Markets Wired

The Federal Trade Commission is seeking public comments on a proposal to collect information from food and beverage companies and quick-service restaurants on promotional activities, nutrition information, and expenditures for products marketed to children and adolescents. The proposed study follows one the Commission conducted in 2006 on the same topic. The report on the 2006 study was published in July 2008 and titled “Marketing Food To Children and Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation”
(http://www.ftc.gov/os/2008/07/P064504foodmktingreport.pdf).

The FTC has approved a Federal Register notice requesting comments on the proposed study. The comments will be considered before the FTC seeks clearance for the study from the Office of Management and Budget, in compliance with the Paperwork Reduction Act. The notice provides background on the purpose of the proposal, details the proposed information requests, and tells interested parties how and where to submit their comments. Comments are due to the Commission on or before November 23, 2009.

The Commission vote approving publication of the Federal Register notice was 4-0. A copy of the notice can be found as a link to this press release and on the FTC’s Web site. (FTC File No. P094511; the staff contacts are Carol Jennings, Bureau of Consumer Protection, 202-326-3010, and Mary Johnson, Bureau of Consumer Protection, 202-326-3115.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC 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 1,700 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.

The Federal Trade Commission today announced two new law enforcement actions in a continuing crackdown on mortgage foreclosure rescue and loan modification scams, bringing to 22 the number of these cases the Commission has filed since the housing crisis began. The FTC also announced developments in similar pending mortgage-related actions.

“Today’s challenging economy presents an opportunity for con artists who prey upon financially distressed consumers. The Federal Trade Commission and our state and federal partners will continue to bring law enforcement actions to stop this insidious fraud,” FTC Chairman Jon Leibowitz said. “If you’re worried about keeping your home, avoid any company that asks for a large fee in advance, guarantees that they’ll stop a foreclosure or modify a loan, or tells you to stop paying your mortgage company and to pay them instead.”

The FTC’s announcement accompanied a meeting of federal and state officials including Chairman Leibowitz, Treasury Secretary Timothy Geithner, Attorney General Eric Holder, Department of Housing and Urban Development Secretary Shaun Donovan, and the state attorneys general from eleven states (Arkansas, Connecticut, Illinois, Iowa, Maryland, Missouri, Nevada, North Carolina, Ohio, Rhode Island and Washington). These federal and state officials met in Washington, D.C., to discuss emerging trends and ongoing efforts against fraud in the mortgage marketplace. In addition to law enforcement, the FTC discussed its ongoing rulemaking proceeding involving mortgage modification services and continuing efforts to educate consumers about avoiding mortgage-related scams.

In today’s two new announced FTC actions, the defendants allegedly falsely claimed that they would obtain a mortgage modification in virtually all cases. According to the FTC’s complaints, after charging homeowners large up-front fees, the defendants often did little or nothing to help them renegotiate their mortgages or stop foreclosure. The FTC seeks to stop the defendants’ deceptive claims and make them forfeit their ill-gotten gains.

Nations Housing Modification Center and its principals allegedly violated the FTC Act and the FTC’s Telemarketing Sales Rule by misrepresenting themselves as a federal government agency or affiliate and falsely claiming that, in return for a $3,000 fee – half due up-front and half due two weeks later – they would obtain mortgage modifications that would make consumers’ loan payments substantially more affordable in virtually every instance. According to the FTC, the defendants also falsely claimed a 90 percent success rate, that only selected customers meeting certain qualifications were offered a loan, and that they had attorneys and forensic accountants on staff. In fact, the FTC alleges that very few homeowners got modifications, the defendants accepted advance fees for services from all applicants, and they had neither lawyers nor accountants on staff.

According to the FTC’s complaint, the defendants solicited consumers by mail designed to look as if it came from a federal government agency, deceptively stating, “a bill has been passed by Congress” that “allows the Nations Housing Modification Center to provide relief for homeowners that are delinquent on their mortgage through the Nations Home Affordable Modification Program.” The defendants also allegedly made misleading statements on their Web site and with consumers who called their toll-free number. The complaint alleges that consumers were misled because the defendants’ promotion is very similar to the real government “Making Home Affordable” program that provides free mortgage loan assistance.

The defendants are Federal Housing Modification Department, Inc., doing business as Nations Housing Modification Center and Loan Modification Reform Association, and Michael A. Trap, Glenn S. Rosofsky, and Bryan P. Rosenberg. The Commission vote to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the District of Columbia on September 16, 2009.

The FTC appreciates the assistance of the Office of the Special Inspector General for the Troubled Asset Relief Program, the office of Jim Freis, Director of the Financial Crimes Enforcement Network of the U.S. Department of the Treasury, the office of Bonnie M. Dumanis, District Attorney, County of San Diego, California, and the Washington, D.C. Division of the U.S. Postal Inspection Service the in this matter.

Infinity Group Services and its president are charged with violating the FTC Act by falsely representing that they would obtain a loan modification in all, or virtually all, instances; that they would give full refunds if they failed to do so; and that they would obtain loan refinancing for an up-front fee of $995.

According to the FTC’s complaint, the defendants’ radio ads and Web site urged consumers to call a toll-free number. Once consumers called, the defendants’ sales personnel promised that, in return for the up-front fee, the company would help them modify their mortgage loans through the Department of Housing and Urban Development’s Hope for Homeowners program. The defendants claimed a high success rate and offered a full refund if they failed. The FTC alleges that the company often failed to obtain loan modifications and either failed to answer or return consumers’ telephone calls or update them about their status. When consumers were able to contact the defendants, they were falsely told that negotiations were proceeding smoothly or that lenders had caused a delay. In many instances, consumers received refunds only after repeatedly complaining to the FTC, the California Attorney General’s Office, or the Better Business Bureau.

The FTC’s complaint further alleged that the defendants also offered mortgage loan refinancing for a “flat fee” of $995 but then sought additional fees ranging from $2,000 to $15,000. In other instances, consumers were led to believe that they had closed on their loans but were later told by the defendants that the loan would not be funded. According to the complaint, the defendants’ Web site stated that there were no hidden costs, but a fine-print footnote stated, “Rates, Fees and Terms are subject to change.”

The defendants are Infinity Group Services, also doing business as IGS, Hope to Homeowners, ASK IGS, and ASK IGS, Inc., and the company’s president, Kahram Zamani. The Commission vote to authorize staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Central District of California, Southern Division, on August 26, 2009.

The FTC also announced developments in four previously filed foreclosure rescue cases:

The FTC has obtained a stipulated federal court order barring Lucas Law Center and its principals from misrepresenting their services and charging up-front fees. The defendants allegedly used an attorney to circumvent California prohibitions against receiving a fee before providing any services. In addition to falsely representing that they would obtain mortgage loan modifications, the defendants allegedly told some homeowners to stop paying their mortgage in order to pay the defendants’ fees of up to $3,995.

The order announced today bars the defendants’ allegedly deceptive practices, pending a trial, and requires them to disable Web sites offering their services and to note the FTC’s lawsuit and the order on the Web sites. The order also requires domain name registrars to prevent any changes to the defendants’ Internet domain name registrations. The order names a permanent receiver over the corporate defendants, extends an earlier asset freeze, and bars the defendants from filing for bankruptcy without the court’s permission. The FTC ultimately seeks consumer restitution and a permanent bar on the defendants’ deceptive practices.

The defendants are LUCASLAWCENTER “INCORPORATED,” Future Financial Services, LLC, Paul Jeffrey Lucas, Christopher Francis Betts, and Frank Sullivan. The complaint was filed in the U.S. District Court for the Central District of California, Southern Division, on July 7, 2009. (see July 15, 2009, press release http://www.ftc.gov/opa/2009/07/loanlies.shtm) The stipulated order was entered on August 24, 2009.

The FTC has obtained a preliminary injunction halting the allegedly deceptive practices of United Credit Adjusters Inc., The Loan Modification Shop, Ltd., and their principals, and freezing their assets, pending a trial. The Commission recently filed an amended complaint in this matter, adding as defendants The Loan Modification Shop, Ltd. and Casey Lynn Cohen, also known as Casey Lynn Collins, alleging that they and one of the original defendants, Ezra Rishty, misrepresented that they would help consumers obtain a mortgage loan modification or stop foreclosure in all or virtually all instances.

The FTC’s original complaint, filed in February 2009, charged seven corporate and three individual defendants with falsely promising to remove negative information from consumers’ credit reports (even information that is accurate and current), charging an up-front fee, and failing to provide written disclosures. (see March 17, 2009, press release http://www.ftc.gov/opa/2009/03/unitedcredit.shtm.) The original defendants are United Credit Adjusters, Inc., doing business as United Credit Adjustors and UCA; United Credit Adjustors, Inc., d/b/a United Credit Adjusters and UCA; United Counseling Association, Inc., d/b/a UCA; Bankruptcy Masters Corp., National Bankruptcy Services Corp., Federal Debt Solutions, Ltd., United Money Tree, Inc., and Ahron E. Henoch, Ezra Rishty, and Gerald Serino, also known as Jerry Serino.

The Commission vote authorizing the staff to file the amended complaint was 4-0. The amended complaint was filed in the U.S. District Court for the District of New Jersey on August 4, 2009. The court entered a preliminary injunction as to all of the defendants on September 1, 2009.

The FTC has obtained preliminary injunctions halting the allegedly deceptive practices of Loss Mitigation Services and its principals, pending a trial. Primarily through direct mail solicitation, the defendants allegedly targeted consumers whose mortgage payments have increased, who have made late payments, and whose homes were in foreclosure. They charged up to $5,500 in advance and promised that a loan modification was assured or virtually assured if consumers hired them. The defendants also misrepresented that they were a department of, or affiliated with, the consumer’s lender or mortgage servicer. In many cases, they failed to obtain loan modifications for consumers, some of whom lost their homes while waiting for the promised results.

The defendants are Loss Mitigation Services, Inc., Synergy Financial Management Corporation, doing business as Direct Lender, and Dean Shafer, Bernadette Perry, and Tony Perry. The complaint was filed in the U.S. District Court for the Central District of California on July 13, 2009. (see July 15, 2009, press release http://www.ftc.gov/opa/2009/07/loanlies.shtm) The litigated preliminary injunction as to the corporate defendants and the stipulated preliminary injunction as to the individual defendants were filed on August 19, 2009.

The FTC has filed an amended complaint in its action pending against Hope Now Modifications, LLC, adding as defendants Michael Kwasnik, Esq. and The Law Firm of Kwasnik, Rodio, Kanowitz & Buckley P.C. The original complaint, filed in March 2009, alleged that the defendants misled consumers about their ability to provide mortgage loan modification and foreclosure relief or to provide refunds if they failed to do so, and misrepresented that they were affiliated with, or part of, the HOPE NOW Alliance, a non-profit organization endorsed by the U.S. Department of Housing and Urban Development. The amended complaint also alleges violations of the Telemarketing Sales Rule.

The Commission vote authorizing the staff to file the amended complaint was 4-0. The complaint and amended complaint were filed in the U.S. District Court for the District of New
Jersey on March 17, 2009, and September 14, 2009, respectively. (see March 24, 2009, press release http://www.ftc.gov/opa/2009/03/newhope.shtm)

The FTC asks homeowners to report foreclosure rescue and mortgage modification scams to FTC.gov or by calling 1-877-FTC-HELP. The FTC makes those complaints available to federal, state, and local law enforcement through the Consumer Sentinel Network. Homeowners in distress can get free help from the Homeowner’s HOPE Hotline 888-995-HOPE (4673), which connects homeowners to HUD-certified housing counselors.

In addition to the FTC’s law enforcement efforts, the agency has initiated a rulemaking proceeding to address the proliferation of companies offering mortgage modification services to determine whether new rules could be useful to protect consumers. The FTC also launched new initiatives to educate consumers on avoiding these scams. For example, the Commission has released a video, “Real People. Real Stories,” featuring people targeted by foreclosure rescue scammers sharing lessons learned from their experiences. The FTC is distributing the video, and a version in Spanish, to more than 5,000 housing counseling and consumer protection organizations around the country, and posting them at FTC.gov/yourhome and YouTube.com/FTCVideos. The Commission’s mortgage-related resources are available at www.ftc.gov/moneymatters.

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 defendants have actually violated the law.

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 1,500 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.

(LoanModsSept2009)
(FTC File Nos. 0923124, 0923073, 0923135, 0923127, 0823211, X090034)

The Federal Trade Commission will host a series of day-long public roundtable discussions to explore the privacy challenges posed by the vast array of 21st century technology and business practices that collect and use consumer data. Such practices include social networking, cloud computing, online behavioral advertising, mobile marketing, and the collection and use of information by retailers, data brokers, third-party applications, and other diverse businesses. The goal of the roundtables is to determine how best to protect consumer privacy while supporting beneficial uses of the information and technological innovation.

The roundtable discussions will consider the risks and benefits of information collection and use in online and offline contexts, consumer expectations surrounding various information management practices, and the adequacy of existing legal and self-regulatory regimes to address privacy interests. Roundtable participants will include stakeholders representing a wide rangeof views and experiences, such as academics, privacy experts, consumer advocates, industry participants and associations, technology experts, legislators, international representatives, and others.

The Privacy Roundtables are free and open to the public. The first will be held Monday, December 7, 2009, at the FTC Conference Center at 601 New Jersey Avenue, N.W., Washington, DC. Pre-registration is not required. Members of the public and press who wish to participate but who cannot attend can view a live Webcast at FTC.gov. The Commission plans to convene additional roundtables in subsequent months, and will post information regarding these events at a later date.

Individuals and organizations may submit requests to participate as panelists and may recommend topics for inclusion on the agenda. The requests and recommendations should be submitted electronically to [email protected]. Prospective panelists should submit a statement detailing their expertise on the issues to be addressed and contact information, no later than October 30, 2009. Panelists will be selected based on expertise and the need to include a broad range of views.

The Commission also invites interested parties to submit written comments or original research. A list of specific questions to inform the first roundtable discussions is available at the Commission’s Web site at www.ftc.gov/bcp/workshops/privacyroundtables/. The Commission will post additional questions to inform subsequent roundtable discussions at a later date.

Comments should refer to “Privacy Roundtables – Comment, Project No. P095416.” To file electronically, follow the instructions and fill out the form at
https://public.commentworks.com/ftc/privacyroundtable1. Paper comments should include the above reference both in the text and on the envelope, and should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex P), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Comments containing confidential material, however, must be filed in paper form, must be clearly labeled “Confidential,” and must comply with Commission Rule 4.9(c). The FTC requests that any paper comments be sent by courier or overnight service, if possible, because postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

Reasonable accommodations for people with disabilities are available upon request. Requests should be submitted via e-mail to [email protected] or by calling Carrie McGlothlin at 202-326-3388. Requests should be made in advance. Please include a detailed description of the accommodation needed, and provide contact information.

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 1,500 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.

(Privacy Roundtable)

For Your Information

September 11, 2009

The Federal Trade Commission warns consumers to use caution when donating to charities that claim to help victims of the devastating California wildfires. While many legitimate groups help victims, scam artists may take advantage of the disaster by creating bogus fundraising operations.

The FTC’s Charity Checklist consumer alert offers tips to ensure that donation dollars benefit the people and organizations consumers want to help. The alert, available at www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt114.shtm, advises consumers to be wary of appeals that tug at the heart strings, but are short on details about how disaster victims will benefit. The FTC advises consumers who are asked to contribute to a charity:

• Don’t be shy about asking who wants your money. Some charities hire professional fundraisers for large-scale mailings, telephone drives, and other solicitations rather than use their own staff or volunteers, and then use a portion of the donations to pay the fundraiser’s fees. If you’re solicited for a donation, ask if the caller is a paid fundraiser, who they work for, and the percentage of your donation that will go to the charity and to the fundraiser. If you don’t get a clear answer – or if you don’t like the answer you get – consider donating to a different organization.
• Call the charity. Find out if the organization is aware of the solicitation and has authorized the use of its name. If not, you may be dealing with a scam artist.
• Ask for written information about the charity, including name, address, and telephone number.
• Contact the office that regulates charitable organizations and charitable solicitations in your state to see if the charity or fundraiser must be registered. If so, check to make sure that the company you’re talking to is registered. For a list of state offices, visit the National Association of State Charity Officials at www.nasconet.org/agencies. Your state office also can verify how much of your donation goes to the charity, and how much goes to fundraising and management expenses. You also can check out charities with the Better Business Bureau’s (BBB) Wise Giving Alliance (www.bbb.org/charity) and GuideStar (www.guidestar.org).
• Trust your gut – and check your records if you have any doubt about whether you’ve made a pledge or a contribution. Callers may try to trick you by thanking you for a pledge you didn’t make. If you don’t remember making the donation or don’t have a record of your pledge, resist the pressure to give.
• Be wary of charities that spring up overnight in connection with current events or natural disasters. They may make a compelling case for your money, but as a practical matter, they probably don’t have the infrastructure to get your donation to the affected area or people.
• Watch out for similar sounding names. Some phony charities use names that closely resemble those of respected, legitimate organizations. If you notice a small difference from the name of the charity you intend to deal with, call the organization you know to check it out.
• Be cautious of promises of guaranteed sweepstakes winnings in exchange for a contribution. According to U.S. law, you never have to give a donation to be eligible to win a sweepstakes.
• Be wary of charities offering to send a courier or overnight delivery service to collect your donation immediately.
• Know the difference between “tax exempt” and “tax deductible.” Tax exempt means the organization doesn’t have to pay taxes. Tax deductible means you can deduct your contribution on your federal income tax return.
• Do not send or give cash donations. Cash can be lost or stolen. For security and tax record purposes, it’s best to pay by credit card. If you’re thinking about giving online, look for indicators that the site is secure, like a lock icon on the browser’s status bar or a URL that begins “https:” (the “s” stands for “secure”).

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 1,700 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.

(FYI 2009 Fires)

Contact Information

MEDIA CONTACT:

Office of Public Affairs
202-326-2180

The Federal Trade Commission today launched the 2009 “We Don’t Serve Teens” public education campaign to help prevent teenagers from getting easy access to alcohol, and to promote compliance with the legal drinking age of 21.

In its annual effort to keep alcohol out of the hands of teens, the FTC and a coalition of public and private organizations will be distributing campaign materials in stores where alcohol is sold; offering public service announcements for TV and radio; and updating the campaign Web site, DontServeTeens.gov. All materials are available in English and Spanish.

Data show that most kids who drink alcohol get it free from family or friends, often with disastrous results. About 5,000 people under 21 die each year from alcohol-related injuries, including auto accidents, homicides, and suicides, according to a U.S. Surgeon General’s report.

“Some friends and family may think underage drinking is harmless, but they’re wrong,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection.

“The evidence is clear,” he added. “Since laws nationwide established the legal drinking age of 21, teen drinking has dropped substantially. It’s a law that protects kids, so our message to adults is, ‘Don’t provide alcohol to teens. It’s unsafe, it’s illegal, it’s irresponsible.’ ”

The FTC’s DontServeTeens.gov Web site features information about the rates and risks of teen drinking, links to state alcohol laws, and things that people can do and say to prevent teens from drinking and getting injured as a result. The site also offers free materials that can be downloaded – including signs that say “The legal drinking age is 21. Thanks for not providing alcohol to teens.” Campaign participants are distributing the materials to businesses and other interested groups across the country.

Public- and private-sector organizations sponsoring the campaign include law enforcement agencies, consumer groups, and representatives of the alcohol and advertising industries.

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 1,700 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.

(Don’t Serve Teens.wpd)

The Federal Trade Commission today told the U.S. Senate Committee on Homeland Security and Governmental Affairs that the agency is working to protect consumers from fraudulent schemes claiming to dispense guaranteed grants from the economic stimulus program, and from other frauds exploiting consumers who are struggling due to the economic downturn.

FTC Chairman Jon Leibowitz testified that the Commission is aggressively pursuing fraudulent marketers who are capitalizing on the American Recovery and Reinvestment Act of 2009 by claiming to offer free government grant money and using other come-ons to bilk money from consumers confronted with job losses, foreclosures, and dwindling retirement accounts. The testimony highlighted the agency’s law enforcement efforts against these and other schemes that prey upon financially distressed consumers, and described its work to educate consumers.

“To con artists, today’s challenging economy presents a golden opportunity — sadly, an opportunity to play on the economic distress of American consumers,” Leibowitz said. The Commission is working with heightened urgency. The FTC and state and federal partners collectively have filed 389 law enforcement actions in FTC-led sweeps targeting fraud during the last six months. For example, in “Operation Short Change,” the FTC, the Department of Justice, and 14 states filed more than 120 law enforcement actions challenging government grant scams, employment and work-at-home scams, advance-fee credit card scams, bogus debt relief services, and get-rich-quick schemes such as buying and selling foreclosed real estate.

The testimony highlighted recent FTC cases involving government grant-related schemes. The Commission charged Grant Connect, LLC, and related entities with misrepresenting their expertise and the availability of grants, and making unauthorized withdrawals from consumers’ bank accounts. Also, the FTC and three states obtained a federal court order halting Grant Writers Institute and its telemarketers, who allegedly charged hundreds of dollars for grant-related services and falsely claimed a 70 percent success rate in securing grant money. The Commission alleged that Web site operators using names like “Grants for You Now” enrolled consumers in a negative-option program with recurring charges of nearly $100 per month. An individual operating as “Cash Grant Institute” allegedly advertised “free grant money” in prerecorded robocalls and operated a fraudulent Web site with images of President Obama and the U.S. Capitol.

The testimony noted several other “Operation Short Change” cases in which the FTC obtained court orders that halted the defendants’ practices and froze their assets. The agency charged Career Hotline and Wagner Borges Ramos, operating as Job Safety USA, with selling bogus job assistance. John Beck/Mentoring of America and Freedom Foreclosure Prevention Services allegedly made false earnings claims in real estate-related scams, and an entity using the name Google Money Tree allegedly made unauthorized debits from consumers’ accounts in a work-at-home scam. The FTC also sued an enterprise that tricked consumers into buying credit cards useful only for buying certain products, and it charged Mutual Consolidated Savings with using robocalls to sell a bogus debt relief program.

In March, having searched the Internet for fraudulent marketing offers, the FTC held a press conference to warn consumers about Web sites promising grant money to start a business, take a vacation, or pay bills. The event alerted consumers throughout the nation and identified www.grants.gov, operated by the U.S. Department of Health and Human Services, as the official source for information about federal government grants. The Commission also issued a consumer alert stating that the promise of stimulus money in return for a fee or consumers’ financial information is always a scam. At the FTC’s request, major online ad networks agreed to screen out ads touting grants for individual consumers.

The testimony described the FTC’s consumer education efforts, including “Operation Short Change” press coverage that reached more than 35 million Americans. The Commission produced a video featuring a former con artist, who talked about his techniques and how consumers can protect themselves from fraud (YouTube.com/ftcvideos). In connection with a federal-state crackdown on mortgage foreclosure rescue scams, the FTC created mortgage-related resources available at www.ftc.gov/moneymatters, and groups such as NeighborWorks America and the Homeowners Preservation Foundation are distributing FTC materials to homeowners. Next month, the Commission will send a video to thousands of community organizations, HUD-certified housing counselors, and state attorneys general, featuring legitimate counselors helping to save people’s homes from foreclosure. The agency is also alerting publishers and broadcasters to claims that can signal a rip-off, and providing public service announcements for the business opportunity section of newspapers’ classified ads.

The testimony also described the FTC’s research to stay abreast of marketplace developments to ensure its preparedness against fraud, including consumer fraud surveys and a fraud forum held earlier this year to help law enforcement, consumer advocates, and businesses understand how fraudulent marketers operate. In conclusion, the testimony expressed the FTC’s commitment to using its resources to stop fraud and help consumers avoid being victimized.

The Commission vote authorizing the testimony was 4-0.

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 1,700 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.

(Senate Testimony)