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FTC Enforcement

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May 4, 2017

A company that marketed itself as “the leader in home opiate detox since 2009” and its CEO have settled FTC charges that the withdrawal treatment claims for their “Withdrawal Ease” and “Recovery Ease” products were false or unsupported by scientific evidence. The court order settling the FTC’s charges bars Catlin Enterprises, Inc. and George Catlin, based in Austin, Texas, from making claims about opiate withdrawal, opiate dependency, or other health conditions, including through their product names, unless they possess competent and reliable science to back up those claims. “Opioid addiction is a scourge that has affected millions of Americans,” said Acting FTC Chairman Maureen K. Ohlhausen. “People who struggle with this problem need real help, not phony claims and false promises like the ones peddled by these defendants.”

April 24, 2017

At the FTC’s request, a federal court has ordered Timothy L. Ford, the president of Commercial Recovery Systems Inc. (CRS), to pay a $2 million civil penalty for violating the Fair Debt Collection 91Թ Act by falsely threatening debtors. The court judgment resolves a case filed on the FTC’s behalf by the Department of Justice in January 2015, alleging that CRS’s collectors falsely claimed the company would sue debtors, garnish their wages, levy their bank accounts, or seize their property unless their debts were paid.

April 18, 2017

The FTC has approved final consent orders settling charges that iSpring Water Systems, LLC, a Georgia-based distributor of water filtration systems, and Block Division, Inc., a Texas-based distributor of pulley block systems, made misleading Made-in-the-USA claims. The FTC’s complaint against iSpring alleged that the company’s unqualified claims that its products are built in the United States deceived consumers. In many instances – despite iSpring’s false, misleading or unsupported claims – its products either are wholly imported or are made using a significant amount of inputs from overseas. The FTC’s complaint against Block Division alleged that for a period of several years, the company’s pulleys featured imported steel plates that were stamped “Made in USA” before they entered the United States.

April 14, 2017

The FTC has approved final orders with three companies resolving allegations that they deceived consumers by misrepresenting their participation in the Asia-Pacific Economic Cooperation (APEC) Cross-Border Privacy Rules (CBPR) system. The APEC CBPR system facilitates privacy-respecting data transfers between APEC member economies through a voluntary, enforceable mechanism, which certifies companies as being compliant with APEC CBPR program requirements. Like the EU-U.S. and Swiss-U.S. Privacy Shield frameworks that also facilitate privacy-respecting data transfers between different countries, the APEC CBPR system is backstopped by FTC enforcement. In separate complaints, the FTC charged that Sentinel Labs, Inc., which provides endpoint protection software to enterprise customers, SpyChatter, Inc., marketer of the SpyChatter private message app, and Vir2us, Inc., which distributes cyber security software, falsely represented in their online privacy policies that they participated in the APEC CBPR system.

April 4, 2017

The FTC and Amazon Inc. have agreed to end appeals related to last year’s court findings that the company billed consumers for unauthorized in-app charges incurred by children, paving the way for affected consumers to seek refunds from the online retailer shortly. A federal district court found in April 2016 that Amazon billed consumers for unauthorized in-app charges incurred by children using mobile apps such as online games downloaded through the company’s app store. The court found that Amazon failed to get parents’ consent for in-app charges made by their children.

March 31, 2017

Following a public comment period, the Federal Trade Commission has approved final consent orders with CarMax, Asbury Automotive Group and West-Herr Automotive Group, settling charges that they touted how rigorously they inspect their used cars, yet failed to adequately disclose that some of the cars were subject to unrepaired safety recalls. The final orders announced today prohibit CarMax, Asbury and West-Herr from claiming that their used vehicles are safe, have been repaired for safety issues, or have been subject to a rigorous inspection, unless they are free of open recalls, or the companies clearly and conspicuously disclose that their vehicles may be subject to unrepaired recalls for safety issues and explain how consumers can determine a vehicle’s recall status. The orders also prohibit the companies from misrepresenting material facts about the safety or recall status of the used cars they advertise.

March 24, 2017

The FTC has charged a group of online marketers with deceptively luring consumers with “free” and “risk-free” trials for cooking gadgets, golf equipment, and access to related online subscription services. According to the FTC, the defendants asked people for their credit card information to cover shipping and handling, and then charged them for products and services without their consent. The FTC’s complaint alleges that Brian Bernheim, Joshua Bernheim, Jared Coates, Robert Koch AAFE Products Corp., JBE International LLC, BSDC Inc., KADC Inc., Purestrike Inc., and BNRI Corp., formerly known as Bernheim and Rice Inc., violated the FTC Act and the Restore Online Shoppers’ Confidence Act. According to the complaint, the defendants’ websites, TV infomercials and email deceived consumers by prominently claiming that their products and services were free, without clearly disclosing that they would start charging consumers if they did not cancel their “free trial” or return the “free” products. They also misrepresented their return, refund and cancellation policies.

March 17, 2017

Three Florida-based affiliate marketers charged with using illegal spam e-mail, false weight-loss claims, and phony celebrity endorsements to market bogus weight-loss products will pay $500,000 to settle FTC charges. The court order resolving the FTC’s allegations also prohibits the defendants from the illegal advertising and marketing tactics alleged in the complaint. According to the FTC’s June 2016 complaint, Colby Fox; his companies, Tachht, Inc. and Teqqi, LLC; and a fourth defendant paid affiliate marketers to send consumers millions of illegal spam emails from hacked email accounts, making it appear that the messages came from the consumers’ family members, friends, or other contacts. The email messages appeared to be a quick note from a family member or friend, passing along a link to an interesting news story.

March 14, 2017

Sage Automotive Group – nine Los Angeles-based auto dealerships, their holding and management companies, and two individuals – has agreed to pay more than $3.6 million for return to consumers in order to settle FTC charges that it used deceptive and unfair sales and financing practices, deceptive advertising, and deceptive online reviews. The proposed settlement order, which will be filed in the U.S. District Court for the Central District of California for approval, will prohibit the defendants from making misrepresentations relating to their advertising, add-on products, financing, and endorsements or testimonials.

March 7, 2017

A debt relief company and its principals who allegedly misled consumers and charged illegal advance fees will be banned from those practices under a settlement with the FTC. According to the FTC’s complaint, United Debt Counselors LLC exaggerated how much money people would save using its services. The company’s direct mail ads, which reached up to 100,000 consumers per week, looked like official documents from a bank or attorney, and claimed that typical customers would have their credit card debt cut in half and become debt-free within 36 months.
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