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Bosley, Inc. Settles FTC Charges That It Illegally Exchanged Competitively Sensitive Business Information With Rival Firm, Hair Club, Inc.

Bosley, Inc., the nation’s largest manager of medical/surgical hair restoration procedures, has settled Federal Trade Commission charges that it illegally exchanged competitively sensitive, nonpublic information about its business practices with one of its competitors, HC (USA), Inc., commonly known as Hair Club. In settling the FTC’s charges, Bosley has agreed not to communicate such information in the future, and will institute an antitrust compliance program.

Bosley, headquartered in Beverly Hills, Calif., is a wholly owned subsidiary of Aderans America Holdings, Inc. Aderans America, also located in Beverly Hills, is a wholly owned subsidiary of Aderans Co., Ltd, headquartered in Tokyo, Japan. Bosley manages medical/surgical hair restoration practices and provides hair therapy products.

Hair Club, headquartered in Boca Raton, Fla., is a wholly owned subsidiary of Regis Corporation, which is based in Minneapolis, Minnesota. Hair Club provides hair-loss treatments, including non-surgical hair restoration and hair therapy products. Hair Club also manages medical/surgical hair restoration practices. Under a stock purchase agreement dated July 13, 2012, Aderans intends to acquire Hair Club for $163.5 million.

The FTC alleges that for at least the past four years, Bosley has exchanged competitively sensitive, nonpublic information about its business operations with Hair Club. The information exchanged by the companies’ CEOs included details about future product offerings, surgical hair transplantation price floors and discounts, plans for business expansion and contraction, and current business operations and performance.

The FTC charges that by directly and repeatedly exchanging competitively sensitive, nonpublic information, the companies have violated Section 5 of the Federal Trade Commission Act, which prohibits unfair methods of competition. According to the FTC’s complaint, the exchange of such information could facilitate coordination between Bosley and Hair Club by reducing uncertainty regarding each other’s product offerings, prices, and strategic plans.

In addition, the FTC alleges that Hair Club was not the only firm to which Bosley provided such information. Bosley’s exchange of sensitive information to other rivals increases the potential for competitive harm.

The proposed order settling the FTC’s charges remedies the anticompetitive conduct alleged in the complaint. The proposed order bars Bosley from communicating competitively sensitive, nonpublic information directly to any hair transplantation competitor. It also bars Bosley from requesting, encouraging, or facilitating the communication of any such information from any of its competitors.

In addition, the proposed order requires Bosley to institute a program to ensure that it complies with federal antitrust laws in the future. This program includes: 1) developing annual compliance training for all Bosley officers, executives, and employees who have contact with competitors or have sales, marketing, or pricing responsibilities for Bosley’s hair transplantation operations; 2) providing legal support to respond to questions regarding compliance with federal antitrust laws; and 3) retaining documents needed to ensure compliance with the FTC’s order.

Finally, the proposed order requires Bosley to submit periodic compliance reports to the FTC, to provide the FTC with 30 days’ notice before any corporate changes that may affect compliance with the order, and to provide the FTC access to its U.S. facilities, records, and employees with five days’ notice.

The proposed order does not interfere with Bosley’s ability to compete or to participate in legitimate business activities, including trade associations and medical societies. The proposed order specifically exempts from its provisions certain types of legitimate information exchanges.

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 recused. 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 8, 2013, after which the Commission will decide whether to make the proposed consent order final.

Interested parties can submit 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, 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. The complaint is not a finding or ruling that the respondent has actually violated the law. A consent order is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated. 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.

Federal Trade Commission Posts New Video to Help Identity Theft Victims

If you’re a victim of identity theft or know someone who is, the Federal Trade Commission has a new video designed to help facilitators who assist consumers in repairing their identity. Helping Victims of Identity Theft is the latest addition to the FTC’s library of resources that explain not only how to recognize identity theft, but also how to report it and repair the damage it can cause. The FTC gets more complaints about identity theft each year than any other consumer issue, and estimates that nine million consumers become identity theft victims each year.

The video promotes the Guide for Assisting Identity Theft Victims, a tool for advocates, social workers, attorneys, and others who work to help resolve the issues identity theft causes. The Guide is a complement to the do-it-yourself instructions in Taking Charge: What To Do if Your Identity is Stolen.

The agency distributed more than two million publications just about identity theft in 2012 alone. Check out the video, and fight back against identity theft.

FTC Sends Refunds to Consumers Harmed by Foreclosure Relief Scheme

The Federal Trade Commission mailed 341 refund checks to Spanish-speaking consumers who lost money to scammers who promised to stop foreclosure or obtain mortgage loan modifications. Under a summary judgment order, the Dinamica Financiera defendants were banned from selling mortgage loan modification or foreclosure relief services.

More than $107,000 is being returned to consumers. The amount each consumer will receive will vary; the check represents 12 percent of each consumer’s estimated loss. 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 provide information before refund checks can be cashed. Those with questions should call the refund administrator, Gilardi & Co., LLC, at 1-877-281-5622, or visit www.FTC.gov/refunds for more general information.

FTC Warns Data Brokers That Provide Tenant Rental Histories They May Be Subject to Fair Credit Reporting Act

The Federal Trade Commission has warned the operators of six websites that share information about consumers’ rental histories with landlords that they may be subject to the requirements of the Fair Credit Reporting Act (FCRA).

The letters inform the recipients that if they meet certain criteria, namely collecting information on tenants and their rental history and providing that information to landlords so they can make judgments about renting to those tenants, they are considered credit reporting agencies and are subject to certain legal requirements.

Among the requirements cited in the letter are the companies’ obligation to protect the privacy of tenants whose information they collect, including ensuring that those requesting information about tenants have a legitimate reason to acquire it. The letter reminds the companies of their obligation to ensure that the information they provide is accurate, to give consumers a copy of the information about them on request, and to allow consumers to dispute information they believe is inaccurate. The letters also note that the companies must notify landlords of their requirements if they use the data to deny housing to a tenant, and to notify the sources of their information of the requirement that they provide accurate information.

Companies receiving the letters are The BlueChip Group LLC (donotrentto.com), M & R Rental Properties (badtenantlistings.com), The Landlord Protection Agency (thelpa.com), National Tenant Network (ntnonline.com), 123 Rent Inc. (therentersblacklist.com), and Tenancy Bureau Inc. (tenancybureau.us).

The letters state that the FTC has made no determination whether the companies have violated the law but encourages them to review their business practices to ensure that they comply with the FCRA. The FTC acknowledges the assistance of the Privacy Rights Clearinghouse in this matter.

FTC Announces Robocall Challenge Winners

The Federal Trade Commission announced that judges for the FTC Robocall Challenge selected two winners, in a tie for the $50,000 prize for Best Overall Solution to block illegal robocalls. The challenge, designed to help solve this problem by spurring innovation in the marketplace, garnered nearly 800 eligible submissions.

Serdar Danis and Aaron Foss will each receive $25,000 for their proposals, which both focus on intercepting and filtering out illegal prerecorded calls using technology to “blacklist” robocaller phone numbers and “whitelist” numbers associated with acceptable incoming calls. Both proposals also would filter out unapproved robocallers using a CAPTCHA-style test to prevent illegal calls from ringing through to a user.

Additionally, organizations that employ 10 or more people were eligible for the Robocall Challenge Technology Achievement Award, which does not include a monetary prize. Judges selected Daniel Klein and Dean Jackson from Google for their Crowd-Sourced Call Identification and Suppression solution.

“The solutions that our winners came up with have the potential to turn the tide on illegal robocalls, and they show the wisdom of tapping into the genius and technical expertise of the public,” said Charles Harwood, Acting Director, FTC’s Bureau of Consumer Protection. “We’re hoping these winning proposals find their way to the marketplace soon, and will provide relief to millions of American consumers harassed by these calls.”

Danis’s proposal, titled Robocall Filtering System and Device with Autonomous Blacklisting,Whitelisting, GrayListing and Caller ID Spoof Detection,would analyze and block robocalls using software that could be implemented as a mobile app, an electronic device in a user’s home, or a feature of a provider’s telephone service. Foss’s proposal, called Nomorobo, is a cloud-based solution that would use “simultaneous ringing,” which allows incoming calls to be routed to a second telephone line. In the Nomorobo solution, this second line would identify and hang up on illegal robocalls before they could ring through to the user. The proposal from Klein and Jackson, like the Best Overall Solutions, would involve using automated algorithms that identify “spam” callers.

The judges, FTC Chief Technologist Steve Bellovin, FCC Chief Technologist Henning Schulzrinne, and Kara Swisher, Co-Executive Editor of All Things D, focused on technical considerations alone. They evaluated submissions based on the following criteria: Does it work? (50 percent); Is it easy to use? (25 percent); and Can it be rolled out? (25 percent).

Brief descriptions of all the eligible challenge entries are available on a submission gallery at robocall.challenge.gov. Many of the proposals submitted included long-term policy, regulatory, and technical ideas about how to stop illegal robocalls. FTC staff encouraged all participants to continue the conversation by publishing a more detailed, public overview of their ideas on the FTC.gov website. In addition, some of the submissions focused on what consumers are doing right now to reduce illegal robocalls. FTC staff compiled several tips from these submissions, and with the help of the Government Services Administration, produced this new video for consumers:

[Video Link]

The FTC contracted with ChallengePost in August 2012 to administer the challenge and award the prize using fiscal year 2012 funds. The Commission launched the challenge in response to the growing number of robocall complaints by American consumers bombarded with prerecorded calls that are often unwanted and frequently deceptive. The challenge is part of an ongoing campaign against illegal, prerecorded telemarketing calls, and FTC enforcement efforts have stopped companies responsible for billions of illegal robocalls. Commission staff persists in aggressive law enforcement, and continues to work with industry insiders and other experts to identify potential solutions. For more information about all of the FTC’s robocall initiatives, see www.ftc.gov/robocalls.

By selecting winners, the FTC isn’t endorsing any particular products or services. Before implementing any service involving personal information, companies should conduct a thorough privacy review and must consider and comply with the federal and state privacy, consumer protection, and other laws that may apply.

Charlotte Pipe and Foundry Settles Charges That Its 2010 Purchase of Star Pipe’s Cast Iron Soil Pipe Business Was Anticompetitive

Today, the Federal Trade Commission accepted for public comment a proposed consent order settling charges that Charlotte Pipe and Foundry Company’s 2010 purchase of Star Pipe Products, Inc.’s cast iron soil pipe (CISP) business was anticompetitive. To help restore competition in CISP markets in the United States, the proposed order prohibits Charlotte Pipe from enforcing a confidentiality and non-compete agreement with Star Pipe, ensures that Charlotte Pipe will publicly disclose its prior acquisitions of other CISP importers, and requires Charlotte Pipe to notify the Commission before making future acquisitions in this industry.

CISP products are important components of pipeline systems used to transport wastewater from buildings to municipal sewage systems, to vent plumbing systems, and to transport rainwater to storm drains. Construction firms, plumbers, and developers throughout the United States use them.

Charlotte Pipe is a privately held corporation with its headquarters in Charlotte, North Carolina. It is one of the largest producers and sellers of CISP products in the United States. The U.S. market for CISP is highly concentrated, with two firms, Charlotte Pipe and McWane, Inc., making up at least 90 percent of all domestic sales as of 2010. In 2007, Star Pipe entered the U.S. CISP market and expanded its sales base throughout the country between 2007 and 2010. The Commission alleges that in numerous areas of the country, Star Pipe competed aggressively on price and service, which benefitted American consumers.

Instead of continuing to compete with Star, in 2010, Charlotte Pipe purchased its CISP business for approximately $19 million. At the same time, the FTC charges, the companies entered into an agreement under which Star Pipe and its employees kept the acquisition secret, and agreed not to compete with Charlotte Pipe in the CISP market for six years. According to the Commission, after the acquisition, Charlotte Pipe destroyed Star Pipe’s CISP production equipment.

The FTC’s complaint alleges that Charlotte Pipe’s purchase of Star Pipe’s CISP business substantially lessened competition in U.S. markets for CISP products. Specifically, the acquisition eliminated Star as “maverick firm” that could put pricing pressure on Charlotte Pipe, and gave the latter the opportunity to raise prices to consumers. Furthermore, the acquisition eliminated the direct competition between Charlotte Pipe and Star Pipe.

The proposed order settling the FTC’s charges is designed to remedy Charlotte Pipe’s alleged anticompetitive conduct. Because in the past Charlotte Pipe has acquired other firms in the CISP market through transactions that were not disclosed to the public and that were not reportable under the antitrust guidelines, the proposed order requires Charlotte Pipe to inform industry participants of its prior confidential acquisitions, as well as its role in Star Pipe’s exit from the CISP market.

The proposed order also requires Charlotte Pipe to notify the FTC before making similar acquisitions in the United States. This will allow the FTC to review all future CISP-related deals that Charlotte Pipe proposes to enter into to ensure that they are not anticompetitive. Finally, the proposed order prevents Charlotte Pipe from enforcing the confidentiality and non-compete agreement with Star Pipe. This will allow Star Pipe and its employees to enter the CISP market and compete directly against Charlotte Pipe in the immediate future.

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 in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through May 2, 2013, after which the Commission will decide whether to make the proposed consent order final.

Interested parties can submit 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, 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 can also be submitted electronically.

FTC to Announce Winners of Robocall Challenge

Media Advisory

April 1, 2013

The Federal Trade Commission will announce the winners of the FTC Robocall Challenge in Washington, D.C., on Tuesday, April 2, 2013 at 11:00 a.m. The challenge, launched October 2012, sought the best technical solution to block illegal robocalls. The FTC received nearly 800 eligible submissions.

WHO:	Charles Harwood, Acting Director, Bureau of Consumer Protection Challenge Winners
WHAT:	Press conference to announce winners of the FTC Robocall Challenge
WHEN:	Tuesday, April 2, 2013 at 11:00 a.m.
WHERE:	FTC Headquarters, 600 Pennsylvania Ave. NW, Washington, D.C. 20580 View the archived webcast of the event
TWITTER:	Follow @FTC and the hashtag #FTCrobo for event details

Contact Information

MEDIA CONTACT:

Cheryl Hackley
FTC Office of Public Affairs
202-326-2480

FTC Seeks Public Comment on Universal Health Services, Inc.’s Application to Divest the Peak Behavioral Health Assets to Strategic Behavioral Health, LLC

The Federal Trade Commission is seeking public comment on an application by Alan B. Miller and the hospital management company Universal Health Services, Inc. to sell an acute inpatient psychiatric facility in the El Paso, Texas/Santa Teresa, New Mexico area to Strategic Behavioral Health, LLC (SBH). The divestiture of the facility, called Peak Behavioral Health Assets, is required by the FTC’s October 2012 consent order which put conditions on UHS’s proposed acquisition of Ascend Health Corporation. Under that order, UHS was required to sell the Peak Behavioral Health Assets to an acquirer approved by the Commission.

According to the application, the proposed divestiture would accomplish the purpose of the FTC’s final decision and order by ensuring the continuation of the Peak Assets as an ongoing, viable acute psychiatric hospital facility, and by remedying the lessening of competition that resulted from UHS’s acquisition of Ascend. UHS contends that SBH has the financial, professional, and operational resources to be a strong competitor for the provision of acute inpatient psychiatric services in the El Paso/Santa Teresa market.

The Commission will decide whether to approve the application after the expiration of the public comment period. Public comments may be submitted until April 29, 2013. Written comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. Comments also can be filed electronically. Copies of the application also can be found on the FTC’s website and as a link to this press release. (FTC Docket No. C-4372; the staff contact is Elizabeth Piotrowski, Bureau of Competition, 202-326-2623; see press release dated October 5, 2012.

New FTC Graphic Highlights Key Information About Mobile Apps for Kids

The FTC infographic 'Keeping Up With Kids' Apps', which includes information on 4 things your kids' apps might do but might not tell you, and what you can do at the online app store, on your couch, and on your phone or tablet.

Keeping Up With Kids’ Apps graphic – click the image to view full-size. The graphic is also available in a Spanish version.

For parents, the growing universe of mobile applications targeted at kids can be overwhelming. Knowing which app is the right fit for your family poses a major challenge to parents on the go.

A new informational graphic produced by the staff of the Federal Trade Commission helps with a useful visual tool for parents and other consumers making decisions about what kids’ apps to download to their mobile devices.

The infographic highlights the importance of taking time to check out an app and also to change the settings on your phone to make sure kids using an app can’t inadvertently access any unwanted features. In addition, the infographic notes that one of the best ways to know an app is to use the app alongside the child to see the full scope of what it can do. The graphic points out that many times free apps may allow users to make purchases with real money, and apps may share personal information or contain advertising but not disclose this upfront.

The information is drawn from the Commission’s recent report titled “Mobile Apps for Kids: Disclosures Still Not Making the Grade.” The FTC also provides a wide array of online information for consumers about mobile apps.

In Settlement with FTC, Debt Collectors Agree to Stop Deceiving Consumers and Pay Nearly $800,000

After allegedly misleading consumers into paying unnecessary fees and falsely threatening consumers with lawsuits, defendants in a debt collection operation have agreed to settle Federal Trade Commission charges.

The FTC alleged in its complaint that the defendants – a debt buyer and a debt collection law firm, both based in Mississippi – violated the FTC Act and the Fair Debt Collection Practices Act by deceptively charging consumers a fee for payments authorized by telephone. According to the FTC, the defendants led consumers to believe that the fee was unavoidable when, in fact, those who paid by mail or online did not incur the fee. The FTC also alleged that the companies violated the laws by falsely threatening to sue consumers as a means of getting them to pay. A debt collector is prohibited by law from using false, deceptive, or misleading representations or tactics when collecting a debt.

Under the terms of the proposed settlement, the defendants will pay $799,958 in restitution for consumers. The defendants also are barred from making any misrepresentations when collecting a debt, including false claims that consumers must pay an extra fee when making payments on a debt or that they will be sued for not paying a debt.

According to the complaint, debt buyer Security Credit Services, LLC, and Jacob Law Group, PLLC have worked together since 2006 to collect debts nationwide. Security Credit buys consumer debt accounts, and contracts with Jacob Law to collect on them. The complaint alleges that Jacob Law called and pressured consumers to immediately make payments on their debts by authorizing electronic checks or credit or debit card payments over the phone. Jacob Law allegedly told consumers they were required to pay an additional fee of $18.95 for this service, but routinely failed to mention that they could avoid the fee by mailing the payment or paying online. Since 2008, the defendants have collected at least $799,958 in fees from consumers.

The FTC also alleged that Jacob Law Group implied that it would file lawsuits to collect the debts even when it did not intend to do so.

For consumer information about dealing with debt collectors, see Debt Collection.

The Commission vote authorizing the staff to file the complaint and approving the proposed consent decree was 4-0. The FTC filed the complaint in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on March 13, 2013, and has submitted the proposed consent decree to the court for approval.

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 complaint is not a finding or ruling that the defendants have actually violated the law. The consent decree is for settlement purposes only and does not constitute an admission by the defendants that the law has been violated. Consent decrees have the force of law when approved and signed by the District Court judge.

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