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FTC Approves Final Order Settling Charges that Tested Green Environmental Certifications Were Neither Tested, Nor Green

Following a public comment period, the Federal Trade Commission approved a final order resolving allegations that a Washington, DC-based firm, Tested Green, sold environmental certifications to businesses in exchange for money and not based on their environmental attributes; and misrepresented that its certifications were endorsed by two independent associations, which were actually owned and operated by Jeremy Ryan Claeys, the owner of Tested Green.

The final order bars Tested Green and Claeys from making misrepresentations when selling any product or service. The final order further bars Tested Green and Claeys from making any representations about an endorser unless they clearly and prominently disclose any connection they have with the endorser when one exists.

The Commission vote approving the final order was 5-0. It can be found on the FTC’s website and as a link to this press release. (FTC File No. 102-3064; the staff contact is Elsie B. Kappler, Bureau of Consumer Protection, 202-326-2466; see press release dated January 11, 2011). Consumer information about the FTC’s Green Guides for environmental marketing can be found here.

Copies of the document mentioned in this release are available from the FTC’s website at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

(FYI 9.2011.wpd)

FTC, Federal Reserve Board Propose Changes to Risk-Based Pricing Rule

The Federal Trade Commission and the Federal Reserve Board are seeking public comment on proposed amendments to the Risk-Based Pricing Rule that would require creditors, as of July 21, 2011, to disclose credit score information to consumers when a credit score is used in setting or adjusting credit terms.

Since January 1, 2011, the Rule has required creditors to send consumers a “risk-based pricing” notice when, based on the consumer’s credit report, the creditor provides the consumer with less favorable credit terms than it provides to other consumers. Consumers who receive the notice can obtain a free credit report to check the report’s accuracy. As an alternative to providing the notice, the Rule permits creditors to provide credit applicants with a free credit score and information about their score.

Risk-based pricing refers to the practice of setting or adjusting the price and other terms of credit provided to a particular consumer based on the consumer’s creditworthiness.

The proposed amendments to the Rule would reflect new requirements that were added by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposed amendments would add content to risk-based pricing notices, provide new model notices, and specify certain technical requirements regarding credit score disclosures.

The Commission vote authorizing the publication in the Federal Register of the Notice of Proposed Rulemaking and model notice forms was 5-0. The proposal will be published soon in the Federal Register, and the comment period will end 30 days thereafter. Persons who want to file comments should refer to filing instructions in the Federal Register notice. The FTC staff contacts are Katherine White and Manas Mohapatra, Bureau of Consumer Protection, 202-326-2252.

(Risk-Based Pricing)
(FTC File No. R411009)

FTC Seeks Public Comment on Dow Chemicals Application to Modify Terms of its 2009 Settlement Regarding Dows Acquisition of Rohm & Haas

The Federal Trade Commission is seeking public comment on an application by the Dow Chemical Company to modify the terms of a settlement it reached with the FTC in 2009. The settlement resolved the agency’s concerns about how Dow’s acquisition of Rohm and Haas Company would affect competition in the markets for acrylics and other industrial chemicals that are used to make coated paper products, paints, and adhesive.

The final order settling the case includes a requirement that Dow sell its acrylic latex plant in Torrance, California. According to Dow’s application, however, Arkema Inc, the FTC-approved buyer of the acrylic acid business and the latex polymers business, did not want to buy the entire Torrance site at the time it was sold. Instead, Arkema bought the plant but agreed to a long-term lease with an option to buy only the portion of the property where the plant is located. In its application, Dow says that it has tried unsuccessfully to sell the whole site, as required by the FTC order and that it has not yet obtained the approval it needs to subdivide the site so a portion of it can be sold to a third party.

Dow is now requesting that the order be modified to eliminate its obligation to sell the entire site. If the FTC decides not to modify the order as requested, Dow asks that it be granted a three-year extension of time to complete the divestiture of the Torrance site so it can complete the process of obtaining approval to subdivide the property.

The Commission is accepting public comments on Dow’s application until March 28, 2011, after which it will decide whether to approve the modified order. Written comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. To file a comment, click on: https://ftcpublic.commentworks.com/ftc/rohmandhaaspetition and follow the instructions at that site. Copies of the application also can be found on the FTC’s website and as a link to this press release. (FTC File No. 081-0214, Docket No. C-4243; the staff contact is Roberta S. Baruch, Bureau of Competition, 202-326-2861; see press release dated January 23, 2009.)

(FYI 8.5.2011.wpd)

FTC Mails Redress Checks to Victims of Foreclosure Rescue Scam

An administrator working for the Federal Trade Commission is mailing 1,455 refund checks to consumers defrauded by a mortgage loan modification and foreclosure rescue scam. The FTC alleged, and the court found, that operators of the scam falsely told consumers they would prevent their homes from being foreclosed and negotiate lower mortgage interest rates, monthly payments, and principal balances. The court also found that homeowners got few, if any, loan modifications, and many people lost their homes to foreclosure after paying up to $5,500.

At the request of the FTC, in April 2010, a federal court issued an $11.4 million contempt order against the defendants, Bryan D’Antonio, The Rodis Law Group, Inc., America’s Law Group, and The Financial Group, Inc., for operating the scam, which violated a 2001 order that banned D’Antonio from telemarketing and misleading consumers about goods or services. The FTC obtained the 2001 order against D’Antonio and his former company, Data Medical Capital, Inc., for operating a work-at-home medical billing opportunity scheme.

Consumers who receive the checks should cash them, and they will have 60 days to do so before the checks become void. Those who submitted a valid claim form will receive about 24 percent of their total claim loss. The FTC never requires consumers to pay money or provide information before redress checks can be cashed. Consumers with questions should call the administrator at 1-888-398-8205 or visit www.ftc.gov/refunds.

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 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

FTC Announces Major Law Enforcement Sweep; Swindlers Conned People Seeking Jobs or Extra Income

Media Advisory

February 28, 2011

The Federal Trade Commission will host a press conference in Washington, DC, on Wednesday, March 2, 2011, at 11 a.m. EST to announce a major federal-state law enforcement crackdown on swindlers whose bogus employment schemes cheat financially distressed Americans.

David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection will be available to answer reporters’ questions, as well as Tony West, Assistant Attorney General for the Civil Division of the Department of Justice; Greg Campbell, Deputy Chief Inspector of the U.S. Postal Inspection Service; North Carolina Attorney General Roy Cooper; and a consumer who was deceived by a self-employment scam.

The event will be webcast live on the FTC’s website.

WHO:	David C. Vladeck, Director, FTC’s Bureau of Consumer Protection Tony West, Assistant Attorney General, Civil Division, Department of Justice Greg Campbell, Deputy Chief Inspector of the U.S. Postal Inspection Service North Carolina Attorney General Roy Cooper A consumer who was deceived by a self-employment scam
WHEN:	Wednesday, March 2, 2011, 11 a.m. EST
WHERE:	Federal Trade Commission Room 432, 600 Pennsylvania Avenue NW Washington, DC
CALL-IN:	Reporters unable to attend the event can call in. The phone number is 800-230-1092, the confirmation number is 194437. The lines, which are only for news media, will open at 10:45 a.m. The conference host is Bruce Jennings.
WEBCAST:	The event will be webcast live.

Contact Information

MEDIA CONTACT:

Office of Public Affairs
202-326-2180

FTC Seeks Public Comment on Dow Chemical Application to Amend Agreement with Huntsman Related to Union Carbide Acquisition

The Federal Trade Commission is seeking public comment on an application by the Dow Chemical Company to amend an agreement related to its 2001 acquisition of Union Carbide Corporation. The settlement in this matter, which was designed to remedy the alleged anticompetitive effects of the deal, included the Huntsman Agreement, under which Dow agreed to sell its ethyleneamines business to Huntsman International LLC.

As part of the sale, the agreement required Dow to separate the environmental systems of the ethyleneamines business from other systems at its Freeport, Texas, site. Ethyleneamines are a family of chemicals used in a variety of applications, including lubricating oil additives, epoxy curing agents, personal care products, pulp and paper products, and fungicides

In December 2010, Dow entered into the proposed “Deep Well Amendment” with Huntsman to accomplish this goal. According to the application, the proposed amendment reflects an understanding between Dow and Huntsman regarding a joint wastewater treatment project at the Freeport site. In its application, Dow states that the proposed Deep Well Amendment is consistent with the FTC’s Order and should be approved.

The Commission is accepting public comment on Dow’s application until March 28, 2011, after which it will decide whether to approve it. Written comments should be sent to: FTC Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. To file a comment, please click on: https://ftcpublic.commentworks.com/ftc/dowhuntsmanpetition, and follow the instructions at that site. Copies of the application also can be found on the FTC’s website and as a link to this press release. (FTC File No. 991-0301, Docket No. C-3999; the staff contact is Roberta S. Baruch, Bureau of Competition, 202-326-2861; see press release dated February 5, 2001.)

(FYI 8.2011.wpd)

FTC Asks Court to Shut Down Text Messaging Spammer

The Federal Trade Commission asked a federal judge to shut down an operation that allegedly blasted consumers with millions of illegal spam text messages, including many messages that deceptively advertised a mortgage modification website called “Loanmod-gov.net.” The FTC is asking the court to freeze the defendant’s assets.

According to the FTC complaint, the defendant behind the operation, Phillip A. Flora, sent millions of text messages, pitching loan modification assistance, debt relief, and other services. In one 40-day period, Flora sent more than 5.5 million spam text messages, a “mind boggling” rate of about 85 per minute, every minute of every day, according to additional court documents filed by the agency. The FTC alleges that consumers lose money as a result of Flora’s spam text messaging because many of them get stuck paying fees to their mobile carriers to receive the unwanted text messages.

The text messages told consumers to respond to the message or visit one of the operation’s websites. One of the sites, loanmod-gov.net, used a web address that appeared to be a government web address, claimed to provide “Official Home Loan Modification and Audit Assistance Information,” and displayed a photo of an American flag. According to the FTC’s complaint, Flora collects information from consumers who respond to the text messages – even those asking him to stop sending messages. He then sells their contact information to marketers claiming they are “debt settlement leads.”

The FTC charges that Flora violated the FTC Act by sending unsolicited commercial text messages to consumers, and by misrepresenting that he was affiliated with a government agency. In addition, the FTC charges that he advertised his text message blasting services by sending consumers e-mail spam that violated the CAN-SPAM Act – a law that sets the rules for commercial email. The FTC alleges that his e-mail spam failed to include a way for consumers to “opt-out” of future messages and failed to include the physical mailing address of the sender, as required by the law.

The FTC acknowledges the invaluable assistance it received from Verizon Wireless, AT&T, and CTIA – The Wireless Association in this matter.

The Commission vote authorizing the staff to file the complaint was 5-0. It was filed in the U.S. District Court for the Central District of California.

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 case will be decided by the court.

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 1,800 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 File No. 102 3005)

FTC Submits Fiscal Year 2012 Budget Request and Performance Plans to Congress

For Your Information

February 18, 2011

The Federal Trade Commission submitted its Fiscal Year 2012 budget request to Congress, including an FY 2012 Budget Overview Statement, and FY 2011 and FY 2012 Performance Plans that are required under the Government Performance and Results Act. The FTC’s formal budget request was submitted to Congress on February 14, 2011, in support of the President’s FY 2012 budget for the federal government.

The Commission vote to submit the budget request and performance plans to Congress was 5-0. Copies of the documents can be found here on the FTC’s website. (FTC File No. P859900; the staff contact is James Baker, 202-326-3168.)

(FYI 7.2011.wpd)

Contact Information

MEDIA CONTACT:

Office of Public Affairs
202-326-2180

FTC Recovers More Than $3 Million from Operators of DVD Vending Machine Scam

The Federal Trade Commission has recovered more than $3 million that will be refunded to investors who were duped in an alleged scam that promoted video rental machines as a business opportunity.

The FTC’s law enforcement action against American Entertainment Distributors, Inc., was filed in 2005, naming 10 defendants. The U.S. District Court for the Southern District of Florida has now entered final orders against nine of them, prohibiting further illegal conduct and requiring payments for refunds. The FTC alleged that the defendants tricked investors into paying $28,000 to $37,500 apiece for video rental vending machines, 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. The FTC’s case was halted for three years while the Department of Justice pursued parallel criminal proceedings.

The U.S. District Court for the Southern District of Florida has entered a permanent injunction against one defendant, approved settlements with five defendants, and entered default judgments against three other defendants:

The court entered a permanent injunction against Russell G. MacArthur in July 2009. He is serving time in federal prison on related criminal charges. A judgment of more than $19 million was entered against him in the parallel criminal proceedings. The FTC has sued him for other business opportunity scams in the past.
The court approved a settlement with defendant Miriam Andreoni on November 17, 2010. The order includes a judgment of $19.2 million, which is equal to the sum of the payments the American Entertainment Distributors operation took from consumers. Andreoni agreed to give up her rights in a litigation over the proceeds of her late husband’s life insurance policy. On December 30, 2010, the FTC obtained a judgment for $2 million in insurance proceeds in that case. She also agreed to forfeit $470,000 held by a shell corporation, and the court entered an order forfeiting these funds to a court-appointed receiver on January 25, 2011. The unpaid portion of the judgment is suspended because of her inability to pay. If she misrepresented her financial information, the FTC may seek payment of the full judgment. The settlement order also permanently bars her from making misleading statements when selling goods and services; from violating the FTC’s Franchise Rule or Business Opportunity Rule; and from selling, renting, leasing, transferring, or disclosing customer information.
The court approved a settlement on November 17, 2010 with defendants Mauricio Paz and the now-defunct Universal Cybercom Corporation, which also includes a $19.2 million judgment. All but $116,617.95 was suspended based on the defendants’ inability to pay. If they misrepresented their financial information, the FTC may seek payment of the full judgment. Paz, who served time in federal prison on related criminal charges, is permanently barred from marketing business ventures or investment opportunities, and from making misrepresentations in marketing other goods or services.
The court approved a settlement on November 17, 2010 with two other defunct corporations, Automated Entertainment Dispensers, Inc., and Universal Technical Support, Inc. These corporations will be dissolved by a court-appointed receiver, and their net assets, totaling more than $250,000, will be turned over to the FTC for consumer refunds.
The court entered default judgments in February 2005 against defendants James MacArthur, American Entertainment Distributors, Inc., and American Entertainment Machines, Inc. More than $330,000 in assets have been recovered from these defendants. James MacArthur is serving time in federal prison on related criminal charges. A court-appointed receiver will pay the net assets from American Entertainment Distributors, Inc. and American Entertainment Machines, Inc. to the FTC for consumer refunds.

Litigation continues against the estate of the tenth defendant, Anthony Andreoni, who died in 2009. In addition, Miriam Andreoni has tried to withdraw from her settlement and has objected to awarding the insurance proceeds to the FTC. The district court rejected these efforts, and she is challenging those decisions in the federal court of appeals.

The FTC’s case against the American Entertainment Distributors, Inc. defendants was part of “Project Biz Opp Flop,” a 2005 FTC law enforcement sweep targeting business opportunity scams. The sweep included 16 FTC actions against more than 60 individual and corporate defendants who were charged with business opportunity and work-at-home fraud.

The Commission vote approving the proposed settlement order against Miriam Andreoni was 5-0. The January 2009 Commission vote approving the proposed settlement orders against Mauricio Paz; Universal Cybercom Corporation; Automated Entertainment Dispensers, Inc.; and Universal Technical Support, Inc. was 4-0.

Copies of the settlements and the court opinion concerning the life insurance proceeds are available on the FTC’s website.

NOTE: The consent decrees are for settlement purposes only and do not constitute admissions 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.

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 1,800 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.

(American Entertainment Distributors NR)
(FTC File No. X04-0082; Civ. Action No. 04-22431)

FTC Sends Refund Claim Forms to Nearly 12,000 Victims of Auto Warranty Robocaller

An administrator working for the Federal Trade Commission began mailing claim forms today to 11,780 people defrauded by illegal auto “warranty” robocalls made by Voice Touch, Inc., and its related individuals and entities. The Federal Trade Commission alleged that Transcontinental Warranty, Inc., the company selling the so-called warranties, hired Voice Touch to bombard U.S. consumers with millions of deceptive prerecorded calls in 2009. As a result of settlements reached by the Federal Trade Commission, funds now are available to return to consumers who purchased “warranties” from Transcontinental.

Consumers who receive the forms will have 60 days to complete them and return them to the claims administrator, Analytics, Inc., at the address listed on the forms. The amount of refunds will be determined after consumers return their forms.

Under a series of settlements with the FTC, the various Voice Touch and Transcontinental Warranty defendants were permanently banned from telemarketing. They also were prohibited from making any prerecorded calls like the millions they allegedly used to trick consumers into buying extended service contracts under the guise that they were extensions of original vehicle warranties. The Voice Touch defendants also were required to pay approximately $3 million for consumer refunds.

According to the FTC, Transcontinental was one of several companies for which Voice Touch blasted auto warranty robocalls, which generated a flood of complaints to the agency. The claim forms mailed today, however, are only for consumers defrauded by Transcontinental.

The amount of money consumers receive will be based on the number of claim forms received and approved, and the amount available for refunds. While consumers may not receive refunds for all the money they lost, they must return the forms in order to be eligible for refunds. Consumers who have questions about completing the form after they receive it can contact Analytics, Inc. toll-free at 1-877-720-5908 or visit www.ftc.gov/refunds.

Information for consumers on telemarketing and robocalls can be found here.

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 1,800 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.

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