FTC Approves Federal Register Notice Amending Appliance Labeling Rule Regarding Metal Halide Lamps

Commission approval of Federal Register notice– Following a public comment period, the Commission has approved the publication of a notice in the Federal Register amending the Appliance Labeling Rule with regard to the labeling requirements for metal halide lamp fixtures. As detailed in the notice, which will be published soon and is available now on the FTC’s Web site and as a link to this press release, Section 324(d) of the Energy Independence and Security Act of 2007 (EISA) requires the Commission to develop labeling and reporting requirements for metal halide lamp fixtures by July 1, 2008. The EISA also requires the FTC to conduct a rulemaking to examine the effectiveness of the current lighting disclosures required by the Commission. That rulemaking will be initiated at a later date.

The notice announced today focuses specifically on metal halide fixtures. Metal halide lamps produce a bright white light and offer the best color rendition among high-intensity lighting types. They are used to light large outdoor areas, such as gymnasiums and sports arenas. According to the notice, the FTC is amending the Appliance Labeling Rule to specifically address labeling rules for the fixture packaging and ballasts of such metal halide lamps. The Commission vote approving publication of the notice was 4-0. (FTC File No. R611004; the staff contact is Robert S. Kaye, Bureau of Consumer Protection, 202-326-2215; see press release dated March 14, 2008.)

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 33.2008.wpd)

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  4. FTC Announces Lower Price Cap for Extra Credit Report Copies; FTC Continues Crackdown on Mortgage Relief Scams; Three More Defendants Added to Operation Stolen Hope

FTC Challenges Carlyle Partners’ Purchase of INEOS’s Sodium Silicate Businesses

The Federal Trade Commission today issued a complaint charging that Carlyle Partners IV, L.P.’s (Carlyle) proposed acquisition of the world-wide sodium silicate and silicas business of INEOS Group Limited (INEOS) would be anticompetitive and in violation of the antitrust laws. Carlyle owns PQ Corporation (PQ), and the transaction as proposed would therefore combine PQ – the largest sodium silicate producer and seller in the highly concentrated Midwest region of the United States – with INEOS, its third-largest competitor.

To remedy the alleged anticompetitive effects of the transaction, the companies have entered into a consent agreement with the Commission that requires them to sell PQ’s sodium silicate plant and businesses in Utica, Illinois, to an FTC-approved buyer. The order also requires the companies to license all of the intellectual property related to sodium silicate product at the Utica plant.

“The consent agreement underscores that even when the to-be-acquired firm is relatively small, the Commission has concerns when the market is highly concentrated and characterized by an absence of strong competition,” said Jeffrey Schmidt, Director of the FTC’s Bureau of Competition.

The Relevant Product Market

Both PQ and INEOS participate in the sodium silicate market world-wide, and PQ is the largest sodium silicate producer in the United States. Sodium silicate has a variety of direct uses and also is used in the production of downstream silicate derivatives, also known as silicas. It is typically sold in an aqueous solution that is 65 percent water; sodium silicate markets exhibit strong regional characteristics because of high transportation costs relative to the value of the product. Because there are no close chemical substitutes for sodium silicate, the FTC contends that other products do not constrain its pricing.

The Commission’s Complaint

According to the Commission’s complaint, the proposed acquisition would be anticompetitive and violate Section 5 of the FTC Act and Section 7 of the Clayton Act as amended, in that it would combine the largest firm in the Midwest U.S. sodium silicate market, PQ, with the third-largest firm in that market, INEOS. Currently PQ has 50 percent of the market and INEOS has 12 percent of the market. The FTC contends that in addition to reducing direct competition between the two companies, the proposed acquisition could lead to coordination among competing firms in the sodium silicate market.

The Midwest market for sodium silicate already is conducive to such coordination due to several structural features, including the facts that sodium silicate is a homogenous product, pricing information is readily available, and competitors recognize that the market is essentially a duopoly in which the top two firms, PQ and Occidental, operate interdependently. Based on concentration levels and competitive concerns, the complaint states that the acquisition could make coordinated interaction between the competing firms more likely, leading to higher prices for sodium silicate. Finally, the complaint alleges that entry into the relevant market would not be timely, likely, or sufficient to deter the acquisition’s anticompetitive impacts.

Terms of the Consent Order

The Commission’s consent order is designed to remedy the alleged anticompetitive effects of the acquisition. The order requires Carlyle to divest PQ’s sodium silicate plant in Utica, Illinois, to Oak Hill Acquisition Company, LLC (Oak Hill), or another FTC-approved buyer if Oak Hill is later found to be an unacceptable acquirer, within five days of acquiring INEOS. Oak Hill is a new firm created for the purpose of acquiring the Utica plant. However, its principal owner has been involved in many industrial investments over the past 25 years in the chemical, software, telecom, construction, real estate, and energy areas.

The consent order contains several other terms to ensure that the sale of the Utica plant to Oak Hill is successful and that competition continues within the market. For example, in addition to allowing the Commission to require Carlyle to find another buyer if Oak Hill is found to be unacceptable, it requires Carlyle and INEOS to make available to any buyer the necessary personnel, assistance, and training to enable it to successfully operate the Utica plant for two years after its sale.

In addition, the companies must enter into an employee services agreement covering certain union employees at the Utica plant to ensure that they can keep their jobs after the sale. Next, the order allows the FTC to appoint an interim monitor to ensure that the companies comply with their obligations following the divestiture, as well as a divestiture trustee if PQ fails to comply fully with the terms of the order. Finally, the order requires the companies to notify the FTC of any change in their corporate structures that may affect compliance with its terms. The order will expire in 10 years.

The Commission vote to accept the complaint and proposed consent order was 4-0. The FTC will publish an announcement regarding the agreement in the Federal Register shortly.

The agreement will be subject to public comment for 30 days, beginning today and continuing through July 29, 2008, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-135, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments also can be filed electronically using the Commission’s Web site.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent 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 $11,000.

Copies of the Commission’s complaint, consent order, and analysis to aid public comment are available from the FTC’s web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to [email protected], or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.

(INEOS.final)
(FTC File No. 071-0203)

Related posts:

  1. Commission Approves Final Consent Order in Matter of National Association of Music Merchants, Inc.
  2. Commission Appoints Interim Monitor, Approves Interim Monitor Agreement in Matter of Reed Elsevier NV/ChoicePoint, Inc.
  3. FTC Issues New Update of Horizontal Merger Investigation Data Report
  4. FTC Launches Suit to Block Merger of CCC and Mitchell

FTC Challenges Carlyle Partners’ Purchase of INEOS’s Sodium Silicate Businesses

The Federal Trade Commission today issued a complaint charging that Carlyle Partners IV, L.P.’s (Carlyle) proposed acquisition of the world-wide sodium silicate and silicas business of INEOS Group Limited (INEOS) would be anticompetitive and in violation of the antitrust laws. Carlyle owns PQ Corporation (PQ), and the transaction as proposed would therefore combine PQ – the largest sodium silicate producer and seller in the highly concentrated Midwest region of the United States – with INEOS, its third-largest competitor.

To remedy the alleged anticompetitive effects of the transaction, the companies have entered into a consent agreement with the Commission that requires them to sell PQ’s sodium silicate plant and businesses in Utica, Illinois, to an FTC-approved buyer. The order also requires the companies to license all of the intellectual property related to sodium silicate product at the Utica plant.

“The consent agreement underscores that even when the to-be-acquired firm is relatively small, the Commission has concerns when the market is highly concentrated and characterized by an absence of strong competition,” said Jeffrey Schmidt, Director of the FTC’s Bureau of Competition.

The Relevant Product Market

Both PQ and INEOS participate in the sodium silicate market world-wide, and PQ is the largest sodium silicate producer in the United States. Sodium silicate has a variety of direct uses and also is used in the production of downstream silicate derivatives, also known as silicas. It is typically sold in an aqueous solution that is 65 percent water; sodium silicate markets exhibit strong regional characteristics because of high transportation costs relative to the value of the product. Because there are no close chemical substitutes for sodium silicate, the FTC contends that other products do not constrain its pricing.

The Commission’s Complaint

According to the Commission’s complaint, the proposed acquisition would be anticompetitive and violate Section 5 of the FTC Act and Section 7 of the Clayton Act as amended, in that it would combine the largest firm in the Midwest U.S. sodium silicate market, PQ, with the third-largest firm in that market, INEOS. Currently PQ has 50 percent of the market and INEOS has 12 percent of the market. The FTC contends that in addition to reducing direct competition between the two companies, the proposed acquisition could lead to coordination among competing firms in the sodium silicate market.

The Midwest market for sodium silicate already is conducive to such coordination due to several structural features, including the facts that sodium silicate is a homogenous product, pricing information is readily available, and competitors recognize that the market is essentially a duopoly in which the top two firms, PQ and Occidental, operate interdependently. Based on concentration levels and competitive concerns, the complaint states that the acquisition could make coordinated interaction between the competing firms more likely, leading to higher prices for sodium silicate. Finally, the complaint alleges that entry into the relevant market would not be timely, likely, or sufficient to deter the acquisition’s anticompetitive impacts.

Terms of the Consent Order

The Commission’s consent order is designed to remedy the alleged anticompetitive effects of the acquisition. The order requires Carlyle to divest PQ’s sodium silicate plant in Utica, Illinois, to Oak Hill Acquisition Company, LLC (Oak Hill), or another FTC-approved buyer if Oak Hill is later found to be an unacceptable acquirer, within five days of acquiring INEOS. Oak Hill is a new firm created for the purpose of acquiring the Utica plant. However, its principal owner has been involved in many industrial investments over the past 25 years in the chemical, software, telecom, construction, real estate, and energy areas.

The consent order contains several other terms to ensure that the sale of the Utica plant to Oak Hill is successful and that competition continues within the market. For example, in addition to allowing the Commission to require Carlyle to find another buyer if Oak Hill is found to be unacceptable, it requires Carlyle and INEOS to make available to any buyer the necessary personnel, assistance, and training to enable it to successfully operate the Utica plant for two years after its sale.

In addition, the companies must enter into an employee services agreement covering certain union employees at the Utica plant to ensure that they can keep their jobs after the sale. Next, the order allows the FTC to appoint an interim monitor to ensure that the companies comply with their obligations following the divestiture, as well as a divestiture trustee if PQ fails to comply fully with the terms of the order. Finally, the order requires the companies to notify the FTC of any change in their corporate structures that may affect compliance with its terms. The order will expire in 10 years.

The Commission vote to accept the complaint and proposed consent order was 4-0. The FTC will publish an announcement regarding the agreement in the Federal Register shortly.

The agreement will be subject to public comment for 30 days, beginning today and continuing through July 29, 2008, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-135, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments also can be filed electronically using the Commission’s Web site.

NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent 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 $11,000.

Copies of the Commission’s complaint, consent order, and analysis to aid public comment are available from the FTC’s web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to [email protected], or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.

(INEOS.final)
(FTC File No. 071-0203)

Related posts:

  1. Commission Approves Final Consent Order in Matter of National Association of Music Merchants, Inc.
  2. Commission Appoints Interim Monitor, Approves Interim Monitor Agreement in Matter of Reed Elsevier NV/ChoicePoint, Inc.
  3. FTC Issues New Update of Horizontal Merger Investigation Data Report
  4. FTC Launches Suit to Block Merger of CCC and Mitchell

FTC Reports on Alcohol Marketing and Self-Regulation

A new Federal Trade Commission report on alcohol marketing and youth examines industry efforts to reduce the likelihood that alcohol advertising will target those under the legal drinking age of 21. It also announces a new system for monitoring alcohol industry compliance with self-regulatory programs. The report explains where alcohol suppliers spend their promotional dollars, provides data on compliance with the industry’s advertising placement standard, discusses the status of external review of advertising complaints, and provides information about the Commission’s education program to reduce teen access to alcohol.

This is the third FTC report on the status of alcohol industry self-regulation. The Commission’s first report in 1999 criticized the voluntary guidelines, which at times permitted alcohol ads to appear in media for which up to half the audience consisted of children and youth, and for failing to provide for third-party consideration of complaints about compliance with the guidelines. The FTC’s 2003 report announced that the alcohol industry had agreed to obtain audience data before placing ads, and required that at least 70 percent of the audience for print, radio, and television ads consist of adults over 21. Noting that one industry group had adopted third-party review of advertising, the report continued to urge the remaining two groups to follow suit.

The new report, based on data provided by 12 major alcohol suppliers in response to FTC orders, is the first to present detailed information about how alcohol companies allocate their promotional dollars. It finds that about 42 percent of such expenditures are used for traditional television, radio, print, and outdoor advertising; about 40 percent are used to help wholesalers and retailers promote alcohol; about 16 percent are used for sponsorships; and two percent are directed to other efforts, such as Internet and digital advertising.

With regard to advertising placement, the FTC found that more than 92 percent of radio, television, and print ads disseminated by the 12 suppliers met the 70 percent standard. Because placements that missed the target were concentrated in smaller media, more than 97 percent of total alcohol advertising “impressions” (individual exposures to advertising) met the 70 percent standard. The report also notes that all three segments of the alcohol industry have now adopted systems for third-party review of advertising complaints.

In addition, the report provides an update on the FTC’s “We Don’t Serve Teens” alcohol consumer education program. Supported by a broad base of public and private organizations, including federal and state organizations, the alcohol and advertising industries, and consumer groups, “We Don’t Serve Teens” provides information about the importance of restricting underage access to alcohol. In 2007, “We Don’t Serve Teens” public service announcements (PSAs) generated more than 1.1 billion advertising impressions, with a market value of over $9 million.

The report recommends that the industry adopt the 70 percent standard for event sponsorships, and that self-regulatory review boards accept complaints from competitors and anonymous complainants. It also found that a 70 percent placement standard has now been adopted for Internet advertising, at the agency’s request. Finally, it announces a new monitoring system to help the agency assess the industry’s efforts on an ongoing basis. Each year, the Commission will issue orders requiring two to four suppliers to provide information about advertising and marketing practices and compliance with self-regulatory guidelines.

The Commission vote to approve the Report on Alcohol Marketing and Advertising was 4-0. Commissioner Pamela Jones Harbour issued a separate statement concurring in part and dissenting in part. This statement can be found as a link to this press release on the FTC’s Web site.

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.

Related posts:

  1. FTC Orders Alcoholic Beverage Manufacturers to Provide Data for Agency’s Fourth Major Study on Alcohol Advertising
  2. FTC Seeks Second Round of Public Comments for Follow-up Study of Alcohol Industry’s Voluntary Guidelines for Reducing Advertising and Marketing to Underage Audiences
  3. FTC Seeks Public Comment on Proposed Information Requests to Alcohol Beverage Manufacturers
  4. FTC Reports on Alcohol Marketing and Self-Regulation

FTC Reports on Alcohol Marketing and Self-Regulation

A new Federal Trade Commission report on alcohol marketing and youth examines industry efforts to reduce the likelihood that alcohol advertising will target those under the legal drinking age of 21. It also announces a new system for monitoring alcohol industry compliance with self-regulatory programs. The report explains where alcohol suppliers spend their promotional dollars, provides data on compliance with the industry’s advertising placement standard, discusses the status of external review of advertising complaints, and provides information about the Commission’s education program to reduce teen access to alcohol.

This is the third FTC report on the status of alcohol industry self-regulation. The Commission’s first report in 1999 criticized the voluntary guidelines, which at times permitted alcohol ads to appear in media for which up to half the audience consisted of children and youth, and for failing to provide for third-party consideration of complaints about compliance with the guidelines. The FTC’s 2003 report announced that the alcohol industry had agreed to obtain audience data before placing ads, and required that at least 70 percent of the audience for print, radio, and television ads consist of adults over 21. Noting that one industry group had adopted third-party review of advertising, the report continued to urge the remaining two groups to follow suit.

The new report, based on data provided by 12 major alcohol suppliers in response to FTC orders, is the first to present detailed information about how alcohol companies allocate their promotional dollars. It finds that about 42 percent of such expenditures are used for traditional television, radio, print, and outdoor advertising; about 40 percent are used to help wholesalers and retailers promote alcohol; about 16 percent are used for sponsorships; and two percent are directed to other efforts, such as Internet and digital advertising.

With regard to advertising placement, the FTC found that more than 92 percent of radio, television, and print ads disseminated by the 12 suppliers met the 70 percent standard. Because placements that missed the target were concentrated in smaller media, more than 97 percent of total alcohol advertising “impressions” (individual exposures to advertising) met the 70 percent standard. The report also notes that all three segments of the alcohol industry have now adopted systems for third-party review of advertising complaints.

In addition, the report provides an update on the FTC’s “We Don’t Serve Teens” alcohol consumer education program. Supported by a broad base of public and private organizations, including federal and state organizations, the alcohol and advertising industries, and consumer groups, “We Don’t Serve Teens” provides information about the importance of restricting underage access to alcohol. In 2007, “We Don’t Serve Teens” public service announcements (PSAs) generated more than 1.1 billion advertising impressions, with a market value of over $9 million.

The report recommends that the industry adopt the 70 percent standard for event sponsorships, and that self-regulatory review boards accept complaints from competitors and anonymous complainants. It also found that a 70 percent placement standard has now been adopted for Internet advertising, at the agency’s request. Finally, it announces a new monitoring system to help the agency assess the industry’s efforts on an ongoing basis. Each year, the Commission will issue orders requiring two to four suppliers to provide information about advertising and marketing practices and compliance with self-regulatory guidelines.

The Commission vote to approve the Report on Alcohol Marketing and Advertising was 4-0. Commissioner Pamela Jones Harbour issued a separate statement concurring in part and dissenting in part. This statement can be found as a link to this press release on the FTC’s Web site.

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.

Related posts:

  1. FTC Orders Alcoholic Beverage Manufacturers to Provide Data for Agency’s Fourth Major Study on Alcohol Advertising
  2. FTC Seeks Second Round of Public Comments for Follow-up Study of Alcohol Industry’s Voluntary Guidelines for Reducing Advertising and Marketing to Underage Audiences
  3. FTC Seeks Public Comment on Proposed Information Requests to Alcohol Beverage Manufacturers
  4. FTC Reports on Alcohol Marketing and Self-Regulation

FTC Approves Final Consent Order in Matter of Missouri State Board of Embalmers and Funeral Directors

For Your Information

Commission approval of final consent order – Following a public comment period, the FTC has approved the issuance of a final consent order in the matter concerning the Missouri Board of Embalmers and Funeral Directors, as well as a letter responding to the commenter of record. The Commission vote approving the final order was 4-0. (FTC File No. 061-0026; the staff contact is Joel Christie, Bureau of Competition, 202-326-3297; see press release dated March 10, 2008.)

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 32.2008.wpd)

Contact Information

MEDIA CONTACT:
Office of Public Affairs
202-326-2180

Related posts:

  1. Commission Approves Final Consent Order in Matter of National Association of Music Merchants, Inc.
  2. Commission Appoints Interim Monitor, Approves Interim Monitor Agreement in Matter of Reed Elsevier NV/ChoicePoint, Inc.
  3. FTC Issues New Update of Horizontal Merger Investigation Data Report
  4. FTC Launches Suit to Block Merger of CCC and Mitchell

FTC Approves Final Consent Order in Matter of Missouri State Board of Embalmers and Funeral Directors

For Your Information

Commission approval of final consent order – Following a public comment period, the FTC has approved the issuance of a final consent order in the matter concerning the Missouri Board of Embalmers and Funeral Directors, as well as a letter responding to the commenter of record. The Commission vote approving the final order was 4-0. (FTC File No. 061-0026; the staff contact is Joel Christie, Bureau of Competition, 202-326-3297; see press release dated March 10, 2008.)

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 32.2008.wpd)

Contact Information

MEDIA CONTACT:
Office of Public Affairs
202-326-2180

Related posts:

  1. Commission Approves Final Consent Order in Matter of National Association of Music Merchants, Inc.
  2. Commission Appoints Interim Monitor, Approves Interim Monitor Agreement in Matter of Reed Elsevier NV/ChoicePoint, Inc.
  3. FTC Issues New Update of Horizontal Merger Investigation Data Report
  4. FTC Launches Suit to Block Merger of CCC and Mitchell

Payday Loan Lead Generators Settle FTC Charges

Two payday loan lead generators have agreed to settle Federal Trade Commission charges that their Internet advertising stated payday loan costs and repayment periods without disclosing annual percentage rate (APR) information as federal law requires. The settlements require the respondents to disclose APR information in similar payday loan ads in the future and to comply in all other respects with the Truth in Lending Act (TILA) and its implementing Regulation Z. APR information helps consumers compare the costs of these payday loans with others and with alternative forms of short-term credit.

In typical payday loan transactions, consumers receive cash in exchange for their personal checks or authorization to debit their bank accounts, and lenders and consumers agree that consumers’ checks will not be cashed or their accounts debited until a designated future date. Payday loans have high fees and short repayment periods, which translate to high annual rates, and they often are due on the borrower’s next payday, usually about every two weeks. For more information about payday loans, see the FTC’s consumer education publication, “Payday Loans = Costly Cash,” available at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt060.shtm.

The respondents, We Give Loans, Inc. and Aliyah Associates, LLC, d/b/a American Advance, are lead generators based in Minnesota and Arizona, respectively. They advertise payday loans on their Web sites and collect information from consumers through their online applications. The respondents then sell this “lead” information to lenders that ultimately offer payday loans to consumers.

The TILA and Regulation Z require that those who advertise the cost of credit must disclose the APR of the loans to help consumers make better-informed decisions, including assisting them in comparison shopping among loans. According to the FTC’s complaints, the respondents stated loan costs on their Web sites – a $20 fee for a $100 loan, for example – but failed to disclose the APR. For a typical 14-day pay period, consumers who obtained payday loans advertised by We Give Loans, Inc. would pay an APR from 260 percent to 521 percent or higher, and consumers who obtained payday loans advertised by Aliyah Associates would pay an APR of 782 percent.

The proposed consent orders prohibit the respondents from advertising certain credit offers without providing consumers with key disclosures, such as the APR, and bar them from violating the TILA and Regulation Z in any other manner.

The Commission voted 4-0 to accept the administrative complaints and consent orders.

The FTC will publish an announcement regarding the agreements in the Federal Register soon. The agreement will be subject to public comment for 30 days, until July 24, 2008, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-135 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC requests that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments that do not contain any nonpublic information may instead be filed in electronic form by following the instructions on the web-based form at http://secure.commentworks.com/ftc-WeGiveLoans and/or http://secure.commentworks.com/ftc-Aliyah.

NOTE: The Commission issues an administrative 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. These complaints are not a finding or ruling that the respondents have actually violated the law. The consent agreements are for settlement purposes only and do not constitute admissions by the respondents of a law violation.

Copies of the complaints, consent orders, and analyses to aid public comment are available from the FTC’s Web site at http://www.ftc.gov and 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. 0723205, 0723206)
(We Give Loans)

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  1. FTC Asks Court To Halt Defendant from Impersonating Federal Agencies While Steering Consumers to Mortgage, Tax, and Debt Relief Services
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  3. FTC Permanently Halts Operation that Allegedly Made Bogus Claims about Eliminating Consumers’ Debt
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Payday Loan Lead Generators Settle FTC Charges

Two payday loan lead generators have agreed to settle Federal Trade Commission charges that their Internet advertising stated payday loan costs and repayment periods without disclosing annual percentage rate (APR) information as federal law requires. The settlements require the respondents to disclose APR information in similar payday loan ads in the future and to comply in all other respects with the Truth in Lending Act (TILA) and its implementing Regulation Z. APR information helps consumers compare the costs of these payday loans with others and with alternative forms of short-term credit.

In typical payday loan transactions, consumers receive cash in exchange for their personal checks or authorization to debit their bank accounts, and lenders and consumers agree that consumers’ checks will not be cashed or their accounts debited until a designated future date. Payday loans have high fees and short repayment periods, which translate to high annual rates, and they often are due on the borrower’s next payday, usually about every two weeks. For more information about payday loans, see the FTC’s consumer education publication, “Payday Loans = Costly Cash,” available at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt060.shtm.

The respondents, We Give Loans, Inc. and Aliyah Associates, LLC, d/b/a American Advance, are lead generators based in Minnesota and Arizona, respectively. They advertise payday loans on their Web sites and collect information from consumers through their online applications. The respondents then sell this “lead” information to lenders that ultimately offer payday loans to consumers.

The TILA and Regulation Z require that those who advertise the cost of credit must disclose the APR of the loans to help consumers make better-informed decisions, including assisting them in comparison shopping among loans. According to the FTC’s complaints, the respondents stated loan costs on their Web sites – a $20 fee for a $100 loan, for example – but failed to disclose the APR. For a typical 14-day pay period, consumers who obtained payday loans advertised by We Give Loans, Inc. would pay an APR from 260 percent to 521 percent or higher, and consumers who obtained payday loans advertised by Aliyah Associates would pay an APR of 782 percent.

The proposed consent orders prohibit the respondents from advertising certain credit offers without providing consumers with key disclosures, such as the APR, and bar them from violating the TILA and Regulation Z in any other manner.

The Commission voted 4-0 to accept the administrative complaints and consent orders.

The FTC will publish an announcement regarding the agreements in the Federal Register soon. The agreement will be subject to public comment for 30 days, until July 24, 2008, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-135 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC requests that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments that do not contain any nonpublic information may instead be filed in electronic form by following the instructions on the web-based form at http://secure.commentworks.com/ftc-WeGiveLoans and/or http://secure.commentworks.com/ftc-Aliyah.

NOTE: The Commission issues an administrative 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. These complaints are not a finding or ruling that the respondents have actually violated the law. The consent agreements are for settlement purposes only and do not constitute admissions by the respondents of a law violation.

Copies of the complaints, consent orders, and analyses to aid public comment are available from the FTC’s Web site at http://www.ftc.gov and 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. 0723205, 0723206)
(We Give Loans)

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FTC Warns Against Sweepstakes Scammers Posing as Government Officials

Putting a new twist on an old scam, con artists are posing as government officials when they tell consumers they have won a sweepstakes prize. Crooks also take advantage of Internet technology, which can make it appear that they are calling from Washington, DC, or the consumer’s hometown while they tell consumers they represent the Federal Trade Commission or some other government agency.

To learn more about how to avoid this type of scam, go to http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt167.shtm.

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.

(FYI govt officials)

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