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Marketer of Internet-Connected Home Security Video Cameras Settles FTC Charges It Failed to Protect Consumers’ Privacy

A company that markets video cameras designed to allow consumers to monitor their homes remotely has settled Federal Trade Commission charges that its lax security practices exposed the private lives of hundreds of consumers to public viewing on the Internet. This is the agency’s first action against a marketer of an everyday product with interconnectivity to the Internet and other mobile devices – commonly referred to as the “Internet of Things.”

The FTC’s complaint alleges that TRENDnet marketed its SecurView cameras for purposes ranging from home security to baby monitoring, and claimed in numerous product descriptions that they were “secure.” In fact, the cameras had faulty software that left them open to online viewing, and in some instances listening, by anyone with the cameras’ Internet address.

“The Internet of Things holds great promise for innovative consumer products and services. But consumer privacy and security must remain a priority as companies develop more devices that connect to the Internet,” said FTC Chairwoman Edith Ramirez.

In its complaint, the FTC alleges that, from at least April 2010, TRENDnet failed to use reasonable security to design and test its software, including a setting for the cameras’ password requirement. As a result of this failure, hundreds of consumers’ private camera feeds were made public on the Internet.

According to the complaint, in January 2012, a hacker exploited this flaw and made it public, and, eventually, hackers posted links to the live feeds of nearly 700 of the cameras. The feeds displayed babies asleep in their cribs, young children playing, and adults going about their daily lives. Once TRENDnet learned of this flaw, it uploaded a software patch to its website and sought to alert its customers of the need to visit the website to update their cameras.

The FTC also alleged that, from at least April 2010, TRENDnet transmitted user login credentials in clear, readable text over the Internet, even though free software was available to secure such transmissions. In addition, the FTC alleged that TRENDnet’s mobile applications for the cameras stored consumers’ login information in clear, readable text on their mobile devices.

Under the terms of its settlement with the Commission, TRENDnet is prohibited from misrepresenting the security of its cameras or the security, privacy, confidentiality, or integrity of the information that its cameras or other devices transmit. In addition, the company is barred from misrepresenting the extent to which a consumer can control the security of information the cameras or other devices store, capture, access, or transmit.

In addition, TRENDnet is required to establish a comprehensive information security program designed to address security risks that could result in unauthorized access to or use of the company’s devices, and to protect the security, confidentiality, and integrity of information that is stored, captured, accessed, or transmitted by its devices. The company also is required to obtain third-party assessments of its security programs every two years for the next 20 years.

The settlement also requires TRENDnet to notify customers about the security issues with the cameras and the availability of the software update to correct them, and to provide customers with free technical support for the next two years to assist them in updating or uninstalling their cameras.

The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 4-0. 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 October 4, 2013, 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. 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: 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 $16,000.

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.

At the FTC’s Request, Court Halts Alleged Phony Payday Loan Broker

At the request of the Federal Trade Commission, a U.S. district court has halted a Tampa, Florida-based operation that promised to help consumers get payday loans. Instead of loans, the defendants used consumers’ personal financial information to debit their bank accounts in increments of $30 without their authorization, the FTC alleged.

Claiming to be affiliated with a network of 120 potential payday lenders, the defendants misrepresented that 80 percent of applicants got loans in as soon as one hour, according to the FTC. The court order freezes the defendants’ assets to preserve the possibility of providing redress to consumers.

“Repeatedly, we’ve seen situations where consumers provide sensitive financial information when inquiring about a payday loan online, and that information falls into the wrong hands,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to shutting down these fraudulent operations.”

The FTC alleged that defendants Sean C. Mulrooney and Odafe Stephen Ogaga and five companies they controlled used websites with the names Vantage Funding, Ideal Advance, Loan Assistance Company, Palm Loan Advances, Loan Tree Advances, Pacific Advances, and Your Loan Funding to collect consumers’ names, Social Security numbers, bank routing numbers, and bank account numbers, which allowed them to access consumers’ checking accounts.

The defendants obtained other consumers’ financial information by paying more than $500,000 to third parties, and debited those consumers’ accounts without authorization as well, according to documents filed with the court. In all, the defendants victimized tens of thousands of consumers, taking more than $5 million from their bank accounts. Many of the victims were in difficult financial straits to begin with, and as an added insult, often began receiving harassing telemarketing and debt collection calls shortly after the defendants made their unauthorized withdrawals, according to the FTC. Consumers who complained to Defendants’ Philippines-based customer service agents were frequently offered refunds and $100 gasoline vouchers that never materialized, according to the FTC.

Mulrooney and Ogaga apparently used proceeds from their allegedly illegal scheme to finance a lavish lifestyle. Mulrooney is the registered owner of a 2012 Maserati GranTurismo, while Ogaga owns a 2011 Rolls Royce Ghost and a 2006 Ferrari 430, according to documents filed with the court.

This is the FTC’s third recent case involving allegedly fraudulent online payday-loan-related operations, and the first one in which the defendants claimed to broker payday loans. In two previous cases, American Credit Crunchers, LLC and Broadway Global Master Inc., the defendants allegedly attempted to collect on payday loan debts that either did not exist or weren’t owed to them.

The complaint charges the defendants with violating the Federal Trade Commission Act by using unfair billing practices, and by misrepresenting that they will help consumers find a payday loan and use their personal and financial information to get the loan. The complaint also alleges that the defendants untruthfully claim four of five consumers who applied were approved for a payday loan.

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

In addition to Mulrooney and Ogaga, the Vantage Funding complaint names 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 authorizing the staff to file the Vantage complaint was 4-0. The complaint and request for a temporary restraining order were filed in the U.S. District Court for the Northern District of Illinois. On August 29, 2013, the court granted the FTC’s request.

NOTE: The Commission a files 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 Halts Two Automobile Dealers’ Deceptive Ads

Two car dealers from Maryland and Ohio have agreed to settle the Federal Trade Commission’s charges that they falsely advertised the cost or available discounts for their vehicles. The settlements, part of the FTC’s continuing crackdown on deceptive motor vehicle dealer practices, prohibit the dealers from advertising discounts or prices unless the ads clearly disclose any qualifications or restrictions.

The FTC charged that Timonium Chrysler, Inc., of Cockeysville, Md., violated the FTC Act by advertising discounts and prices that were not available to a typical consumer. Ganley Ford West, Inc., in Cleveland, also is charged with misrepresenting that vehicles were available at a specific dealer discount, when in fact the discounts only applied to specific, and more expensive, models of the advertised vehicles.

New 2013 Ford Fusion. Lease for $180 per month or 25% off MSRP!

Excerpt from Ganley Ford West Ad, Exhibit A showing vehicle discounts available. See full ad under Related Resources.

“Buying a car is a huge financial commitment, and people often calculate what they can pay down to the penny,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “They should be able to depend on the dealers to provide truthful information, and they can depend on the FTC to enforce consumer protection laws on the lot.”

Timonium Chrysler’s website touted specific “dealer discounts” and “internet prices,” but allegedly failed to disclose adequately that consumers would need to qualify for a series of smaller rebates not generally available to them. The complaint further alleges that, in many instances, even if a consumer qualified for all the rebates, the cost of the vehicle was still greater than the advertised price.

Ganley Ford West advertised its discounted vehicles on its website and in local newspapers, and it allegedly failed to disclose that its advertised discounts generally only applied to more expensive versions of the vehicles advertised.

The proposed orders settling the FTC’s charges against Timonium Chrysler and Ganley Ford West are designed to prevent them from engaging in similar deceptive advertising practices in the future. The two auto dealers cannot advertise prices or discounts unless accompanied by clear disclosures of any required qualifications or restrictions. The auto dealers are also barred from misrepresenting:

the existence or amount of any discount, rebate, bonus, incentive, or price;
the existence, price, value, coverage, or features of any product or service associated with the motor vehicle purchase;
the number of vehicles available at particular prices; or
any other material fact about the price, sale, financing, or leasing of motor vehicles.

The dealers must maintain and make available copies of all advertisements and promotional materials to the Commission for inspection upon request for the next five years, and they are required to comply with the FTC’s order for 20 years.

Consumers in the market for a new or used vehicle should read the FTC’s Car Ads and Buying and Owning a Car.

The Commission vote to issue the administrative complaints and accept the consent agreement packages containing the proposed consent orders for public comment was 4-0. The agreement will be subject to public comment for 30 days, beginning today and continuing through October 3, 2013, after which the Commission will decide whether to make the proposed consent order final. Interested parties can submit written comments electronically for Timonium Chrysler and Ganley Ford West or in paper form.

Comments submitted 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, D.C., 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.

FTC Updates Telemarketer Fees for the Do Not Call Registry as of October 1, 2013

The Federal Trade Commission has announced updated fees starting on October 1, 2013, for telemarketers accessing phone numbers on the National Do Not Call Registry.

All telemarketers calling consumers in the United States are required to download the numbers on the Do Not Call Registry to ensure they do not call those who have registered their phone numbers. The first five area codes are free, and organizations that are exempt from the Do Not Call rules, such as some charitable organizations, may obtain the entire list for free. Telemarketers must subscribe each year for access to the Registry numbers.

The access fees for the Registry are being increased as required by the Do‑Not‑Call Registry Fee Extension Act of 2007. Under the Act’s provisions, in fiscal year 2014 (from October 1, 2013 to September 30, 2014), telemarketers will pay $59, an increase of $1, for access to Registry phone numbers in a single area code, up to a maximum charge of $16,228 for all area codes nationwide, an increase from the previous maximum of $15,962. Telemarketers will pay $1 more per area code for numbers they subscribe to receive during the second half of the 12‑month subscription period, for a total of $30 per area code.

For consumers who want to add their phone number to the Registry, registration is free and does not expire.

The Commission vote authorizing publication of the Federal Register notice announcing the new fees was 4-0. (FTC File No. P034305; the staff contact is Ami Dziekan, Bureau of Consumer Protection, 202‑326‑2648)

FTC Approves Final Order Settling Charges that General Electric’s Acquisition of Avio Aviation’s Business Would be Anticompetitive in Market for Airbus’s A320neo Aircraft Engines

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that General Electric Company’s acquisition of the aviation business of Italy’s Avio S.p.A would be anticompetitive. The FTC’s complaint alleges that GE’s acquisition of Avio would substantially lessen competition, giving GE the ability and incentive to disrupt the design and certification of Avio’s accessory gearbox, or AGB, a critical component in Pratt & Whitney’s PW1100G engine. GE — through CFM International, its joint venture with France’s Snecma S.A. — and Pratt & Whitney are the only two firms that manufacture engines used on Airbus’s A320neo aircraft.

The settlement with the FTC, first announced in July 2013, prevents GE from interfering with Avio’s development of the AGB for the PW1100G engine, or accessing Pratt & Whitney’s proprietary information about the AGB that is shared with Avio.

The Commission vote approving the final order was 3-0-1, with Commissioner Joshua D. Wright not participating. (FTC File No. 131-0069; the staff contact is Stephen W. Rodger, Bureau of Competition, 202-326-3643; see press release dated July 19, 2013)

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.

FTC Returns Additional $950,000 to Consumer Victims in DVD Vending Scam

The Federal Trade Commission is mailing 426 refund checks totaling more than $950,000 to consumers who were victimized by a scam that promoted video rental machines as a business opportunity. This mailing, combined with checks previously mailed by the FTC, will increase the total funds returned to consumers by the FTC in this matter to nearly $4 million.

The additional funds are a result of the FTC’s court victory in a collection action against the estate of the tenth and final defendant, Anthony Andreoni. The FTC is continuing to liquidate assets awarded in this case so that additional funds may be returned to injured consumers in the future.

The FTC alleged in its case against American Entertainment Distributors, Inc., that the defendants – five companies and five individuals – deceived consumers into paying $28,000 to $37,500 apiece for video rental vending machines by telling them they could expect to earn between $60,000 and $80,000 a year, or recoup their initial investment in six to 14 months. In fact, according to the FTC, the defendants had no reasonable basis for their claims and all investors lost money.

The refund amounts will vary depending on the amount lost by each consumer; over 400 refund checks will be for more than $1,000. The checks will be mailed by an administrator working for the FTC on August 30, 2013, and must be cashed on or before October 29, 2013. Consumers who have questions, or who have not yet filed a claim with the FTC and wish to do so, should call the Redress Administrator, Gilardi & Co. LLC, toll free, at 1-866-271-9147.

Remember: The FTC never requires consumers to pay money or provide information before redress checks can be cashed. Consumers should carefully evaluate claims about business opportunities. For more information see: Going into Business.

FTC Files Complaint Against LabMD for Failing to Protect Consumers’ Privacy

The Federal Trade Commission filed a complaint against medical testing laboratory LabMD, Inc. alleging that the company failed to reasonably protect the security of consumers’ personal data, including medical information. The complaint alleges that in two separate incidents, LabMD collectively exposed the personal information of approximately 10,000 consumers.

The complaint alleges that LabMD billing information for over 9,000 consumers was found on a peer-to-peer (P2P) file-sharing network and then, in 2012, LabMD documents containing sensitive personal information of at least 500 consumers were found in the hands of identity thieves.

The case is part of an ongoing effort by the Commission to ensure that companies take reasonable and appropriate measures to protect consumers’ personal data.

LabMD conducts laboratory tests on samples that physicians obtain from consumers and then provide to the company for testing. The company, which is based in Atlanta, performs medical testing for consumers around the country. The Commission’s complaint alleges that LabMD failed to take reasonable and appropriate measures to prevent unauthorized disclosure of sensitive consumer data – including health information – it held. Among other things, the complaint alleges that the company:

did not implement or maintain a comprehensive data security program to protect this information;
did not use readily available measures to identify commonly known or reasonably foreseeable security risks and vulnerabilities to this information;
did not use adequate measures to prevent employees from accessing personal information not needed to perform their jobs;
did not adequately train employees on basic security practices; and
did not use readily available measures to prevent and detect unauthorized access to personal information.

The complaint alleges that a LabMD spreadsheet containing insurance billing information was found on a P2P network. The spreadsheet contained sensitive personal information for more than 9,000 consumers, including names, Social Security numbers, dates of birth, health insurance provider information, and standardized medical treatment codes. Misuse of such information can lead to identity theft and medical identity theft, and can also harm consumers by revealing private medical information.

P2P software is commonly used to share music, videos, and other materials with other users of compatible software. The software allows users to choose files to make available to others, but also creates a significant security risk that files with sensitive data will be inadvertently shared. Once a file has been made available on a P2P network and downloaded by another user, it can be shared by that user across the network even if the original source of the file is no longer connected.

“The unauthorized exposure of consumers’ personal data puts them at risk,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “The FTC is committed to ensuring that firms who collect that data use reasonable and appropriate security measures to prevent it from falling into the hands of identity thieves and other unauthorized users.”

The complaint also alleges that in 2012 the Sacramento, California Police Department found LabMD documents in the possession of identity thieves. These documents contained personal information, including names, Social Security numbers, and in some instances, bank account information, of at least 500 consumers. The complaint alleges that a number of these Social Security numbers are being or have been used by more than one person with different names, which may be an indicator of identity theft.

The complaint includes a proposed order against LabMD that would prevent future violations of law by requiring the company to implement a comprehensive information security program, and have that program evaluated every two years by an independent, certified security professional for the next 20 years. The order would also require the company to provide notice to consumers whose information LabMD has reason to believe was or could have been accessible to unauthorized persons and to consumers’ health insurance companies.

The Commission vote to issue the administrative complaint and notice order was 4-0.

Because LabMD has, in the course of the Commission’s investigation, broadly asserted that documents provided to the Commission contain confidential business information, the Commission is not publicly releasing its complaint until the process for resolving any claims of confidentiality is completed and items in the complaint deemed confidential, if any, are redacted.

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. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.

FTC Signs Memorandum of Understanding with Nigerian Consumer Protection and Criminal Enforcement Authorities

The Federal Trade Commission signed a memorandum of understanding (MOU) with two Nigerian agenciestoday to increase cooperation and communication in their joint efforts to stamp out cross-border fraud. Nigeria’s Ambassador to the United States, Ambassador Adebowale Adefuye, provided opening remarks for the MOU signing ceremony.

The MOU was signed by FTC Chairwoman Edith Ramirez; Director General Dupe Atoki, of Nigeria’s Consumer Protection Council (CPC); and Executive Chairman Ibrahim Lamorde, of Nigeria’s Economic and Financial Crimes Commission (EFCC). It is the first FTC MOU of this kind to include a foreign criminal enforcement authority. The CPC addresses consumer complaints through investigations and enforcement; the EFCC is a criminal enforcement agency with authority to address consumer fraud and other financial crimes.

“Cross-border scammers use fraudulent e-mails and other scams to bilk consumers all over the world, while undermining confidence in legitimate businesses,” said FTC Chairwoman Ramirez. “This MOU will help our agencies better protect consumers in both the U.S. and Nigeria.”

Director Atoki stated that “We fully support this collaboration on consumer and fraud matters, and have already detailed a senior CPC official to the FTC for a six-month staff exchange.” And Executive Chairman Lamorde noted that he “welcomes this partnership, which builds on our existing collaboration with the FTC and with U.S. criminal enforcement authorities.”
The MOU provides for a Joint Implementation Committee to identify concrete areas of collaboration, establish joint training programs and workshops, and provide assistance regarding specific cases and investigations. The MOU is a framework for voluntary cooperation and will not change existing laws in either country.

The FTC has already worked with the two Nigerian agencies on policy and enforcement matters in various fora, including the African Consumer Protection Dialogue, the International Mass Marketing Fraud Working Group, the London Action Plan (LAP, an anti-spam network), and the International Consumer Protection and Enforcement Network.

The Commission vote authorizing Chairwoman Ramirez to sign the MOU on behalf of the agency was 4-0.

As more U.S. companies and consumers do business overseas, more FTC work involves international cooperation. The Office of International Affairs serves both as an internal resource to Commission staff on international aspects of their work and as an official representative to numerous international organizations. In addition, the FTC cooperates with foreign authorities through formal and informal agreements. The FTC works with more than 100 foreign competition and consumer protection authorities around the world to promote sound policy approaches. For questions about the Office of International Affairs, send an e-mail to [email protected]. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases and the FTC International Monthly for the latest FTC news and resources.

Hospital Authority and Phoebe Putney Health System Settle FTC Charges That Acquisition of Palmyra Park Hospital Violated U.S. Antitrust Laws

The Hospital Authority of Albany-Dougherty County andPhoebe Putney Health System, Inc. have agreed to settle Federal Trade Commission charges that the acquisition ofPalmyra Park Hospital harmed hospital competition in six Georgia counties. The proposed consent includes provisions to aid competition in these local health care markets, but due to the unique circumstances of the Certificate of Need (CON) laws in Georgia, the Commission is unable to require that the hospitals become independent competitors.

Divestiture, the Commission’s preferred remedy to restore competition lost due to an illegal merger, would trigger CON review. Unfortunately, Albany is deemed “over-bedded” by Georgia’s strict need assessment criteria making it unlikely that any possible divestiture buyer could obtain the necessary CON approval to operate an independent hospital. Under the proposed consent order, the Hospital Authority and Phoebe Putney will be required to give the FTC prior notice of future transactions, and will be barred from opposing certain applications by potential competitors seeking state certification to enter local health care markets.

“The FTC’s efforts in this case produced a tremendous victory for consumers when the Supreme Court unanimously reined in overbroad application of state action immunity and allowed federal antitrust review of this merger,” said Deborah Feinstein, Director of the FTC’s Bureau of Competition. “Regrettably, that legal victory will not undo the acquisition’s clear harm to competition. Because divestiture is unavailable in light of Georgia’s strict certificate of need legislation, this proposed order is the most effective and efficient resolution that can be achieved at this time.”

The Complaint. The FTC’s administrative complaint, issued on April 20, 2011, alleged that the acquisition of Palmyra Park by the Hospital Authority and Phoebe Putney was essentially a merger to monopoly and would allow Phoebe Putney to raise prices for general acute-care hospital services charged to commercial health plans, as well as diminish healthcare quality and service, substantially harming patients and local employers and employees. The complaint also alleged that Phoebe Putney was the main driver of the acquisition, having intentionally structured the deal in a way that involved the Hospital Authority as a “straw man” to shield the anticompetitive acquisition from federal antitrust scrutiny under the state action doctrine. The state action doctrine immunizes from antitrust enforcement conduct that qualifies as an act of state government.

In July 2011, the FTC stayed the administrative case pending resolution of federal court litigation regarding the applicability of state action immunity to the proposed acquisition. Ultimately, the Eleventh Circuit U.S. Court of Appeals ruled that state action immunity prevented federal antitrust review of the acquisition. Following the decision, the parties consummated the acquisition on December 15, 2011. Thereafter, the FTC sought and obtained certiorari from the U.S. Supreme Court, which issued a unanimous ruling in the FTC’s favor on February 19, 2013, holding that the acquisition was not subject to state action immunity. The Supreme Court’s ruling clarifies the test for determining when state action immunity applies to anticompetitive actions by non-sovereign state actors, such as the Hospital Authority in this case. The ruling has broad implications for antitrust enforcement in a variety of industries and contexts.

On March 14, 2013, the Commission lifted its stay of administrative litigation and ordered a new date for trial before Chief Administrative Law Judge D. Michael Chappell.

The Proposed Settlement Order. The Commission’s order does not require the divestiture of a hospital or other assets involved in the transaction because, even if the transaction were ruled anticompetitive after a full trial on the merits, it would not be feasible to restore the competition that was lost due to the legal and practical challenges presented by Georgia’s CON laws and regulations. More information about Georgia’s CON laws and their implications in this case can be found in the analysis to aid public comment for this matter.

The proposed consent order announced today is designed to address through the most effective means available the FTC’s competitive concerns regarding the acquisition of Palmyra by the Hospital Authority and Phoebe Putney. Its terms are acceptable to the Commission only under the unique circumstances present here, in particular the unavailability of divestiture or other structural relief. Specifically, the order:

requires the Hospital Authority and Phoebe Putney to give the Commission prior notice of any future transactions involving not only hospitals in the affected counties, but also other healthcare providers such as inpatient and outpatient facilities or physician practice groups. Prior notice will allow the Commission to take steps to prevent potential anticompetitive effects of any future acquisitions before they are consummated, and
prohibits the Hospital Authority and Phoebe Putney from opposing a CON application for a general acute-care hospital in the six-county area. CON laws can act as a barrier to entry; the order provision ensures that the Hospital Authority and Phoebe Putney cannot impose additional costs on potential entrants by raising objections or filing negative comments in opposition to a pending application.

The order notes that the Hospital Authority and Phoebe Putney have stipulated that the effect of the consummated transaction may be substantially to lessen competition within the relevant service and geographic markets alleged in the Complaint.

The Commission vote to accept the consent agreement package containing the proposed consent order for public comment was 3-0-1, with Commissioner Joshua D. Wright not participating. 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 September 23, 2013, 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 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. Comments also can be submitted electronically.

Precious Metal Marketers Agree to Settle FTC Charges

Telemarketers behind an allegedly fraudulent investment scheme used to con nearly $5 million from elderly consumers have been banned from selling precious metals under a settlement with the Federal Trade Commission.

The settlement resolves FTC charges against Sterling Precious Metals LLC, Matthew Meyer and Francis Ryan Zofay for promising consumers they could profit by investing in precious metals with little risk of loss, without telling them they probably would have to pay more money later or lose their investment.

In addition to banning the defendants from selling precious metals, the settlement order permanently prohibits them from misrepresenting material facts about any products and services, selling or otherwise benefitting from consumers’ personal information, failing to properly dispose of customer information, and failing to provide consumer information to the FTC so it can administer consumer redress. The order also requires them to record all of their telemarketing calls for seven years.

The order imposes a judgment of more than $4.7 million against Meyer and Zofay, which will be partially suspended based on their ability to pay and the surrender of Meyer’s leased cars, a 2013 Bentley Continental and a 2012 Land Rover. The full judgment will become due immediately if they are found to have misrepresented their financial condition. The Commission will also seek to dismiss Kerry Marshall as a defendant.

For consumers considering investing in precious metals, the FTC offers advice, including Investing in Gold, Investing in Bullion and Bullion Coins, and Investing in Collectible Coins.

The Commission vote authorizing the staff to file the proposed consent judgment and amended complaint was 4-0. The consent judgment was entered by the U.S. District Court for the Southern District of Florida on August 22, 2013.

NOTE: Consent judgments have the force of law when approved and signed by the District Court judge.

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