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Federal Trade Commission Chairman Jon Leibowitz today issued the FTC’s 2009 Annual Report at the American Bar Association’s Section of Antitrust Law Spring Meeting in Washington, DC. “The FTC in 2009,” available on the Commission’s Web site at http://www.ftc.gov/reports/index.shtm, describes the agency’s competition and consumer protection accomplishments since last March. The online version of the report links readers to all source documents, such as press releases, reports, speeches, and educational materials.

“Many Americans have been touched by the economic downturn, whether they are facing mounting debts, struggling to avoid foreclosure, or scrambling to keep up with the rising cost of basic drugs and medical care,” Leibowitz said. “In such times, the Commission must maintain its focus on the areas that most affect American consumers and the U.S. economy.”

The report highlights several of the FTC’s accomplishments in the past year, including:

• Filing suits to keep health care costs down. The Commission continued to bring cases against pharmaceutical companies that would rather collude than compete, entering “pay-for-delay” agreements to keep lower cost generic drugs off the market, and potentially costing consumers and taxpayers billions of dollars a year. The FTC also blocked a merger between two hospital providers in Northern Virginia and stopped two physician groups from boycotting insurance payors to keep reimbursement rates high.
• Filing a record six merger cases for threatening to harm competition in a range of markets, from hospital services and retail goods, to pharmaceuticals and technology products. When it cannot resolve its concerns by consent, the Commission files suit to block or undo anticompetitive mergers.
• Challenging unlawful and deceptive financial services, particularly those related to sub-prime credit or lending. Examples include a settlement with CompuCredit Corporation that will bring consumers an estimated $114 million in credits and cash refunds; six actions against businesses falsely promising foreclosure rescue; and joint actions with state enforcers against 36 credit repair operations that deceptively claimed they could remove accurate and timely negative information from consumer credit reports.
• Urging self-regulatory industry principles for behavioral advertising – the practice of tracking an individual’s online activities to deliver advertising tailored to his or her interests. As part of its efforts to examine consumer privacy issues, FTC staff issued “Self-Regulatory Principles for Online Behavioral Advertising.” The report discusses the potential benefits (including free online content); as well as various privacy concerns, such as the risk that sensitive health or financial information could fall into the wrong hands or be used for unanticipated purposes.
• Launching an ambitious plan to address the virtual explosion of “green” marketing claims. As consumers become more concerned about environmental and energy issues, the Commission initiated an information gathering, law enforcement, and rulemaking plan to ensure that consumers have accurate information about the environmental and energy impact of the products they use. Work this year included workshops on carbon offsets and renewable energy certificates, enforcement actions alleging deceptive claims for home insulation products and for devices advertised to increase gas mileage, and rulemaking to examine energy labeling for light bulbs, televisions, and personal computers and monitors.
• Increasing the effectiveness of cross-border cooperation and enforcement by using the tools provided by the 2006 U.S. SAFE WEB Act and working with multilateral organizations. In addition to key antitrust enforcement efforts in the global marketplace, the FTC also worked with its global partners to shut down one of the world’s largest international e-mail “spam gangs.”

Copies of the report 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 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.

Federal Trade Commission Chairman Jon Leibowitz today issued the FTC’s 2009 Annual Report at the American Bar Association’s Section of Antitrust Law Spring Meeting in Washington, DC. “The FTC in 2009,” available on the Commission’s Web site at http://www.ftc.gov/reports/index.shtm, describes the agency’s competition and consumer protection accomplishments since last March. The online version of the report links readers to all source documents, such as press releases, reports, speeches, and educational materials.

“Many Americans have been touched by the economic downturn, whether they are facing mounting debts, struggling to avoid foreclosure, or scrambling to keep up with the rising cost of basic drugs and medical care,” Leibowitz said. “In such times, the Commission must maintain its focus on the areas that most affect American consumers and the U.S. economy.”

The report highlights several of the FTC’s accomplishments in the past year, including:

• Filing suits to keep health care costs down. The Commission continued to bring cases against pharmaceutical companies that would rather collude than compete, entering “pay-for-delay” agreements to keep lower cost generic drugs off the market, and potentially costing consumers and taxpayers billions of dollars a year. The FTC also blocked a merger between two hospital providers in Northern Virginia and stopped two physician groups from boycotting insurance payors to keep reimbursement rates high.
• Filing a record six merger cases for threatening to harm competition in a range of markets, from hospital services and retail goods, to pharmaceuticals and technology products. When it cannot resolve its concerns by consent, the Commission files suit to block or undo anticompetitive mergers.
• Challenging unlawful and deceptive financial services, particularly those related to sub-prime credit or lending. Examples include a settlement with CompuCredit Corporation that will bring consumers an estimated $114 million in credits and cash refunds; six actions against businesses falsely promising foreclosure rescue; and joint actions with state enforcers against 36 credit repair operations that deceptively claimed they could remove accurate and timely negative information from consumer credit reports.
• Urging self-regulatory industry principles for behavioral advertising – the practice of tracking an individual’s online activities to deliver advertising tailored to his or her interests. As part of its efforts to examine consumer privacy issues, FTC staff issued “Self-Regulatory Principles for Online Behavioral Advertising.” The report discusses the potential benefits (including free online content); as well as various privacy concerns, such as the risk that sensitive health or financial information could fall into the wrong hands or be used for unanticipated purposes.
• Launching an ambitious plan to address the virtual explosion of “green” marketing claims. As consumers become more concerned about environmental and energy issues, the Commission initiated an information gathering, law enforcement, and rulemaking plan to ensure that consumers have accurate information about the environmental and energy impact of the products they use. Work this year included workshops on carbon offsets and renewable energy certificates, enforcement actions alleging deceptive claims for home insulation products and for devices advertised to increase gas mileage, and rulemaking to examine energy labeling for light bulbs, televisions, and personal computers and monitors.
• Increasing the effectiveness of cross-border cooperation and enforcement by using the tools provided by the 2006 U.S. SAFE WEB Act and working with multilateral organizations. In addition to key antitrust enforcement efforts in the global marketplace, the FTC also worked with its global partners to shut down one of the world’s largest international e-mail “spam gangs.”

Copies of the report 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 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.

At the request of the Federal Trade Commission, a U.S. district court has ordered two companies to stop falsely advertising that they are part of a government-endorsed mortgage assistance network and that they successfully modify mortgages for almost all of their clients or else give refunds. In fact, the FTC alleges that the defendants are not affiliated with the legitimate HOPE NOW Alliance mortgage assistance network, often divert one month’s mortgage payment as a fee from distressed homeowners, fail to help them modify their mortgages, and then deny them refunds.

“With many consumers desperate for relief and afraid they might lose their homes in these difficult economic times, some unscrupulous individuals prey on these fears for their own financial gain,” said FTC Chairman Jon Leibowitz. “The New Hope and Hope Now scammers have given consumers false hope under the guise of the government-endorsed HOPE NOW Alliance. We won’t hesitate to take action against these types of con artists now and in the future.”

According to the Commission, the defendants advertised, marketed, and sold mortgage loan modification services to consumers nationwide using Web sites including www.newhopemodifications.com and www.hopenowmod.com. The FTC charged the defendants with violating federal law by misrepresenting that they could obtain mortgage loan modifications for consumers in all or virtually all cases and that they would refund consumers’ money if they did not.

The FTC also charged the defendants with making false claims that they are affiliated with, or part of, the HOPE NOW Alliance, a non-profit organization that is a broad-based coalition of credit and home ownership counselors, lenders, investors, mortgage market participants, and trade associations. The HOPE NOW Alliance offers free assistance to homeowners who may not be able to pay their mortgages and need help working with their mortgage company or loan services. Seeking to capitalize on its name, the defendants called their firms New Hope Modifications and Hope Now Modifications, and used telephone numbers that included “HOPE,” to mimic the real HOPE NOW Alliance hotline which is 888-995-HOPE.

Both defendants’ Web sites contain statements designed to induce consumers to buy their services. For example, the New Hope defendants’ Web sites represent that “Loss Mitigation” is “The Fast and Easy Way To save your home,” and that, “Our experience with the loss mitigation departments of major mortgage companies and servicers gives you the advantage needed to secure a plan you can live with.” The Hope Now defendants’ Web site claims that Hope Now “can help you save your credit and your home, often within 60 to 90 days.” Other claims include, “We STOP FORECLOSURE In Its Tracks!**”

According to the FTC, when consumers call the New Hope or Hope Now toll-free numbers, the defendants’ telemarketers promise them that they can help modify their mortgage loans and prevent foreclosure. Consumers are then told that they first must pay an up-front fee, referred to as a “mitigation escrow fee” before the defendants begin working with them.

The complaints also allege the defendants tell consumers they can receive a full refund if they are not satisfied with the defendants’ services. The complaints state that, in many cases, after consumers have paid the up-front fees, the defendants fail to return their phone calls to provide them with updates about the status of their purported communications with the consumers’ lenders or misrepresent that negotiations are proceeding smoothly. In most instances, the defendants fail to obtain mortgage loan modifications, and in many instances consumers find out later from their lenders that they have not even been contacted by the defendants. Finally, the complaints state that consumers who complain about the lack of service often find they cannot get a refund for the substantial up-front fee they paid.

The complaints and temporary restraining orders announced today were entered against: 1) Hope Now Modifications, LLC, Hope Now Financial Services Corp., also doing business as (dba) Hope Now Modifications, and their principals, Nick Puglia and Salvatore Puglia; and 2) New Hope Property LLC, also dba New Hope Modifications LLC, and its principals, Brian Mammoccio and Donna Fisher. The FTC continues to seek a permanent halt to the defendants’ illegal conduct.

The Commission vote approving each complaint was 4-0. Both complaints were filed on March 17, 2009 in the U.S. District Court for the District of New Jersey. The court entered the temporary restraining orders and related asset freezes on March 19, 2009. The FTC brought the complaints with the invaluable assistance of the HOPE NOW Alliance and the Attorney General of New Jersey.

NOTE: The Commission authorizes the filing of complaints 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 complaints are not a finding or ruling that the defendants actually have violated the law.

Copies of the complaints 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 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. 092-3068 and 092-3079; FTC v. New Hope Property LLC, et al., Case No. 1:09-cv-01203-JBS-JS (D.N.J.); FTC v. Hope Now Modifications LLC, et al., Case No. 1:09-cv-01204-JBS-JS (D.N.J.))
(New Hope.final.wpd)

At the request of the Federal Trade Commission, a U.S. district court has ordered two companies to stop falsely advertising that they are part of a government-endorsed mortgage assistance network and that they successfully modify mortgages for almost all of their clients or else give refunds. In fact, the FTC alleges that the defendants are not affiliated with the legitimate HOPE NOW Alliance mortgage assistance network, often divert one month’s mortgage payment as a fee from distressed homeowners, fail to help them modify their mortgages, and then deny them refunds.

“With many consumers desperate for relief and afraid they might lose their homes in these difficult economic times, some unscrupulous individuals prey on these fears for their own financial gain,” said FTC Chairman Jon Leibowitz. “The New Hope and Hope Now scammers have given consumers false hope under the guise of the government-endorsed HOPE NOW Alliance. We won’t hesitate to take action against these types of con artists now and in the future.”

According to the Commission, the defendants advertised, marketed, and sold mortgage loan modification services to consumers nationwide using Web sites including www.newhopemodifications.com and www.hopenowmod.com. The FTC charged the defendants with violating federal law by misrepresenting that they could obtain mortgage loan modifications for consumers in all or virtually all cases and that they would refund consumers’ money if they did not.

The FTC also charged the defendants with making false claims that they are affiliated with, or part of, the HOPE NOW Alliance, a non-profit organization that is a broad-based coalition of credit and home ownership counselors, lenders, investors, mortgage market participants, and trade associations. The HOPE NOW Alliance offers free assistance to homeowners who may not be able to pay their mortgages and need help working with their mortgage company or loan services. Seeking to capitalize on its name, the defendants called their firms New Hope Modifications and Hope Now Modifications, and used telephone numbers that included “HOPE,” to mimic the real HOPE NOW Alliance hotline which is 888-995-HOPE.

Both defendants’ Web sites contain statements designed to induce consumers to buy their services. For example, the New Hope defendants’ Web sites represent that “Loss Mitigation” is “The Fast and Easy Way To save your home,” and that, “Our experience with the loss mitigation departments of major mortgage companies and servicers gives you the advantage needed to secure a plan you can live with.” The Hope Now defendants’ Web site claims that Hope Now “can help you save your credit and your home, often within 60 to 90 days.” Other claims include, “We STOP FORECLOSURE In Its Tracks!**”

According to the FTC, when consumers call the New Hope or Hope Now toll-free numbers, the defendants’ telemarketers promise them that they can help modify their mortgage loans and prevent foreclosure. Consumers are then told that they first must pay an up-front fee, referred to as a “mitigation escrow fee” before the defendants begin working with them.

The complaints also allege the defendants tell consumers they can receive a full refund if they are not satisfied with the defendants’ services. The complaints state that, in many cases, after consumers have paid the up-front fees, the defendants fail to return their phone calls to provide them with updates about the status of their purported communications with the consumers’ lenders or misrepresent that negotiations are proceeding smoothly. In most instances, the defendants fail to obtain mortgage loan modifications, and in many instances consumers find out later from their lenders that they have not even been contacted by the defendants. Finally, the complaints state that consumers who complain about the lack of service often find they cannot get a refund for the substantial up-front fee they paid.

The complaints and temporary restraining orders announced today were entered against: 1) Hope Now Modifications, LLC, Hope Now Financial Services Corp., also doing business as (dba) Hope Now Modifications, and their principals, Nick Puglia and Salvatore Puglia; and 2) New Hope Property LLC, also dba New Hope Modifications LLC, and its principals, Brian Mammoccio and Donna Fisher. The FTC continues to seek a permanent halt to the defendants’ illegal conduct.

The Commission vote approving each complaint was 4-0. Both complaints were filed on March 17, 2009 in the U.S. District Court for the District of New Jersey. The court entered the temporary restraining orders and related asset freezes on March 19, 2009. The FTC brought the complaints with the invaluable assistance of the HOPE NOW Alliance and the Attorney General of New Jersey.

NOTE: The Commission authorizes the filing of complaints 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 complaints are not a finding or ruling that the defendants actually have violated the law.

Copies of the complaints 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 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. 092-3068 and 092-3079; FTC v. New Hope Property LLC, et al., Case No. 1:09-cv-01203-JBS-JS (D.N.J.); FTC v. Hope Now Modifications LLC, et al., Case No. 1:09-cv-01204-JBS-JS (D.N.J.))
(New Hope.final.wpd)