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Federal Trade Commission, Consumer Financial Protection Bureau to Co-Host Roundtable on Debt Collection and the Latino Community

UPDATED

The Federal Trade Commission and the Consumer Financial Protection Bureau will co-host a roundtable in Long Beach, California, on October 23, 2014, to examine how debt collection issues affect Latino consumers, especially those who have limited English proficiency. The event, titled “Debt Collection & the Latino Community,” will bring together consumer advocates, industry representatives, state and federal regulators, and academics to exchange information on a range of issues. Topics will include:

An overview of the Latino community, their finances, and the collectors who contact them;
Pre-litigation collection from Latino consumers;
The experience of limited-English-proficiency Latinos in debt collection litigation;
Credit reporting issues among limited-English-proficiency Latinos; and
Developing improved strategies for educating and reaching out to the Latino community about debt collection.

The roundtable is free and open to the public. It will be held in the Grand Ballroom at the University Student Union at California State University, Long Beach. The event also will be webcast. The address for the University is 1250 Bellflower Boulevard, Long Beach, California, 90840.

Send your ideas and comments regarding the roundtable event to the following email address: [email protected] or [email protected].

Additional information, including registration and the agenda, will be posted on the event page.

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

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Phony Payday Loan Brokers Settle FTC Charges

The operators of a Tampa, Florida-based payday loan broker scheme have agreed to settle Federal Trade Commission charges that they falsely promised to help consumers get loans, but instead used consumers’ personal financial data to take money from their bank accounts without their consent.

Claiming to be affiliated with a network of 120 potential payday lenders, defendants Sean C. Mulrooney and Odafe Stephen Ogaga, and five companies they controlled, misrepresented that 80 percent of all applicants got loans within an hour, according to the FTC’s complaint. In reality, the defendants did not lend money to consumers, and there is no evidence that they helped anyone in obtaining a loan.

According to the complaint, the defendants used consumers’ personal financial information it had collected through its websites to withdraw $30 from the bank accounts of tens of thousands of consumers, without authorization and without providing anything of value in return.

“These defendants deceived consumers to get their sensitive financial data and used it to take their money,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue putting a stop to these kinds of illegal practices.”

The proposed settlement bans the defendants from:

marketing or providing any credit-related products or services, including loans, prepaid credit cards, debt-relief services, and credit repair services;

collecting, selling, or buying consumers’ personal and financial information, except in order to process a specifically authorized transaction; and

processing transactions using remotely created checks or remotely created payment orders.

The settlement imposes a $6.2 million judgment, which is equal to the defendants’ ill-gotten gains. The settlement requires Ogaga to surrender nearly all his assets: $50,000 in cash, and proceeds from the sale of his 2011 Rolls Royce Ghost, 2007 Lexus LS460, and 2006 Ferrari. Once he surrenders these assets, the remainder of the judgment against Ogaga will be suspended. The judgment against Mulrooney is entirely suspended, due to his inability to pay.

Also under the settlement, the defendants are prohibited from misrepresenting the terms and conditions of any service or product they market, and from charging consumers for anything without their consent. The settlement also requires the defendants to dispose of customer information that they have already collected and not to use, disclose, or benefit from, and it.

For more consumer information on this topic, see Online Payday Loans.

In addition to Mulrooney and Ogaga, the complaint named Caprice Marketing LLC; NuVue Partners LLC; Capital Advance LLC; Loan Assistance Company LLC; and ILife Funding, LLC, formerly known as Guaranteed Funding Partners LLC.

The Commission vote approving the proposed stipulated final order was 5-0. The FTC filed the order in the U.S. District Court for the Northern District of Illinois, and the court entered it on July 1, 2014.

FTC Seeks Public Comment on Franchise Services of North America’s Application to Sell Two Former Advantage Rental Car Locations to Avis Budget Group and Sixt Rent-A-Car

The Federal Trade Commission is seeking public comment on an application submitted by Franchise Services of North America, Inc. (FSNA) to approve the sale of two former Advantage rental car locations in Portland, Oregon and San Jose, California, neither of which is currently operating, to Avis Budget Group and Sixt Rent-A-Car, respectively.

FSNA acquired the Advantage locations from Hertz Global Holdings, Inc. under a 2012 FTC settlement that required Hertz to sell its Advantage rental car business and other assets to a Commission-approved buyer to resolve charges that its proposed $2.3 billion acquisition of Dollar Thrifty Automotive Group, Inc. would have been anticompetitive. Under the terms of the FTC order, for a period of three years following the entry of the order, any sale of divested assets by FSNA requires Commission approval.

On November 5, 2013, FSNA, through a subsidiary, filed for Chapter 11 bankruptcy protection, and sought to sell Advantage, which continued to operate during the proceedings. Following a bankruptcy auction held in December 2013, the bankruptcy court approved Catalyst’s acquisition of Advantage, subject to FTC approval, obtained on January 30, 2014.

Catalyst ultimately decided to operate at 40 of the Advantage locations, and it purchased these assets from FSNA on April 30, 2014. FSNA then ceased operations at the remaining 28 locations and sold the majority of them after obtaining FTC approval. In this petition, FSNA is seeking FTC approval to sell two of the non-transferred locations.

The Commission will decide whether to approve the sales after expiration of a 30-day public comment period. Public comments may be submitted until August 12, 2014. Written comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. Comments can also be submitted electronically.

Copies of the application can be found on the FTC’s website and as a link to this press release. (FTC File No. 131-0163, Docket No. C-4376; the staff contact is Daniel P. Ducore, Bureau of Competition, 202-326-2526)

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., NW, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Alleges Amazon Unlawfully Billed Parents for Millions of Dollars in Children’s Unauthorized In-App Charges

Note: A conference call for media with FTC Consumer Protection Director Jessica Rich was held:

Date: July 10, 2014
Time: 2 p.m. ET

Jessica Rich and FTC staff took questions from the media about the case.

Amazon.com, Inc. has billed parents and other account holders for millions of dollars in unauthorized in-app charges incurred by children, according to a Federal Trade Commission complaint filed today in federal court.

The FTC’s lawsuit seeks a court order requiring refunds to consumers for the unauthorized charges and permanently banning the company from billing parents and other account holders for in-app charges without their consent. According to the complaint, Amazon keeps 30 percent of all in-app charges.

Amazon offers many children’s apps in its appstore for download to mobile devices such as the Kindle Fire. In its complaint, the FTC alleges that Amazon violated the FTC Act by billing parents and other Amazon account holders for charges incurred by their children without the permission of the parent or other account holder. Amazon’s setup allowed children playing these kids’ games to spend unlimited amounts of money to pay for virtual items within the apps such as “coins,” “stars,” and “acorns” without parental involvement.

“Amazon’s in-app system allowed children to incur unlimited charges on their parents’ accounts without permission,” said FTC Chairwoman Edith Ramirez. “Even Amazon’s own employees recognized the serious problem its process created. We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents’ consent for in-app purchases.”

The complaint alleges that when Amazon introduced in-app charges to the Amazon Appstore in November 2011, there were no password requirements of any kind on in-app charges, including in kids’ games and other apps that appeal to children. According to the complaint, this left parents to foot the bill for charges they didn’t authorize.

According to the complaint, kids’ games often encourage children to acquire virtual items in ways that blur the lines between what costs virtual currency and what costs real money. In the app “Ice Age Village,” for example, the complaint noted that children can use “coins” and “acorns” to buy items in the game without a real-money charge. However, they can also purchase additional “coins” and “acorns” using real money on a screen that is visually similar to the one that has no real-money charge. The largest quantity purchase available in the app would cost $99.99.

The complaint highlights internal communications among Amazon employees as early as December 2011 that said allowing unlimited in-app charges without any password was “…clearly causing problems for a large percentage of our customers,” adding that the situation was a “near house on fire.”

In March 2012, according to the complaint, Amazon updated its in-app charge system to require an account owner to enter a password only for individual in-app charges over $20. As the complaint notes, Amazon continued to allow children to make an unlimited number of individual purchases of less than $20 without a parent’s approval. An Amazon employee noted at the time of the change that “it’s much easier to get upset about Amazon letting your child purchase a $99 product without any password protection than a $20 product,” according to the complaint. In July 2012, as set forth in the complaint, internal emails again described consumer complaints about in-app charges as a “house on fire” situation.

The complaint alleges that in early 2013, Amazon updated its in-app charge process to require password entry for some charges in a way that functioned differently in different contexts. According to the complaint, even when a parent was prompted for a password to authorize a single in-app charge made by a child, that single authorization often opened an undisclosed window of 15 minutes to an hour during which the child could then make unlimited charges without further authorization. Not until June 2014, roughly two and a half years after the problem first surfaced and only shortly before the Commission voted to approve the lawsuit against Amazon, did Amazon change its in-app charge framework to obtain account holders’ informed consent for in-app charges on its newer mobile devices, as explained in the complaint.

According to the complaint, thousands of parents complained to Amazon about in-app charges their children incurred without their authorization, amounting to millions of dollars of charges. For example, one mother noted in the FTC complaint told Amazon that her daughter was able to rack up $358.42 in unauthorized charges, while others complained that even children who could not read were able to “click a lot of buttons at random” and incur several unauthorized charges.

The company’s stated policy is that all in-app charges are final and nonrefundable. According to the complaint, even parents who have sought an exception to that policy have faced a refund process that is unclear and confusing, involving statements that do not explain how to seek refunds for in-app charges or suggest consumers cannot get a refund for these charges.

This is the Commission’s second case relating to children’s in-app purchases; Apple, Inc. settled an FTC complaint concerning the issue earlier this year. The Commission is seeking full refunds for all affected consumers, disgorgement of Amazon’s ill-gotten gains, and a court order ensuring that in the future Amazon obtains permission before imposing charges for in-app purchases.

The Commission vote authorizing the staff to file the complaint was 4-1, with Commissioner Joshua D. Wright voting no. The complaint was filed in the U.S. District Court for the Western District of Washington.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

FTC Requests Public Comments on SCI’s Application to Approve Sale of Two Georgia Cemeteries to Hunsaker Partners, LLC

The Federal Trade Commission is currently accepting public comments on an application by Service Corporation International (SCI) to sell certain funeral and cemetery assets, as required under the FTC’s April 2014 order settling charges that SCI’s acquisition of Stewart Enterprises, Inc. would likely be anticompetitive. In total, the order requires the combined SCI/Stewart to divest 53 funeral homes and 38 cemeteries to ensure competition is maintained in 59 communities throughout the United States.

In the current application, SCI has petitioned the FTC to approve the divestiture of two cemeteries in Georgia, Holly Hill Memorial Park in Fairburn and Eastlawn Memorial Park in McDonough, to Hunsaker Partners, LLC (Hunsaker). Previously, on March 13, 2014, SCI filed an application seeking Commission approval to divest Cheatham Hill Memorial Park/Southern Cremations & Funerals in Marietta, Georgia, to Hunsaker.

According to SCI’s application, Hunsaker will be a strong and effective competitor in the local market, and has the expertise to successfully operate the businesses it plans to acquire. In addition, SCI states that the proposed divestitures will remedy any alleged anticompetitive effects that could result from its acquisition of Stewart in the local market.

The Commission will decide whether to approve the proposed divestiture after expiration of a 30-day public comment period. Public comments may be submitted until August 8, 2014. Written comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. Comments also can be submitted electronically. Copies of the application can be found on the FTC’s website and as a link to this press release. (FTC File No. 131-0163, Docket No. C-4423; the staff contact is Elizabeth A. Piotrowski, Bureau of Competition, 202-326-2623)

FTC Approves Final Orders Settling Charges That Ski Equipment Manufacturers Marker Völkl GmbH and Tecnica Group S.p.A. Colluded Regarding Endorsers and Employees

Following a public comment period, the Federal Trade Commission has approved two final orders settling charges that ski equipment manufacturers Marker Völkl (International) GmbH and Tecnica Group S.p.A. for many years illegally agreed not to compete for one another’s ski endorsers or employees.

According to the FTC’s May 2014 complaint, starting in 2004, the two companies illegally agreed not to compete with each other to secure endorsements by professional skiers. Specifically, the FTC charged that Marker Völkl agreed not to solicit, recruit, or contact any skier who previously endorsed Tecnica skis, and Tecnica agreed to a similar arrangement with respect to Marker Völkl’s endorsers.

In addition, according to the FTC, in 2007, the companies expanded the scope of their non-compete agreement to cover all of their employees. The purpose was to avoid bidding up the cost of securing endorsements from skiers, as well as the salaries of their employees.

The final orders settling the FTC’s charges [Marker Völkl order | Tecnica Group order] bar each firm from engaging in similar anticompetitive conduct in the future.

The Commission vote approving the final orders was 5-0. (FTC File No. 121-0004; the staff contact is Mark Taylor, Bureau of Competition, 202-326-2287)

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave. NW, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Sends Refunds to Consumers Duped by Mortgage Loan Modification Scam

The Federal Trade Commission is mailing refund checks totaling $499,701.84 to 229 consumers who paid the Lucas Law Center an advance fee for mortgage loan modifications the company falsely claimed it would obtain for them.

Affected consumers will receive checks ranging from $427.62 to $8,246.90; the average check is $2,182.10. Those who receive the checks from the FTC’s refund administrator should cash them within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide information before refund checks can be cashed. Those with questions should call the refund administrator, Analytics Consulting LLC, at 1-855-332-3410, or visit www.FTC.gov/refunds for more general information.

FTC, Partners To Recognize Second Annual Military Consumer Protection Day July 16

The Federal Trade Commission, along with more than 30 public and private sector organizations, are collaborating to provide military consumers with free resources about managing their money, avoiding scams, and dealing with identity theft in celebration of the second annual Military Consumer Protection Day (MCPD) on July 16.

MCPD is part of Military Consumer, a year-round campaign hosted by the FTC, the Department of Defense, the Consumer Financial Protection Bureau, Military Saves, and other consumer advocacy and military support organizations to empower and engage servicemembers, veterans and their families with information related to pocketbook issues.

The centerpiece of MCPD is a town hall/Twitter chat at 2:00 p.m. EST, July 16. To join the conversation, which is focused on identity theft and credit-related issues, submit questions using the hashtag #MCPD2014. Visit Military Consumer to learn more about the ongoing campaign, subscribe to the blog, and more.

FTC Approves Two SCI Applications to Divest Funeral Home and Cemetery Assets in South Carolina and Maryland

Following a public comment period, the Federal Trade Commission has approved two applications by Service Corporation International (SCI) to divest certain funeral and cemetery assets, as required under the FTC’s order settling charges that SCI’s acquisition of Stewart Enterprises, Inc. would likely be anticompetitive. In total, the order requires the combined SCI/Stewart to divest 53 funeral homes and 38 cemeteries to ensure competition is maintained in 59 communities throughout the United States.

Through this action, the FTC has approved the divestiture of several funeral home and cemetery properties in South Carolina to Rollings Funeral Services, Inc.; and in Rockville, Maryland, to Edward Sagel Funeral Direction, Inc., as detailed in SCI’s April 7, 2014, applications to the Commission.

The Commission vote to approve both applications was 5-0. (FTC File No. 131-0163, Docket No. 4423; the staff contact is Elizabeth A. Piotrowski, Bureau of Competition, 202-326-2623)

FTC Seeks Comment on Hobby Protection Rules

The Federal Trade Commission is seeking public comment on its Hobby Protection Rules as part of its systematic review of all FTC rules and guides.

Issued in 1975, as required by Congress, the “Rules and Regulations Under the Hobby Protection Act” regulate the marking of imitation coins and political items sold to hobbyists. The FTC seeks comment on the costs and benefits of the Rules, how changes to the Rules would affect consumers, businesses, and compliance costs, and whether technological or marketplace changes have affected the Rules.

The Commission vote approving the Federal Register Notice was 5-0. It is available on the FTC’s website and as a link to this press release and will be published in the Federal Register soon. Instructions for filing comments appear in the Federal Register Notice. Comments must be received by September 22, 2014. All comments received will be posted at www.ftc.gov/policy/public-comments. (FTC File No. P974230; the staff contact is Joshua S. Millard, Division of Enforcement, 202-326-2454)

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