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FTC Wins Court Judgment Against Immigration Services Scam

A federal court has ordered the operators of a Baltimore-based immigration services scam to pay as much as $616,000 in refunds to Spanish-speaking immigrants, who were deceived into paying the defendants for immigration services that they were not qualified or authorized to provide. The order bans the defendants from providing or promoting these services in the future.

The court found that some customers “suffered severely” for relying on the defendants. Several were deported and one was arrested and jailed for almost 11 months, according to the court.

In March 2013, the court found Manuel Alban, his wife Lola Alban, and their company, Loma International Business Group, Inc., liable for violating the FTC Act. Targeting Spanish speakers from El Salvador and Honduras, the Albans misled immigrants to believe they were authorized to provide immigration services for a fee, according to the court. Under federal regulations, except for attorneys, only authorized providers may accept money in exchange for preparing immigration forms on someone else’s behalf.

The court found that although the defendants were not authorized providers, they took in an estimated $479,000 to $753,000 from unsuspecting immigrants. The Court also noted that according to United States Citizenship and Immigration Services data, the agency denied or rejected more than 60 percent of the immigration applications handled by the Albans.

“Misleading people to steal their money and destroy their dreams crosses the line,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The FTC is here to protect people from just these kinds of scams.”

The court order requires Manuel Alban and his wife Lola Alban to pay the refund judgment in installments totaling up to $616,000, depending on the number of victims the FTC is able to locate to receive a refund.

In addition to banning the defendants from providing immigration services, the order prohibits them, their employees, and others representing them from misrepresenting anything about goods or services they are promoting – including that they are qualified or authorized to provide immigration or tax preparation services. It also requires all customer information held by the defendants to be destroyed, and all customer information held by a court-ordered monitor to be turned over to the FTC.

Consumer Information

Spanish-speaking immigrants often are targeted by scammers who call themselves “immigration consultants” or “notarios” – or falsely claim that they are attorneys. The FTC has information in Spanish that explains how to find legitimate free or low-cost immigration advice from authorized providers, and where to report immigration services fraud. Because scammers target immigrants from around the world, the FTC’s immigration-related materials also are in Chinese, Korean, Creole, and Vietnamese.

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.

Payday Lenders That Used Tribal Affiliation to Illegally Garnish Wages Settle with FTC

A South Dakota-based payday lending operation and its owner will pay $967,740 to the U.S. Treasury as part of a settlement resolving FTC charges that they used unfair and deceptive tactics to collect on payday loans and forced debt-burdened consumers to travel to South Dakota and appear before a tribal court that did not have jurisdiction over their cases.

“Debt collectors cannot garnish consumers’ wages without a court order, and they cannot sue consumers in a tribal court that doesn’t have jurisdiction over their cases,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Regardless of tribal affiliation, debt collectors must comply with federal law.”

According to the complaint filed by the FTC, Webb and his companies offered short-term, high-fee, unsecured payday loans of $300 to $2,525 to consumers throughout the country, advertising on television and online. The FTC charged that defendants illegally tried to garnish consumers’ wages without a court order, and sought to manipulate the legal system and force borrowers to appear before the Cheyenne River Sioux Tribal Court in South Dakota, which did not have jurisdiction over their cases. The defendants also attempted to obtain tribal court orders to garnish consumers’ wages, according to the agency.

Under the terms of the settlement, Martin A. Webb and his companies have agreed to a $550,000 civil penalty for violating the Credit Practices Rule – which prohibits payday lenders from requiring borrowers to consent to have wages taken directly out of their paychecks in the event of a default. Following a partial judgment in favor of the FTC in September 2013, the defendants surrendered $417,740 in ill-gotten gains stemming from their prior practice of attempting to garnish consumers’ wages without court orders.

In addition to the monetary payment imposed on the defendants, the settlement prohibits them from further unfair and deceptive practices, and bars them from suing any consumer in the course of collecting a debt, except for bringing a counter suit to defend against a suit brought by a consumer.

For consumer information regarding payday loans see: Payday Loans.

In addition to Webb, the FTC’s complaint and amended complaint named as defendants Payday Financial, LLC, Great Sky Finance, LLC, Western Sky Financial, LLC, Red Stone Financial, LLC, Financial Solutions, LLC, Management Systems, LLC, 24-7 Cash Direct, LLC, Red River Ventures, LLC, and High Country Ventures, LLC.

The Commission vote approving the settlement was 4-0. On April 4, 2014, the U.S. District Court for the District of South Dakota approved the settlement and entered a final order and judgment.

Technology Alert: OpenSSL “Heartbleed” Vulnerability

FIL-16-2014
April 11, 2014

Technology Alert: OpenSSL “Heartbleed” Vulnerability

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FIL-16-2014 – PDF (PDF Help)

Summary:

The FDIC, as a member of the Federal Financial Institutions Examination Council (FFIEC), is issuing the attached alert advising financial institutions of a material security vulnerability in OpenSSL, a popular cryptographic library used to authenticate Internet services and encrypt sensitive information.

Statement of Applicability to Institutions with Less than $1 Billion in Total Assets: This Financial Institution Letter (FIL) applies to all FDIC-supervised institutions.

Highlights:

OpenSSL is an open-source implementation of the Secure Sockets Layer and Transport Layer Security protocols. Financial institutions may use OpenSSL in common network services such as Web servers, email servers, virtual private networks, instant messaging, and other applications.
A significant vulnerability has been found in OpenSSL that could allow an attacker to decrypt, spoof, or perform attacks on network communications that would otherwise be protected by encryption.
The FDIC expects financial institutions to upgrade vulnerable systems as soon as possible, following appropriate patch management practices.
Financial institutions should monitor the status of their third-party service providers and vendors’ efforts to implement patches on software that uses OpenSSL and to take the following steps, as appropriate:
- Ensure that third-party vendors that use OpenSSL on their systems are aware of the vulnerability and take appropriate risk mitigation steps.
- Monitor the status of their vendors’ efforts.
- Identify and upgrade vulnerable internal systems and services.
- Follow appropriate patch management practices¹ and test to ensure a secure configuration.
Examination guidance and additional information on patch management, software maintenance, and security updates can be found in the following FFIEC IT Examination Booklets:

FTC, DOJ Issue Antitrust Policy Statement on Sharing Cybersecurity Information

The Federal Trade Commission and the Department of Justice today issued a policy statement on the sharing of cyber-security information that makes clear that properly designed cyber threat information sharing is not likely to raise antitrust concerns and can help secure the nation’s networks of information and resources. The policy statement provides the agencies’ analytical framework for information sharing among private entities and is designed to reduce uncertainty for those who want to share ways to prevent and combat cyberattacks.

“Because of the FTC’s long experience promoting data security, we understand the serious threat posed by cyberattacks,” said FTC Chairwoman Ramirez. “This statement should help private businesses by making it clear that antitrust laws do not stand in the way of legitimate sharing of cybersecurity threat information.”

“The Department of Justice is committed to doing all it can to protect the security of our nation’s networks. Through the FBI and the National Security and Criminal Divisions, the department plays a critical role in preventing and prosecuting cybercrime,” said Deputy Attorney General James M. Cole. “Private parties play a critical role in mitigating and responding to cyber threats, and this policy statement should encourage them to share cybersecurity information.”

“Cyber threats are increasing in number and sophistication, and sharing information about these threats, such as incident reports, indicators and threat signatures, is something companies can do to protect their information systems and help secure our nation’s infrastructure,” said Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division. “With proper safeguards in place, cyber threat information sharing can occur without posing competitive concerns.”

In the policy statement, the federal antitrust agencies recognize that the sharing of cyber threat information has the potential to improve the security, availability, integrity and efficiency of the nation’s information systems. The policy statement also emphasizes that the legitimate sharing of cyber threat information is very different from the sharing of competitively sensitive information such as current or future prices and output or business plans, which may raise antitrust concerns. Cyber threat information is typically technical in nature and covers a limited type of information, and disseminating that information appears unlikely to raise competitive concerns.

The joint Department of Justice/Federal Trade Commission “Antitrust Guidelines for Collaborations Among Competitors” provide an overview of the agencies’ analysis of information sharing as a general matter. The agencies consider whether the relevant agreement likely harms competition by increasing the ability or incentive to raise price above or reduce output, quality, service or innovation below what likely would prevail in the absence of the relevant agreement.

Previous antitrust analysis on cyber threat information sharing was issued in October 2000, when the Antitrust Division issued specific guidance in a business review letter to Electric Power Research Institute Inc. Under the Justice Department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division will challenge the action under the antitrust laws. In that letter, the Antitrust Division confirmed that it had no intention of taking enforcement action against the company’s proposal to exchange certain cyber-security information, including exchanging actual real-time cyber threat and attack information. In that matter, the division concluded that as long as the information exchanged was limited to physical and cyber-security issues, the proposed interdictions on price, purchasing and future product innovation discussions should be sufficient to avoid any threats to competition. The legal analysis in that matter remains current.

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, 601 New Jersey Ave., N.W., Room 7117, Washington, DC 20001. 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.

Ardagh Group SA Settles FTC Litigation Charging That Acquisition of Rival Saint-Gobain Containers, Inc. Would be Anticompetitive

Ardagh Group SA has agreed to sell six of its nine glass container manufacturing plants in the United States to settle Federal Trade Commission charges that its $1.7 billion proposed acquisition of Saint-Gobain Containers, Inc. would likely harm competition in the markets for glass containers used to package beer and spirits.

“The remedy we achieved in this matter reflects the Commission’s willingness to litigate on behalf of consumers until all competitive concerns have been addressed,” said Deborah Feinstein, Director of the FTC’s Bureau of Competition. “The proposed order creates a strong, independent third competitor that fully replaces the competition—in both the beer and spirits glass container markets—that would have been lost had the merger proceeded.”

In July 2013, the Commission filed suit in federal district court to halt the proposed acquisition, pending completion of an administrative litigation to stop the transaction permanently. As alleged in an FTC administrative complaint, the proposed transaction would have concentrated most of the $5 billion U.S. glass container industry in two companies – the newly combined Ardagh/Saint-Gobain, and Owens-Illinois, Inc. These two companies would have controlled about 85 percent of the glass container market for brewers and 77 percent of the market for distillers, reducing competition and likely leading to higher prices for customers that purchase beer or spirits glass containers.

The FTC’s proposed settlement order requires Ardagh to sell six of the manufacturing plants and related assets it acquired through its 2012 acquisition of Anchor Glass Container Corporation, along with Anchor’s former corporate headquarters in Tampa, Fla. The six plants are located in: Elmira, N.Y.; Jacksonville, Fla.; Warner Robins, Ga.; Henryetta, Okla.; Lawrenceburg, Ind.; and Shakopee, Minn. The divestiture to a Commission-approved buyer must be completed within six months.

The Commission vote to accept the consent agreement package containing the proposed consent orders for public comment was 3-1, with Commissioner Joshua D. Wright voting no. The Commission issued a separate statement and Commissioner Wright issued a separate dissenting statement.

The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through May 12, 2014, after which the Commission will decide whether to make the proposed consent order final.

Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

Comments can be submitted electronically or in paper form. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

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 $16,000.

FTC Notifies Facebook, WhatsApp of Privacy Obligations in Light of Proposed Acquisition

The director of the Federal Trade Commission’s Bureau of Consumer Protection notified Facebook and WhatsApp about their obligations to protect the privacy of their users in light of Facebook’s proposed acquisition of WhatsApp.

In a letter to the two companies, Bureau Director Jessica Rich noted that WhatsApp has made clear privacy promises to consumers, and that both companies have told consumers that after any acquisition, WhatsApp will continue its current privacy practices.

“We want to make clear that, regardless of the acquisition, WhatsApp must continue to honor these promises to consumers. Further, if the acquisition is completed and WhatsApp fails to honor these promises, both companies could be in violation of Section 5 of the Federal Trade Commission (FTC) Act and, potentially, the FTC’s order against Facebook,” the letter states.

In 2011, Facebook settled FTC charges that it deceived consumers by failing to keep its privacy promises. Under the terms of the FTC’s order against the company, it must get consumers’ affirmative consent before making changes that override their privacy settings, among other requirements.

The letter notes that before making any material changes to how they use data already collected from WhatsApp subscribers, the companies must get affirmative consent. In addition, the letter notes that the companies must not misrepresent the extent to which they maintain the privacy or security of user data. The letter also recommends that consumers be given the opportunity to opt out of any future changes to how newly-collected data is used.

FTC Approves Final Order Settling Charges Against Flashlight App Creator

Following a public comment period, the Federal Trade Commission has approved a final order settling charges against Goldenshores Technologies, LLC, and its owner, Erik Geidl.

According to the FTC’s complaint, the company created a popular flashlight app for Android devices that the FTC charged deceived consumers with a privacy policy that did not reflect the app’s use of personal data and presented consumers with a false choice on whether to share their information.

The settlement, first announced in December 2013, prohibits Goldenshores and Geidl from misrepresenting how consumers’ information is collected and shared and how much control consumers have over the way their information is used.

The settlement also requires the defendants to provide a just-in-time disclosure that fully informs consumers when, how, and why their geolocation information is being collected, used and shared, and requires defendants to obtain consumers’ affirmative express consent before doing so.

The defendants also will be required to delete any personal information collected from consumers through the Brightest Flashlight app.

The Commission vote approving the final order and letters to members of the public who commented on it was 4-0. (FTC File No. 132-3087; the staff contacts are Kerry O’Brien, FTC Western Region – San Francisco, 415-848-5189; and Sarah Schroeder, FTC Western Region – San Francisco, 415-848-5186.)

FTC Warns Small Businesses: Don’t Open Email Falsely Claiming to be From FTC

The Federal Trade Commission is warning small businesses that an email with a subject line “Pending consumer complaint” is not from the FTC. The email falsely states that a complaint has been filed with the agency against their company. The FTC advises recipients not to click on any of the links or attachments with the email. Clicking on the links may install a virus or other spyware on the computer.

The FTC’s advice: Delete the email. For more information on malicious software (malware), visit www.OnGuardOnline.gov/malware.

Two Data Brokers Settle FTC Charges That They Sold Consumer Data Without Complying With Protections Required Under the Fair Credit Reporting Act

Two data brokers have agreed to settle Federal Trade Commission charges that they violated the Fair Credit Reporting Act (FCRA) by providing reports about consumers to users such as prospective employers and landlords without taking reasonable steps to make sure that they were accurate, or without making sure their users had a permissible reason to have them.

In separate cases, the two companies – Instant Checkmate, Inc., and InfoTrack Information Services – have agreed to pay civil penalties and will be prohibited from continuing their alleged illegal practices.

Instant Checkmate and InfoTrack sell public record information about consumers. According to the FTC’s complaints, both companies operated as consumer reporting agencies under the law but failed to abide by the FCRA. The FTC charged, among other things, that in many instances InfoTrack provided inaccurate information suggesting that job applicants potentially were registered sex offenders, possibly causing employers to reject their job application. According to the complaint against Instant Checkmate, that company failed to require that users of its reports identify themselves or certify the purpose for which they were seeking consumers’ information.

“Consumers shouldn’t have to worry that they’ll be turned down for a job or an apartment because of false information in a consumer report,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Data brokers that operate as consumer reporting agencies have a responsibility to ensure the accuracy of the information they sell for decisions about whether to hire someone, extend them credit, rent them an apartment, or insure them.”

The court orders impose a fine of $525,000 against Instant Checkmate and $1 million against InfoTrack and its owner. All but $60,000 of the penalty imposed on InfoTrack and its owner are suspended, based on their inability to pay.

Instant Checkmate, Inc., headquartered in San Diego, California, runs InstantCheckmate.com, a website that allows users to search public records for information about anyone, including a person’s current and previous address, arrest and conviction records, and birth, marriage and divorce records. On its website and in online ads, Instant Checkmate marketed its service to landlords and employers. For example, the website enticed landlords to “check out tenants before they rent” and advertised that the website’s background checks “are especially useful when employers are seeking candidates that require high security or a position of trust.”

According to the FTC, by providing background reports that it expected would be used for the purpose of determining eligibility for housing and employment, Instant Checkmate qualifies as a “consumer reporting agency” and is subject to the FCRA. The complaint alleges that Instant Checkmate violated the FCRA by failing to maintain reasonable procedures to ensure that those using its reports had permissible purposes for accessing them; furnishing reports to users that it did not have reason to believe had permissible purposes to access them; failing to follow reasonable procedures to assure that its reports were as accurate as possible; and failing to provide FCRA-mandated “User Notices” outlining several important consumer protections.

The court order against Instant Checkmate prohibits the company from violating the FCRA by:

furnishing consumer reports to anyone who does not have an FCRA-defined permissible purpose;
failing to maintain reasonable procedures to limit the furnishing of reports to people with permissible purposes;
failing to maintain reasonable procedures to assure the maximum possible accuracy of the reports; and
failing to provide User Notices.

InfoTrack Information Services, Inc. Based in Deerfield, Illinois, InfoTrack provides background screening reports to hundreds of employers nationwide about prospective and current employees. The reports include driving records, employment and education history, and criminal records, including sex offender records.

According to the FTC’s complaint, InfoTrack and its owner, Steve Kaplan, violated the FCRA by failing to use reasonable procedures to assure maximum possible accuracy of consumer report information obtained from sex offender registry records; failing to provide FCRA-required notices; and failing to provide written notices to consumers of the fact that InfoTrack reported public record information to prospective employers, when that information was likely to adversely affect consumers’ ability to obtain employment.

The court order against InfoTrack and Kaplan requires the defendants to comply with the FCRA by:

maintaining reasonable procedures to assure the maximum possible accuracy of consumer report information;
providing required FCRA notices; and
notifying consumers when InfoTrack has provided public record information about them that is likely to have an adverse effect upon their ability to obtain employment.

Information for Consumers and Business

The FTC has new blogs containing information for consumers and businesses related to the FCRA, and what they can to do avoid fraud and to comply with the FCRA, respectively.

The Commission votes approving the referral of the complaints to the Department of Justice and consents in settlement of the court actions was 4-0. The complaints and proposed consent orders were filed in the following courts: 1) Instant Checkmate: U.S. District Court for the Southern District of California; 2) InfoTrack Information Services: U.S. District Court for the Northern District of Illinois. The proposed consent decrees are subject to court approval.

NOTE: The Commission authorizes the filing of 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. Consent decrees have the force of law when signed by the District Court judge.

(FTC File Nos. 122-3221 and 122-3092)

FTC Approves Final Consent Settling Charges that L’Occitane, Inc. Misled Consumers to Believe that Creams Could Slim Their Bodies

Following a public comment period, the Federal Trade Commission has approved a final consent order settling charges that beauty products and cosmetics marketer L’Occitane violated the Federal Trade Commission Act with claims about the slimming properties of its Almond Beautiful Shape and Almond Shaping Delight skin creams.

First announced in January 2014, the settlement with L’Occitane requires the company to pay $450,000 for consumer redress and prohibits it from making future false and deceptive weight-loss claims.

The Commission vote to approve the final order in this case was 4-0. (FTC File No. 122 3115; the staff contacts are Matthew D. Gold or Evan Rose, FTC Western Region, San Francisco, 415-848-5100.)

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Technology Alert: OpenSSL “Heartbleed” Vulnerability

Printable Format:

Summary:

Highlights:

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