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FTC Returns More than $2 Million to Buyers of the “Google Money Tree” Work-at-Home Scam

The Federal Trade Commission is mailing 93,086 refund checks totaling nearly $2.3 million to consumers who allegedly were charged hidden fees tied to a bogus work-at-home product.

In July 2009, the FTC took action against the online marketers behind “Google Money Tree,” which also operated under names including “Google Pro” and “Google Treasure Chest,” alleging that they had charged hidden fees to consumers’ credit card and bank accounts. By deceptively using the name and logo of the Internet search company Google Inc. and falsely promising that consumers could earn $100,000 in six months, the FTC charged, defendants lured consumers into divulging their financial account information to pay a modest shipping fee for a work-at-home kit. Many consumers were unaware, however, that the fee for the kit would trigger recurring monthly charges of $72.21, because the defendants did not adequately disclose the charges, according to the FTC’s lawsuit. Moreover, the defendants were not affiliated with Google Inc., and their work-at-home product did not provide a method for earning the income promised, the FTC alleged.

Under a settlement agreement with the FTC, the defendants are banned from selling products through “negative option” transactions, in which the seller interprets consumers’ silence or inaction as permission to charge them, and are also prohibited from making misleading or unsupported claims while marketing or selling any product or service. The settlement also required the defendants to surrender cash and other assets, and these are now being used by the FTC to refund consumers who bought the “Google Money Tree,” “Google Pro,” or “Google Treasure Chest” products.

The checks will be mailed by an administrator working for the FTC. Consumers who made purchases from “Google Money Tree,” “Google Pro,” or “Google Treasure Chest” will receive approximately $24.50. Consumers who have questions, or who have not yet filed a complaint with the FTC and wish to do so, should call the Redress Administrator, Gilardi & Co. LLC, toll free, at 1-877-226-2847. Consumers seeking general information about the FTC’s redress program may visit the FTC’s refunds website. The FTC never requires consumers to pay money or provide information before redress checks can be cashed.

Checks will be mailed on September 11, 2012, and must be cashed on or before November 12, 2012.

Consumers should carefully evaluate claims about work-at-home offers. For more information see: Money Matters: Work-at-Home.

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.

Subsidiary of Diet Plan Marketer Medifast Inc. to Pay $3.7 Million to Settle FTC Charges

A subsidiary of diet plan marketer Medifast Inc. will pay a $3.7 million civil penalty to settle Federal Trade Commission charges that it violated a previous agency order by making unsupported claims about its weight-loss program.

Medifast unit Jason Pharmaceuticals, Inc. has agreed to settle FTC charges that weight-loss claims in the company’s advertisements for meal replacement products violated a 1992 FTC settlement order, which barred it from making any unsupported claims about users’ success in achieving or maintaining weight loss or weight control. This enforcement action is part of the FTC’s ongoing effort to make sure that companies comply with FTC orders, and the agency’s crackdown on deceptive and misleading health claims. Under the FTC Act, companies may be liable for civil penalties of up to $16,000 per violation of an FTC order per day.

Jason Pharmaceuticals sells Medifast-brand low-calorie meal substitutes. Its most advertised plan is the Medifast “5 and 1” plan that consists of 800-1,000 calories per day. Filed on the FTC’s behalf by the Department of Justice, the complaint against Jason Pharmaceuticals alleges that the company made unsupported representations since at least November 2009 in radio, television, Internet, and print advertisements that consumers using Medifast programs and products would lose two to five pounds each week.

The company also represented that the experiences of consumer endorsers featured in the advertisements were typical, and that consumers would lose more than 30 pounds, according to the complaint.

One such ad stated:
“Why Medifast? Three great reasons.
Cynthia Lujan lost 73 lbs on Medifast! Cindy Daniels lost 43 lbs on Medifast!
Jennifer Lilley lost 70 lbs on Medifast!
You can lose up to 2 to 5 pounds per week on Medifast.”

Under the new settlement order announced today, Jason Pharmaceuticals is prohibited from misrepresenting that consumers who use any low-calorie meal replacement program, including the Medifast “5 and 1” plan, can expect to achieve the same results that an endorser does, or can lose a particular amount of weight or maintain the weight loss. Such representations must be non-misleading and backed by competent and reliable scientific evidence that consists of at least one adequate and well-controlled human clinical study of the low-calorie meal replacement program, or a study that follows a protocol detailed in the settlement order.

Under the settlement order, the company also is prohibited from making any other representation about the health benefits, safety, or side effects of any low-calorie meal replacement program, unless the representation is non-misleading and backed by competent and reliable scientific evidence that is generally accepted in the profession to yield accurate results.

The company also is prohibited from misrepresenting that any doctor, health professional, or endorser recommends a weight-loss product, program, service, drug, or dietary supplement.

Consumers should carefully evaluate advertising claims for weight loss. For more information, see the FTC’s consumer education piece: Who Cares: Weight Loss Promises.

The Commission vote to authorize the staff to refer the complaint to the Department of Justice, and to approve the proposed consent decree, was 5-0. The DOJ filed the complaint and proposed consent decree on behalf of the Commission in U.S. District Court for the District of Columbia on September 7, 2012. The proposed consent decree is subject to court approval.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the District Court judge.

FTC Takes Action Against Companies Marketing Allegedly Unproven Natural Bed Bug and Head Lice Treatments

The Federal Trade Commission filed deceptive advertising charges against two marketers of remedies for bed bug infestations, who allegedly failed to back up overhyped claims that they could prevent and eliminate infestations using natural ingredients, such as cinnamon and cedar oil. One marketer also allegedly made misleading claims that its products were effective against head lice.

In one of the two cases, RMB Group, LLC and its principals have agreed to settle the charges relating to their “Rest Easy” bed bug products. In the case against Cedarcide Industries, Inc. and others, challenging their marketing of “Best Yet!” bed bug and head lice treatments, the defendants have not settled, and the FTC is beginning litigation against them.

Bed bugs have been a growing public health pest in recent years, according to the Environmental Protection Agency. Consumers plagued with bed bugs experience considerable stress, discomfort, and expense in attempting to rid themselves of these pests, and many are unaware of the complex measures needed to prevent and control them, according to the EPA.

Consumers concerned about bed bugs also should see the FTC publication, “Good Night, Sleep Tight, and Don’t Let the Bed Bugs Bite . . . Your Wallet,” which urges caution about advertisements that offer quick solutions, and provides advice to consumers for treating bed bug infestations.

Also, as children head back to school this fall, the FTC urges parents to carefully research products that claim to treat head lice infestations.

In both cases, the FTC charged the marketing companies – as well as the individuals behind them – with deceptive advertising for claiming that their products can stop and prevent bed bug infestations. The Cedarcide defendants also are charged with making deceptive claims that their product can stop and prevent head lice infestations, and that the federal government endorses and is affiliated with their product.

The Cedarcide Industries, Inc. defendants market BEST Yet!, a line of cedar-oil-based liquid products they claim will treat and prevent bed bug and head lice infestations. The defendants sell the product to consumers nationwide. They also sell it to hotels and other commercial establishments for treating bed bugs, and to school districts for treating head lice. Consumers can buy the product online, by phone, at the Cedarcide website , and at Amazon.com. The cost of the products ranges from $29.95 for the quart-sized spray bottle to $3,394.95 for a hotel-motel bed bug eradication kit.

One radio advertisement for the product stated:

“In light of the recent bed bug media frenzy that has all of us nervous, you need to
know that bed bug prevention and eradication relief are available. So let’s not all freak out. All you need is Best Yet from CedarCide.com. . . . Best Yet was developed at the request of the USDA for our military, as a solution for killing sand fleas. But guess what, it’s equally deadly to bed bugs, larvae and eggs.”

The FTC complaint charges that the Cedarcide defendants make:

unsupported claims that Best Yet!is effective at stopping and preventing bed bug infestations and that it is more effective than synthetic pesticides at doing so;
false claims that scientific studies prove Best Yet!is effective at stopping and preventing bed bug infestations, and that it is more effective than synthetic pesticides at doing so;
a false claim that the Environmental Protection Agency has warned consumers to avoid all synthetic pesticides for treating bed bug infestations;
unsupported claims that Best Yet!is effective in stopping and preventing head lice infestations, killing head lice eggs, dissolving the glue that binds head lice eggs (known as nits) to hair, and killing head lice and their eggs in a single treatment; and
false claims that scientific studies prove Best Yet! is effective in stopping and preventing head lice infestations.
false claims that Best Yet!was invented for the U.S. Army at the request of the U.S. Department of Agriculture, and that the USDA has acknowledged the product as the number one choice of bio-based pesticides.

The Cedarcide complaint names Dave Glassel and several companies he controls: Springtech 77376, LLC; Cedarcide Industries, Inc.; Chemical Free Solutions, LLC; and Cedar Oil Technologies Corp.

RMB Group, LLC marketed Rest Easy, a liquid solution containing cinnamon, lemongrass, peppermint, and clove oils. The company sold it to retail chains Bed Bath & Beyond, Walgreens, and Big Lots, which in turn sold it to consumers primarily for use when staying in hotel rooms. The product was sold in a 16-ounce spray bottle, which cost $6.99 to $9.99, and a 2-ounce twin pack, which retailed for $5.99 to $7.77. It also was sold in a gallon jug for approximately $50.

A video ad appearing on a company-sponsored website stated:

“Did you Know … Bed bugs can survive up to 10 months without feeding. They can lay between 5 and 12 eggs per day … per bug! Why take a chance on being their next meal when you travel? Or having your business shut down because somebody unwittingly brought them in? Rest Easy … is a real GREEN All-Natural, Non-Pesticide, designed as a preventative for just these potential problems. Rest Easy And rest assured, bed bugs no more!”

The FTC complaint charges that the RMB Group defendants make unsupported claims that Rest Easy kills and repels bed bugs, and that a consumer can create a barrier against them by spraying the product around a bed.

Under the settlement, the defendants are barred from:

representing that Rest Easy or any other pesticide kills or repels bed bugs or creates a barrier against them, and
making any claims about the performance of such a product,

unless the representations are true and backed by competent and reliable scientific evidence.

The settlement imposes a $264,976 judgment against the Stuart, Florida-based RMB Group, LLC, and its owners, Howard and Bruce Brenner. The judgment is suspended because of the defendants’ inability to pay.

The Commission vote authorizing the staff to file the complaint against the RMB Group LLC defendants and approving the proposed consent decree was 4-1, with Commissioner J. Thomas Rosch voting no. The Commission vote authorizing the staff to file the complaint against the Cedarcide defendants was 5-0. The FTC filed both complaints and the proposed settlement order for the RMB defendants in the U.S. District Court for the Northern District of California on September 5, 2012. The proposed settlement order is subject to court 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 defendant has actually violated the law. The stipulated order is for settlement purposes only and does not constitute an admission by the defendant that the law has been violated. Stipulated orders have the force of law when approved and signed by the District Court judge.

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

Federal Trade Commission staff, in response to a request from West Virginia State Senator Daniel Foster, provided testimony to a state legislative panel stating that making it simpler for Advanced Practice Registered Nurses (APRNs) to prescribe medications could benefit West Virginia health care consumers by expanding choice for patients, containing costs, and improving access to primary health care services.

According to the FTC staff testimony before Subcommittee A of the Joint Committee on Health of the State of West Virginia Legislature, state law allows APRNs to diagnose and treat patients without physician involvement, but requires APRNs to have a signed collaboration agreement with a physician in order to prescribe medications. The testimony noted that current shortages of primary care providers in West Virginia are expected to worsen as more West Virginians gain health insurance and seek access to primary health care services and that a recent Institute of Medicine report found advanced practice nurses can help improve access to health care.

“Legislative action to eliminate the collaborative agreement requirement for prescriptive authority may improve access and consumer choice for primary care services, especially for rural and other underserved populations, and also may encourage beneficial price competition that could help contain health care costs,” the FTC staff testimony stated. “We applaud the West Virginia legislature’s efforts to review and study the statutory limits on APRNs and we recommend that the legislature ensure that such limits are no stricter than patient protection requires.”

The FTC staff testimony asked the legislature to carefully consider available safety evidence on APRN practice in West Virginia and elsewhere. “Absent a finding that there are countervailing patient care and safety concerns regarding APRN practice,” the testimony stated, “suggestions to remove the collaborative agreement for prescriptive authority appear to be a procompetitive improvement in the law that likely would benefit West Virginia 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 testimony was 5-0. It was sent to West Virginia State Senator Daniel Foster on September 7, 2012. A copy of the letter can be found on the FTC’s website and as a link to this press release. (FTC File No.V120010; the staff contact is Patricia Schultheiss, Office of Policy Planning, 202-326- 2877.)

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 [email protected] or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

FTC Proposes Changes to its Fur Labeling Rules

The Federal Trade Commission is seeking public comment on changes the agency is proposing that would eliminate unnecessary requirements on companies that sell fur products to give them more flexibility on labeling, and update the Fur Products Name Guide that lists common animal names allowed on fur labels. The proposed changes also would incorporate provisions of a fur labeling law passed by Congress in 2010, the Truth in Fur Labeling Act of 2010 (TFLA). The proposals are part of a review of the Name Guide required by Congress under the TFLA and the FTC’s systematic review of all current FTC rules and guides.

The Fur Products Name Guide is part of the FTC’s Fur Labeling and Advertising Rules, commonly known as the Fur Rules, which help inform consumers by requiring manufacturers and retailers to label fur products with certain information, such as the animal’s name and an imported fur’s country of origin. The Name Guide provides English names for fur-producing animals, listed by genus-species.

In March 2011, as required by the TFLA, the FTC began a review of the Name Guide, sought public comments on the Fur Rules generally, and announced upcoming changes to the Fur Rules required by Congress. In December 2011, the Commission also held a public hearing and invited views on all aspects of the Name Guide, including using the Integrated Taxonomic Information System to determine an animal’s true English name, and whether the agency should modify, add or delete names for several specific species.

Instructions for filing comments appear in the Federal Register Notice. Comments can be filed electronically by clicking here. Comments must be received by November 16, 2012. All comments received will be posted on the FTC website.

The Commission vote approving the Notice of Proposed Rulemaking was 5-0. It is available on the FTC’s website and as a link to this press release and will be published in the Federal Register soon. (FTC File No. P074201; the staff contact is Matthew Wilshire, Bureau of Consumer Protection, 202-326-2976)

For more information, read How to Comply with the Fur Products Labeling Act and the complete Rules and Regulations Under the Fur Products Labeling Act.

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.

FTC Publishes Guide to Help Mobile App Developers Observe Truth-in-Advertising, Privacy Principles

cover of mobile app developers’ guide The Federal Trade Commission has published a guide to help mobile application developers observe truth-in-advertising and basic privacy principles when marketing new mobile apps. The FTC’s new publication, “Marketing Your Mobile App: Get It Right from the Start,” notes that there are general guidelines that all app developers should consider. They include:

Tell the Truth About What Your App Can Do. – “Whether it’s what you say on a website, in an app store, or within the app itself, you have to tell the truth,” the publication advises;
Disclose Key Information Clearly and Conspicuously. – “If you need to disclose information to make what you say accurate, your disclosures have to be clear and conspicuous.”
Build Privacy Considerations in From the Start. – Incorporate privacy protections into your practices, limit the information you collect, securely store what you hold on to, and safely dispose of what you no longer need. “For any collection or sharing of information that’s not apparent, get users’ express agreement. That way your customers aren’t unwittingly disclosing information they didn’t mean to share.”
Offer Choices that are Easy to Find and Easy to Use. – “Make it easy for people to find the tools you offer, design them so they’re simple to use, and follow through by honoring the choices users have made.”
Honor Your Privacy Promises. – “Chances are you make assurances to users about the security standards you apply or what you do with their personal information. App developers – like all other marketers – have to live up to those promises.”
Protect Kids’ Privacy. – “If your app is designed for children or if you know that you are collecting personal information from kids, you may have additional requirements under the Children’s Online Privacy Protection Act.”
Collect Sensitive Information Only with Consent. – Even when you’re not dealing with kids’ information, it’s important to get users’ affirmative OK before you collect any sensitive data from them, like medical, financial, or precise geolocation information.
Keep User Data Secure. – Statutes like the Graham-Leach-Bliley Act, the Fair Credit Reporting Act, and the Federal Trade Commission Act may require you to provide reasonable security for sensitive information. The FTC has free resources to help you develop a security plan appropriate for your business. One place to start: Protecting Personal Information: A Guide for Business.

FTC Approves Final Order Settling Charges that Novartis AG’s Proposed Acquisition of Fougera Holdings, Inc. was Anticompetitive

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that Novartis AG’s proposed acquisition of Fougera Holdings, Inc. was anticompetitive in the markets for the marketing rights to four topical skin care medications. The final order resolving the charges preserves competition in the markets by requiring Novartis, a drug supplier, to end a marketing agreement that allows it to sell three of the products and return the rights to the fourth product to its manufacturer.

The Commission vote approving the final order was 5-0. (FTC File No. 121-0144, Docket No. C-4364; the staff contact is Christine Tasso, Bureau of Competition, 202-326-2232; see press release dated July 16, 2012.)

FTC Sends Refunds to Victims of Robocall Credit Card Interest Rate Reduction Scheme

The Federal Trade Commission is mailing refund checks to 4,468 consumers nationwide who allegedly were defrauded by a telemarketer who used robocalls to pitch worthless credit card rate reduction programs for an up-front fee. Each consumer will receive a check for between $31 and $1,300, based on how much money he or she lost in the scam.

The refunds stem from the July 2010 judgment in one of several cases the FTC brought against defendants that made illegal robocalls to consumers, using names including “Heather from card services” and “client services.” According to the FTC, the defendants in this case claimed that they could lower the interest rates on consumers’ credit cards – for an up-front fee that typically ranged from $990 to $1,495. The defendants also falsely stated that consumers who did not save the “guaranteed” amount – typically $4,000 or more – could get a full refund of the up-front fee. However, after consumers paid the fee, the defendants did little to negotiate better terms on their behalf and refused refunds to consumers who were dissatisfied with their services.

Consumers who receive the checks should cash them within 60 days of the date they were issued. The redress checks are valid for 60 days from the date they are issued. The FTC never requires the payment of money up front, or the provision of additional information, before consumers cash redress checks issued to them. Consumers with questions should call the redress hotline at 1-866-224-5404.

(Civ. No. 1 09-cv-3347 TCB)

FTC to Return Money to Victims of Allegedly Deceptive Drug Price Claims by CVS Caremark

The FTC will provide refunds to nearly 13,000 consumers who paid significantly more for their drugs than they expected based on allegedly deceptive pricing claims made by CVS Caremark. Consumers eligible for refunds will receive all of the amount they overpaid for the drugs.

In January 2012, the FTC charged that CVS Caremark misrepresented the prices of certain Medicare Part D prescription drugs – including drugs used to treat breast cancer symptoms and epilepsy – at CVS and Walgreens pharmacies. The claims caused many seniors and disabled consumers to pay significantly more for their drugs than they expected and pushed them into the “donut hole” – a term referring to the coverage gap where none of their drug costs are reimbursed – sooner than they anticipated or planned. The settlement barred the deceptive claims and required CVS Caremark to pay $5 million to reimburse affected Medicare Part D consumers for the price discrepancy.

Beginning on September 4, a redress administrator for the FTC, Rust Consulting, Inc., began mailing checks to victims of the deceptive conduct. The checks will be valid for 60 days from the date they are issued and must be cashed by then.

Consumers who have questions can call a toll-free hotline at 1-888-773-8392.

FTC Approves Modified Final Order Settling Charges that CoStar’s $860 Million Acquisition of LoopNet was Anticompetitive

Following a public comment period, the Federal Trade Commission has approved a modified final order settling charges that CoStar Group, Inc.’s $860 million acquisition of Loopnet would have been anticompetitive in the market for commercial real estate information services in the United States. The modified final order resolving the charges preserves competition that otherwise would have been lost through the acquisition by requiring the combined firm to sell LoopNet’s interest in Xceligent, a significant provider of U.S. commercial real estate information.

The modified final order addresses concerns expressed in the more than 50 public comments the FTC received after approving the proposed consent agreement with the companies. Based on these comments, the FTC has proposed, and CoStar has agreed to, four modifications to the proposed consent order. The modifications, which can be found in the final order linked to this press release on the FTC’s website, address concerns regarding the proposed order’s clarity and the ability of the commercial real estate industry to support the competitive expansion of Xceligent.

The Commission vote approving the modified final order and letters to the members of the public who commented was 4-0-1, with Commissioner Maureen Ohlhausen not participating. (FTC File No.111-0172; the staff contact is Justin Stewart-Teitelbaum, Bureau of Competition, 202-326-3597; see press release dated April 26, 2012.)

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