Author: mkatz

Gravity Defyer Medical Technology Corporation (Gravity Defyer) and its owner Alexander Elnekaveh will have to stop making alleged deceptive pain-relief claims for Gravity Defyer footwear, under a settlement with the Federal Trade Commission.

The federal order also requires Elnekaveh to pay a $175,000 civil penalty for allegedly violating a prior Commission order barring him from deceptive advertising.

California-based Gravity Defyer advertised their Gravity Defyer footwear as containing soles with “VersoShock” technology that supposedly relieves pain, including pain from numerous medical conditions, according to the FTC’s complaint. The complaint alleged the ads claimed, without adequate scientific evidence, that Gravity Defyer footwear:

• will relieve pain, including knee, back and foot pain;
• will relieve pain in people suffering from multiple conditions such as plantar fasciitis, arthritis, joint pain, and heel spurs; and
• was clinically proven to relieve pain, including 85% less knee pain, 91% less back pain, 92% less ankle pain, and 75% less foot pain.

The FTC alleged that Elnekaveh’s conduct violated a 2001 order barring him from such allegedly deceptive advertising by making scientifically unsupported claims and using misleading consumer testimonials to sell Gravity Defyer products.

The stipulated order settling the complaint bars Gravity Defyer and Elnekaveh from making pain relief claims or claims that a device will cure, mitigate, or treat any disease unless they have competent and reliable scientific evidence to back up the claims, including human clinical trials.

The order further prohibits Gravity Defyer and Elnekaveh from making health, efficacy, and safety claims about other products unless they are supported by scientific evidence, bars them from misrepresenting the results of any test, study, or research, and requires them to preserve certain scientific records related to human clinical studies.

Finally, the order imposes a $175,000 civil penalty against Elnekaveh. He must also notify retailers selling Gravity Defyer footwear of the Commission’s order.

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 District of Columbia and it has now been entered by the judge.

The staff attorneys on this matter are Maria Del Monaco, Derek Diaz, Adrienne Jenkins, and Matthew Scheff of the FTC’s East Central Region. 

The Federal Trade Commission has adjusted the maximum civil penalty dollar amounts for violations of 16 provisions of law the FTC enforces, as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The Act directs agencies to implement annual inflation adjustments based on a prescribed formula.

The new maximum civil penalty amounts became effective once they were published in the Federal Register on January 17, 2025.

The maximum civil penalty amount has increased from $51,744 to $53,088 for violations of Sections 5(l), 5(m)(1)(A), and 5(m)(1)(B) of the FTC Act, Section 7A(g)(l) of the Clayton Act, and Section 525(b) of the Energy Policy and Conservation Act. It has increased from $680 to $698 for violations of Section 10 of the FTC Act.

The maximum civil penalty amount has increased from $1,472,546 to $1,510,803 for violations of Section 814(a) of the Energy Independence and Security Act of 2007. The maximum civil penalty amounts for other law violations within the agency’s jurisdiction are listed in the Federal Register notice.

The Commission vote to publish the Federal Register notice amending Commission Rule 1.98 was 5-0.

The Federal Trade Commission today sued Florida-based Evoke Wellness, LLC and Evoke Health Care Management and their officers Jonathan Mosley and James Hull for using a combination of deceptive Google search ads and telemarketing to masquerade as other substance use disorder treatment providers.

“Preying on consumers suffering from addiction and other substance use disorders is wrong, and it’s illegal,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The use of deceptive online ads to trick consumers into selecting one clinic over another is unacceptable, and the Commission will continue taking action against clinics, marketers, and others in this space, as well as their executives, when they break the law.”

According to the complaint, Evoke tricked consumers into contacting Evoke’s call center by using deceptive Google search ads that appeared to be from the specific substance use disorder treatment clinics searched for by consumers. Evoke targeted consumers who were searching on their mobile phones not only by using the specific names of other clinics as keywords but also prominently displayed the names of those other clinics in the Google ads in a format that impersonated the searched-for clinics.

When consumers clicked on or dialed the telephone number in those ads, Evoke funneled them to their own telemarketers. Evoke’s telemarketers continued the deception, typically by falsely claiming that consumers had reached a centralized admissions office or addiction treatment hotline, rather than a call center associated with Evoke. Even when callers indicated clearly that they sought a different, specific treatment clinic, the telemarketers consistently reinforced the callers’ misimpressions created by Evoke’s deceptive ads, for example by falsely claiming to have a relationship with the other clinic.

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The complaint further alleges that between 2021 and 2023, Evoke disseminated at least 68,510 misleading Google search ads, resulting in at least 3,500 calls to Evoke’s call center. The Commission alleges this conduct violated both FTC Act and the Opioid Addiction Recovery Fraud Prevention Act of 2018. The lawsuit asks the court to permanently stop the deceptive practices and seeks civil penalties.

This is one of several FTC actions in recent years targeting deceptive conduct in the substance use disorder treatment industry. The FTC has previously brought actions against, for example;

• R360 LLC and its owner, Steven Doumar, for deceiving consumers about the evaluation and selection criteria for the treatment centers in their network; Michael J. Connors and his companies for deceptively claiming their Smoke Away products could eliminate consumers’ nicotine addiction;
• Rejuvica, LLC and its owners for making numerous unsubstantiated and false claims about Sobrenix, marketed to reduce and even eliminate alcohol consumption;
• Dr. Dalal A. Akoury and a set of companies operating as AWAREmed Health & Wellness Resource Center, for making a wide range of false or unsupported claims for addiction treatment services;
• Cerebral and its former CEO, Kyle Robertson, for breaking their privacy promises to consumers and misleading them about the company’s cancellation policies in connection with telehealth services; and
• Monument, Inc., an alcohol addiction treatment service provider, for allegedly disclosing users’ personal health data to third-party advertising platforms.

The Commission vote authorizing the filing of the complaint against Evoke Wellness, LLC and Evoke Health Care Management, LLC as well as Mosley and Hull was 5-0. The complaint was filed in the U.S. District Court for the District for the Southern District of Florida.

The lead staff attorneys on this matter are Victor DeFrancis and Cassandra Rasmussen in 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 case will be decided by the court.

The Federal Trade Commission is sending more than $1 million to fully refund consumers who purchased deceptively marketed Zephyr face masks during the COVID-19 pandemic.

In April 2024, the FTC took action against Razer Inc., alleging that the company falsely advertised its Zephyr masks as N95 or N95-equivalent. According to the FTC, the company never even submitted the masks for testing to the FDA or the National Institute for Occupational Safety and Health, and the masks were never certified as N95.

The FTC is sending checks and PayPal payments to 6,764 consumers who purchased the deceptively marketed products. Recipients will get a full refund. Consumers should cash their check within 90 days, as indicated on the check, or redeem their PayPal payment within 30 days. 

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Consumers who have questions about their payment should contact the refund administrator, Simpluris, at 1-833-285-3003 or visit the FTC’s 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 $330 million in refunds to consumers across the country.

Under federal district court orders announced today, the co-founders of the Stem Cell Institute of America and several related companies are banned from marketing stem cell therapy in the future. The order resolves a complaint filed jointly by the Federal Trade Commission and Georgia Attorney General’s Office. A separate order requires the defendants to pay $5,155,146 in both civil penalties and refunds to defrauded consumers on Georgia’s state law claims.

“The founders of the Stem Cell Institute of America and their network of companies tricked people who needed real medical help into buying expensive, unproven stem cell therapy,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The court’s orders hold them accountable, refund consumers, and permanently ban the defendants from offering stem cell therapy and other regenerative medicine treatment in the future.”

The agencies’ 2021 complaint named Steven D. Peyroux and Brent J. Detelich; Regenerative Medicine Institute of America, LLC, doing business as Stem Cell Institute of America, LLC (SCIA); Physicians Business Solutions, LLC (PBS); and Superior Healthcare, LLC (SHC) as defendants.

In 2015, Peyroux, a chiropractor, and Detelich, a former chiropractor, co-founded SCIA, a company that trained chiropractors and other healthcare practitioners how to deceptively market unproven stem cell therapy in their practices. SCIA trained its client clinics how to recruit patients through advertising, host free “educational seminars,” and conduct consultations. SCIA provided its clients access to a “vault” of sample advertisements rife with baseless claims of efficacy, and the appearance of being part of a nationwide SCIA network.

The defendants also used these deceptive marketing materials and “educational seminars” to attract stem cell patients to their own chiropractic clinic, SHC. SHC charged up to $5,000 per stem cell therapy injection, with many patients receiving more than one injection as part of their treatment. The group of consumers who purchased defendants’ unproven stem cell therapy consisted almost exclusively of elderly and disabled people.

Summary Judgment

Following extensive litigation, in March 2024, the U.S. District Court for the Northern District of Georgia issued a summary judgment opinion and order in favor of the FTC and the State of Georgia on all counts. In granting summary judgment, the court found that the defendants created and published false and misleading advertisements about the efficacy and approval of stem cell therapy injection treatments for a host of medical conditions (osteoarthritis, neuropathy, joint pain, and more), and embarked on a comprehensive marketing campaign to distribute those ads to the public and to other medical clinics across the county.

Orders for Injunctive and Monetary Relief

On December 26, 2024, the court issued orders for injunctive and monetary relief. The first order permanently bans the defendants from advertising, marketing, promoting, offering for sale, or selling any regenerative medicine treatments, including any treatment or therapy that falls under the definition of stem cell therapy.

It also prohibits them from misrepresenting that any regenerative medicine compliance training program is approved by either the FTC or the U.S. Food and Drug Administration. Finally, it prohibits the defendants from providing others with the means of making false and misleading statements about regenerative medical treatment.

The second order, based on Georgia’s state law claims, requires Peyroux and Detelich to pay $3,310,146 that may be used to provide refunds to defrauded consumers, and Peyroux, Detelich, and PBS to pay $1,845,000 in civil penalties, resulting in a total monetary penalty of $5,155,146.

The litigation was handled by attorneys Elizabeth Nach, Robert Van Someren Greve, Stacy Cammarano, and Cassandra Rasmussen and investigators Sallie Schools and Kenneth Chrzanowski from the FTC’s Bureau of Consumer Protection. The FTC appreciates the partnership of the Georgia Attorney General’s Office in bringing the action announced today.

The Federal Trade Commission is sending refund claim forms to consumers who bought deceptively marketed treatment plans sold by Golden Sunrise Nutraceutical, Inc., including products that falsely claimed to treat COVID-19, cancer, and Parkinson’s disease.

In June 2021, the FTC announced an order under which the medical director of Golden Sunrise agreed to settle Commission charges that he took part in deceptively advertising a $23,000 treatment plan as a scientifically proven way to treat COVID-19, and using false or unproven claims that other treatment plans could cure cancer and Parkinson’s disease. Dr. Stephen Meis was barred from making similar unsupported health claims in the future and ordered to pay $103,420 to provide consumer refunds.

The FTC is mailing notices to 581 consumers who bought certain products from Golden Sunrise between July 2017 and July 2020, including: 1) Primary Plan of Care, 2) Emergency D-Virus Plan of Care, 3) Metabolic Plan of Care, and 4) Cancer Plan of Care.

Eligible consumers can file a claim online at www.ftc.gov/GoldenSunrise. Payment amounts will depend on several factors, including how many people file claims.

The deadline for filing a claim is April 6, 2025. Consumers who have questions or need help filing a claim should call 844-804-3922 or email [email protected]. The Commission never requires people to pay money or provide account information to submit a claim or receive 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 $330 million in refunds to consumers across the country.

The Federal Trade Commission will require software provider accessiBe to pay $1 million to settle allegations that it misrepresented the ability of its AI-powered web accessibility tool to make any website compliant with the Web Content Accessibility Guidelines (WCAG) for people with disabilities.

“Companies looking for help making their websites WCAG compliant must be able to trust that products do what they are advertised to do,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Overstating a product’s AI or other capabilities without adequate evidence is deceptive, and the FTC will act to stop it.”

New York-based accessiBe Inc. and accessiBe Ltd. (accessiBe) market and sell a web accessibility software plug-in called accessWidget that the company has said can make any website compliant with WCAG, a comprehensive set of technical criteria used to assess website accessibility. The company made the claims on its website, on social media, and in articles on third-party websites formatted to look like impartial and objective reviews.

According to the complaint, despite the company’s claims, accessWidget did not make all user websites WCAG-compliant and these claims were therefore false, misleading, or unsubstantiated, in violation of the FTC Act. In addition, the complaint alleges that accessiBe deceptively formatted third-party articles and reviews to appear as if they were independent opinions by impartial authors and failed to disclose the company’s material connections to the supposedly objective reviewers.

Under the proposed order settling the complaint, accessiBe would be prohibited from engaging in the allegedly illegal conduct. First, the order would bar the company from representing that its automated products, including accessWidget’s AI, can make any website WCAG-compliant or can ensure continued compliance with WCAG over time, unless it has the evidence to support such claims.

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Next, the order would prohibit accessiBe from misrepresenting any material facts about its products and services to consumers regarding their features, performance, benefits and other qualities, and from misrepresenting that: 1) statements made in third-party reviews, blog posts, or articles about its automated products are independent opinions by impartial users; 2) an endorser is an independent or ordinary user of the automated product; or 3) an endorser is an independent organization providing objective information.

The order also would require accessiBe to clearly and conspicuously disclose any “unexpected material connection” that an endorser has to the company’s automated products, including accessWidget’s artificial intelligence and other automated technology. Finally, the order would require accessiBe to pay the FTC $1 million that may be used to provide refunds to consumers.

The Commission vote to accept the proposed consent order was 5-0, with Commissioners Andrew Ferguson and Melissa Holyoak issuing a joint separate statement.

The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment for 30 days, after which the Commission will decide whether to make the proposed consent order final. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.

NOTE: When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $51,744.

The lead staff attorney on this matter is Kristin Williams in the FTC’s Bureau of Consumer Protection. 

The Federal Trade Commission has approved a final consent order against Sitejabber, a company offering an AI-enabled consumer review platform, which deceived consumers by misrepresenting that ratings and reviews it published came from customers who experienced the reviewed product or service, artificially inflating average ratings and review counts.

The FTC’s November 2024 complaint alleges Sitejabber collected ratings and reviews from consumers for its online business clients at the time of purchase, before they received or had the chance to experience the products or services they bought. The company used these ratings and reviews to deceptively inflate the average ratings and review counts of its clients on the company’s review platform. The inflated ratings and review counts were also displayed in Google and other search results. The FTC also alleges Sitejabber provided its clients with pre-fulfilment product ratings and reviews, providing them with the means to misrepresent that the reviews and ratings are from customers who had received their purchases.

The final order settling the Commission’s complaint prohibits Sitejabber from making, or assisting anyone else in making, misrepresentations about any ratings, average ratings, or reviews it collects, moderates, or displays.

Following a public comment period, the Commission voted 5-0 to approve the final consent order.

The Federal Trade Commission has approved a final consent order against Rytr, settling allegations that it sold an AI “Testimonial & Review” service that provided subscribers with the means of generating false and deceptive online reviews.

The FTC’s September 2024 complaint alleges Rytr’s service generated detailed reviews that contained specific, often material details that had no relation to the user’s input, so almost certainly would be false for the users who copied them and published them online. Accordingly, the complaint charges Rytr violated the FTC Act by providing subscribers with the means to generate false and deceptive written content for reviews. It also alleges Rytr engaged in an unfair business practice by offering a service that is likely to pollute the marketplace with a glut of fake reviews.

The final order settling the Commission’s complaint prohibits Rytr from engaging in similar illegal conduct in the future. It also bars the company from advertising, promoting, marketing, or selling any service dedicated to – or promoted as – generating consumer reviews or testimonials.

Following a public comment period, the Commission voted 3-2 to approve the final consent order and letters to eight public commenters. Commissioners Melissa Holyoak and Andrew Ferguson previously issued separate dissenting statements.

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The Federal Trade Commission today announced a final Junk Fees Rule to prohibit bait-and-switch pricing and other tactics used to hide total prices and bury junk fees in the live-event ticketing and short-term lodging industries. These unfair and deceptive pricing practices harm consumers and undercut honest businesses.

“People deserve to know up-front what they’re being asked to pay—without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” said FTC Chair Lina M. Khan. “The FTC’s rule will put an end to junk fees around live event tickets, hotels, and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time. I urge enforcers to continue cracking down on these unlawful fees and encourage state and federal policymakers to build on this success with legislation that bans unfair and deceptive junk fees across the economy.”

The Junk Fees Rule will ensure that pricing information is presented in a timely, transparent, and truthful way to consumers of live-event tickets and short-term lodging, two industries whose pricing practices the Commission has studied in particular. Consumers searching for hotels or vacation rentals or seats at a show or sporting event will no longer be surprised by a pile of “resort,” “convenience,” or “service” fees inflating the advertised price. By requiring up-front disclosure of total price including fees, the rule will make comparison shopping easier, resulting in savings for consumers and leveling the competitive playing field.

The Commission launched this rulemaking in 2022 by requesting public input on whether a rule could help eliminate unfair and deceptive pricing tactics. After receiving more than 12,000 comments on how hidden and misleading fees affected personal spending and competition, the FTC announced a proposed rule in October 2023 and invited a second round of comments. The Commission received more than 60,000 additional comments which it considered in developing the final rule announced today.

The FTC estimates that the Junk Fees Rule will save consumers up to 53 million hours per year of wasted time spent searching for the total price for live-event tickets and short-term lodging. This time savings is equivalent to more than $11 billion over the next decade.

The Final Rule

The final rule targets specific and widespread unfair and deceptive pricing practices in the sale of live-event tickets and short-term lodging, while preserving flexibility for businesses. It does not prohibit any type or amount of fee, nor does it prohibit any specific pricing strategies. Rather, it simply requires that businesses that advertise their pricing tell consumers the whole truth up-front about prices and fees.

To accomplish this, the Junk Fees Rule requires that businesses clearly and conspicuously disclose the true total price inclusive of all mandatory fees whenever they offer, display, or advertise any price of live-event tickets or short-term lodging. Businesses cannot misrepresent any fee or charge in any offer, display, or ad for live-event tickets or short-term lodging.

In addition, the rule requires businesses to display the total price more prominently than most other pricing information. This means that the most prominent price in an ad needs to be the all-in total price—truthful itemization and breakdowns are fine but should not overshadow what consumers want to know: the real total.

Finally, the rule requires businesses that exclude allowable fees up front to clearly and conspicuously disclose the nature, purpose, identity, and amount of those fees before consumers consent to pay. For instance, businesses that exclude shipping or taxes from the advertised price must clearly and conspicuously disclose those fees before the consumer enters their payment information.

Industries beyond live-event ticketing and short-term lodging are prohibited from deceiving consumers about fees and pricing per longstanding law. The FTC will use its law enforcement authority to continue to rigorously pursue bait-and-switch pricing tactics, such as drip pricing and misleading fees, in other industries through case-by-case enforcement.

The Commission vote approving publication of the final rule was 4-1, with Commissioner Andrew Ferguson dissenting. Chair Lina M. Khan issued a separate statement, as did Commissioner Rebecca Kelly Slaughter. Commissioner Melissa Holyoak issued a concurring statement and Commissioner Andrew Ferguson issued a dissenting statement. The final rule will become effective 120 days after its publication in the Federal Register.

The primary staffers leading development of the final rule are Annette Soberats and Karen Mandel in the FTC’s Bureau of Consumer Protection. 

The Federal Trade Commission today announced a court order requiring GOAT, a leading online marketplace for sneakers, apparel, and accessories, to pay more than $2 million for violating an agency rule requiring companies to have reasonable shipping practices.

The FTC’s complaint also alleges GOAT offered “Buyer Protection” for consumers that received deficient products but did not put a system in place to honor its policy. GOAT did not establish a customer service program to effectively identify requests for the return of deficient products covered by the policy and many consumers were denied refunds. The FTC alleges consumers were forced to complain to customer service to get relief, which often excluded shipping costs and only included store credit, not full monetary refunds.

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“When an online business promises to protect consumers’ purchases, it must have the appropriate systems in place to make sure those protections can be implemented,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Forcing consumers to jump through hoops or keep complaining in order to get a promised refund is also unacceptable under the law.”

Los Angeles-based ecommerce marketplace 1661, Inc., doing business as GOAT, advertises, markets, and sells sneakers and other apparel to consumers throughout the United States through its website and mobile app.

According to the FTC’s complaint, GOAT advertises that the products it sells are put through the company’s verification process before they are shipped to buyers. GOAT has offered priority processing for its “Instant” orders and advertised specific shipping times based on whether the customer paid for “Standard” or “Next Day” shipping. GOAT made promises of same-day shipping for certain orders, advertising that “Standard” orders would typically arrive within three to six business days, and that “Next Day” orders usually arrive within one to two days after an order is placed.

Despite these claims, the FTC alleges that GOAT shipped 37% of all “Instant” orders later than it promised and shipped more than 16% of all “Next Day” orders on the second day or later after the order, despite the buyers paying $14.50 to $25 in shipping upgrade charges. In such cases, the FTC alleges, GOAT failed to offer buyers the option of agreeing to the delay or cancelling the order and receiving a prompt refund, as required by the FTC’s Mail, Internet, or Telephone Order Merchandise Rule.

In addition, the FTC alleges that, despite GOAT’s “Assurance of Authenticity” and “Buyer Protection Policy,” the company misrepresented that it would provide full refunds to buyers who request to return deficient products that are inauthentic, incorrect, or otherwise not as described. Instead, GOAT rejected many of these return requests outright and gave only partial refunds or only provided in-store credits.

Finally, the FTC says GOAT made it difficult for consumers to complain about deficient products and that its customer service practices were designed to provide full refunds only to consumers who continued to complain and escalate their return requests.

Under the proposed court order settling the FTC’s complaint, GOAT will be required to pay $2,013,527 to provide refunds to consumers harmed by the company’s illegal shipping practices. In addition, the company will be prohibited from the illegal practices detailed in the complaint, including misrepresenting the relief it will provide to consumers who receive a deficient product or the special treatment it will provide with respect to those products. It also will require GOAT to implement certain customer service practices to be used when it says it will provide special protection for certain products.

The order also will prohibit GOAT from denying refund requests or credit for specially protected products, including when they are purchased as used or final sale items, or due to the timing of the consumers’ refund requests, unless the company clearly discloses its denial policies. In addition, the order will also prohibit GOAT from misrepresenting material aspects of its return policies and practices.

The Commission vote authorizing the staff to file the complaint and stipulated final order was 5-0, with Commissioner Melissa Holyoak issuing a separate concurring statement and Commissioner Andrew Ferguson issuing a separate concurring statement. The FTC filed the complaint and final order in the U.S. District Court for the Central District of California.

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 lead staff attorneys on this matter are Delilah Vinzon and Matthew Fine of the FTC’s Western Region, Los Angeles.

The Federal Trade Commission has approved final amendments to its Telemarketing Sales Rule (TSR) that will extend the rule’s coverage to so-called “inbound” telemarketing calls made for technical support services. These would include calls made by consumers to companies pitching technical support services through advertisements or direct mail solicitations.

“The Commission will not sit idle as older consumers continue to report tech support scams as a leading driver of fraud losses,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Expanding the TSR to make sure calls for tech support services are covered will help us hold businesses accountable and get money back for injured consumers.”

As the FTC recently reported to Congress, last year consumers 60 and older were five times more likely than younger people to report losing money on a tech support scam. Older consumers reported more than $175 million in losses to tech support scams last year.

In April 2024, the FTC announced that it was seeking public comment on the TSR regarding a proposal to extend the rule’s coverage to inbound telemarketing calls to technical support services. Many tech support scams try to trick consumers into calling them by using pop-up alerts and other tactics that claim that consumers’ computers or other devices are infected with malware or other problems in order to sell them bogus tech support services.

Tech support scams often want the caller to pay for tech support services they don’t need, to fix a problem that doesn’t exist. They often ask consumers to pay by wiring money, putting money on a gift card, prepaid card, or cash reload card, or using cryptocurrency or a money transfer app because they know those types of payments can be hard to reverse. So far in 2024, consumers have reported losing more than $165 million to tech support scams.

The TSR has been updated regularly since 2000, leading to amendments in 2003 to create the national Do Not Call Registry for telemarketers, as well as in 2008 and 2010, when the rule was amended to specifically address pre-recorded telemarketing calls and debt collection services, respectively. In March 2024, the Commission amended the rule to prohibit deception in calls between businesses. The final rule announced today follows staff’s evaluation and consideration of the 25 submissions received during the public comment period.

The Federal Register notice announcing the final rule summarizes the comments received, addresses concerns raised, and proposes one modification regarding the definition of technical support services. It otherwise adopts the amendments as proposed earlier this year.

According to the statement of basis and purpose accompanying the notice, the final rule announced today:

• Defines technical support services as “any plan, program, software, or service that is marketed to repair, maintain, or improve the performance or security of any device on which code can be downloaded, installed, run, or otherwise used, such as a computer, smartphone, tablet, or smart home product, including any software or application run on such a device;” and
• Adds “technical support services” to the categories of calls excluded from the TSR’s exemptions for inbound calls made “in response to an advertisement through any medium, as well as those made in response to direct mail solicitation including email.”

The Commission vote approving publication of the notice in the Federal Register was 4-1, with Commission Andrew Ferguson voting no and issuing a dissenting statement. Commissioner Melissa Holyoak issued a separate concurring statement. Most provisions of the final rule will become effective 60 days after publication.

The primary staff attorney who developed the final rule is Benjamin Davidson in the FTC’s Bureau of Consumer Protection. 

Today, the Federal Trade Commission released the National Do Not Call Registry Data Book for Fiscal Year 2024 which shows that consumer reports about unwanted calls continue to drop for the third straight year, with complaint volume down by more than half since 2021.

The FTC has pursued a multifaced strategy to crack down on unwanted calls. In 2023, the agency announced Operation Stop Scam Calls, the largest crackdown on illegal telemarketing in the agency’s history. This year, the agency issued a rule banning impersonation of government or business, and expanded the Telemarketing Sales Rule (TSR) to protect businesses facing illegal telemarketing. The FTC is also confronting emerging threats such as voice cloning, by launching a Voice Cloning Challenge and clarifying that the TSR covers AI-enabled scam calls.

“Illegal calls remain a scourge, but the FTC’s strategy to pursue upstream players and equip the agency to confront emerging threats is showing clear signs of success,” said Sam Levine, Director of the FTC’s Bureau of Consumer Protection. “In the years to come, it will be critical we continue this progress by confronting not only telemarketers but those firms who knowingly profit from scam calls.”

Now in its 16^th year of publication, the FTC’s data book provides the most recent fiscal year information available on robocall complaints, the types of calls consumers reported to the FTC, and a complete state-by-state analysis of the data. According to this year’s edition, complaints unwanted calls about medical and prescription issues topped the list, with more than 170,000 reports—more than half of which were robocalls—received during the fiscal year ending on September 30, 2024.

FY 2024 Registration and Complaint Data

The FTC’s National Do Not Call (DNC) Registry lets consumers add their phone number and choose not to receive most legal telemarketing calls. In the last fiscal year, more than 4.2 million people signed up with the DNC Registry, bringing the total to more than 253 million actively registered phone numbers, up from 249.5 million at the end of FY 2023.

The overall number of complaints about unwanted calls continued its decline in FY 2024, down more than 33,000 from FY 2023. The number of consumer complaints decreased for most topics, though complaints about calls related to debt-reduction, the third largest topic, saw an increase of more than 85 percent from last year.

In FY 2024, the Commission received 1.1 million complaints about robocalls, down from 1.2 million in FY 2023, and from more than 3.4 million in FY 2021. This is the third year in a row the number of robocalls reported has decreased. For every month in the fiscal year, robocalls—defined under FTC regulations as calls delivering a prerecorded message—made up most of the consumer complaints about DNC violations.

Reports about imposters comprised the second-most commonly reported topic, with consumers filing more than 158,000 complaints. Complaints about debt reduction made up the third-most commonly reported topic, followed by complaints about energy, solar, and utilities and home improvement and cleaning. The FTC’s new Impersonation Rule applies to government imposters and anyone who misrepresent affiliations, endorsements, or sponsorships by legitimate businesses, such as scammers who promise solar energy to consumers for free or at little cost.

Registration and Complaint Data by State

The FTC also provides a state-by-state breakdown of its data. New Hampshire continues to top the nation in active DNC registrations per capita. The top five states reporting the most DNC complaints per 100,000 people in FY 2024 were Delaware, Ohio, Arizona, Illinois, and North Carolina.

The underlying data in the report is publicly available on the FTC’s website. Information for consumers about the DNC Registry, company-specific DNC requests, and telemarketer caller ID requirements can be found on the FTC’s website, and consumers can sign up for the DNC Registry for free. Other information about robocalls and what consumers can do about them is also available. To report unwanted telemarketing calls, consumers can file a complaint at www.donotcall.gov or call 1-888-382-1222.

The primary staffer on the FY24 report is Paul Witt in the FTC’s Bureau of Consumer Protection.

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The Federal Trade Commission is sending more than $536,000 in refunds to consumers who bought Sobrenix, a supplement marketed and sold by Rejuvica using unsupported claims that it could reduce and even eliminate alcohol cravings and consumption.

According to the FTC’s July 2023 complaint, Rejuvica and its owners, Kyle Armstrong and Kyle Dilger, made numerous unsubstantiated and false claims about Sobrenix using paid endorsers in deceptively formatted advertising. The defendants also used bogus review sites – including sites designed to appear to be independent, but were in fact, owned and operated by the defendants – to deceive consumers about their products.

The FTC is sending checks to 56,686 consumers who bought Sobrenix. 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, Analytics, at 844-716-5800 or visit the FTC’s 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 $330 million in refunds to consumers across the country.

The Federal Trade Commission today charged that Sitejabber, a company offering an AI-enabled consumer review platform, deceived consumers by misrepresenting that ratings and reviews it published came from customers who experienced the reviewed product or service, artificially inflating average ratings and review counts.

Under a proposed order settling the agency’s complaint, Sitejabber will be prohibited from making such misrepresentations in the future and from making other misrepresentations about consumer ratings or reviews.

“Platforms don’t have free rein to mislead people about the consumer reviews shown for companies and their products,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Along with our rule on fake reviews and testimonials, cases like this one show that we’ll act to stop all forms of deception in the review ecosystem.”

According to the FTC’s complaint, GGL Projects, Inc., which does business as Sitejabber, collected ratings and reviews for its online business clients from consumers at the time of purchase, before they received or had the chance to experience the products or services they bought. For example, after online customers checked out, they were asked to “rate your overall shopping experience so far” on a 5-star scale and then to “type a quick message about your shopping experience so far.”

Sitejabber allegedly used these point-of-sale ratings and reviews to deceptively inflate the average ratings and review counts of its clients on the company’s review platform, claiming that the ratings “indicat[e] that most customers are generally satisfied with their purchases.” Sitejabber’s inflated ratings and review counts were also displayed in Google and other search results.

Further, the complaint alleges that Sitejabber provided its clients with pre-fulfilment product ratings and reviews by asking customers, “Why did you choose the [product] today?” and requesting a rating on a 5-star scale. The FTC alleges that, by providing clients with product review tools that allowed them to publish this feedback on their own websites as product reviews and ratings, Sitejabber provided its clients with the means to misrepresent that the reviews and ratings were from customers who had received their purchases.

The proposed order prohibits the company from misrepresenting, or assisting anyone else in misrepresenting, that the average customer rating, number of ratings or reviews, or any rating or review of a product, service, or business reflects the views of customers who actually received the product or service purchased or had an opportunity to experience the product or service. It also bars Sitejabber from making or assisting anyone else in making any misrepresentation about any ratings, average ratings, or reviews it collects, moderates, or displays.

Finally, the proposed order prohibits Sitejabber from providing others with the means to misrepresent that ratings or reviews collected at the time of purchase were from consumers who had received or had the opportunity to experience the product or service purchased.

The Commission vote to issue the administrative complaint and to accept the consent agreement was 5-0, with Commissioners Andrew Ferguson and Melissa Holyoak issuing separate statements.

The FTC will publish a description of the consent agreement package in the Federal Register soon. The agreement will be subject to public comment, after which the Commission will decide whether to make the proposed consent order final. Instructions for filing comments will appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.

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. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $51,744.

The staff attorneys on this matter are Michael Ostheimer and Michel Atleson in the FTC’s Bureau of Consumer Protection.

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The Federal Trade Commission is sending more than $1.1 million in refunds to consumers who were misled by deceptive bait-and-switch advertising by LCA-Vision, the nation’s largest LASIK surgery provider.

According to the FTC’s January 2023 complaint, LCA-Vision, doing business as LasikPlus and Joffe MediCenter, used deceptive bait-and-switch advertising to trick consumers into believing they could have their vision corrected for less than $300. In reality, only 6.5% of consumers lured in for consultations were eligible for the advertised promotional price for both eyes. To be eligible for the promotion, consumers had to already have near-normal vision (good enough to drive without glasses).

In some ads, LasikPlus also neglected to tell consumers that the promotional price was per-eye—not the total amount. After consumers spent considerable time and effort undergoing lengthy full-dilation eye exams and in-person consultations, the company typically quoted a price between $1,800 and $2,295 per eye for the procedure. Today, the FTC is compensating consumers for their wasted time.

The FTC is sending checks and PayPal payments to 12,077 consumers who filed a valid claim before the deadline. Consumers should cash their check within 90 days or redeem their PayPal payment within 30 days.

Consumers who have questions about their payment should contact the refund administrator, JND Legal Administration, at 877-871-0504 or visit the FTC’s 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 $330 million in refunds to consumers across the country.

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The Federal Trade Commission is sending more than $2.8 million in refunds to consumers who were charged for purported “free trial” offers for personal care products and supplements.

According to the FTC’s 2018 complaint, Apex Capital Group, Phillip Peikos, David Barnett, and related entities marketed supposed “free trial” offers for personal care products and dietary supplements online, but instead billed consumers the full price for the products and enrolled them in negative option continuity plans without their consent. To further the scheme, the defendants used dozens of shell companies and straw owners in the United States and abroad to process consumers’ credit and debit card payments.

The Apex Capital defendants began the alleged online subscription scam in early 2014, and marketed and sold a variety of products to consumers before the court issued an order in November 2018 halting the scheme at the Commission’s request.

The FTC is sending 153,940 checks totaling more than $2.8 million to consumers who lost money as a result of Apex Capital’s scheme. 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, Analytics, at 844-541-3531 or visit the FTC’s 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 $330 million in refunds to consumers across the country.

At the request of the Federal Trade Commission, a federal court today approved settlements that will require the forfeiture of assets valued at about $40 million from a group of defendants who allegedly defrauded consumers nationwide by enrolling them, without their knowledge, into continuity plans for CBD and keto-related products that they did not agree to buy.

In addition to imposing monetary judgments, the orders permanently ban all the defendants from the alleged illegal conduct, as well as from debiting money from consumers’ accounts without prior authorization and from credit card laundering. They also require the defendants to turn over or relinquish claims to substantial assets, as set forth in the orders, which will be used to provide refunds to consumers who incurred unauthorized charges from the defendants’ alleged conduct.

The defendants include U.K. resident Harshil Topiwala, Florida resident Kirtan Patel, and the three companies they operated, Legion Media, LLC, KP Commerce, LLC, and Pinnacle Payments, LLC (together, the Legion Media defendants) as well as Florida resident Manindra Garg and a company he operated called Sloan Health Products, LLC.

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According to the FTC’s complaint, the Legion Media defendants operated two types of unauthorized billing scams and participated in business impersonation scams, facilitating them by securing merchant accounts using shell entities to process unauthorized online charges. Sloan Health allegedly worked with Legion Media by shipping the deceptively marketed personal care products and handling the large volume of customer returns. It shared in the profits of the scheme and distributed the products to consumers without providing any information that would reveal their actual identities.

Based on these allegations, the complaint charged the defendants with violating Section 5 of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), and the Electronic Funds Transfer Act (EFTA).

The court approved three orders settling the FTC’s complaint that contain similar conduct provisions and separate provisions detailing the monetary judgments imposed by the court against Topiwala, Legion Media, LLC, and Pinnacle Payments, LLC; Garg and Sloan Health Products LLC,; and Patel and KP Commerce, LLC.

Conduct Provisions. The three orders permanently ban all defendants from marketing or selling any product or service using a negative option feature. They also ban the defendants from marketing or selling any product or service as a “forced upsell,” including by using pre-checked boxes for upsells or by bundling products together with no way for consumers to opt out.

The orders also prohibit the defendants from failing to disclose certain facts regarding costs, charges, refund and cancellation policies, endorsements, and “free” trial offers, and require them to have adequate substantiation before making health-related claims for CBD, skincare, or weight-loss products, or any other food, drug, dietary supplement, or cosmetic.

Further, the orders bar all defendants from violating the EFTA and engaging in illegal credit card laundering practices. They are also prohibited from failing to disclose material facts to a financial institution relating to obtaining a merchant account and from engaging in any tactics to avoid detection by fraud and risk-monitoring programs, including the use of shell companies. Finally, the orders prohibit all defendants from passing consumers’ billing information to another seller and from violating ROSCA.

Monetary Provisions. The court imposed a $30 million judgment against Topiwala and his companies. The judgment will be suspended after they turn over or relinquish claims to bank accounts and other assets, including a collectible Michael Jordan worn jersey and shorts from the 1998 Eastern Conference Semi Finals (purchased for $1.35 million) and a Richard Mille Tourbillon Aerodyne watch (purchased for $1.225 million).

The court imposed a $30 million judgment against Garg and Sloan Health Products, which will be suspended after they turn over or relinquish claims to bank accounts and other assets, including luxury cars, watches, and jewelry. The order against Patel and KP Commerce imposes a $3 million judgment, which will be suspended upon the transfer of cryptocurrency assets valued at approximately $100,000 to the FTC.

The Commission vote authorizing staff to file the proposed orders was 5-0. They were filed in the U.S District Court for the Middle District of Florida, Tampa Division, and have been signed by District Court Judge John Badalamenti.

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

The FTC recognizes the assistance that the following partners provided in this investigation: the United States Postal Inspection Service in Nashville, Tennessee, the Attorney General’s Offices in Florida and Tennessee, and the Better Business Bureau in West Florida.

The lead staff attorneys on this matter are Darren H. Lubetzky, Vikram Jagadish, and Karen Dahlberg O’Connell of the FTC’s Northeast Region.

The Federal Trade Commission today announced a final rule that will combat fake reviews and testimonials by prohibiting their sale or purchase and allow the agency to seek civil penalties against knowing violators.

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“Fake reviews not only waste people’s time and money, but also pollute the marketplace and divert business away from honest competitors,” said FTC Chair Lina M. Khan. “By strengthening the FTC’s toolkit to fight deceptive advertising, the final rule will protect Americans from getting cheated, put businesses that unlawfully game the system on notice, and promote markets that are fair, honest, and competitive.”

The final rule announced today follows an advance notice of proposed rulemaking and a notice of proposed rulemaking announced in November 2022 and June 2023, respectively. The FTC also held an informal hearing on the proposed rule in February 2024. In response to public comments, the Commission made numerous clarifications and adjustments to its previous proposal.

The final rule prohibits:

• Fake or False Consumer Reviews, Consumer Testimonials, and Celebrity Testimonials: The final rule addresses reviews and testimonials that misrepresent that they are by someone who does not exist, such as AI-generated fake reviews, or who did not have actual experience with the business or its products or services, or that misrepresent the experience of the person giving it. It prohibits businesses from creating or selling such reviews or testimonials. It also prohibits them from buying such reviews, procuring them from company insiders, or disseminating such testimonials, when the business knew or should have known that the reviews or testimonials were fake or false.
• Buying Positive or Negative Reviews: The final rule prohibits businesses from providing compensation or other incentives conditioned on the writing of consumer reviews expressing a particular sentiment, either positive or negative. It clarifies that the conditional nature of the offer of compensation or incentive may be expressly or implicitly conveyed.
• Insider Reviews and Consumer Testimonials: The final rule prohibits certain reviews and testimonials written by company insiders that fail to clearly and conspicuously disclose the giver’s material connection to the business. It prohibits such reviews and testimonials given by officers or managers. It also prohibits a business from disseminating such a testimonial that the business should have known was by an officer, manager, employee, or agent. Finally, it imposes requirements when officers or managers solicit consumer reviews from their own immediate relatives or from employees or agents – or when they tell employees or agents to solicit reviews from relatives and such solicitations result in reviews by immediate relatives of the employees or agents.
• Company-Controlled Review Websites: The final rule prohibits a business from misrepresenting that a website or entity it controls provides independent reviews or opinions about a category of products or services that includes its own products or services.
• Review Suppression: The final rule prohibits a business from using unfounded or groundless legal threats, physical threats, intimidation, or certain false public accusations to prevent or remove a negative consumer review. The final rule also bars a business from misrepresenting that the reviews on a review portion of its website represent all or most of the reviews submitted when reviews have been suppressed based upon their ratings or negative sentiment.
• Misuse of Fake Social Media Indicators: The final rule prohibits anyone from selling or buying fake indicators of social media influence, such as followers or views generated by a bot or hijacked account. This prohibition is limited to situations in which the buyer knew or should have known that the indicators were fake and misrepresent the buyer’s influence or importance for a commercial purpose.

As the Commission noted previously, case-by-case enforcement without civil penalty authority might not be enough to deter clearly deceptive review and testimonial practices. The Supreme Court’s decision in AMG Capital Management LLC v. FTC has hindered the FTC’s ability to seek monetary relief for consumers under the FTC Act. This rule will enhance deterrence and strengthen FTC enforcement actions.

The Commission vote to approve the final rule and accompanying statement of basis and purpose was 5-0. The rule will become effective 60 days after the date it’s published in the Federal Register.

The primary staff members on this matter are Michael Ostheimer and Michael Atleson in the FTC’s Bureau of Consumer Protection. 

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NRRM, LLC, which does business as CarShield, along with American Auto Shield, LLC (AAS), the administrator of its vehicle service contracts (VSCs), will pay $10 million to settle Federal Trade Commission charges that its advertisements and telemarketing for VSC are deceptive and misleading, and that many purchasers found that many repairs were not “covered,” despite making payments of up to $120 per month. The FTC also alleges CarShield’s celebrity and consumer endorsers made false statements in its ads.

The stipulated order settling the Commission’s complaint also bars CarShield and AAS from making deceptive and misleading statements in the future and requires them to ensure their endorsers’ testimonials are truthful, accurate, and not deceptive.

“For many consumers, a personal vehicle is one of their most valuable assets and a vital lifeline for getting to work, taking their kids to school, and obtaining medical care. Instead of delivering the ‘peace of mind’ promised by its advertisements, CarShield left many consumers with a financial headache,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Worse still, CarShield used trusted personalities to deliver its empty promises. The FTC will hold advertisers accountable for using false or deceptive claims to exploit consumers’ financial anxieties.”

NRRM is a Missouri-based company that advertises VSCs to consumers throughout the United Sates. AAS, based in Lakewood, Colorado, designs and administers the VSCs.

According to the FTC’s complaint, CarShield advertises and sells VSCs costing approximately $80 to $120 a month. CarShield’s ads for VSCs often feature celebrities such as sports commentator Chris Berman and actor Ice-T. These endorsers try to assure consumers that buying a CarShield service plan will provide them with “peace of mind” and “protection” from the cost and inconvenience of vehicle breakdowns, which will inevitably occur.

The complaint alleges many ads claim that all repairs or repairs to “covered” systems, such as the engine and transmission, will be covered and use language that makes consumers believe CarShield will pay for all necessary repairs. For example, one ad that ran 18,000 times on television stated, “With CarShield’s administrators, they make sure you don’t get stuck with expensive car repair bills like this.” It also touts CarShield VSCs as “your best line of defense against expensive breakdowns.”

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The company sells its plans using telemarketers who answer inbound calls and make outbound calls responding to consumers, including those who made web inquiries. Using scripted statements written by CarShield and cleared by AAS, the telemarketers pitch the VSCs and tell consumers that, whether they use a dealer or local mechanic for the repair work, “there is just a $100 deductible for any covered repair.” 

However, consumers do not always get what they think they bought when signing up for the VSCs. Instead, the complaint alleges that CarShield’s ads deceptively represent that: 1) all repairs or repairs to “covered” vehicle systems will be paid for under the plans; 2) consumers will receive a rental car at no cost when their car breaks down; and 3) consumers can use the repair facility of their choice for repairs.

Specifically, many consumers could not use the repair facility of their choice, as many do not accept the VSCs. Many consumers also find that repairs they thought were covered are not. In fact, none of CarShield’s VSCs covers all repairs or even repairs to “covered” vehicle systems. Instead, the plans contain myriad exclusions. Consumers with denied claims receive no rental car, while many consumers with “approved” claims must pay a portion of their rental car costs.

In addition, while CarShield’s celebrity endorsers said they had signed up and used the company’s VSCs, in many cases this was not true. They were not “real” customers and had never saved money by using an AAS VSC. Finally, many CarShield ads deceptively feature consumer endorsers who claim to have saved a specific amount of money using their plans but have not in fact saved that amount.

The proposed order settling the complaint addresses the defendants’ alleged violations of the FTC Act. First, it prohibits CarShield from making the misrepresentations described in the complaint, along with any other misrepresentations related to any good or service. It also prohibits CarShield and AAS from failing to make required disclosures and from violating the FTC’s Telemarketing Sales Rule.

Next, the order bars CarShield from misrepresenting any endorser’s ownership, use of, or experience with any product or service and requires AAS to inform third-party marketers of the order and to review and monitor their advertising and marketing. The order also imposes standard reporting and compliance provision that will remain in place for up to 10 years.

Finally, the order imposes a $10 million monetary judgment against CarShield and AAS, which will be used to provide refunds to defrauded consumers. The full amount of the judgment must be paid to the FTC within seven days of when the court enters the order.

The Commission vote authorizing the staff to file the complaint and proposed order was 5-0. FTC staff filed the complaint and proposed order in U.S. District Court for the Eastern District of Missouri. The case was brought by the agency’s East Central Region. The FTC thanks the Missouri Attorney General’s Office for its help in bringing this case.

The staff attorneys on this case are Matthew Scheff, Adrienne Jenkins, and Sammi Nachtigal.

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.

For the second time in as many years, the Federal Trade Commission today sent cease-and-desist letters – jointly with the U.S. Food and Drug Administration (FDA) – to several companies currently marketing edibles containing Delta-8 tetrahydrocannabinol (THC) in packaging deceptively similar to many foods children eat such as Froot Loops and Chips Ahoy! chocolate chip cookies.

“Companies that market and sell edible THC products that are easily mistaken for snacks and candy are not only acting illegally, but they are also putting the health of young children at risk,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Those that prioritize profits in front of children’s safety are at serious risk of legal action.”

“Inadequate or confusing labeling can result in children or unsuspecting adults consuming products with strong resemblance to popular snacks and candies that contain delta-8 THC without realizing it,” said FDA Principal Deputy Commissioner Namandjé Bumpus, Ph.D. “As accidental ingestion and/or overconsumption of Delta-8 THC containing products could pose considerable health risks, the companies who sell these illegal products are demonstrating complete neglect for consumer safety. The FDA will continue to work to safeguard the health and safety of U.S. consumers by monitoring the marketplace and taking action when companies sell products that present a threat to public health.”

The agencies sent letters to the following companies: 1) Hippy Mood (Levittown, Pennsylvania); 2) Life Leaf Medical CBD Center (Murrells Inlet, South Carolina); 3) Shamrockshrooms.com (online only); 4) Mary Janes Bakery Co. LLC and Miami Rave LLC (Miami, Florida); and 5) Earthly Hemps (Cape Coral, Florida).

According to the letters, children can suffer serious health consequences from eating products containing cannabis, and they are at special risk of consuming edible THC products that appear similar to traditional foods because children are less likely to focus on or be able to understand text on the product labels.

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After reviewing online marketing for Delta-8 THC products sold by the companies, the FTC has determined that their advertising may violate the FTC Act’s prohibition against unfair or deceptive acts in the marketplace, including practices that present unwarranted health or safety risks. The letters stress that preventing practices that present such risks, particularly to young children, is one of the Commission’s highest priorities, and that imitating non-THC-containing food products that children consume is also misleading.

The companies’ Delta-8 THC products mimic a range of food that appeal to children. Hippy Mood sells various Delta-8 THC cereal products with names like Berry Boss, Chocolate Balls, Cookie Cat Crunch, and Frutti Rocks that have colorful packages and other graphical elements causing them to resemble packaging for children’s cereal. For example, the Rainbow Rings Delta-8 Cereal package features a cartoon toucan on a red background and depicts ring-shaped cereal in multiple colors – all suggestive of the packaging for Kellogg’s Froot Loops cereal.

Life Leaf Medical CBD Center sells a Delta-8 THC product that strongly resembles Nerds Rope candy, with both products comprising multi-colored crunchy candies attached to a gummy rope. The company’s packaging features a brightly colored background, the blue and white Nerds logo, and what appears to be the Nerds mascot — a cartoon anthropomorphic Nerds candy with two eyes, a prominent round nose, and two legs.

Mary Janes Bakery Co. LLC and Miami Rave LLC sell Trips Ahoy chocolate chip cookies, which are in packaging that closely resembles that for Nabisco Chips Ahoy cookies, including the use of a blue background, the depiction of a chocolate chip cookie with a bite taken out on the left side displayed underneath the word “ORIGINAL” in all caps in a white font that mimics handwriting, and the use of a similar color scheme and font for the “Trips Ahoy!” logo as that used for Chips Ahoy! logo. The packaging for other products sold on the companies’ sites, including Stoney Patch Sour Watermelon Slices, Stoney Ranchers Hard Candy, Dank Ropes, and Flaming Hot Weedos, contain color schemes and graphical elements resembling Sour Patch Kids Watermelon Candy, Jolly Rancher hard candy, Nerds Rope, and Flamin’ Hot Cheetos.

In the letters, the FTC demands the companies immediately stop marketing edible Delta-8 THC products that imitate conventional foods using advertising or packaging that is likely to appeal to young children. The FTC also strongly urges the sellers to review all of their marketing and product packaging for similar edible THC products and to take swift action and steps to protect consumers, especially young children, from these products. Finally, the FTC has asked each company to contact agency staff within 15 days to detail the specific actions it has taken to address the Commission’s concerns.

In July 2023, the agencies sent joint warning letters to six companies that were marketing edible products containing Delta-8 THC in packaging almost identical to many snacks and candy children eat, including Doritos, Cheetos, and Nerds. The letters sent today follow up on that effort and put additional companies on notice that selling such products may violate the FTC Act and lead to enforcement action.

The primary staff attorney on this matter is Christine DeLorme in the FTC’s Bureau of Consumer Protection.         

A U.S. district court in central Florida today unsealed a Federal Trade Commission complaint charging two related groups of defendants with defrauding consumers nationwide by enrolling them, without their knowledge, into continuity plans where they are shipped and charged repeatedly for personal care products that they did not agree to purchase.

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The defendants allegedly deceived consumers with ads for “free” CBD and Keto-related personal care products, billing many for products they did not consent to purchase, signing many up for unwanted continuity plans, and debiting money from their bank accounts without prior authorization. In addition, the FTC alleges that some of the defendants laundered credit card payments by setting up bank accounts for shell companies using straw signers.

“These defendants bilked consumers out of millions of dollars by repeatedly charging them for products they never ordered or agreed to purchase,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to aggressively pursuing companies and individuals involved in these unauthorized billing scams.”

The FTC’s complaint names two related groups as defendants: 1) U.K. resident Harshil Topiwala, Florida resident Kirtan Patel, and the three companies they operate, Legion Media, LLC, KP Commerce, LLC, and Pinnacle Payments, LLC; and 2) Florida resident Manindra Garg and a company he operates, Sloan Health Products, LLC.

According to the complaint, the Legion Media defendants have operated two types of unauthorized billing scams. In the first, the defendants market products that supposedly promote weight loss, clear skin, or other health benefits. They then defraud consumers who bought the products by charging them more than the advertised price and enrolling them in continuity plans without their consent in which they are charged for products they never intended or agreed to buy.

The Legion Media defendants also allegedly participated in business impersonation scams where consumers received communications appearing to be from known businesses inviting them to pay a small shipping fee for a supposedly free “gift” online. However, after consumers used their credit and debit cards to pay a fee, they incurred recurring unauthorized charges on their cards. The Legion Media defendants facilitated the scams by securing numerous merchant accounts using shell entities to process the unauthorized online charges.

The FTC alleges Sloan Health worked together with Legion Media by labeling and shipping the deceptively marketed personal care products and handling the large volume of customer returns. The complaint states they shared in the profits of the scheme and distributed the products without providing any information that would reveal their identity to consumers, using only the generic name “Fulfillment Center” and a post office box address in Smyrna, Tennessee.

Based on these allegations, the Commission’s eight-count complaint charges the defendants with violating Section 5 of the FTC Act for misrepresenting that consumers will get free products with their purchases, unfairly charging consumers without their consent, credit card laundering, and business impersonation.

Three counts allege violations of the Restore Online Shoppers’ Confidence Act (ROSCA) for failing to clearly disclose all material terms before obtaining consumers’ billing information, failing to get consumers’ express informed consent before charging them, and failing to provide a simple method for consumers to cancel unwanted recurring charges.

Finally, one count alleges violations of the Electronic Funds Transfer Act for debiting from consumers’ back accounts without their consent. Each count names all defendants, except the unfair credit card laundering and business impersonation counts, which only name the Legion Media defendants. A complete list of defendants can be found in the complaint linked to this press release on the FTC’s website. 

The Commission vote authorizing staff to file the complaint was 5-0. It was filed under seal in the U.S District Court for the Middle District of Florida, Tampa Division, and the seal has now been lifted.

The FTC recognizes the assistance that the following partners provided in this investigation: the United States Postal Inspection Service in Nashville, Tennessee, the Attorney General’s Offices in Florida and Tennessee, the Better Business Bureau in West Florida, the Florida Department of Law Enforcement, and the Tampa Police.

The lead staff attorneys on this matter are Darren H. Lubetzky and Vikram Jagadish of the FTC’s Northeast Region.

The sellers of a supposed N95-grade face mask called the Zephyr will pay more than $1.1 million to provide full refunds to consumers nationwide, as well as a civil penalty, under a proposed settlement the Federal Trade Commission announced today.

The stipulated order settling the complaint also bars Razer, Inc., along with its affiliated entities involved in the development, marketing, and sale of the Zephyr, from making COVID-related health misrepresentations or unsubstantiated health claims about protective health equipment and requires them to pay a civil penalty of $100,000.

According to the FTC, while Razer advertised the Zephyr masks as N95-grade, they never even submitted them for testing to the FDA or National Institute for Occupational Safety and Health (NIOSH), and the masks were never certified as N95. The complaint alleges that Razer only stopped the false advertising following negative press coverage and consumer outrage at the deceptive claims. The Department of Justice filed the case upon notification and referral from the FTC.

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“These businesses falsely claimed, in the midst of a global pandemic, that their face mask was the equivalent of an N95 certified respirator,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to hold accountable businesses that use false and unsubstantiated claims to target consumers who are making decisions about their health and safety.”

The complaint alleges the defendants deceptively advertised Razer’s Zephyr mask as an N95-equivalent, COVID-protective product. They offered the standard Razer Zephyr, consisting of one Zephyr mask and three sets of filters, for $99.99; the Razer Zephyr Starter Pack, consisting of one Zephyr mask and 33 sets of filters, for $149.99; and a Razer Zephyr Filter Pack, containing 10 sets of filters, for $29.99.

According to the complaint, the defendants began selling the Razer Zephyr and the Razer Zephyr Filter Pack to U.S. consumers online and in three stores – in Seattle, San Francisco, and Las Vegas – in October 2021. Later that month, they started selling the Razer Zephyr Starter Pack to U.S. consumers online through limited “drops.”

In their advertisements, the defendants initially falsely marketed their Zephyr masks as an N95 or N95-equivalent mask that would protect consumers from contracting COVID-19. Most of these advertisements were on the Internet, including on the defendants’ own website and social media posts and videos on sites including TikTok, Twitter, Instagram, Facebook, Discord and YouTube.

The complaint alleges that the defendants misrepresented the Razer Zephyr as an N95-equivalent mask that met standards established by NIOSH, the agency that approves N95 respirators. By definition, N95 respirators must filter at least 95 percent of ambient air particles between .1 and .3 micrometers in size, with even higher filtration levels for larger particles. While respirators and masks are designed for different purposes, N95 respirators are frequently referred to as N95 masks.

Despite the N95-related claims the defendants made in their ads, Razer never submitted a facemask to NIOSH for approval for any type of certification and NIOSH accordingly never certified any version of the Zephyr mask as an N95 respirator. The defendants also never sought or received permission from NIOSH to use the term N95 in marketing and selling its products. Accordingly, the defendants never had the required approval to advertise the Zephyr as an N95 facemask.

The proposed order settling the complaint addresses each alleged violation of the FTC Act. First, it bans Razer from making, without prior FDA approval, any claims that any product prevents or reduces the likelihood of infection with, or transmission of, the COVID-19 virus; reduces the severity or duration of COVID-19; or otherwise cures, mitigates, or treats COVID-19.

The proposed order also prohibits the defendants from representing the health benefits, performance, efficacy, safety, or side effects of protective goods and services (as defined in the proposed order), unless they have competent and reliable scientific evidence to support the claims made. The proposed order also prohibits the Razer defendants from making certain marketing and advertising misrepresentations, including that any goods or services are affiliated with, endorsed, certified, cleared, authorized, approved by, registered, or otherwise connected to any government entity.

Next, the order prohibits them from the deceptive use of government logos or trademarks to imply such an affiliation, from falsely claiming that any product meets government-established standards when it has not, and from misrepresenting any other fact material to consumers such as total cost of the product and any aspect of its performance, efficacy, or other primary characteristics.

Finally, the order imposes a $100,000 civil penalty against the defendants and requires them to pay $1,071,254.33 to the United States, equal to Razer’s revenue from the masks, which the FTC expects to use to provide refunds to defrauded consumers. This amount will allow the FTC to provide full refunds to consumers who purchased the deceptively marketed products.

The Commission vote approving the complaint and proposed order was 3-0. It was filed by DOJ in the U.S. District Court for the Central District of California. The proposed order settles the FTC case against: 1) Razer, Inc.; 2) Razer (Asia-Pacific) Pte., Ltd.; 3) Razer USA, Ltd.; 4) Razer Health Pte., Ltd.; and 5) Razer Online Pte., Ltd.

The staff attorneys on this case are Vikram Jagadish and Jordan Navarrette of the FTC’s Northeast Region.

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 Federal Trade Commission is sending $1.2 million in refunds to consumers who paid for the advice of supposed experts based on deceptive claims of substantial investment profits.

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The FTC sued Wealthpress in January 2023 along with two of its owners, Roger Scott and Conor Lynch, alleging that the company used deceptive claims of likely profits to sell consumers investment advising services—often touting that the services’ recommendations were based on a specific “algorithm” or “strategy” created by a purported expert. The company charged consumers hundreds or even thousands of dollars for access to these services but could not show that services they offered purchasers were likely to reap substantial profits. Indeed, many consumers lost substantial amounts of money in attempting to follow the services’ advice.

The defendants in the case agreed to a settlement that required them to pay more than $1.2 million in monetary relief along with $500,000 in civil penalties. The settlement also prohibits them from making any claims about earnings without having written evidence to back those claims up.

The FTC is sending payments to 19,857 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, JND Legal Administration, at 877-231-0641 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 today announced a final rule extending telemarketing fraud protections to businesses and updating the rule’s recordkeeping requirements in light of developments in technology and the marketplace. The Commission also announced a proposed rule that would provide the agency with significant new tools to combat tech support scams.

To stop these illegal overseas calls, the FTC announced in April 2023 that it had implemented Project Point of No Entry (PoNE), targeting “point of entry” or “gateway” Voice over Internet Protocol (VoIP) service providers and warning they must work to keep illegal robocalls out of the country. The project’s work has continued over the past year and continues to demonstrate its effectiveness by targeting more than two dozen service providers that were involved in millions of illegal robocall campaigns.

Both actions are part of the Commission’s current review of the Telemarketing Sales Rule (TSR), which includes the Do Not Call Registry (DNC) rules and provisions banning nearly all telemarketing robocalls to consumers. Importantly, the FTC also affirms the TSR’s prohibitions on robocalls using voice cloning technology.

“Today’s changes provide important new protections for small business and will help ensure that the FTC can take action against deceptive marketers who use AI robocalls and other emerging technology,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We look forward to comments from the public on the additional proposals that would deter tech support scams and aid the Commission’s efforts to put money back into the pockets of defrauded consumers.”

The TSR became effective in 1995 and applies to virtually all “telemarketing” activities, both in the United States and international sales calls to consumers in the United States. The rule generally applies only to outbound calls made by telemarketers to consumers, with some exceptions, and protects consumers in a range of ways. For example, the rule requires telemarketers to make certain disclosures and prohibits misrepresentations during sales calls. The TSR also prohibits calls to consumers on the Do Not Call Registry, and it prohibits calls using prerecorded messages regardless of whether the consumer is listed on the Do Not Call Registry.

The Current Regulatory Review

Both the final rulemaking and notice of proposed rulemaking announced today stem from the Commission’s regulatory review of the TSR and address public comments received as part of that review. In April 2022, the FTC proposed extending telemarketing protections to businesses and strengthening safeguards against other pernicious telemarking tactics plaguing consumers.

The final rule announced today implements updates that:

• Prohibit deceptive and abusive practices in all business-to-business calls: The original TSR exempted business-to-business calls (other than those selling office and cleaning supplies, which the Commission considered the “most significant business-to-business problem area” at the time). The final rule announced today expands prohibitions against misrepresentations to business-to-business telemarketing
• Updates the TSR’s recordkeeping requirements: The final rule will make several modifications to the recordkeeping amendments. The primary substantive modifications relate to new recordkeeping requirements for call detail records and its corresponding safe harbor, records of consent, records of compliance with the DNC Registry, and the provision allowing sellers and telemarketers to allocate responsibility for recordkeeping.

The Tech Support Notice of Proposed Rulemaking

The notice of proposed rulemaking announced today proposes amending the TSR to extend its coverage to inbound telemarketing calls involving technical support services. The TSR applies to certain categories of inbound calls—i.e., calls that consumers make to telemarketers—and the proposed amendment would add calls selling technical support services to that list.

The proposed amendment is needed due to the widespread deception and consumer injury caused by tech support scams, including those in which consumers call supposed tech support operations in response to advertising. The amendment would enable the FTC to obtain stronger relief—including civil penalties and consumer redress—against tech support scams. The Commission also is seeking comments on a proposed definition of tech support scams.

The Commission vote approving publication of the both the final rule and notice of proposed rulemaking in the Federal Register was 3-0.

The staff contact on this matter is Benjamin Davidson in the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission is sending claim forms to consumers who may have been misled by deceptive bait-and-switch advertising by Ohio-based LCA-Vision, doing business as LasikPlus and Joffe MediCenter (LasikPlus), the nation’s largest LASIK surgery chain. 

The Commission is sending notices to 159,711 consumers who may be eligible for a payment. Consumers may apply if they visited a LasikPlus or Joffe MediCenter facility for a LASIK consultation but declined surgery after learning the true price. Most eligible consumers will get an email, but about 4,600 people who don’t have an email address on file will get a notice in the mail. Eligible consumers can file a claim online at www.ftc.gov/lasik. The deadline to file a claim is May 20, 2024. Payment amounts will depend on several factors, including how many people file claims.

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According to the FTC’s January 2023 complaint, LasikPlus used deceptive bait-and-switch advertising to trick consumers into believing they could have their vision corrected for less than $300. In reality only 6.5 percent of consumers lured in for consultations were eligible for the advertised promotional price for both eyes. To be eligible for the promotion, consumers had to already have near-normal vision (good enough to drive without glasses). For everyone else, the company typically quoted a price between $1,800 and $2,295 per eye. Additionally, some ads neglected to tell consumers up-front that the advertised price was per-eye.

Under the terms of the settlement, LCA paid $1,250,000, which the FTC will use to pay claims to consumers harmed by the company’s actions. Consumers who have questions or need help filing a claim can call 1-877-871-0504 or send an email to [email protected]. The FTC 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.

Continuing its rigorous enforcement of the nation’s telemarketing and robocall laws, the Federal Trade Commission over the past year expanded its efforts to stop illegal calls originating overseas from entering the United States, working in coordination with its sister agency, the Federal Communications Commission (FCC).

To stop these illegal overseas calls, the FTC announced in April 2023 that it had implemented Project Point of No Entry (PoNE), targeting “point of entry” or “gateway” Voice over Internet Protocol (VoIP) service providers and warning they must work to keep illegal robocalls out of the country. The project’s work has continued over the past year and continues to demonstrate its effectiveness by targeting more than two dozen service providers that were involved in millions of illegal robocall campaigns.

“Illegal robocalls are a scourge that waste Americans’ time and defraud them of money. VoIP providers knowingly enable these scammers, allowing robocalls to proliferate on a massive scale,” said FTC Chair Lina M. Khan. “The FTC will continue to crack down on upstream actors that facilitate fraud, and we’ll keep working with the FCC to protect Americans in the fight against illegal telemarketing.”

“Coordination among federal partners is key when cutting off the scourge of illegal robocalls from abroad,” said FCC Chairwoman Jessica Rosenworcel. “These results of our recent actions are clear: together we are stronger in our efforts to protect American consumers from fraudulent and harassing international robocallers.”

Through Project PoNE, the FTC is disrupting foreign-based scammers and imposters responsible for blasting U.S. consumers with annoying and unwanted calls. As part of the project, the Commission: 1) identifies point of entry VoIP service providers that are routing or transmitting illegal call traffic from overseas, 2) demands they stop doing so and warns their conduct may violate the Telemarketing Sales Rule, and then 3) monitors them to pursue recalcitrant providers, including by opening law enforcement investigations and filing lawsuits when appropriate.

Through the FTC’s enforcement efforts and its collaboration with partners such as the Industry Traceback Group (ITG), FCC, and state attorneys general, Project PoNE uncovered 24 target point of entry VoIP service providers responsible for routing and transmitting illegal robocalls between 2021 and 2023, in connection with approximately 307 telemarketing campaigns.

According to ITG, a single campaign often represents hundreds of thousands or millions of calls, and a traceback represents a snapshot of any given campaign. After being contacted by Project PoNE staff, ITG traceback data showed that 22 of the 24 targets significantly curbed or altogether stopped the flow of illegal robocalls through their networks, as evidenced by the decrease in the combined tracebacks from 1,043 last year to 306 this year, a decrease of over 70 percent.

During the most recent effort, the FTC issued cease and desist letters to seven more targets. These VoIP providers were identified as the point of entry for illegal robocalls entering the U.S. and were involved in a total of 452 tracebacks.

The targets were involved in about 154 illegal robocall campaigns, including government and business impersonator scams, utility disconnection scams, and student loan and credit card debt relief schemes, among others. Some of the other campaigns targeted Chinese-speaking communities in the U.S. by blasting illegal robocalls in Chinese, with scammers misrepresenting their affiliation with the “Chinese Consulate,” with a well-known package delivery company, or a major telephone service provider.

For the most recent round of letters, the FTC coordinated with the FCC, which issued separate letters to the same targets. Last year, the FCC issued an order against a VoIP service provider, which also was a target of Project PoNE. The combined efforts of both agencies make the message clearer to these VoIP service providers that they need to be more vigilant gatekeepers of the U.S. telephone lines, especially against illegal robocalls coming from overseas.

As part of its commitment to protect every community, the FTC has provided consumer tips on How to Avoid a Scam, including those that use illegal robocalls, in English, in Traditional Chinese and Simplified Chinese, and several other languages.

The FTC’s East Central Region is spearheading Project PoNE. Consumers who want to report concerns regarding any of the voice service providers that received letters from Project PoNE staff can do so by going online to ReportFraud.FTC.gov or calling (877) FTC-HELP.

The Federal Trade Commission is sending more than $3 million in refunds to businesses that paid for memberships to HomeAdvisor, Inc., a company affiliated with Angi (formerly known as Angie’s List). The agency is also sending claim forms to businesses that are eligible for additional refunds.

The refunds stem from FTC allegations that HomeAdvisor used deceptive marketing tactics when selling home improvement project leads to service providers, including small businesses operating in the “gig” economy. The FTC’s March 2022 complaint alleged that since at least mid-2014, HomeAdvisor made false, misleading, or unsubstantiated claims about the quality and source of the leads it was selling to home service providers in search of potential customers. The agency also charged that HomeAdvisor told businesses that their annual membership would include one free month of mHelpDesk, an optional scheduling and payment processing service marketed by HomeAdvisor, but in reality the company charged an additional $59.99 for the first month.

The FTC is sending 110,372 checks to eligible home service providers. These refunds are related to the FTC’s allegations that HomeAdvisor misled businesses about the quality of customer leads they would get with their membership. Recipients should cash their checks within 90 days, as indicated on the check.

The agency is also sending 91,273 claims forms to businesses that paid for mHelpDesk. The deadline to submit a claim is February 26, 2024. More information about the refund process is available at www.ftc.gov/HomeAdvisor or by calling the refund administrator, Rust Consulting, Inc., at 1-833-915-1144. 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 2022, Commission actions led to more than $392 million in refunds to consumers across the country.

In a comment submitted to the U.S. Copyright Office, the Federal Trade Commission identifies several issues raised by the development and deployment of Artificial Intelligence (AI) that implicate competition and consumer protection policy, noting the Commission’s role in monitoring the impact of generative AI and vigorously enforcing the law as appropriate to protect competition and consumers.

“The manner in which companies are developing and releasing generative AI tools and other AI products . . . raises concerns about potential harm to consumers, workers, and small businesses,” according to the comment. “The FTC has been exploring the risks associated with AI use, including violations of consumers’ privacy, automation of discrimination and bias, and turbocharging of deceptive practices, imposters schemes and other types of scams.”

The comment explains that the FTC has an interest in copyright-related issues beyond questions about the scope of rights and the extent of liability under the copyright laws. For instance, not only may creators’ ability to compete be unfairly harmed, but consumers may be deceived when authorship does not align with consumer expectations. A consumer may think a work has been created by a particular musician or other artist when it is an AI-created product.

“Conduct that may violate the copyright laws . . . may also constitute an unfair method of competition or an unfair or deceptive practice, especially when the copyright violation deceives consumers, exploits a creator’s reputation or diminishes the value of her existing or future works, reveals private information, or otherwise causes substantial injury to consumers,” the comment continues. In addition, certain large technology firms have vast financial resources that enable them to protect the users of their generative AI tools or exclusive licenses to copyrighted proprietary data, potentially further entrenching the market power of these dominant firms.

Accordingly, the FTC has been using its existing legal authorities to take action against illegal practices involving AI, citing consumer protection examples including allegations that Amazon and Ring used highly private data they collected to train their algorithms while violating consumer privacy.

“AI, in particular generative AI, is still evolving rapidly, but it already has the potential to transform many industries and business practices. Notably, there is no AI exemption from the laws on the books. Accordingly, the FTC will vigorously use the full range of its authorities to protect Americans from deceptive and unfair conduct and maintain open, fair, and competitive markets,” the comment concludes.

The FTC submitted the comment in response to a notice of inquiry and request for comments on the copyright and policy issues raised by AI systems. It provides an overview of the FTC’s expertise in promoting competition and protecting consumers in an economy in which AI is being rapidly deployed, highlights the interconnection between AI-related copyright issues and FTC-focused competition and consumer protection concerns, and shares themes found in comments made at last month’s FTC roundtable on AI’s effects on the work of creative professionals.

Today, the Federal Trade Commission released the National Do Not Call Registry Data Book for Fiscal Year 2023, which shows that consumer complaints about robocalls and unwanted live telemarketing calls have decreased to a five-year low.

Now in its fifteenth year of publication, the data book also provides the most recent fiscal year information available on robocall complaints, the types of calls consumers reported to the FTC, and a complete state-by-state analysis. According to the data book, complaints about imposter calls again topped the list, with more than 175,000 received during the fiscal year ending on September 30, 2023, 117,000 of which were robocalls. In such calls, imposters falsely pose as representatives of government, such as the Social Security Administration or the IRS, legitimate business entities or as people affiliated with them.

FY 2023 Registration and Complaint Data

The FTC’s National Do Not Call (DNC) Registry lets consumers add their phone number and choose not to receive most legal telemarketing calls. In the last fiscal year, more than 2.6 million people signed up with the DNC Registry, bringing the total to more than 249 million actively registered phone numbers, up from 246.8 million at the end of FY 2022.

The overall number of complaints continued its decline in FY 2023, down more than 900,000 from FY 2022. The number of consumer complaints decreased for most topics, including warranties and protection plans, the second largest topic the past several years, which saw a decrease of more than 84 percent from FY 2022.

In FY 2023, the Commission received 1.2 million complaints about robocalls, down from 1.8 million in FY 2022. This is the second year in a row the number of robocalls reported has decreased. For every month in the fiscal year, robocalls—defined under FTC regulations as calls delivering a prerecorded message—made up the majority of consumer complaints about DNC violations.

Calls about medical and prescription issues comprised the second-most commonly reported topic, with consumers filing more than 142,000 complaints. Complaints about supposed debt-reduction made up the third-most commonly reported topic, followed by complaints about energy, solar, and utilities and warranties and protection plans.

Registration and Complaint Data by State

The FTC also provides a state-by-state breakdown of its data. New Hampshire continues to top the nation in active DNC registrations per capita. The top five states reporting the most DNC complaints per 100,000 people in FY 2023 were Delaware, Ohio, Virginia, Nevada and Illinois.

Operation Stop Scam Calls

In July 2023, the FTC and more than 100 federal and state law enforcement partners nationwide, including the attorneys general from all 50 states and the District of Columbia, announced “Operation Stop Scam Calls,” the largest crackdown on illegal telemarketing calls in U.S. history.

The initiative involved more than 180 actions targeting operations responsible for billions of calls to U.S. consumers, and it not only targeted telemarketers and the companies that hire them, but also lead generators who deceptively collect and provide consumers’ telephone numbers to robocallers and others, falsely representing that these consumers have consented to receive calls. The effort also targeted Voice over Internet Protocol (VoIP) service providers who facilitate illegal robocalls every year, which often originate overseas.

Underlying Data Availability

The underlying data in the report is publicly available on the FTC’s website.

Information for consumers about the DNC Registry, company-specific DNC requests, and telemarketer caller ID requirements can be found on the FTC’s website, and consumers can sign up for the DNC Registry for free. Other information about robocalls and what consumers can do about them is also available. To report unwanted telemarketing calls, consumers can file a complaint at www.donotcall.gov or call 1-888-382-1222.

The primary staffer on the report is Paul Witt in the FTC’s Bureau of Consumer Protection.

The Federal Trade Commission sued to stop four related defendants from deceptively marketing their 1 Virus Buster Invisible Mask (Invisible Mask) that purportedly creates a three-foot barrier of protection against 99.9 percent of all viruses and bacteria, including COVID-19 – without any scientific proof that the product actually works.

Despite receiving a warning letter that the FTC

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sent in July 2020, the New York-based defendants continued falsely advertising the Invisible Mask—a badge worn around the neck—as a scientifically proven defense against COVID-19 and other diseases and that it was a government-approved device, according to the FTC’s complaint.

Three of the four defendants have agreed to a proposed order settling the FTC’s complaint, and will be banned from making unsupported health claims for products designed to prevent or treat COVID-19.

“The defendants’ claims that their products can stand in for approved COVID-19 vaccines are bogus,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will use every tool it has at its disposal to stop false and unsubstantiated health claims that endanger consumers.”

The complaint alleges defendants Gary Kong, Timothy Wetzel, and the two companies they operate, K W Technology Inc. and K W Technology NV Inc., violated the FTC Act and the Covid Consumer Protection Act through their marketing and sale of the Invisible Mask on their own website, YouTube, and Facebook, where it was called “The 1 Virus Buster Card.”

This card, which was worn around the neck or clipped onto clothing, was sold using deceptive claims, the FTC says. For example, the defendants claimed their product “uses quantum theory technology, combines known virus and bacteria killing compounds. It is safe, simple, and effective. All you need to do is hang it around your neck or attach it to your collar, close to your mouth and nose. . . it kills 99.9% of most harmful bacterial and viruses . . . within a three-foot radius.”

The FTC contends the defendants have no reliable scientific evidence to support their claims that the Invisible Mask can prevent any human disease, and that despite contacting the FTC after receiving the warning letter and vowing to stop making such claims, they simply continued deceptively marketing the product.

The complaint also alleges the defendants falsely claimed that the Invisible Mask or its materials are government approved or made in a government-approved facility. They also falsely claimed the Invisible Mask had “FDA Approval” and that that the materials used to make it are “EPA-approved.” On their website the defendants posted a phony “Certificate of Registration” with the FDA’s logo, despite the fact that no such agency certificate exists.

The Kong Proposed Order

Three of the defendants have agreed to settle the FTC’s complaint in this case. A proposed court order will ban defendants Kong and his two companies, K W Technology Inc. and K W Technology NV Inc., from advertising, promoting, or selling any product claiming to prevent or treat COVID-19, unless the claims are true and supported by scientific evidence. The order also will bar the defendants from making any health-related product claims unless they have scientific evidence that the claim is true and from making misrepresentations about products’ health benefits, performance, efficacy, safety, or side effects.

The order also prohibits the defendants from misrepresenting they have government approval, clearance, or authority for their products and product claims. Finally, it requires the payment of $150,000.

The Commission voted 3-0 to file the complaint and proposed stipulated order against defendants Kong, K W Technology Inc. and K W Technology NV Inc. The FTC filed the documents in the U.S. District Court for the Eastern District of New York. Litigation continues against defendant Wetzel, who did not agree to the proposed settlement.

The lead attorney on the matter is Robin L. Rock of the FTC’s Southeast Region.