher levels received the same online video series that could be purchased at lower costs.

According to the complaint, consumers paid more than $29 million to the defendants when the scheme was active between 2018 and 2022. During that time, one of the corporate defendants in 2021 received the FTC’s Notice of Penalty Offenses relating to earnings claims and endorsements. The complaint charges that the defendants violated the FTC Act and the Telemarketing Sales Rule and engaged in illegal practices described in the Notices they received.

There are two proposed court orders, which were agreed to by the defendants to settle the case: one against Evans and the other against the Welches; Shanks; Evans and Welch, Inc.; WE Capital, LLC; Traffic and Funnels, LLC; and Evans and Welch Holdings, LLC. Both orders include:

• Prohibition on deceptive earnings claims: Each of the defendants will be prohibited from making earnings claims that are misleading or unsubstantiated.
• Prohibition on deceiving consumers: The defendants will be prohibited from any misrepresentation in selling of any goods or services.
• Turn over money: The orders will require Taylor Welch to turn over $600,000 and Evans to turn over $400,000 to the FTC to be used to provide refunds to consumers harmed by the scheme.

The orders contain a total monetary judgment of $16,363,073.11 against all of the defendants except Shanks, which is largely suspended based on the defendants’ inability to pay the full amount. If the defendants are found to have lied to the FTC about the financial status, the full judgment would be immediately payable.

The Commission vote authorizing the staff to file the complaint and stipulated final orders was 3-0. The FTC filed the complaint and final orders in the U.S. District Court for the Middle District of Tennessee.

NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Stipulated final injunctions/orders have the force of law when approved and signed by the District Court judge.

The staff attorneys on this matter are Virginia Rosa and Frances Kern of the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission has provided the Consumer Financial Protection Bureau (CFPB) with its annual summary of activities to protect consumers in the debt collection arena.

The summary is used by CFPB in its annual report to Congress, released today, on the activities of both agencies, who share law enforcement responsibility in this area.

In the summary, the Commission highlights its multi-faceted work covering the debt collection market to protect consumers and small businesses, including:

• litigating two cases against debt collection operations who, the FTC charged, used a variety of illegal tactics to target small businesses with threats about supposed debts;
• issuing more than $1.27 million refunds to consumers harmed by unlawful debt collection practices;
• halting collections of millions of dollars in debt that originated from illegal financing and sales practices;
• providing tens of millions of people educational materials, in both English and Spanish, informing them about their rights, and educating debt collectors about their responsibilities, under the FDCPA and FTC Act.

The lead staff attorney on this matter for the FTC is Naomi Takagi in the Bureau of Consumer Protection.

As part of its ongoing efforts to combat scammers and protect consumers in every community, the Federal Trade Commission is now providing the ability to report fraud, scams and deceptive practices in multiple languages in addition to English and Spanish.

These new language access enhancements will allow people to file reports with the FTC in their preferred language when calling the FTC. Among the new languages available are Mandarin, Tagalog, Vietnamese, French, Arabic, Russian, Korean, Portuguese and Polish. Consumers speaking English and Spanish can also continue to file reports directly online.

The FTC is also offering guidance online and in print to consumers and businesses in additional languages. This includes advice on how to spot, stop and avoid scams and what to if you paid a scammer online, as well as offering free print resources in multiple languages.

More information about the enhanced language access for both reporting and consumer and business guidance is available in a new FTC blog post.

As a result of a law enforcement action by the Federal Trade Commission and the State of Florida, Chargebacks911 and its owners have agreed to a settlement that will prohibit them from working with certain high-risk clients and using deceptive tactics to stop consumers trying to dispute credit card charges through the chargeback process.

In a complaint filed in April 2023, the FTC and Florida charged that, since at least 2016, the “chargeback mitigation” company and its owners, Gary Cardone and Monica Eaton, have used multiple unfair techniques to prevent consumers from winning chargeback disputes.

“The settlement order will provide important protections for consumers who shop online,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “It sends a clear message that chargeback mitigation companies must not undermine consumers’ ability to exercise their rights.”

The chargeback process is a key protection for consumers who wish to contest unwanted, fraudulent, or incorrect credit card charges. When a consumer sees a charge they did not authorize, or for which the promised goods or services didn’t arrive, they can dispute the charge with their credit card company. The consumer’s credit card company then contacts the merchant’s credit card company for information and determines whether to reverse the charge.

The FTC and Florida charged that Chargebacks911 sent materials that it knew or should have known were misleading or inaccurate to credit card companies on behalf of their clients, including screenshots of websites that were different than the ones visited by consumers. The complaint also alleged that Chargebacks911 used its “Value-Added Promotions” service to game the systems that credit card companies use to detect fraud on their payment networks.

The proposed court order, which was agreed to by the defendants and must be approved by a federal judge before it can go into effect, would prohibit them from providing chargeback mitigation services to high-risk clients who use affiliate marketing and negative option plans to sell certain product types that are often fraudulently marketed.  The order would also prohibit them from knowingly using deceptive or misleading information on behalf of their clients and would prevent them from using techniques like their Value-Added Promotions service to help clients evade fraud-monitoring programs.

The order will also require the defendants to pay $100,000 in civil penalties and $50,000 in legal costs to the State of Florida.

The Commission vote approving the stipulated final order was 3-0. The FTC filed the proposed order in the U.S. District Court for the Middle District of Florida.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The FTC staff attorneys on this matter are Evan Rose, Bobbi Tonelli, and Denise Oki of the FTC’s Western Region San Francisco.

As a result of a Federal Trade Commission lawsuit, Jonathan Braun, who controlled small-business funding company RCG Advances, will face a permanent ban from the merchant cash advance and debt collection industries. A federal court issued summary judgment in favor of the FTC in the case along with a permanent injunction against Braun.

“Mr. Braun and his company targeted small business consumers with an egregious array of tactics, from predatory contract terms to violent threats, and the court’s opinion is a significant win on their behalf,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This case makes clear that the FTC will fight back against those who prey on small businesses.”

The FTC sued Braun in June 2020, along with four other defendants, for his role with RCG Advances, which formerly did business as Richmond Capital Group, charging that he deceived small businesses and other organizations by misrepresenting the terms of merchant cash advances the business provided, and then used unfair collection practices, including sometimes threatening physical violence, to compel consumers to pay.

The suit also alleged that Braun and the other defendants made unauthorized withdrawals from consumers’ accounts and required businesses and their owners to sign confessions of judgment as part of their contracts, which allowed the defendants to go immediately to court and obtain an uncontested judgment in case of an alleged default. The complaint alleges that the defendants unlawfully and unfairly used these confessions of judgment to seize consumers’ personal and business assets in circumstances not expected by consumers or permitted by the defendants’ financing contracts.

The court’s opinion granting summary judgment in favor of the FTC found that Braun engaged in “extensive misconduct” that violated both the FTC Act and the Gramm-Leach-Bliley (GLB) Act, and that Braun was liable for the damages caused by his and the company’s unlawful conduct.

The permanent injunction includes a number of key provisions:

• Ban on merchant cash advance: Braun is permanently banned from any involvement with the merchant cash advance industry, including assisting anyone else in offering those services.
• Ban on debt collection: Braun is permanently banned from the debt collection industry.
• Remove negative credit information: Braun is required to contact credit reporting agencies within 30 days to remove any negative information that was filed on consumer or business credit reports as a result of his actions.
• Prohibition on deceiving consumers and unauthorized charges: Braun is prohibited from deceiving consumers about any product or service, and is also prohibited from charging consumers without their authorization.

The court has scheduled a trial for January 2024 to determine the amount of monetary relief that should be imposed for Braun’s law violations.

The other defendants in the FTC’s case previously settled the FTC’s charges against them, resulting in industry bans and monetary relief totaling more than $2 million.

The Federal Trade Commission and State of Wisconsin are taking action against Wisconsin auto dealer group Rhinelander Auto Center, its current and former owners, and general manager Daniel Towne for deceiving consumers by tacking hundreds or even thousands of dollars in illegal junk fees onto car prices and for discriminating against American Indian customers by charging them higher financing costs and fees.

The defendants have agreed to proposed court orders that will require Rhinelander’s current owners and Towne to stop their unlawful practices and provide $1.1 million to be used for refunds to consumers.

“Working closely with the State of Wisconsin, we are holding these dealerships accountable for discriminating against American Indian customers and sneaking junk fees onto consumers’ bills,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “A vehicle is one of the most expensive purchases families make, and we are fully committed to ensuring that all consumers navigating the car-buying process can do so without facing unlawful discrimination or paying for products and services they do not want.”

“Companies must not be permitted to engage in discriminatory practices or improperly charge customers for ‘add-on’ products or services,” said Wisconsin Attorney General Josh Kaul. “Thank you to those at Wisconsin DOJ, the FTC, and other agencies whose work led to the filing of this complaint.”

In their complaint, the FTC and Wisconsin DOJ say that Rhinelander and Towne regularly charged many of their customers junk fees for “add-on” products or services without their consent. The complaint cites one survey of Rhinelander customers that shows half of the dealer’s customers said they were charged for add-ons without authorization or through deception. One consumer was told—deceptively—that Guaranteed Asset Protection (commonly referred to as “GAP,” or “GAP insurance”) was required for her car purchase, even though she didn’t want to buy it; it cost her more than $1,000 in fees and additional interest on her loan.

Rhinelander and Towne discriminated against American Indian customers in the cost of financing by adding more “markup” to their interest rates, according to the FTC’s complaint. This additional markup cost American Indian customers $401 more on average compared to non-Latino white customers. The complaint also notes that, since Rhinelander changed ownership in 2019, the disparity has only increased.

In addition, the complaint alleges that American Indian customers were charged for unwanted add-ons at a higher rate than non-Latino white customers. These additional junk fees can significantly drive up the amount that customers finance when they purchase their vehicle, which in turn leads to higher cost over the life of the loan. In total, American Indians paid on average approximately $1,362 more for add-ons in credit transactions than non-Latino White customers since 2016, and $1,374 more since the new ownership took over, according to the complaint.

The proposed settlement with Rhinelander’s current owners and Towne will require the company to stop deceiving consumers about whether add-ons are required for a purchase and obtain consumers’ express informed consent before charging them for add-ons. The settlement will also the require the defendants to establish a comprehensive fair lending program that, among other components, will allow consumers to seek outside financing for a purchase and cap the additional interest markup Rhinelander can charge consumers. The current owners and Towne will also be required to pay $1 million to be used to refund affected consumers.

The former owners, Rhinelander Auto Center, Inc. and Rhinelander Motor Company, have agreed to a separate settlement that would require the companies to permanently wind down the businesses and pay $100,000 to be used to refund affected consumers.

The Commission vote to authorize FTC staff to file the complaint and to approve the proposed stipulated final orders was 3-0. The complaint and proposed final orders were filed in the U.S. District Court for the Western District of Wisconsin.

In addition to its partnership with the Wisconsin Department of Justice in this case, the FTC also thanks Wisconsin’s Department of Transportation; Department of Financial Institutions; and Department of Agriculture, Trade and Consumer Protection, as well as the Better Business Bureau of Wisconsin, for their assistance with this matter.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Consent judgments have the force of law when approved and signed by the District Court judge.

The FTC attorneys on this matter are Nathan Nash, Rachel Sifuentes and Rachel Granetz of the FTC’s Midwest Region.

The settlement with the State of Wisconsin is dependent on approval by Wisconsin’s Joint Committee on Finance per the requirements of 2017 Wisconsin Act 369.

The Federal Trade Commission has issued its latest report to Congress on protecting older adults, which highlights key trends based on fraud reports by older adults, and the FTC’s multi-pronged efforts to combat the problem through law enforcement actions, rulemaking, and outreach and education programs.

In addition, the report calls on Congress to update the FTC Act in response to the Supreme Court’s 2021 ruling in the AMG Capital Management case, which severely limited the FTC’s ability to recover money that older adults and other consumers lose to scammers.

“We do all we can to protect older adults and shut down the scams targeting them,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “But we still need Congress to restore our authority to get money back from the scammers and into consumers’ pockets.”

The report, Protecting Older Consumers, 2022-2023, A Report of the Federal Trade Commission, finds that older adults reported losing more than $1.6 billion to fraud in 2022.

Because the vast majority of frauds are not reported, this figure represents only a fraction of the overall cost of fraud to older consumers, which the FTC estimates to be as high as $48 billion. The report also finds that in 2022, older adults reported significantly higher losses to investment scams, business impersonation scams and government impersonation scams than they did in 2021:

• Investment scams: $404 million reported lost, up 175% from 2021.
• Business impersonation scams: $271 million reported lost, up 78% from 2021.
• Tech support scams: $159 million reported lost, up 117% from 2021.

As in prior years, the analysis of fraud reports received by the FTC in 2022 showed that adults aged 60 and over were substantially less likely to report losing money to fraud than adults aged 18-59. When they did report losing money, though, they tended to report losing substantially more than younger adults. Consumers 80 and older reported losing a median of $1,750 to fraud, while those in their seventies reported a median loss of $1,000, with both numbers increasing over 2021.

The analysis included in the report to Congress also found that adults 60 and older were more than six times as likely as adults aged 18 to 59 to report losing money to a tech support scam. Older adults were more than twice as likely to report a loss to a prize, lottery or sweepstakes scam, and 73 percent more likely to report losing money to a friend or family impersonation scam.

The report’s analysis shows that older adults filed the largest number of reports about online frauds—where consumers were first exposed to the fraud via social media, the web, or online ads. The largest median losses, however, were reported by older adults on fraud that started with a phone call. The impact of scams where older adults were contacted on social media also increased; the median reported loss from this type of scam jumped from $460 in 2021 to $800 in 2022.

The report focuses on key actions the FTC has taken to protect older consumers, particularly in light of the Supreme Court’s AMG Capital decision. In 2022, the Commission issued a notice of proposed rulemaking on government and business impersonation, which is aimed at curbing a form of fraud that has resulted in tremendous losses for older consumers. A new rule would offer additional tools for the FTC to seek refunds for consumers harmed by these scams.

In addition, the report notes a number of enforcement actions that had a particular impact on older consumers, including cases against Publishers Clearing House for using dark patterns to mislead consumers into thinking that making a purchase would increase their chances of winning the company’s sweepstakes drawing; a company that placed more than a billion calls to consumers, including hundreds of robocalls and calls to consumers on the National Do-Not-Call Registry; a bogus credit card relief scheme; a timeshare exit scam; a company making false health claims about COVID prevention; and current and former major distributors for the multi-level marketing company doTERRA for making baseless claims about COVID treatments. The report highlights a number of ongoing law enforcement partnerships in which the FTC works with other federal agencies, along with state and local authorities, to take actions to protect older consumers.

Finally, the report details the FTC’s outreach and education efforts through such programs as the Pass it On campaign, which focuses on providing fraud prevention resources to older adults so they can help protect their communities by sharing the information and materials with family and friends. It also details the FTC’s ongoing efforts to implement the Stop Senior Scams Act of 2022.

The Commission vote authorizing the report to Congress was 3-0.