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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.

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.

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.

FTC Undercover Shopper Survey on Entertainment Ratings Enforcement Finds Compliance Highest Among Video Game Sellers and Movie Theaters

A Federal Trade Commission undercover shopper survey found that video game retailers continue to enforce age-based ratings, while movie theaters have made marked improvement in box office enforcement.

Only 13 percent of underage shoppers were able to purchase M-rated video games, while a historic low of 24 percent were able to purchase tickets to R-rated movies. In addition, for the first time since the FTC began its mystery shop program in 2000, music CD retailers turned away more than half of the undercover shoppers. Movie DVD retailers also demonstrated steady improvement, permitting less than one-third of child shoppers to purchase R-rated DVDs and unrated DVDs of movies that had been rated R for theaters. (See Figure 1).

“Our underage shopper survey shows continued progress in reducing sales,” said Charles Harwood, Acting Director of the FTC’s Bureau of Consumer Protection. “But retailers can still strengthen their commitment to limit children’s access to products that are rated or labeled as potentially inappropriate for them.”

The FTC arranged for 13- to 16-year-olds, unaccompanied by a parent, to attempt to buy R-rated movie tickets; R-rated DVDs; unrated DVDs that were R-rated when first released in theaters; music CDs carrying a Parental Advisory Label (PAL) that warns of explicit content; and video games rated “M,” which means they may be suitable for persons age 17 and older. Between April and June 2012, the teenagers attempted to buy these products, which are rated or labeled by self-regulatory bodies of the entertainment industry, from national and regional chain stores and theaters across the United States.

Movie tickets. Ratings enforcement at the movie box office is at its highest level since the FTC began its mystery shopper program in 2000. Less than one-quarter of underage shoppers were able to buy a ticket to an R-rated movie, down from one-third in 2010.
Movie DVDs. Retailers of R-rated and unrated DVDs continued their trend toward increased ratings enforcement. Thirty percent of shoppers were able to purchase R-rated DVDs compared to 38 percent in 2010, and 30 percent were able to buy unrated DVDs, down from 47 percent in 2010.
Music CDs. Retailers of explicit-content music are increasingly turning away children attempting to purchase music CDs bearing the Parental Advisory Label. Less than half of underage shoppers (47 percent) were able to purchase CDs with this label, down from 64 percent in 2010 and 72 percent in 2009.
Video games. Unchanged from 2010, 13 percent of underage teenage shoppers were able to buy M-rated video games – the highest level of compliance among the industries.

Figure 1. Trend in children's purchase of restricted or labeled entertainment products, 2000 to 2012, by product category. The graph shows the percentage able to purchase, for five categories: R-rated ticket, R-rated DVD, unrated DVD, PAL music CD, and M-rated game.

Figures 2 through 6 below depict historical survey results for each product category, broken out by major theater chain or retailer.

According to Figure 2, four of the seven major theater chains have demonstrated a statistically significant trend toward increased enforcement of the R-rating at the box office since 2000. In the most recent survey, AMC Entertainment, Regal Entertainment Group, and Marcus Theatres demonstrated the highest level of enforcement. AMC turned away 95 percent of child shoppers trying to buy tickets to an R-rated movie.

Figure 2. Trend in children's purchase of tickets to R-rated movies, 2000 to 2012, by major chain. The graph shows the percentage able to make purchase, for seven chains: AMC Entertainment, Carmike Cinemas, Cinemark USA, Hollywood Theaters, Marcus Theatres, National Amusements, and Regal Entertainment Group.

Figure 3 shows that, since 2003, five of the seven major retailers have demonstrated a statistically significant trend toward restricting the sale of R-rated DVDs to underage shoppers. In the most recent survey, Blockbuster, Best Buy, Walmart, and Kmart denied more than three quarters of purchase attempts.

Figure 3. Trend in children's purchase of R-rated DVDs, 2003 to 2012, by major chain. The graph shows the percentage able to make purchase, for seven chains: Barnes & Noble, Best Buy, Blockbuster, Kmart, Target, Transworld Group, and Walmart.

Figure 4 shows that, since 2006, the same five major retailers from the R-rated DVD category have demonstrated a statistically significant trend toward restricting the sale of unrated DVDs based on films rated R for theaters. In addition, Barnes & Noble, Best Buy, and Kmart refused to sell unrated DVDs to more than eight of ten underage shoppers. Also, two retailers – Barnes & Noble and Walmart – demonstrated markedly different enforcement levels for unrated DVDs compared to R-rated DVDs: Whereas Barnes & Noble permitted 48 percent of underage shoppers to buy R-rated DVDs, it allowed only 14 percent to purchase unrated DVDs. In contrast, Walmart permitted 22 percent of R-rated DVD purchases, but 33 percent of unrated DVD purchases.

Figure 4. Trend in children's purchase of unrated DVDs, 2006 to 2012, by major chain. The graph shows the percentage able to make purchase, for seven chains: Barnes & Noble, Best Buy, Blockbuster, Kmart, Target, Transworld Group, and Walmart.

As shown in Figure 5, four of the five major retail chains have demonstrated a statistically significant trend toward restricting the sale of Parental Advisory Label music to child shoppers since 2000. In the most recent survey, all of the retailers denied sales to half or more of the undercover shoppers.

Figure 5. Trend in children's purchase of PAL Music CDs, 2000 to 2012, by major chain. The graph shows the percentage able to make purchase, for five chains: Barnes & Noble, Best Buy, Kmart, Target, and Transworld Group.

Finally, Figure 6 demonstrates the significant improvement since 2000 in retail enforcement of the Mature rating for packaged video games. Four of the six major game retailers refused to sell M-rated games to 90 percent or more of the underage shoppers. Target registered an impressive 100 percent enforcement rate for all 37 undercover shops, the first time a major retailer has accomplished this feat in any category when shopped on more than ten occasions. However, Target’s enforcement record on R-rated DVDs which, like M-rated games are rated as appropriate for ages 17 and up, was not as impressive. As shown in Figure 3, Target permitted 51 percent of underage shoppers to purchase R-rated DVDs.

Figure 6. Trend in children's purchase of M-rated games, 2000 to 2012, by major chain. The graph shows the percentage able to make purchase, for six chains: Best Buy, GameStop, Kmart, Target, Toys R Us, and Walmart.

Since 2000, when the FTC issued its first report to Congress on marketing violent entertainment to children, the agency has called on the entertainment industry to be more vigilant in three areas: restricting the marketing of mature-rated products to children; clearly and prominently disclosing rating information; and restricting children’s access to mature-rated products at retail. The last report to Congress was published in 2009.

Parents can learn more about how entertainment media for children are rated here. This site describes the different ratings systems, and provides links to the organizations that sponsor them.

FTC Reopens Public Comment Period on Proposed Changes to Update EnergyGuide Labels

In response to requests from stakeholders, the Federal Trade Commission has reopened the public comment period, until April 1, 2013, on a recent proposal to update EnergyGuide label information and issue special labels for refrigerators and clothes washers to help consumers compare products in the wake of new Department of Energy tests for measuring energy costs.

For more information about EnergyGuide labels, read Shopping for Home Appliances? Use the EnergyGuide Label.

The Commission vote approving a notice in the Federal Register reopening the comment period on these proposed changes to the EnergyGuide labels was 4-0. This notice is available on the FTC’s website and as a link to this press release, and will be published in the Federal Register soon. (FTC File No. R611004; the staff contact is Hampton Newsome, Bureau of Consumer Protection, 202-326-2889.)

FTC Stops Foreign Operation That Scammed Many Small Businesses and Nonprofits Into Paying Millions of Dollars for Bogus Online Directory

At the Federal Trade Commission’s request, a federal judge has temporarily halted a Slovakia-based operation that allegedly tricked small businesses and non-profits into collectively paying millions of dollars to be listed in an online directory in which they had no interest in being listed and for which they did not understand they would be charged. The FTC is seeking to permanently halt the alleged scam and require the defendants to refund the fees.

According to the FTC, the defendants send mailings to retailers, home-based businesses, local associations, and others who attend trade shows. The mailings mention a specific trade show or exhibition and are designed to appear as though they are merely asking the recipient to update and check the accuracy of information for the “exhibitors directory” for the named trade show or exhibition.

As alleged in the FTC’s complaint, the mailings include a form stating that the recipient’s basic information has been listed in the directory for free, and instructing them to confirm its accuracy or make corrections on the form. The form falsely suggests that the parties have a preexisting business relationship and that the directory listing is related to the recipient’s participation in the named trade show or exhibition. Many recipients do not notice a statement, buried in fine print at the bottom of the form, that by signing and returning the form they agree to pay the defendants $1,717 per year for three years. Often, the person who returns the form is not even authorized to enter into contracts for their employer.

According to the complaint, long after the form is signed and returned and the defendants’ 10-day cancellation period has expired, the defendants send an invoice demanding payment of $1,717 to a Slovakian bank account. Those who challenge the invoice are told the order cannot be canceled. Late payment notices follow, with late fees added, and some organizations pay just to end the harassment.

The FTC’s complaint was filed against Construct Data Publishers a.s., also doing business as Fair Guide, Wolfgang Valvoda, and Susanne Anhorn. Construct Data moved from Austria to Slovakia in 2008, after being sued by Austrian authorities for deceptive practices. To settle the Austrian case, Construct Data agreed to stop soliciting businesses in the European Union.

The Commission vote authorizing the staff to file the complaint was 4-0. The U.S. District Court for the Northern District of Illinois, Eastern Division, issued a temporary restraining order and asset freeze on March 15, 2013.

The FTC acknowledges the assistance of the United States Postal Inspection Service, the Attorney General’s Offices of California and Illinois, the Better Business Bureaus serving Central Ohio, Metropolitan New York, and Chicago and Northern Illinois, and the Canadian Anti-Fraud Centre.

FTC Returns More than $1.1 Million to Victims of Operation Involving Allegedly Bogus Health Insurance

The Federal Trade Commission is mailing 50,395 refund checks totaling more than $1.1 million to consumers who were victimized by a telemarketing operation that allegedly tricked them into buying worthless medical discount plans.

In June 2012, the FTC announced that it halted the scam. Under several settlement orders, Health Care One, Americans4Healthcare Inc., Elite Business Solutions, Inc., Mile High Enterprise Inc., and their principals were barred from having any role in a healthcare-related enterprise and from selling healthcare-related goods or services.

The checks are being mailed by an administrator working for the FTC, and will expire 60 days after they are issued. Consumers with questions about the Health Care One refund checks should call the refund administrator at 1-877-690-7103. For general questions about the FTC’s redress program, visit www.FTC.gov/refunds.

Health Care One and its affiliates allegedly deceived consumers by marketing medical discount plans as government-endorsed health insurance and claiming they would deliver substantial savings on consumers’ healthcare costs. According to the FTC’s complaint, filed in the Central District of California, the companies also falsely claimed that their program was widely accepted by healthcare providers in consumers’ local communities. The Health Care One companies touted their services in television commercials and radio ads. They promised “100% satisfaction” and a money-back guarantee.

Consumers should carefully evaluate claims about health insurance. For more information see: Discount Plan or Health Insurance?

Retailers Agree to Settle FTC Charges They Marketed Real Fur Products as Fake Fur

Three clothing retailers have agreed to settle Federal Trade Commission charges that they misled consumers by marketing that products contained “faux fur,” when in fact, the products contained real fur.

In administrative complaints, the FTC alleged that The Neiman Marcus Group Inc., DrJays.com Inc., and Eminent Inc., doing business as Revolve Clothing violated the FTC Act and the Fur Products Labeling Act (Fur Act) by falsely claiming that some products had “faux” fur, and by not naming the animal that produced the fur. Neiman Marcus also allegedly misrepresented that a rabbit fur product had mink fur, and failed to disclose the fur country of origin for three fur products. The FTC published for public comment orders prohibiting the retailers, for 20 years, from violating the Fur Act and the Rules and Regulations Under the Fur Act.

According to the FTC, Neiman Marcus’s website misrepresented the fur content and failed to disclose the animal name and fur country of origin for three products: a Burberry Outerwear Jacket, a Stuart Weitzman Ballerina Flat shoe, and an Alice + Olivia Kyah Coat. Neiman Marcus also misrepresented the fur content of the shoe in its catalog, at bergdorfgoodman.com, and in ads mailed to consumers.

DrJays.com allegedly misrepresented the fur content and failed to disclose the animal name for three products: a Snorkel Jacket by Crown Holder with a fur-lined hood, a Fur/Leather Vest by Knoles & Carter with exterior fur, and a New York Subway Leather Bomber Jacket by United Face with fur lining.

Eminent Inc., doing business as Revolve Clothing, allegedly misrepresented the fur content and failed to disclose the animal name for four products: an Australia Luxe Collective Nordic Angel Short Boot with a fur-trimmed hood, a Mark Jacobs Runway Roebling Coat, a Dakota Xan Fur Poncho, and an Eryn Brinie Belted Faux Fur Vest.

Under proposed consent orders that apply for 20 years, the respondents are barred from violating the Fur Act and the Fur Rules. Consistent with the Commission’s Enforcement Policy Statement announced in January, the orders provide that the respondents will not be liable for misrepresentations about fur products that they directly import if they do not embellish or misrepresent claims provided by the products’ manufacturers, they do not sell the product as a private label product, and they neither know nor should have known that the product is marketed in a manner that violates the Fur Act.

The Commission vote to accept the consent agreement packages containing the proposed consent orders for public comment was 4-0. The FTC will publish a description of the consent agreement packages in the Federal Register shortly. The agreements will be subject to public comment for 30 days, beginning today and continuing through April 18, after which the Commission will decide whether to make the proposed consent orders 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 electronic form can be submitted using the following links:

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. 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.

FTC Staff: Connecticut Should Consider Expanding Advance Practice Registered Nurses’ Role in Patient Care

Federal Trade Commission staff, in response to a request from Connecticut State Representative Theresa W. Conroy, provided comments on the likely competitive impact of Connecticut House Bill 6391, stating that eliminating the requirement that Advanced Practice Registered Nurses (APRNs) have collaborative agreements with physicians in order to practice independently could benefit Connecticut health care consumers by expanding choices for patients, containing costs, and improving access to primary health care services.

According to the FTC staff comment, state law requires that APRNs have a collaborative practice arrangement with a physician before the APRN may diagnose, treat, and prescribe medications for their patients. The proposed law would remove the collaborative practice requirement entirely and allow APRNs to practice to the full extent of their education and training without such an agreement. The FTC staff comment recognizes that collaboration between APRNs and other healthcare providers is often beneficial to patients, but such collaboration does not necessarily require direct supervision of one licensed health care provider by another.

“Given the potential benefits of eliminating unwarranted impediments to APRN practice we recommend that the Connecticut legislature seek to ensure that statutory limits on APRNs are no stricter than patient protection requires,” the FTC staff comment stated. “[W]e encourage the legislature to carefully consider available safety evidence on APRN practice in Connecticut and elsewhere. Absent a finding there are countervailing safety concerns regarding APRN practice, HB6391 appears to be a pro-competitive improvement in the law that would benefit Connecticut health care consumers.”

The comment is part of the FTC’s ongoing efforts to promote competition in the health care sector, which benefits consumers through lower costs, better care, and more innovation.

The Commission vote approving the staff comment was 4-0. It was sent to Connecticut State Representative Theresa W. Conroy on March 19, 2013. A copy of the letter can be found on the FTC’s website and as a link to this press release. (FTC File No. V130006; the staff contact is Patricia Schultheiss, Office of Policy Planning, 202-326-2877.)

FTC Approves Final Order Settling Charges Against Epic Marketplace, Inc.

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that Epic Marketplace, Inc. used “history sniffing” to secretly and illegally determine whether millions of consumers had visited any of more than 54,000 domains. The domains included pages relating to sensitive medical and financial issues ranging from fertility and incontinence to debt relief and personal bankruptcy.

In settling the FTC’s complaint, Epic Marketplace, Inc., and Epic Media Group, LLC agreed to no longer use history sniffing, which allows online operators to test specific sites in a browser to see if consumers have visited those sites in the past. The companies are required to delete and destroy all data collected using the technology.

The settlement order also bars misrepresentations about the extent to which the companies maintain the privacy or confidentiality of data from or about a particular consumer, computer or device, including misrepresentations of how that data is collected, used, disclosed or shared. It additionally bars misrepresentations about the extent to which software code on a webpage determines whether a user has previously visited a website. Violations of the consent order may be subject to civil penalties of up to $16,000 per violation.

The Commission vote approving the final order and letters to members of the public who commented on it was 3-0-1, with Commissioner Joshua Wright not participating. (FTC File No. 112-3182; the staff contact is Kate White, Bureau of Consumer Protection, 202-326-2878.)

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