Markets Wired - Page 1194 of 1417 - Global Financial Market News and Press Releases

Judge Upholds FTC Staff Complaint Against Marketers of Bogus Cancer Cures

An Administrative Law Judge has upheld Federal Trade Commission staff charges against a company and its officer for making deceptive claims that shark cartilage and herbal formulations prevent, treat, and cure cancer, and heal the effects of chemotherapy and radiation. After an administrative trial, the judge ordered the marketers to stop making false and unsubstantiated claims.

“[The] respondents did not possess or rely upon competent and reliable scientific evidence to substantiate their claims,” Chief Administrative Law Judge D. Michael Chappell wrote in his decision.

In September 2008, the FTC staff charged the company, Daniel Chapter One, and its officer James Feijo with deceptive advertising. Their operation was one of 11 challenged in Operation False Cures, a law enforcement sweep aimed at peddlers of phony cancer remedies.

In his decision, Judge Chappell ordered Daniel Chapter One and Feijo not to advertise that their supplements inhibit tumor formation or growth; eliminate tumors; treat or cure cancer; or heal the effects of radiation or chemotherapy unless the claim is true, non-misleading, and based on reliable scientific evidence. He also ordered them to notify customers who bought the products that the advertising claims made were false or unsubstantiated; and not to sell or otherwise disclose identifying information about the customers. In addition, the order prohibits health claims about any dietary supplement, food, drug, or other health-related product or service unless the claims are substantiated by competent and reliable scientific evidence.

The order also contains standard reporting and record-keeping provisions to allow the agency to monitor compliance.

The judge’s initial decision in this matter is subject to review by the full Commission on
its own motion or at the request of any party. The initial decision will become the final decision of the Commission 30 days after it is served on respondents, unless either they file a timely notice of appeal or the Commission places the case on its own docket for review.

Copies of the public version of the initial decision by the administrative law judge are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580.

(FTC File No. 082-3085; Docket No. 9329)

FTC Charges Companies with ‘Bamboo-zling’ Consumers with False Product Claims

The Federal Trade Commission has charged four sellers of clothing and other textile products with deceptively labeling and advertising these items as made of bamboo fiber, when they are made of rayon. The complaints also charge the companies with making false and unsubstantiated “green” claims that their clothing and textile products are manufactured using an environmentally friendly process, that they retain the natural antimicrobial properties of the bamboo plant, and that they are biodegradable.

Three of the companies – Sami Designs, LLC, doing business as (d/b/a) Jonäno; CSE, Inc., d/b/a Mad Mod; and Pure Bamboo, LLC – have settled the FTC’s complaints, agreeing to stop making the false claims and to abide by the Commission’s Textile Fiber Products Identification Act (Textile Act) and Rules. Litigation continues against The M Group, Inc., d/b/a Bamboosa, and its principals.

“With the tremendous expansion of green claims in today’s marketplace, it is particularly important for the FTC to address deceptive environmental claims, so that consumers can trust that the products they buy have the environmentally friendly attributes they want,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “When companies sell products woven from man-made fibers, such as rayon, it is important that they accurately label and advertise those products – both with respect to the fibers they use and to the qualities those fibers possess.”

According to the Commission’s complaints, the companies falsely claim that their rayon clothing and other textile products are “100% bamboo fiber.” They market them under such names as “ecoKashmere,” “Pure Bamboo,” “Bamboo Comfort,” and “BambooBaby.” Rayon is a man-made fiber created from the cellulose found in plants and trees and processed with a harsh chemical that releases hazardous air pollutants. Any plant or tree could be used as the cellulose source – including bamboo – but the fiber that is created is rayon.

The complaints also allege that these four companies make a number of other “green” claims about their clothing and textile products, none of which are true or substantiated. All four companies claim their products retain the bamboo plant’s antimicrobial properties. The settling companies – Jonäno, Mad Mod, and Pure Bamboo – also claim that their products are made using environmentally-friendly manufacturing processes, and both Pure Bamboo and Bamboosa make unqualified claims that their products are biodegradable, and that they will completely break down and return to the elements found in nature in a reasonably short period of time after customary disposal.

As the Commission charges, even if the rayon used in the companies’ clothing and textile products is manufactured using bamboo as the cellulose source, rayon does not retain any natural antimicrobial properties of the bamboo plant. The rayon manufacturing process, which involves dissolving the plant source in harsh chemicals, eliminates any such natural properties of the bamboo plant. Similarly, the Commission charges that the companies’ clothing and textiles are not made using an environmentally friendly process.

The rayon manufacturing process uses toxic chemicals and results in the emission of hazardous air pollutants. And, despite the claims of Pure Bamboo and Bamboosa, the Commission charges that these rayon products are not biodegradable because they will not break down in a reasonably short time after customary disposal. Most clothing and textiles are disposed of either by recycling or sending to a landfill. Neither method results in quick biodegradation.

The complaints also charge these four companies with violating the Textile Act and Rules by, among other things, falsely and deceptively labeling and advertising their clothing and textile products as bamboo, when they should be labeled and advertised as rayon. The FTC also charges three of the companies – Jonäno, Mad Mod, and Pure Bamboo – with violating the Textile Act and Rules by advertising or labeling their products without disclosing where the products were manufactured.

Jonäno, Mad Mod, and Pure Bamboo have agreed to settlements that will ensure they use the proper names to label and advertise the fibers in their products and do not violate the Textile Act and Rules in the future.

The settlements bar these companies from claiming that any textile product: is made of bamboo or bamboo fiber; is manufactured using an environmentally friendly process; or is antimicrobial or retains the anti-microbial properties of the product from which it is made, unless the claims are true, not misleading, and substantiated by competent and reliable scientific evidence. Pure Bamboo is further barred from claiming its products are biodegradable, unless the claim is true, not misleading, and substantiated by reliable and competent scientific evidence. The settlements also bar the three companies from making any claims about the benefits, performance, or efficacy of any clothing or textile product they sell, unless the claims are true, not misleading, and substantiated by competent and reliable evidence.

The proposed orders do allow the companies to describe their products as “rayon made from bamboo,” as long as this is true and can be substantiated.

The Commission’s administrative complaint against The M Group, Inc., d/b/a Bamboosa, and its principals was issued on August 7, 2009.

New Information for Business and Consumers

The FTC has a new publication designed to help businesses selling clothing and textile products that are labeled as bamboo to market their products in ways that are truthful, non-deceptive, and in compliance with the law. “Avoid Bamboo-zling Your Customers,” can be found on the Commission’s Web site at ftc.gov/bcp/edu/pubs/business/alerts/alt172.shtm, and provides useful information on how to correctly label and advertise textiles that are rayon made from bamboo. The Commission also has a new alert entitled “Have You Been Bamboozled by Bamboo Fabrics?” that provides useful information for consumers shopping for bamboo-based fabrics. It can be found on the FTC’s Web site at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt160.shtm.

The Commission votes approving the administrative complaints and proposed consent orders were each 4-0. The orders will be subject to public comment for 30 days, until September 10, 2009, after which the Commission will decide whether to make them final. Written comment should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. To file a public comment electronically, please click on the following hyperlink: http://www.ftc.gov/os/2009/08/bamboopubliccomment.pdf and follow the instructions.

NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the law has or is being violated, and it appears to the Commission that a proceeding is in the public interest. A complaint is not a finding or ruling that the defendants have actually violated the law. The consent agreements are for settlement purposes only and do not constitute an admission of a violation of the complaint. When the Commission issues an 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 $16,000.

Copies of the documents related to these cases are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. 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.

(FTC File Nos. Bamboosa, 082-3184; Jonäno, 082-3194; Pure Bamboo, 082-3193, and Mad Mod, 082-3181)(Bamboo.final.wpd)

Two Companies Pay Civil Penalties to Settle FTC Charges; Failed to Give Required Notices to Fired Workers and Rejected Job Applicants

Two companies that fired workers and rejected job applicants based on background checks without informing them of their rights under the Fair Credit Reporting Act (FCRA) have agreed to settle Federal Trade Commission charges that they violated federal law. The settlements require the defendants to pay $77,000 in civil penalties and bar future FCRA violations.

Employers often conduct background checks and seek employees’ and job applicants’ credit records, criminal histories, and other background information from a consumer reporting agency (CRA) such as a credit bureau or background screening company. The FCRA requires that before taking adverse employment actions based on these consumer reports – for example, firing employees or denying job applications – employers must provide the employees or applicants with a copy of the report, identify the CRA that provided it, notify them that the CRA did not make the adverse action decision, and inform them that they have the right to obtain a free copy of the report from the CRA and dispute its accuracy.

According to the FTC’s two complaints, both defendants contracted with a CRA to conduct background checks including criminal record reviews for employees and job applicants, and made hiring and firing decisions based on those background checks. The companies allegedly failed to provide the employees and applicants with pre-adverse action notices and adverse action notices as required by the FCRA.

The settlements require Quality Terminal Services, LLC and Rail Terminal Services, LLC to pay $53,000 and $24,000 in civil penalties, respectively, and to provide the FCRA-required notices in the future. The settlements also contain record-keeping and reporting provisions to allow the FTC to monitor compliance.

The Center for Democracy and Technology (CDT) filed a petition with the Commission complaining of adverse action notice violations by the defendants. The FTC acknowledges CDT’s invaluable contribution in bringing these matters to the agency’s attention. The Commission vote to refer the complaints and stipulated final orders to the Department of Justice for filing was 4-0. The action against Rail Terminal Services was filed in the U.S. District Court for the Western District of Washington; the action against Quality Terminal Services was filed in the U.S. District Court for the District of Colorado.

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. A complaint is not a finding or ruling that defendants have actually violated the law. Stipulated court orders are for settlement purposes only and do not necessarily constitute an admission by the defendants of a law violation. Stipulated orders have the force of law when signed by the 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 1,500 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.

(FTC File No. 0823022, 0823023)
(QTS, RTS)

Commission Reopens Public Comment Period On the Negative Option Rule

The Commission has reopened the public comment period for the review of its Rule Concerning the Use of Prenotification Negative Option Plans at the request of an organization and state and local governments seeking additional time. The public comment period has been extended for 60 days, until October 13, 2009. Information on how and where to submit comments can be found in a new Federal Register notice on the Commission’s Web site.

The vote approving the extension of the public comment period was 4-0. (FTC File No. P064202; the staff contacts are Robin R. Spector, Bureau of Consumer Protection, 202-326-3740, and Matthew Wilshire, Bureau of Consumer Protection, 202-326-2976; see press release dated May 11, 2009, at http://www.ftc.gov/opa/2009/05/budget.shtm.)

Copies of the documents mentioned in this release are available from the FTC’s Web site 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 39.2009.wpd)

Tips for Consumers About Layaway Plans

For a long time, layaway plans have provided an alternative to paying cash or using credit. The retailer holds merchandise in reserve until the consumer pays for it in full. In recent years, Internet layaway sites have provided online shoppers with a similar option.

According to a new consumer alert from the Federal Trade Commission, the nation’s consumer protection agency, it’s important to ask questions about the layaway plan and the refund policy when considering the layaway option. The alert, Layaway: Another Way to Buy, also tells consumers how to check out the business offering the plan.

To learn more, go to http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt173.shtm.

(FYI layaway plans)

New FTC Rule Prohibits Petroleum Market Manipulation

The Federal Trade Commission today issued a Final Rule that will prohibit market manipulation in the petroleum industry. The Rule will prohibit fraud or deceit in wholesale petroleum markets, and omissions of material information that are likely to distort petroleum markets. The FTC’s approval of the Rule concludes a proceeding that incorporated several rounds of public comment. The Final Rule will become effective on November 4, 2009. The Commission issued this Rule under the Energy Independence and Security Act of 2007, pursuant to a provision included by Senator Maria Cantwell of Washington State.

“This new Rule will allow us to crack down on fraud and manipulation that can drive up prices at the pump,” said FTC Chairman Jon Leibowitz. “We will police the oil markets – and if we find companies that are manipulating the markets, we will go after them.”

The Final Rule announced today retains the anti-fraud approach of the April 2009 revised proposed rule. The Rule prohibits fraudulent or deceptive conduct that could harm wholesale petroleum markets. Specific examples of such conduct include false public announcements of planned pricing or output decisions, false statistical or data reporting, and wash sales intended to disguise the actual liquidity of a market or the price of a particular product. The Rule also prohibits material omissions from a statement that, although true, is misleading under the circumstances.

Specifically, the Final Rule prohibits any person, directly or indirectly, in connection with the purchase or sale of crude oil, gasoline, or petroleum distillates at wholesale, from a) knowingly engaging in any act, practice, or course of business – including making any untrue statement of material fact – that operates or would operate as a fraud or deceit upon any person; or b) intentionally failing to state a material fact that under the circumstances renders a statement made by such person misleading, provided that such omission distorts or is likely to distort market conditions for any such product.

Anyone violating the Rule faces civil penalties of up to $1 million per violation per day, in addition to any relief available to the Commission under the FTC Act.

The Commission vote to issue the Final Rule was 3-1, with Commissioner William E. Kovacic voting no, Chairman Jon Leibowitz issuing a separate statement, Commissioner Kovacic issuing a separate dissenting statement, and Commissioner J. Thomas Rosch issuing a separate concurring statement – each of which can be found as links to this press release and on the FTC’s Web site. The Final Rule will be available on the FTC’s Web site and will be published in the Federal Register later this month. Copies of the Final Rule can be found on the FTC’s Web site at http://www.ftc.gov/policy/federal-register-notices/prohibitions-market-manipulation-16-cfr-part-317.

Copies of the Federal Register notice are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

(FTC File No. P082900)
(Manip. Rule.wpd)

Live Webcast: FTC Roundtable on Protecting Consumers in Debt Collection Litigation and Arbitration

Today is the final day of a public event the Federal Trade Commission and the Searle Center on Law, Regulation, and Economic Growth at Northwestern University School of Law are hosting on consumer protection issues in debt collection proceedings. This is the first in a series of FTC roundtable discussions on these topics.

WHAT:	“Protecting Consumers in Debt Collection Litigation and Arbitration: A Roundtable Discussion”
WHEN:	August 6, 2009 – 9 a.m. to 5 p.m., Central Time
WHERE:	Thorne Auditorium, Northwestern Law School 375 E. Chicago Ave. (corner of Lake Shore Drive) Chicago, IL 60611

A live webcast, agenda, and information about the participants are available at http://www.ftc.gov/bcp/workshops/debtcollectround/index.shtm.

Interested parties are also highly encouraged to submit written comments or original research through September 1, 2009. Comments should refer to “Debt Collection Roundtable – Comment, Project No. P094806.” To file electronically, follow the instructions and fill out the form at https://secure.commentworks.com/ftc-debtcollectroundtable1.

Court Halts U.S. Internet Seller Deceptively Posing as U.K. Home Electronics Site

In the wake of a Federal Trade Commission complaint against a company that deceptively sold electronics to hundreds of British consumers, the company has agreed to stop its allegedly illegal tactics until the case is decided in federal court.

Using the Web site names www.bestpricedbrands.co.uk and www.bitesizedeals.co.uk, the California company tricked consumers into believing that they were buying from a company operating in the United Kingdom and were protected by manufacturer warranties that were valid there, according to the FTC complaint. When consumers received the cameras, video games, and other electronic goods, they discovered they had been charged unexpected import duties, were left with invalid warranties, and would be charged draconian cancellation and refund fees if they attempted to send the merchandise back, the complaint stated.

This is the first case the FTC has brought against a U.S. company exclusively doing business abroad. The U.S. SAFE WEB Act of 2006 gave the FTC the authority to sue U.S. companies deceiving foreign consumers, and was part of a strategy to prevent the United States from becoming a haven for fraud.

The Pasadena, California-based defendants charged in the case are Balls of Kryptonite, doing business as Best Priced Brands and Bite Size Deals, and its owner, Jaivin Karnani. Due in part to the defendants’ deceptive use of Web sites ending in “.uk”, the complaint alleges that consumers in the United Kingdom were duped into purchasing goods that carried no manufacturer warranties, were misled about their rights to return or exchange goods under U.K. regulations, were denied the option of cancelling orders, and were sent goods that were different from those depicted on the defendants’ Web sites – and in some cases were unusable.

The FTC also charged the defendants with deceiving consumers about their participation
in a program in which U.S. companies assure customers in the European Union that they secure the customers’ personal information, as required by European law. Known as the EU/U.S. Safe Harbor program, it is administered by U.S. Department of Commerce. The complaint alleges that although the defendants claimed to participate in the EU/U.S. Safe Harbor program, they did not.

European consumers who want to know whether a U.S. company believes it is complying
with European law by participating in the Safe Harbor program can go to http://export.gov/safeharbor to see if the company has self-certified.

The FTC was assisted in its investigation by the U.K. Office of Fair Trading, one of the FTC’s principal international law enforcement partners. Many consumers in the United Kingdom registered complaints with the FTC by using the Web site www.econsumer.gov. Established by consumer protection agencies from 25 countries, this Web site collects consumers’ complaints about problems in other countries, and facilitates international enforcement cooperation by making the complaints available to international consumer protection agencies through the FTC’s Consumer Sentinel Network.

The Commission vote authorizing the complaint was 4-0. The complaint was filed with
the request for a temporary restraining order on July 20, 2009, in the U.S. District Court for the Central District of California.

On July 31, 2009, the court entered a temporary restraining order in which the defendants agreed to halt their deceptive representations and provide an accounting of their assets.

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 or respondent has actually violated the law. The stipulated final order is for settlement purposes only and does not constitute an admission by the defendants of a law violation.

(FTC File No. 092-3081)
(Best Priced Brands NR.wpd)

FTC Sues Prepaid Calling Card Distributor for Deceiving Consumers

The Federal Trade Commission extended its crackdown in the billion-dollar prepaid calling card industry, asking a U.S. district court to permanently halt the illegal practices of a major calling card distributor and its principals. The FTC has charged Diamond Phone Card, Inc., a distributor of prepaid calling cards based in Elmhurst, New York, and its principals with advertising that the calling cards they sold provided more minutes than they actually delivered. The complaint also alleges that the defendants failed to adequately disclose fees that could reduce the value of the calling cards. The FTC is seeking to force the defendants to give up the money they made through their deceptive tactics.

Diamond Phone Card marketed the cards to recent immigrants, many of whom rely on calling cards to stay in touch with family and friends in other countries. The defendants’ advertisements made bold claims about the number of minutes the cards would provide for calls to a wide range of international locations, including the Dominican Republic, El Salvador, Mexico, India, Pakistan, and Guatemala. But the FTC charges that consumers didn’t receive the number of minutes advertised. For example, a calling card claiming to deliver 400 calling minutes to Mexico provided only 106 minutes of calling time, and one claiming to deliver 50 minutes of calling time to Honduras actually delivered only 20 minutes.

The FTC’s complaint also alleges that the defendants failed to properly disclose “maintenance” and other fees. For example, the defendants’ ads trumpeted in large, colorful text the number of calling minutes their cards purportedly would provide. Less obvious to consumers, however, was a 79-cent “maintenance” fee that applied to $2 and $5 cards, and was “disclosed” in nearly illegible print on the very bottom of the advertisement.

This complaint follows two recent FTC actions against distributors of prepaid calling cards. In February 2009, Alternatel, Voice Prepaid, and Mystic Prepaid agreed to pay $2.25 million to resolve FTC allegations that they had deceived consumers. In June 2009, another leading distributor of prepaid cards, Clifton Telecard Alliance, agreed to pay $1.3 million to settle similar FTC charges. The FTC has established a joint federal-state task force to address deceptive advertising and marketing practices in the prepaid calling card industry.

The complaint against Diamond Phone Card, Inc., and the company’s principals, Nasreen Gilani and Samsuddin Panjawani, was filed in U.S. District Court for the Eastern District of New York. The Commission vote to file the complaint was 4-0.

This case was brought with the invaluable assistance of El Salvador’s Defensoría del Consumidor, Colombia’s Superintendencia de Industria y Comercio, the Egypt Consumer Protection Authority, Mexico’s Procuraduría Federal del Consumidor (PROFECO), Panama’s Autoridad de Protección al Consumidor y Defensa de la Competencia (ACODECO), and Peru’s Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual (INDECOPI).

(FTC File No. 082-3038)
(DiamondPhone)

FTC Seeks Comment on ConocoPhillips’s Petition to Amend Its Propane Supply Agreement with NGL

The Federal Trade Commission is seeking public comment on a petition from ConocoPhillips requesting approval to amend its propane supply agreement with NGL Supply, Inc., pursuant to a 2002 Commission consent order. The FTC order was issued to resolve competitive concerns raised by the merger of Conoco Inc. and Phillips Petroleum Company required ConocoPhillips to divest assets relating to the propane business and to supply propane to the acquirer of the propane business.

To comply with the order, ConocoPhillips sold the Phillips propane business to NGL. ConocoPhillips is now petitioning the Commission to approve amendments to the propane supply agreement with NGL to ensure that ConocoPhillips has adequate stocks of propane at relevant times of the year, and is able to continue to supply propane to its own customers and to NGL. As detailed in the petition, a public version of which can be found on the FTC’s Web site and as a link to this press release, the proposed amendments govern the summer supply of propane to NGL when ConocoPhillips’s supplies drop below certain levels.

The Commission is accepting public comments on the petition for 30 days, beginning
today and continuing through September 8, 2009. To file a public comment, please click on the
following hyperlink: http://www.ftc.gov/os/2009/08/C4058publiccomment.pdf and follow the
instructions at that site. All comments will be posted on the Commission’s Web site and become part of the public record. (FTC Docket No. C-4058; the staff contact is Daniel P. Ducore,
Bureau of Competition, 202-326-2526; see press release dated September 22, 2002, at
http://www.ftc.gov/opa/2002/09/fyi0250.shtm.)

(FYI 38.2009.wpd)

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts: