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FTC Enforcement

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November 14, 2016

At the request of the FTC, a U.S. district court judge issued a summary decision and $30 million judgment against the pitchman behind a product called Pure Green Coffee, who deceived consumers using false weight-loss claims, bogus testimonials, and fake news websites. The U.S. District Court for the Middle District of Florida, Tampa Division, ruled that Nicholas Scott Congleton deceptively marketed Pure Green Coffee for weight loss through NPB Advertising, Inc. and a web of other companies under his control. The court order permanently bars him from the deceptive advertising practices challenged by the Commission.

November 10, 2016

The FTC has charged that in numerous instances, prepaid card company NetSpend Corporation deceived consumers, many of whom do not have bank accounts, about access to funds deposited on defendants’ debit cards. According to the FTC’s complaint, NetSpend tells consumers that its reloadable prepaid debit cards offer an alternative way to store and immediately access their funds. But once people have loaded funds onto the cards, many of them find they cannot access their money, either because NetSpend denies or delays activation of the card, or because it blocks consumers from using it. The FTC seeks to return consumers’ funds and ensure that NetSpend provides them with promised access to their funds in the future.

November 8, 2016

The FTC is mailing checks totaling more than $3.7 million to people who lost money to Fortune Hi-Tech Marketing, a pyramid scheme whose operators were banned from multi-level marketing under a settlement with the FTC and the states of Illinois, Kentucky and North Carolina. In January 2013, the FTC and the states charged the Fortune Hi-Tech Marketing defendants with deceiving consumers by claiming they would earn significant income through selling various products and services if they signed up as FHTM representatives. Participants were required to pay substantial start-up costs and monthly fees to retain their positions with the company.

November 4, 2016

The FTC has charged a Pittsburgh-based manufacturer, Innovative Designs, Inc., with making false and unsubstantiated claims that its Insultex House Wrap would save consumers money by providing significant insulation without using much space. According to the FTC, Innovative Designs claims its thinner, less-expensive, house wrap has an insulation value of R-3 and its thicker, more expensive product has an R-6 value, and that its advertised R-values are based on valid scientific testing. In fact, the FTC’s complaint alleges that the R-value of both products is substantially less than one, and the test results and a certificate touted by the company are flawed and invalid. The FTC charges Innovative Designs with failing to substantiate its claims that the purported insulation value of Insultex House Wrap saves consumers money.

October 31, 2016

the FTC has approved a modified final order settling charges that the $28 billion merger of Koninklijke Ahold and Delhaize Group, which together own five well-known U.S. grocery store chains, would likely be anticompetitive. Under the proposed order, first announced in July 2016, the companies are required to sell 81 stores to seven divestiture buyers. The proposed order calls for prior Commission approval before one of the divestiture buyers, Supervalu, transfers or sells an ownership interest in an acquired store to another party. This modified final order approves Supervalu’s proposed joint venture transaction with Donstekim Enterprises, LLC, regarding its acquired stores.

October 28, 2016

The FTC has charged Blue Saguaro Marketing LLC, MarketingWays.com LLC, Amazon.com Associates Program; Max Results Marketing LLC, Grant Strategy Solutions, and Oro Canyon Marketing II LLC, among others, with bilking money from seniors, veterans, and debt-laden consumers by selling them a worthless money-making opportunity purportedly linked to Amazon.com, and luring them with a phony grants program. According to the FTC’s complaint, the defendants’ telemarketers falsely tell people they represent Amazon and offer, for hundreds or thousands of dollars, to create a website for them linked to Amazon.com, claiming they will earn thousands of dollars every month in commissions for sales via the website. They also falsely offer to advertise the consumer’s website and use search engine optimization to drive customers to it.

October 17, 2016

A federal judge has granted the FTC request for a preliminary injunction against two people and their companies for allegedly tricking small commercial trucking businesses into paying them for federal and state motor carrier registrations by impersonating government transportation agencies, such as the U.S. Department of Transportation. According to the FTC’s complaint, James P. Lamb, Uliana Bogash, DOTAuthority.com Inc., DOTFilings.com Inc., Excelsior Enterprises International Inc. and JPL Enterprises International Inc. have taken in more than $19 million from thousands of small businesses by sending misleading robocalls, emails, and text messages that create and reinforce the false impression that they are, or are affiliated with, the USDOT, the UCR system, or another government agency. As noted in the FTC’s complaint, the defendants used official-sounding names, official-looking websites, warnings of $1,000 in civil penalties or fines for non-compliance, and threats of imminent law enforcement to trick consumers into using their registration services instead of using official government website services.

October 13, 2016

Twenty-nine defendants who sold Auravie, Dellure, LéOR Skincare, and Miracle Face Kit branded skincare products have agreed to court orders with the FTC or had default orders entered against them. Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said “these defendants tricked people into paying for skin care products and abused the credit card system to extend their scheme.” The agency’s original complaint, filed in June 2015, charged seven individuals and 15 companies with selling their skincare products through false advertisements for “risk-free trials.” According to the FTC, the defendants convinced consumers to provide their credit card information, purportedly to pay nominal shipping fees. However, the defendants allegedly used consumers’ credit card information to impose unauthorized recurring monthly charges of up to $97.88 per month for unordered products.

October 6, 2016

The FTC will require CentraCare Health, a healthcare provider in St. Cloud, Minnesota, to release some physicians from “non-compete” contract clauses, allowing them to join competing practices, under a settlement mitigating likely anticompetitive effects from CentraCare’s proposed merger with St. Cloud Medical Group. The FTC alleges that by eliminating SCMG as a potential alternative in the St. Cloud area, the acquisition is likely to increase CentraCare’s bargaining power vis-à-vis commercial health plans, allowing it to raise reimbursement rates and secure more favorable terms. The acquisition may also result in a loss of quality and service benefits to patients. The proposed consent order will permit the acquisition to proceed, but lessens its potential anticompetitive effects by requiring CentraCare to allow a number of adult primary care, pediatric, and OB/GYN physicians to leave the health system and work for other local providers or establish a new practice in the area and to provide certain financial incentives to a number of departing physicians.

October 5, 2016

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that ON Semiconductor Corporation’s $2.4 billion acquisition of Fairchild Semiconductor International, Inc. is likely anticompetitive. Under the order, first announced in August 2016, the companies are required to sell ON’s Ignition IGBT business to Chicago-based manufacturer Littelfuse, Inc. within 10 days of the close of the transaction.
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