Markets Wired - Page 1263 of 1418 - Global Financial Market News and Press Releases

FTC Seeks Public Comments on a Model Order to Obtain Data for Study of the Effect of Credit-Based Insurance Scores on Consumers of Homeowners Insurance

The Federal Trade Commission has approved a resolution authorizing the use of compulsory process pursuant to Section 6(b) of the FTC Act and Section 215 of the Fair and Accurate Credit Transactions Act (FACTA). The Commission will use this resolution to issue orders that will require certain insurance companies to produce information for a study on the use and effect of credit-based insurance scores on consumers of homeowners insurance. Following a public comment period, the Commission intends to serve orders on the nine largest private providers of homeowners insurance.

The FTC vote approving the resolution was 4-0. Copies of the resolution can be found as a link to this press release on the Commission’s Web site.

Request for Public Comment on Model Section 6(b) Order

In connection with the FTC’s ongoing study of the use of credit-based insurance scores in the homeowners insurance industry, the agency is soliciting public comments on a draft model order that would be issued to selected firms that sell homeowners insurance. The Commission asks that any interested parties access the proposed order at the link appearing on this press release, and submit comments according to the instructions provided below. The FTC will consider these comments before serving compulsory process orders.

In 2003, Congress enacted Section 215 of FACTA, 15 U.S.C. § 1681 note (2003), which mandates that the Commission study the use and effect of credit-based insurance scores on the availability and affordability of automobile and homeowners insurance. In July 2007, the Commission issued a report describing its automobile insurance industry study (available at http://www.ftc.gov/opa/2007/07/facta.shtm).

The Commission now plans to obtain information for the homeowners insurance study using orders issued pursuant to Section 6(b) of the FTC Act and FACTA. The FTC plans to serve such orders on nine firms that represent roughly 60 percent of the homeowners insurance market. The proposed orders would require the production of data, documents, and some narrative responses on a variety of topics, including: (1) policyholder data; (2) premium data; (3) basic policy coverage data (e.g., coverage type, limits, deductibles); (4) policy endorsements and additional coverage data; (5) data and information on the use of credit-based insurance scores and credit history; (6) risk data, (7) claims data, (8) application and quote data; and (9) rating manuals and underwriting guidelines. The Commission intends to protect the privacy and security of the information collected in response to the 6(b) orders to the extent permitted by law.

The Commission is seeking public comment on this draft model order for a number of reasons. First, the FTC would benefit from the expertise and views of interested parties, particularly given the complexity of, and public interest in, the subject matter of the material requested. Second, the agency seeks information as to how to craft its orders in a manner that will maximize its research capability while minimizing any unnecessary burden on insurance firms participating in the study. Finally, Section 215 of FACTA directs the Commission to seek input on the study from the public and interested consumer, community, civil rights, and housing organizations.

Filing a Comment

The deadline for filing comments is June 18, 2008. Comments should be captioned “Credit-based Insurance Score – Homeowners Insurance – P044804” and should be submitted according to the instructions below.

To File Comments or Original Papers Electronically

Follow the instructions and fill out the form at https://secure.commentworks.com/ftc-homeownersinsurance

To File Comments or Original Papers in Paper Form

Include “Credit-based Insurance Score – Homeowners Insurance – P044804,” both in the text and on the envelope, and mail or deliver to the following address: Federal Trade Commission/Office of the Secretary, Room H-135 (Annex C), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Because postal mail in the Washington area and at the Commission is subject to delay, please consider submitting your comments in electronic form, as prescribed above. The FTC asks that any comment filed in paper form be sent by courier or overnight service, if possible.

To Request Confidential Treatment

You must file in paper form and clearly label the first page of the document “Confidential” and comply with FTC Rule of Practice 4.9(c), 16 C.F.R. § 4.9(c).

FTC’s Privacy Policy

The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. All timely and responsive public comments, whether filed in paper or electronic form, will be considered by the Commission and will be available to the public on the FTC website, to the extent practicable, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the FTC makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC website. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, at http://www.ftc.gov/ftc/privacy.shtm.

U.S. Court of Appeals Affirms FTC Decision That Texas Doctors Group Engaged in Illegal, Anticompetitive Price-Fixing

In a unanimous opinion issued on May 14, the U.S. Court of Appeals for the Fifth Circuit affirmed a 2005 Federal Trade Commission decision that found certain activities of North Texas Specialty Physicians (NTSP) violated Section 5 of the FTC Act. In particular, NTSP, a group of independent competing physicians based in Forth Worth, was found to have participated in horizontal price-fixing that was not related to any procompetitive efficiencies. The appellate court’s decision fully endorsed the analytical framework applied by the Commission in its decision, which found NTSP’s conduct to be “inherently suspect,” with no procompetitive justification.

In the appellate opinion, which can be found on the FTC’s Web site as a link to this press release, the Court concluded that the Commission properly condemned certain NTSP practices, as the anticompetitive effects of those practices were obvious, and stated that NTSP’s justifications for its conduct did not bear up under scrutiny. The Court concluded that, based on the case record, the Commission properly condemned the conduct without the need for a “fullblown market analysis.” The Court did, however, find the FTC’s remedial order overly broad in one narrow respect and remanded it to the Commission for modification regarding that one provision.

Case History

In September 2003, the FTC issued an administrative complaint charging NTSP with unlawfully restraining competition, resulting in increased health care costs for consumers in the Fort Worth area. The Commission charge the group with violating federal law by negotiating agreements among its participating physicians on price and other terms, refusing to deal with payors except on collectively agreed-upon terms, and refusing to submit payor offers to participating doctors unless the offers’ terms complied with NTSP’s minimum-fee standards. The Commission also charged NTSP with illegally polling its participating physicians to determine the minimum fee they would accept for medical services provided under a group payor agreement, reducing competition among participating doctors. Finally, the Commission charged the group with discouraging payors and participating physicians from negotiating directly with one another and that the arrangements resulted in no increase in clinical integration.

In an initial decision filed on November 8, 2004, Administrative Law Judge (ALJ) D. Michael Chappell upheld the Commission’s complaint, finding that NTSP restrained trade by conspiring to fix prices in certain contracts its doctors entered into to provide medical services to health plan patients in Fort Worth. Chappell wrote in the decision that, “The government has proved its case . . .,” and that, “the appropriate remedy [is] an order to cease and desist.” NTSP subsequently appealed the decision to the full Commission, which issued its decision and order in December 2005.

The Commission’s decision, issued in favor of complaint counsel, was authored by Commissioner Thomas B. Leary and announced on December 1, 2005. In it, the FTC confirmed the ALJ’s initial decision that NTSP had illegally fixed prices in its negotiations with payors, including insurance companies and health plans. “This is not really a close case,” the Commission wrote in its opinion. “NTSP’s conduct is similar to conduct that has been found per se unlawful and summarily condemned in other contexts…” In issuing its accompanying order, the FTC required NTSP to cease and desist from engaging in the anticompetitive price-fixing conduct alleged in the complaint. The defendants appealed the Commission’s decision to the Fifth Circuit, leading to the decision and order announced today.

The FTC’s Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580, Electronic Mail: [email protected]; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published “Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws,” which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.

(FTC File No.: 021-0075; Docket No. 9312)
(NTSP Appeal.final.wpd)

FTC, Partners to Announce Operation Tele-PHONEY Law Enforcement Sweep

The Federal Trade Commission, together with more than 30 law enforcement partners from the United States and Canada, will announce the results of ‘Operation Tele-PHONEY’ at a joint press conference at FTC Headquarters in Washington, DC, on Tuesday, May 20, 2008 at 10:30 a.m. The sweep includes a range of cases targeting telemarketing fraud such as pitches for advance-fee loans and credit cards, supposedly free gifts and prize promotions, medical prescription drug plans, tax rebates, magazine subscriptions, and “low-cost” household products. The Commission also will announce a new consumer education campaign that includes a Web site and other materials designed to help people avoid becoming victims of telemarketing fraud. A spokesperson fluent in Spanish will be available at the event for interviews with Hispanic media.

WHAT:	Announcement of ‘Operation Tele-PHONEY’ Sweep
WHO:	William E. Kovacic, Chairman, Federal Trade Commission Rod J. Rosenstein, U.S. Attorney, District of Maryland Andrea Rosen, Competition Bureau Canada Lawrence Wasden, Idaho Attorney General Consumer Guest
WHEN:	Tuesday, May 20, 2008; 10:30 a.m. (doors open for camera set-up at 10:00 a.m.)
WHERE:	FTC Headquarters 600 Pennsylvania Ave., N.W., Washington, DC, Room 432
PRESS CONTACT:	Mitchell J. Katz, FTC Office of Public Affairs 202-326-2161

Call-in Information

Call-in lines are available for members of the press who cannot attend the event. To call in, dial: 866-363-9013 prior to the start of the event. In order to join the conference call, reporters must provide the operator with the following conference ID: 48086048.

Webcast Information

Reporters who are interested in this event but are unable to
attend can view it via Webcast by accessing the following link:
http://htc-01.media.globix.net/COMP008760MOD1/ftc_web/FTCindex.html.

Defendants Agree to $26 Million Judgment to Settle FTC Charges for Deceiving Merchants in Debt/Credit Card Processing Scheme

The marketers of a debit and credit card processing services operation have agreed to judgments of more than $26 million to settle Federal Trade Commission charges that they deceived small businesses throughout the country.

According to the FTC, the defendants’ operation falsely promised that it would save merchants hundreds to thousands of dollars a year in processing fees by offering lower rates than the merchants’ current credit card processing service. The defendants also falsely represented that they would buy out merchants’ equipment leases if the merchants accepted the offer, failed to disclose fees, and concealed pages of fine print until after merchants had signed contracts.

The defendants, all based in Oregon, are Aaron Lee Rian, Karely McCarthy aka Karly Speelman, Merchant Processing, Inc. (MPI), Direct Merchant Processing, Inc., Vequity Financial Group, Inc., and PPI Services, Inc. Rian and McCarthy signed separate settlements, and the four corporate defendants signed a third settlement. Under the settlements, Rian and McCarthy are banned from marketing card processing goods or services for sale or lease. In connection with any product or service, all of the defendants are prohibited from misrepresenting the savings that buyers will receive, that existing leases or contracts will be bought out if a purchase is made, or any material fact relating to the product or service or fees or rates charged. In connection with representing that a particular rate or fee will be charged, the defendants must disclose clearly and conspicuously all material facts, such as the amounts of discount rates, processing surcharges, and cancellation fees.

The settlements prohibit the defendants from altering or adding to documents that consumers have signed without first obtaining their consent, concealing or failing to disclose clearly and conspicuously any terms of a contract, and failing to give consumers a complete copy of any document they sign when it is signed. In addition, they cannot sell, rent, or otherwise disclose personal information about anyone who paid them money before the orders are entered.

Merchant Processing, Inc., founded and owned by Rian, was put under the control of a court-appointed receiver in April 2007. In October 2007, the FTC filed an amended complaint alleging that Rian and McCarthy had opened a new business, PPI Services, Inc., and were continuing to commit the same violations. PPI Services, Inc. was then turned over to the receiver. Both businesses are now being operated lawfully by the receiver, and will be sold to fund payments to merchants who were injured by the scheme. The other two corporate defendants that have settled are Direct Merchant Processing, Inc. and Vequity Financial Group, Inc., both defunct corporations.

The settlements with all of the defendants include judgments of $26,480,041, which will be suspended upon completion of certain events, including transfer of Rian’s real property and his interests in the corporate defendants to the receiver, transfer of McCarthy’s interest in PPI Services, Inc. to the receiver, sale of the real property and the corporate defendants by the receiver, and payment of the proceeds by the receiver to the FTC for consumer restitution. The full judgment will be imposed if the defendants are found to have misrepresented their financial condition. The settlements also contain standard record-keeping provisions to allow the FTC to monitor compliance with the orders.

The Commission vote to authorize staff to file the proposed stipulated final orders was 4-0. They were filed in the U.S. District Court for the District of Oregon.

NOTE: These stipulated final orders are for settlement purposes only and do not constitute an admission by the defendants of law violations. These stipulated final orders have been approved by the court, signed by the judge, and have the force of law.

Copies of the orders 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. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. X070030)
(Merchant Processing)

FTC to Host Conference on Consumer Information and the Mortgage Market

The Federal Trade Commission’s Bureau of Economics will host a conference on May 29 to highlight and assess the role of consumer information in the current mortgage crisis from an economic perspective.

Experts on real estate economics, information economics, consumer behavior, and consumer information policy will examine how consumer information and information regulation affect consumer choices, mortgage outcomes, and consumer welfare. For example, panelists will discuss the causes and effects of mortgage market product developments, the role of consumer information in mortgage choice and market outcomes, and the relationship between consumer information policy and the current mortgage crisis. They will also discuss strategies for ensuring that new consumer protection regulations, especially mandatory information disclosures, will provide the greatest possible long-run net benefit to consumers. This exchange may yield concrete ideas for the development and implementation of more cohesive, comprehensive, and effective consumer information policies.

Housing and mortgage market turmoil affects Americans’ financial security and raises questions about the adequacy of consumer protection regulations in mortgage and housing markets. Concerns about increases in delinquencies and foreclosures have led to numerous new consumer protection regulation proposals, including new mandatory disclosures and prohibitions on mortgage product characteristics. Policy choices made today will affect consumer protections, mortgage options, and home ownership opportunities for years to come. Effective consumer policy solutions require both an understanding of why current consumer protection policies may have failed and an assessment of the likely long-term effects of alternative policies on consumer choice and market outcomes.

Mandatory information disclosures play a central role in the existing consumer protection
regulatory framework for the mortgage market. An economic analysis of consumer information that includes a historical understanding of mortgage product developments, as well as empirical research on consumer use and understanding of mandatory disclosures, will bring together disparate elements of the current mortgage policy debate.

The conference will be held at the agency’s headquarter’s building, 600 Pennsylvania Ave., N.W., Washington, D.C. Members of the public and press who cannot attend may view a live Webcast of the conference on the FTC’s Web site. All attendees must show a valid form of photo identification, such as a driver’s license. Pre-registration is not necessary but is encouraged. To pre-register, please e-mail your name and affiliation to [email protected]. Reasonable accommodations for people with disabilities are available upon request. Requests for such accommodations should be submitted via e-mail to [email protected] or by calling Marcy Baskin at 202-326-2285. Such requests should include a detailed description of the accommodations needed and a way to contact you if we need more information. Please provide advance notice. For more information on the workshop, please visit http://www.ftc.gov/be/workshops/mortgage/index.shtml.

FTC Testifies Before Senate Appropriations Subcommittee on the Agency’s FY 2009 Budget Request

Federal Trade Commission Chairman William E. Kovacic and Commissioner Jon Leibowitz today testified before the U.S. Senate Appropriations Committee’s Subcommittee on Financial Services and General Government Committee on Appropriations on the FTC’s behalf, requesting $256.2 million and 1,102 full-time equivalents (FTE) to accomplish the agency’s competition and consumer protection missions in fiscal year (FY) 2009. The request represents an increase of $12.3 million and 18 FTE over the agency’s FY 2008 appropriations and staffing levels.

“The FTC, though small, is the one federal agency with both consumer protection and competition jurisdiction in broad sectors of the economy,” the testimony stated. “[It] has pursued a vigorous and effective law enforcement program in a dynamic marketplace that is increasingly global and characterized by changing technologies. Through the efforts of a dedicated staff, the FTC continues to handle a growing workload.”

According to the testimony, $7.99 million of the requested $12.3 million increase would fund costs associated with contract expenses and personnel, including $2.8 million for 10 additional FTEs in the consumer protection area and eight dedicated to the agency’s competition mission. Of the additional $1.1 million requested for non-FTE program needs in consumer protection, $500,000 would be spent on “Green” marketing research, an education campaign, and enforcement; $250,000 on high-tech tools to stop fraud; $250,000 on examining food marketing and advertising to children; and $100,000 for privacy and identity theft initiatives, including investigating deceptive and unfair practices in mobile marketing. Also in FY 2009, an additional $400,000 would be used to enhance competition enforcement, litigation, and outreach efforts.

“Looking farther into the future our success will require continued efforts to improve the institutional mechanism through which we execute our responsibilities,” the testimony stated. “In the coming months we will undertake a program to identify the way ahead. Our focus will extend beyond the next few years, and we will ask what the Agency should look like when our centennial arrives in 2014, and beyond.” According to the testimony, this “self assessment” will include “a combination of internal deliberations and external consultations in the United States and overseas” with organizations that have an interest in competition and consumer protection policy.

The testimony presented an overview of the FTC’s current enforcement and education priorities, as well as those planned for FY 2009, in the consumer protection and competition areas. To accomplish its consumer protection mission, the agency has been active in efforts to protect the public from unfair, deceptive, and fraudulent practices and has taken law enforcement actions targeting telemarketing fraud, the deceptive marketing of health care products, consumer fraud against Hispanics, and deceptive business opportunities and work-at-home schemes.

In FY 2009, according to the testimony, the agency’s consumer protection enforcement and education focus will include seven priority areas: financial practices; technology (including spyware, spam, and behavioral advertising), the National Do Not Call Registry for telemarketers, privacy and data security, “Green” advertising and marketing claims, food marketing to children, and marketing to children by the entertainment industry.

To protect consumers and promote competitive markets for their benefit, in FY 2008 the Commission has been active in investigating and bringing enforcement actions in sectors of the economy with the greatest impact on consumers, according to the testimony. These include health care, energy, real estate, and high technology and standard setting. In addition to scrutinizing proposed mergers for their possible anticompetitive impact and either challenging them or ordering divestitures when appropriate to protect consumers, the FTC also combats anticompetitive conduct, focusing its efforts on investigating and bringing enforcement actions concerning illegal competitor collaboration and exclusionary conduct.

To promote sound competition policy, the Commission conducts research and develops reports, conducts studies, hearings and workshops, and submits advocacy filings and amicus briefs. The agency also is active in international competition issues, working with foreign antitrust agencies, cooperating on cross-border cases, and providing technical assistance to new antitrust authorities worldwide. As in the consumer protection area, the testimony discusses the wide range of competition initiatives the Commission has undertaken in FY 2008.

“The FTC appreciates the strong support it has received from Congress to serve its critical mission of protecting the American consumer and ensuring competition in the marketplace,” the testimony concluded. The continuation of this support will allow the FTC “to address critical consumer problems at present and anticipate, adapt, and mitigate the challenges of the future.”

The Commission vote authorizing the presentation of the testimony and its inclusion in the formal record was 4-0.

Copies of the Commission’s testimony 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, DC 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.

FTC and Virginia AG File Complaint in Federal Court Seeking to Block Inova Health System Foundations Acquisition of Prince William Health System

The Federal Trade Commission and the Commonwealth of Virginia filed a complaint in federal court yesterday seeking a temporary restraining order and preliminary injunction to stop Inova Health System Foundation’s (Inova) proposed acquisition of Prince William Health System (PWHS) pending a full administrative trial on the merits.

The complaint, filed in the U.S. District Court for the Eastern District of Virginia, seeks a temporary restraining order and preliminary injunction under Section 13(b) of the Federal Trade Commission Act, 15 U.S.C. § 53(b), to enjoin the proposed acquisition. The federal district court complaint alleges that the acquisition would violate federal antitrust laws by reducing competition for general acute care inpatient hospital services in Northern Virginia, and that if Inova is allowed to acquire PWHS, consumers will pay higher prices and lose the benefits of non-price competition.

On May 9, 2008, the Commission issued an administrative complaint challenging the acquisition. The press release announcing the filing of the administrative complaint and a link to the complaint can be found at http://www.ftc.gov/opa/2008/05/inova.shtm.

NOTE: The Commission issues or 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 named parties have violated the law.

Copies of the complaint 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, DC 20580. The FTC’s Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580, Electronic Mail: [email protected]; Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published “Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws,” which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.

Pair Ordered to Pay $49 Million for Cross-Border Telemarketing Fraud

At the request of the Federal Trade Commission, a federal judge has ordered two persons to pay more than $49 million for their role in a Canada-based scheme that duped American businesses into paying for business directories and listings they did not order.

Bernard Fromstein and Judy Provencher are the remaining defendants in the Datacom Marketing, Inc. case, which was part of an international effort against cross-border fraud. (See press release dated May 23, 2006) Unlike their co-defendants, the pair did not agree to settlements of the charges against them.

Under a default judgment entered against Fromstein and Provencher on May 7, they are barred from misrepresenting that consumers have a preexisting business relationship, that consumers have agreed to purchase business directories or listings in directories, or that consumers owe money for business directories or listings in directories. They are also barred from violating the Telemarketing Sales Rule, and from misrepresenting, or failing to disclose, any fact material to a consumer’s decision to purchase or use any product or service. In addition, during outbound telephone calls, they are barred from failing to disclose the seller’s identity, the call’s purpose is to sell goods or services, and the nature of the goods or services.

The order bars the pair from selling, renting, or otherwise disclosing personal information about anyone whose information was obtained in their scheme, and from benefiting from that information. They are also barred from collecting payment for any business directory or listing on accounts established before the order was issued. The order also waives all of their rights to approximately $470,000 worth of uncashed checks from consumers.

The order includes a $49,235,402 judgment against Fromstein and Provencher for consumer injury, as well as record-keeping provisions to allow the FTC to monitor compliance with the court’s order.

This case was brought with the assistance of the United States Postal Inspection Service, Canada’s Competition Bureau in Vancouver, British Columbia, the Service de Police de la Ville de Montréal, and the Toronto Strategic Partnership. The Toronto Strategic Partnership consists
of the FTC, Competition Bureau Canada, the Toronto Police Service Fraud Squad, the U.S. Postal Inspection Service, the Ontario Ministry of Government Services, the Ontario Provincial Police Anti-Rackets Section, the Royal Canadian Mounted Police, and the United Kingdom’s Office of Fair Trading.

The order for permanent injunction and final default judgment was entered in the U.S. District Court for the Northern District of Illinois, Eastern Division.

Copies of the order 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. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.

FTC Approves New Rule Provision Under The CAN-SPAM Act

The Federal Trade Commission has approved four new rule provisions under the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM or the Act). The provisions are intended to clarify the Act’s requirements. The provisions and the Commission’s Statement of Basis and Purpose (SBP) will be published in the Federal Register shortly.
The new rule provisions address four topics: (1) an e-mail recipient cannot be required to pay a fee, provide information other than his or her e-mail address and opt-out preferences, or take any steps other than sending a reply e-mail message or visiting a single Internet Web page to opt out of receiving future e-mail from a sender; (2) the definition of “sender” was modified to make it easier to determine which of multiple parties advertising in a single e-mail message is responsible for complying with the Act’s opt-out requirements; (3) a “sender” of commercial e-mail can include an accurately-registered post office box or private mailbox established under United States Postal Service regulations to satisfy the Act’s requirement that a commercial e-mail display a “valid physical postal address”; and (4) a definition of the term “person” was added to clarify that CAN-SPAM’s obligations are not limited to natural persons.

In addition, the SBP accompanying the final rule also addresses a number of topics that are not the subject of any new rule provisions. These include: CAN-SPAM’s definition of “transactional or relationship message”; the Commission’s decision not to alter the length of time a “sender” of commercial e-mail has to honor an opt-out request; the Commission’s determination not to designate additional “aggravated violations” under the Act; and the Commission’s views on how CAN-SPAM applies to forward-to-a-“friend” e-mail marketing campaigns, in which someone either receives a commercial e-mail message and forwards the e-mail to another person, or uses a Web-based mechanism to forward a link to or copy of a Web page to another person. The SBP explains that, as a general matter, if the seller offers something of value in exchange for forwarding a commercial message, the seller must comply with the Act’s requirements, such as honoring opt-out requests.

The new rule provisions and SBP are a follow-up to a Notice of Proposed Rulemaking (NPRM) and Advance Notice of Proposed Rulemaking (ANPR) on these and other CAN-SPAM topics that the Commission published on May 12, 2005 and March 11, 2004, respectively. The Commission received 152 comments and suggestions on the NPRM and 13,517 comments and suggestions on the ANPR from representatives of a broad spectrum of the online commerce industry, trade associations, individual consumers, and consumer and privacy advocates. The new rule provisions and SBP are based on these comments and suggestions as well as the Commission’s law enforcement experience.

The Commission vote to approve the Federal Register Notice was 4-0.

Copies of the Federal Register Notice are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

FTC to Host Town Hall Meeting to Explore Contactless Payment

The Federal Trade Commission and the Technology Law and Public Policy clinic at the University of Washington Law School will host a one-day Town Hall meeting to explore emerging uses of contactless payment devices and their implications for consumer protection policy. The Town Hall, entitled “Pay on the Go: Consumers and Contactless Payment, ” follows up on the FTC’s November 2006 forum, “Protecting Consumers in the Next Tech-ade,” which examined the key technological and business developments that will shape consumers’ experiences in the coming decade. The Town Hall, which is free and open to the public, will be held July 24, 2008, in Room 133 of the University of Washington School of Law William H. Gates Hall, located at 15th Avenue NE & NE 43rd Street, in Seattle, WA. Directions are available at http://www.law.washington.edu/About/Direction.aspx.

Contactless payment devices, which use radio frequency identification (“RFID”) technology to allow consumers to make low dollar-value purchases by holding an RFID-enabled device (such as a smart card, key fob, or mobile phone) in proximity to a reader, are increasingly available in the U.S. The Town Hall will explore the extent to which contactless devices and readers are being deployed domestically and around the world, along with potential benefits and risks to consumers of their use.

The Town Hall will explore consumer protection issues arising from the use of contactless devices and readers in both retail and public transit payment. Topics will include:

An overview of various contactless payment devices;
Consumers’ understanding of contactless payment capabilities and potential risks, and the need for further consumer education;
Security and privacy threats and proposed solutions;
Emerging practices and technologies that may shape the contactless payment marketplace over the coming years.

The Commission staff invites interested parties to submit requests to be panelists and to recommend other topics for discussion. The requests should be submitted electronically to [email protected] by June 6, 2008. Interested parties should include a statement detailing their expertise on the issues to be addressed at the Town Hall and complete contact information. The Commission will select panelists based on expertise and the need to represent a range of views.

Interested parties may also submit written comments or original research until June 20, 2008. Comments should refer to “Pay on the Go – Comment, Project No. P059106.” To file electronically, follow the instructions and fill out the form at https://secure.commentworks.com/ftc-payonthego. Paper comments should include this reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex T), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Comments containing confidential material, however, must be filed in paper form, must be clearly labeled “Confidential,” and must comply with Commission Rule 4.9(c). The FTC is requesting that any paper comments be sent by courier or overnight service, if possible, because postal mail to the Commission is subject to delay due to heightened security precautions.

There is no pre-registration. Members of the public and press who wish to participate but who cannot attend can view a live Webcast on the FTC’s Web site.

Information about accessibility for persons with disabilities on the UW campus is available at https://www.washington.edu/admin/ada/newada.php Reasonable accommodations for people with disabilities are available upon request. Requests for such accommodations should be submitted via e-mail to [email protected] or by calling Carrie McGlothlin at 202-326-3388. Requests should be made in advance, include a detailed description of the accommodation needed, and provide contact information.

More information about the Town Hall can be found at: http://www.ftc.gov/bcp/workshops/payonthego/index.shtml.

The FTC works for the consumer 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, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://www.ftc.gov/bcp/consumer.shtm.

For further information on the Technology Law and Public Policy Clinic at the University of Washington Law School see http://www.law.washington.edu/Clinics/Technology/Default.aspx.

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts:

Related posts: